LOS ANGELES \u2014 The California Department of Justice has arrested five people and charged 21 total for their alleged roles in a hospice fraud scheme that pilfered $267 million through Medi-Cal, state Attorney General Rob Bonta announced Thursday, April 9.<\/p>\n
Bonta announced the busts, dubbed \u201cOperation Skip Trace,\u201d during a news conference in Los Angeles where he spent much of the time pushing back against the Trump administration\u2019s claims that California is not doing enough to address rampant fraud in the state\u2019s hospice industry.<\/p>\n
\u201cThis is just the latest example of the California DOJ\u2019s long-standing, ongoing, and successful efforts to combat hospice and medical fraud,\u201d Bonta said. \u201cWe\u2019ve been doing it for years; we\u2019ve been doing it successfully before certain people in this country decided to think about it for the first time.\u201d<\/p>\n
Investigators seized two handguns and $757,000 in cash from raids at 12 locations throughout Southern California. The DOJ\u2019s Division of Medi-Cal Fraud and Elder Abuse has recovered about $30 million from the fraudulent billings so far.<\/p>\n
\u201cThis wasn\u2019t a case of billing errors, cutting corners, or upcharging care,\u201d Bonta said. \u201cThis was a brazen, calculated criminal scheme that exploited the Medi-Cal system, stole from the state of California and Medicaid, and prevented services and care from going to sick individuals who actually need it.\u201d<\/p>\n
The Department of Health Care Services initially flagged the potential fraud to state law enforcement in May 2025. Investigators then identified 14 hospice companies, purchased through straw owners, that were using the stolen identities of non-California residents, purchased from the dark web, to enroll those individuals, without their knowledge, in Medi-Cal through Covered California.<\/p>\n
\u201cThey used fake records, non-existent offices, and fake diagnoses to justify these claims,\u201d Bonta said. \u201cMeanwhile, the so-called patients were healthy, out of state, and completely unaware they had been enrolled in hospice care.\u201d<\/p>\n
No hospice services were ever rendered, officials said. The billings were laundered through 130 shell companies and cryptocurrencies, according to the DOJ.<\/p>\n
The charges, filed across three criminal complaints, include conspiracy, insurance fraud, identity theft, and money laundering. Many of the payments were allegedly submitted through Legit Billing Solutions, a Rancho Cucamonga-based company run by Roberto Sabiron Rubillar Jr. and Liezyl Rubillar, according to the complaints.<\/p>\n
The Rubillars are the only people named in all three complaints.<\/p>\n
Kim Johnson, secretary of California Health and Human Services, said the companies in question were removed from the Medicaid program, and payments were halted as soon as the fraud was discovered. The department also reassessed the systems in place to catch such fraud.<\/p>\n
The department is improving those safeguards by ensuring hospice claims are paid only when the proper documentation is provided, establishing a faster and more secure online process and developing stronger checks and balances to weed out fake and stolen identities earlier, Johnson said.<\/p>\n
\u201cAny misuse of stolen identities, or improper billing, is unacceptable and undermines the trust Californians place in this program,\u201d she said.<\/p>\n
California imposed a moratorium on new hospice licenses in 2022 after a state audit raised concerns about the potential for \u201clarge-scale fraud and abuse\u201d within the industry. That moratorium is currently slated to end in January 2027.<\/p>\n
Much of the alleged fraud in California is tied to Los Angeles County. Hospices linked to the $267 million scheme are located in Van Nuys, Tarzana, Glendale, Torrance, and Garden Grove, records showed.<\/p>\n
\u201cThere is a lot of it in Los Angeles County, there is no doubt about it,\u201d Bonta said, before noting that hospice fraud is a problem throughout the country. California, as the most populous state in the country, has a proportionate amount of fraud, he said.<\/p>\n
The federal government is also increasing its oversight in Texas, Georgia, Ohio, and other states as well, he said.<\/p>\n
Under his tenure, the Department of Justice has conducted 294 hospice-related investigations, filed 119 hospice-related criminal cases, and secured 51 convictions, he said.<\/p>\n
Critics, however, continue to point to Los Angeles County as \u201cground zero\u201d for fraud due to the density of hospices in certain communities. Hundreds of hospices are registered within blocks of each other in Van Nuys, for example, and vastly outpace the need.<\/p>\n
The number of active hospices in the five-county Greater Los Angeles area spiked from 722 in 2018 to 1,799 in 2024. Today, the same region\u2014L.A., Orange, San Bernardino, Riverside, and Ventura counties\u2014accounts for nearly a quarter of the hospices in the country.<\/p>\n
That number grew, despite the moratorium, because hospices go through a two-pronged approval process. California approves the license, which gives a hospice the right to exist, but the U.S. Centers for Medicare and Medicaid, or CMS, approves the right to bill the taxpayer-funded health care systems for services provided.<\/p>\n
A significant number of hospices obtained licenses prior to the moratorium and then sat on those licenses, sometimes for years, before progressing to the federal approval process, experts said.<\/p>\n
The federal side did not have a corresponding moratorium in place.<\/p>\n
Last month, hospice and home health care providers in California sent a letter to CMS requesting exactly that. The letter asked Dr. Mehmet Oz, the administrator of CMS, to halt new enrollments from providers in California \u201cuntil more durable corrective measures are developed and implemented.\u201d<\/p>\n
The announcement of \u201cOperation Skip Trace\u201d came about a week after federal authorities announced separate charges against 15 people for $50 million in hospice and health care fraud in Southern California. During the news conference regarding \u201cOperation Never Say Die,\u201d federal officials similarly took shots at the administration of Gov. Gavin Newsom, who they called \u201cThe King of Fraud.\u201d<\/p>\n
At the time, Oz said CMS is reviewing \u201cevery single hospice in California\u201d and has revoked approvals for 230 hospices in the last 10 weeks alone.<\/p>\n
California officials, amid the national debate, have repeatedly highlighted their fraud prevention efforts over the years to try to counter the federal government\u2019s messaging. Newsom, on social media, has blamed CMS, at one point saying he was \u201cglad to see the feds finally taking seriously the fraud in the programs they themselves manage.\u201d<\/p>\n
And Bonta, during his news conference, said the White House \u201cis late to the party.\u201d<\/p>\n
On April 7, more than 80 investigators and surveyors from the California Department of Public Health, Department of Health Care Services, and Department of Tax and Fee Administration swarmed an office building in Van Nuys spotlighted in the political battle due to the excessive numbers of hospices registered to the address.<\/p>\n
The state audit identified 112 hospices at 14545 Friar St. back in 2021, while a state database linked 89 to that address this year. A federal source, meanwhile, listed about 40 certified hospices at that location as of January.<\/p>\n
The compliance check went door to door in the Friar Street building. Video released by the Department of Public Health shows investigators knocking on a door and calling a listed number only to find it disconnected.<\/p>\n
The footage shows individuals carrying cardboard boxes and wheeling a filing cabinet out of the building.<\/p>\n
The Department of Public Health found that only 19 of the hospices at that location are licensed by the state and eligible to bill Medi-Cal. Another 109 have never been issued a license. More than half of the hospices were denied because of the moratorium, according to a news release<\/p>\n
\u201cAs part of our ongoing work, we are in Los Angeles County actively investigating hospice providers,\u201d said Dr. Erica Pan, director of CDPH, in a statement. \u201cProtecting patients and safeguarding the integrity of our health care system remains our top priority, and we will continue to hold providers accountable.\u201d<\/p>\n
An investigation by the Southern California News Group found that a group registered 22 hospices at that address in a year, including 15 hospices incorporated on a single day inside a single suite. Though no physical subdivisions existed, each hospice used a variation of \u201cSuite 205\u201d with a letter appended to it\u2014from \u201cA\u201d to \u201cP\u201d\u2014to circumvent rules prohibiting hospices from operating out of the same physical space.<\/p>\n
Those hospices all received licenses, despite having overlaps in addresses and personnel, and collected $12.3 million from Medicare and Medi-Cal. Three were later involuntarily decertified by CMS, including one that assigned terminal illnesses to patients who were not, in fact, dying.<\/p>\n
Last month, CDPH stated it had revoked eight licenses at the Friar Street address, with another 12 providers in the process of being revoked. Separately, CMS had terminated the certifications of 21 providers, according to a spokesperson.<\/p>\n
The building\u2019s owner advertises \u201cvirtual offices,\u201d with day passes to use actual office space, specifically to industries needing to \u201cobtain licenses\u201d in the state. State law requires hospices to maintain a physical office, even if care is provided in someone\u2019s home or in another facility.<\/p>\n","protected":false},"excerpt":{"rendered":"LOS ANGELES \u2014 The California Department of Justice has arrested five people and charged 21 total for their…\n","protected":false},"author":2,"featured_media":262390,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,17452,9,8,115240,3130,727,1755,8584],"class_list":["post-262389","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-department-of-justice","tag-california-headlines","tag-california-news","tag-centers-for-medicare-medicaid-services","tag-fraud","tag-issues-in-ethics","tag-medi-cal","tag-politics-of-the-united-states"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/262389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=262389"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/262389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/262390"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=262389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=262389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=262389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}