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Medicare and Medicaid Administrator Mehmet Oz speaks about combating fraud at the Eisenhower Executive Office Buildingin Washington, D.C., on Feb. 25, 2026.\u00a0<\/p>\n
Oliver Contreras\/AFP\/TNS<\/p>\n
State officials conducted a sweep of a three-story Los Angeles office building Tuesday as part of its continued efforts to push back against claims by right-wing influencers and President Donald Trump\u2019s administration that fraud is rampant in the state, particularly among hospice businesses.\u00a0<\/p>\n
California agents said most of the businesses housed at the site can\u2019t access state Medicaid funds, and argued that most potential fraud is happening at the federal level, which is under Trump\u2019s purview.<\/p>\n
Tuesday\u2019s sweep is the latest chapter in a long-running dispute between the state and federal government over how California is run. But the fight over hospice fraud is relatively unique among the many tensions between the state and the White House, because both parties actually agree fraud is taking place. They don\u2019t agree, however, on who\u2019s at fault: California, which licenses the hospices, or the federal government, which runs Medicare.<\/p>\n
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Investigators have a history with the office building at 14545 Friar St. in Van Nuys going back several years, which coincided with a state moratorium on issuing new hospice licenses as part of its own fraud crackdown. On Tuesday, a fleet of 80 investigators<\/a> and state employees visited the tenants again\u00a0\u2014 this time following viral videos from right-wing YouTuber Nick Shirley and Assembly Member Alexandra Macedo<\/a>, R-Tulare, who pointed to 197 businesses<\/a> using the same address.<\/p>\n \u201cThis \u2018ground zero\u2019 for hospice fraud is not an isolated anomaly,\u201d Macedo wrote in a letter<\/a> to a congressional oversight committee. \u201cIt is a symptom of a systemic collapse in oversight.\u201d\u00a0<\/p>\n San Francisco Chronicle Logo<\/p>\n Make us a Preferred Source to get more of our news when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n But the state says a business tying itself to an address in pursuit of a license doesn\u2019t mean it ever received one. State officials said 48 businesses\u00a0\u2014 not 197\u00a0\u2014 hold a hospice license at the complex, which is zoned for 60 office spaces. Of those, 19 are eligible to bill the state\u2019s Medicaid program, known as Medi-Cal, for reimbursements. The other businesses use Medicare\u00a0\u2014 which is a federally managed program that handles the majority of hospice spending\u00a0\u2014 or bill private insurers for reimbursements.<\/p>\n \u201cThis is ongoing work that we have been doing way before any of the media attention has been on us,\u201d said Susan Fanelli, a deputy director with California Department of Public Health, which issues hospice licenses. \u201cWe believe California has taken a lot of action \u2026 to combat fraud and to reduce the number of fraudulent actors that get into the system.\u201d\u00a0<\/p>\n Article continues below this ad<\/p>\n State investigators conduct hospice compliance reviews in Los Angeles County on April 7, 2026.<\/p>\n California Department of Public Health<\/p>\n Trump put a spotlight on Medicaid and Medicare fraud in March when he announced a federal task force<\/a> led by Vice President JD Vance to develop stricter eligibility verification requirements for welfare programs and to stomp out fraud networks across the country.\u00a0<\/p>\n Trump said the task force was \u201cnot a Republican-Democrat thing,\u201d but largely aimed his remarks at Democrat-led Minnesota, which has been enveloped in a welfare funds scandal, and California, where the president claimed without evidence that fraud is \u201c10 times worse.\u201d\u00a0<\/p>\n \u201cI think they\u2019re going to find numbers that are far higher than you even think,\u201d he said in March.\u00a0<\/p>\n While California agencies don\u2019t have the ability to investigate Medicare billing, the state health department is responsible for checking the status of hospice business licenses, which are required before a provider can submit claims to Medicare. The purpose of Tuesday\u2019s visit was so health department agents could verify that all 48 license holders’ businesses were legitimate, Fanelli said.\u00a0<\/p>\n Article continues below this ad<\/p>\n The outcome of the investigations that started Tuesday won\u2019t be available for several weeks, Fanelli said. Agents are checking licensed businesses are operational and abiding by their posted hours; that they have staff hired and present; and have records for the patients they serve.\u00a0<\/p>\n State and federal agents have done 56 licensing investigations since 2021 at the same Friar Street building, which led the health department to revoke 14 licenses while preventing another 146 from ever being issued, according to the health department. It also issued 144 citations in that time.\u00a0<\/p>\n \u201cWe\u2019ll look at their policies and procedures and we\u2019ll look at patient medical records,\u201d Fanelli said. \u201cWe can even interview patients or family members to make sure that what they\u2019re doing is legitimate and that they are delivering good quality patient care.\u201d\u00a0<\/p>\n Shirley, in his video<\/a>, spotted vacant offices and luxury vehicles in the parking lots of the Van Nuys office buildings tied to hospice providers. He accused the companies of taking advantage of taxpayers by calling their actions \u201cwelfare maxxing\u201d\u00a0\u2014 a reference to popular Gen Z slang.\u00a0<\/p>\n The allegations made online prompted the investigation in Los Angeles, Fanelli said.\u00a0<\/p>\n Article continues below this ad<\/p>\n Los Angeles County is a particular point of contention because of its high number of hospice providers, which account for nearly a fifth of all licensed hospices in the nation. Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services, visited Van Nuys earlier this year, where he filmed a controversial video<\/a> tying the alleged fraud to the local Armenian community<\/a>. Shirely\u2019s 40-minute video included some of the same allegations.\u00a0<\/p>\n After a Los Angeles Times investigation in 2020, California began freezing most new hospice licenses and has since revoked more than 280. The state is still working on stricter laws and regulations. While the new regulations were due to start at the beginning of this year, the state sought an extension to implement them. That\u2019s something Macedo has voiced frustration about, saying the delay is fostering more fraud.\u00a0<\/p>\n Last week, federal officials arrested eight people<\/a> they say were involved in health care fraud schemes totaling $50 million in and around Los Angeles. The Department of Justice said those arrested are charged with running sham hospice centers that billed Medicare for patients who were not actually eligible.\u00a0<\/p>\n Shelia Clark, CEO of the California Hospice and Palliative Care Association, called those arrests a \u201ccritical step\u201d in confronting \u201cthe hospice fraud crisis\u201d the group says it has long raised. In 2024, the association contributed to a presentation<\/a> that showed clusters of hospice businesses located within a mile of one another were found in Van Nuys, Glendale, Burbank and North Hollywood. It found no similar clusters in Sacramento, San Diego or the Bay Area.\u00a0<\/p>\n Article continues below this ad<\/p>\n Fanelli said she wants to see more state and federal collaboration and data-sharing so agents can weed out hospice fraud more quickly.\u00a0<\/p>\n \u201cThe Trump administration should follow our lead\u00a0\u2014 institute a federal moratorium on new Medicare hospice certifications, scrutinize Medicare billing, and remove any providers that violate the rules,\u201d Newsom spokesperson Diana Crofts-Pelayo said in a statement. \u201cWe\u2019re doing our part to raise standards, and it\u2019s time for Washington to step up.\u201d<\/p>\n<\/p>\n