780 Fraudulent Hospice Centers Stay Silent After Federal Shutdown
Nearly all 800 hospice centers shuttered for suspected fraud never contacted federal authorities after losing their revenue, with only 20 operators appealing the suspension, officials say.
Nearly all 800 hospice centers shut down for suspected fraud never contacted federal authorities after losing their main revenue stream. Only 20 operators appealed the suspension. The overwhelming silence functionally proves operators knew they ran fraudulent schemes, according to Vice President JD Vance.
"The fraud is right there for everybody to see," Vance told Fox News on May 17. "If you're running a business and the federal government closes down your main source of revenue, do you write a letter? Do you make a phone call? Seven-hundred and eighty of those we've closed down, we haven't even heard a single thing from anybody."
That 97.5 percent silence rate sits at the center of the administration's largest healthcare enforcement action. The crackdown includes a $1.3 billion Medicaid deferral to California, a six-month nationwide enrollment moratorium, and letters to all 50 states demanding proof of active fraud prosecutions.
Federal officials suspended 800 hospice providers in Los Angeles alone. Those operators billed taxpayers $1.4 billion last year, according to Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz. The number ballooned from 70 providers initially suspended in Los Angeles to 447 hospices and 23 home health agencies by mid-April. That represents roughly a 539 percent increase in hospice suspensions over approximately three weeks.
CMS Administrator Dr. Mehmet Oz broke down the $1.3 billion California deferral during a May 13 press conference. The deferral includes $630 million in billing from providers in the top 5 percent of outliers nationally. Another $500 million covers home health spending growing at twice the national average. The remaining $200 million traces to questionable expenditures linked to undocumented immigrants.
Oz said the administration wants California "to at least come to the table and explain how these outlier payments have been generated."
CMS will halt all initial enrollment applications and changes in majority ownership for hospice and home health agencies nationwide for six months. The moratorium allows the agency to deploy advanced data analytics while accelerating removal of suspected fraudsters.
Hospice provider counts increased 126 percent in California between 2019 and 2023. Home health agency provider counts rose 40 percent in Los Angeles County over the same period, CMS noted. That growth dramatically outpaces the population of terminally ill patients.
"A third of all these programs in the entire country are in Los Angeles," Oz told the Los Angeles Times. "They're not that many people dying in Los Angeles."
The administration sent letters to all 50 states requiring proof of active Medicaid fraud investigations and prosecutions. States that cannot demonstrate meaningful enforcement risk losing federal funding for their Medicaid Fraud Control Units. Broader Medicaid penalties remain possible.
Vance specifically called out Hawaii, which he said recorded zero indictments or convictions in recent years despite receiving billions in federal Medicaid funds. New York produced only nine Medicaid fraud indictments last year. Indiana, with one-third of New York's population, logged more than four times as many.
California's hospice problems predate the federal action. A 2020 Los Angeles Times investigation revealed providers billing Medicare for patients who were not actually dying. In response, Gov. Gavin Newsom and the California Legislature froze new hospice licenses in 2021.
A 2022 California State Auditor report noted weak safeguards and a rapid increase in hospices registering in Los Angeles County. Critics said the state's Department of Public Health moved too slowly implementing guidelines from the auditor's report. Lawmakers extended the moratorium into 2027.
Newsom's office called the federal attack "sick" and wrote on X: "We hate fraud. But that's NOT what this is." Attorney General Rob Bonta called the targeting "solely for political reasons." Sen. Alex Padilla said the administration engages in "political retribution plain and simple."
None of these officials provided counter-evidence to CMS data on outlier billing, growth rates, or the 780-silence finding.
CMS's AI-driven fraud detection system, known as the Medicare Fraud War Room, has blocked over $2 billion in fraudulent payments since launching in 2025. The task force's letters to 50 states, the six-month moratorium, and the California deferral form a coordinated, data-driven strategy.
Vance warned that prosecutions may face resistance in Democratic-led jurisdictions. "You can have a fraudster, you can have them dead to rights, you can have them literally in a text message confessing to the crime but sometimes you're still going to have corrupt judges," he said.
The vice president vowed to pursue cases despite judicial obstruction. "For every person that slips through the cracks because of a crooked judge, we're going to get 10 people who actually go to prison or suffer real consequences for it," Vance said. "And we're also saving the American people a lot of money."
The crackdown represents a structural response to systemic failures in how states police taxpayer-funded healthcare programs. With 780 silent operators effectively admitting guilt by their silence, federal officials argue the data proves systemic fraud. For families counting on taxpayer dollars to fund legitimate end-of-life care, the silence of those operators speaks volumes about who was really being served.