California Governor Faces Criticism Over Hospice Fraud Oversight
Governor Newsom faces scrutiny after arrests linked to $50 million hospice fraud scheme.
Why it matters: Legal teams in healthcare must prepare for tighter compliance as scrutiny on state oversight intensifies.
- $50M healthcare fraud uncovered, leading to multiple arrests in Southern California.
- Governor Newsom criticized for lack of oversight allowing hospice regulation fraud.
- 1,500% rise in hospice providers raises regulatory concerns since the moratorium.
- House Oversight Committee seeks documents on state hospice oversight.
Federal officials have arrested several individuals in Southern California for an alleged $50 million Medicare fraud via fake hospice facilities. The operation, called "Never Say Die," brought to light fraudulent activities, including a notable case with $8.5 million in claims, detailed by Courthouse News Service and Los Angeles Times.
Governor Gavin Newsom is facing backlash for inadequate oversight, believed to have enabled the extensive fraud. First Assistant U.S. Attorney Bill Essayli labelled it a "failure of oversight" under current state leadership.
The U.S. House Oversight Committee, led by Rep. James Comer, has requested documents from Governor Newsom about state oversight. Early findings hint at $3.5 billion in suspected fraud, impacting federally funded programs, with significant lapses seen particularly in Los Angeles County.
Dr. Mehmet Oz, overseeing the Centers for Medicare & Medicaid Services (CMS), has committed to reviewing hospice operations in California, notably Los Angeles County, which represents 18% of national hospice spending.
- The number of hospice providers has exploded by 1,500% despite a moratorium on new licenses imposed since 2021, questioning regulatory efficacy.
- California, collaborating with CMS, aims to enhance oversight after reclaiming $1.6 billion in federal funds, underscoring broader regulatory concerns.
By the numbers:
- $50 million — Fraud uncovered by federal officials through the 'Never Say Die' operation.
- 1,500% — Increase in hospice providers since moratorium, raising compliance concerns.
- $1.6 billion — Funds recouped by California, highlighting need for improved oversight.