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Feb 06, 2026

Congress Demands Action on "Staggering" California Fraud Scheme

WASHINGTON, D.C. — APRIL 2, 2026 — In a move that has sent shockwaves from the halls of the Capitol to the statehouse in Sacramento, a powerful coalition of House Republican chairs has officially triggered a massive federal probe into what is being called the "largest concentration of suspected Medicare fraud in U.S. history."

Centered in the heart of Los Angeles County, the scheme involves a sprawling network of hospice and home health agencies that have allegedly siphoned billions from the American taxpayer while operating out of strip malls, unmarked warehouses, and even wrecking yards.

The investigation, led by House Ways and Means Chairman Jason Smith (R-MO) and Energy and Commerce Chairman Brett Guthrie (R-KY), targets a "paper empire" that has flourished under the administration of Governor Gavin Newsom. As the 2026 Renaissance of Law and Order takes hold under the second Trump administration, the federal government is no longer willing to ignore the "asleep at the switch" governance that has allowed criminal enterprises to exploit the nation’s most vulnerable seniors.


I. THE IMPOSSIBLE MATH OF LOS ANGELES COUNTY

The data cited by the House chairs in their January 13 letter to the HHS Office of Inspector General (OIG) is nothing short of staggering. Despite representing only a sliver of the national senior population, Los Angeles County now accounts for a massive 18% of all home health billing in the United States.

The numbers reveal a statistical anomaly that state and federal regulators missed for years:

  • Agency Density: LA County is home to nearly 2,000 hospice agencies—more than 36 U.S. states combined and 30 times the number found in states like Florida or New York.

  • The $120 Million Physician: Investigators highlighted a single physician who allegedly billed Medicare $120 million in one year, claiming to supervise an impossible 1,900 patients simultaneously.

  • The Shared Address Scandal: A 2022 audit revealed that over 112 hospice agencies were registered to the exact same physical address, a hallmark of "shell company" fraud.


II. THE "PAPER EMPIRE" REVEALED: STRIP MALLS AND WRECKING YARDS

Chairman Jason Smith’s assessment of the situation was clinical and devastating. He described a landscape where the "sanctity of healthcare" has been replaced by a criminal facade. "How is it possible that a hospice can operate out of a wrecking yard?" Smith questioned.

The investigation has uncovered that while home health agencies decreased by 6% nationally since 2019, they exploded by 46% in Los Angeles. Over 1,400 new agencies have appeared in the county since 2019, accounting for more than half of all new providers in the entire state of California.

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