CMS Says It Has Removed 1,076 California Hospices From Medicare Billing

The Number Both Sides Want You to See Differently

CMS says it has pulled 1,076 hospice providers out of California's Medicare program. The agency frames that as a roughly 47% cut from the state's peak enrollment, a number it dates to the Biden administration^[18]. Once a provider is removed, it can't bill Medicare anymore. For most hospices, that ends the business, since Medicare pays for the large majority of hospice care in the U.S.

This is the latest move in a crackdown that's been building all year. In May 2026, CMS froze new hospice and home health enrollment nationwide for six months, a pause that runs to mid-November^[3]. It also singled out six states for extra screening of new hospices, including California^[2]. Officials say Los Angeles County is ground zero: CMS Administrator Mehmet Oz has said LA alone holds close to a third of the nation's hospice providers, which he called "not rational," and has pointed to an alleged fraud scheme topping $1 billion^[1].

Here's the thing almost no one disputes: something real and large happened here. California's Medicare-enrolled hospice count rose 126% between 2019 and 2023, according to CMS's own data^[2]. Los Angeles County alone saw roughly a 1,500% jump in hospice providers between 2010 and 2022^[9]. People don't start dying at three times the normal rate. That gap is the strongest neutral evidence something was off.

But 1,076 is also a number nobody outside the administration has independently confirmed^[18]. And that gap between "fraud is real" and "this specific tool is precise" is where the actual argument lives.

How a Flat Daily Rate Turns Into an Opening

To understand why hospice became a fraud magnet, you need to understand how it gets paid. Medicare pays hospices a flat daily rate for every enrolled patient, whether or not much care happens that day. Eligibility rests on a doctor's judgment that the patient likely has six months or less to live — a prognosis, not a lab result.

That combination is easy to exploit. A fraudulent operation mostly needs signatures and a cooperative physician to start generating steady revenue. Investigators describe patients recruited with cash who weren't dying at all, and in some cases billing under the names of people who had already died^[13]. Signing onto hospice also means giving up curative treatment, so a false enrollment doesn't just cost taxpayers money. It can cost a patient real medical care they wanted, like chemotherapy or surgery^[9][13].

Medicare's broader design makes this worse. The program pays claims fast and audits later, on purpose, so care keeps flowing to people who need it. But money paid out to a shell hospice is almost never recovered once it's gone^[2][4]. That means serious enforcement has to act before there's proof — which is exactly what makes it capable of hitting innocent providers too.

Federal prosecutors have already built criminal cases on this pattern. Eight people were arrested in a health-care fraud takedown that included hospice owners^[13]. California's Attorney General separately charged 21 people in a Los Angeles ring the state valued at $267 million^[8].

The Tool Doesn't Distinguish

Here's where the two sides genuinely split, and it isn't over whether fraud exists. CMS can suspend a provider's payments on a "credible allegation of fraud" — a legal standard far below proof, one the agency can meet using billing patterns alone.

For hospice providers, that standard collides with how their businesses run. Payroll for nurses and aides goes out every two weeks no matter what. A payment suspension isn't a warning shot — it's an immediate stop to incoming cash, and a small agency can miss payroll within a month^[4]. CMS suspended payments to 773 hospices and 23 home health agencies in Los Angeles County at once, withholding roughly $70 million^[4]. Providers say a hospice serving a heavily immigrant neighborhood, or one that admits patients others turn away, can look statistically unusual without doing anything wrong. Getting switched off, they say, is far easier than getting switched back on, and some legitimate agencies have already closed while waiting on appeals^[4][5].

CMS's counter is that speed is the entire point. Money sent to a shell company is gone the moment it's paid, so waiting for a conviction guarantees the loss. Oz has publicly rejected the idea that the crackdown is politically motivated^[1]. The agency also argues patients are fine: roughly 7,000 hospices remain approved to bill Medicare nationwide^[5]. Industry groups and some health reporters dispute that this holds true in specific Los Angeles neighborhoods, especially for families who don't speak English^[5][6][9].

Two Governments, Two Different Locks

There's a second layer to this fight, and it's about who gets credit and who takes blame. California can refuse to license a hospice. Only CMS controls whether that hospice can bill Medicare. Those are two separate locks, and during the years California was already saying no to new licenses, the federal enrollment gate stayed open^[2][7].

California's governor's office wants that timeline understood: the state paused new hospice licenses in 2022, years before the federal freeze, and has since revoked more than 280 licenses, with about 300 more providers under investigation^[7]. State officials argue they moved first and that the federal government's own enrollment pipeline kept letting new providers in during that stretch. Newsom's office has also gone on the offensive, arguing the administration's own fraud-enforcement record is inconsistent and pointing to pardons of convicted fraudsters as evidence^[7].

The administration's numbers are measured against a different baseline — the "peak under Biden" — turning the removal count into a scorecard against the prior White House^[1][10]. The House Committee on Oversight has opened its own investigation and sent a letter to Newsom in March 2026 pressing the state on its role^[16]. Each side can accurately say it acted. Each can also accurately say the other side's gate stayed open longer than it should have^[2][7].

What the Headlines Chose to Lead With

Coverage of this story split along fairly predictable lines. Fox News built its account almost entirely around Oz's on-air claims, giving "foreign-linked criminal networks" prominent billing, without quoting a hospice operator or patient advocate answering the dragnet complaint^[1]. The Daily Signal led with the dollar figure frozen rather than how much of that money belonged to providers later cleared^[14].

On the other side, The Washington Post framed its coverage around hospices worrying they'll be "unfairly punished," a word imported from its sources straight into the headline, with fraud treated as ambient background rather than the active subject^[6]. KFF Health News led with "industry experts" — the regulated parties themselves — warning that hospice's damaged reputation will hurt patients^[5]. Hospice News used the industry's own term for the crackdown, "dragnet," in its headline^[4].

CalMatters stood out by framing the fraud itself, not the government's response to it, as the thing locking seniors out of care they need — reporting built on state licensing records rather than either camp's press releases^[9]. CBS News kept relatively neutral language but still named "the Trump administration" as the actor rather than the agency, CMS, which personalizes what is technically a regulatory rule^[15].

What's Left When the Press Releases Are Set Aside

Strip away the round numbers chosen to flatter whoever is announcing them, and what's left is genuinely mixed. A real fraud concentration exists in California, backed by CMS's own enrollment data and multiple criminal cases already filed by both federal and state prosecutors^{[2][8][9][13]}. At the same time, a $70 million payment suspension spread across 773 Los Angeles-area hospices is too blunt an instrument for all of them to be criminal enterprises^[4].

CMS has not published data on whether every patient affected by a removal got a real handoff to a working hospice. That's the test patient advocates say actually matters, more than any removal count^[5][6][9]. The 1,076 figure at the center of this story comes from the administration itself, and no independent dataset has confirmed it^[18]. What happens to the specific patients in the neighborhoods hit hardest by these removals is still an open question, and it's the one none of the press releases answer.