California Busts $267M Hospice Fraud Ring

California Uncovers Massive Hospice Fraud Scheme

LOS ANGELES – California Attorney General Rob Bonta announced Wednesday the takedown of a major hospice fraud ring that stole an estimated $267 million from the state’s Medi-Cal program. The operation, dubbed “Operation Skip Trace,” targeted 14 hospice companies and resulted in felony criminal charges against 21 suspects. The bust highlights the ongoing battle against healthcare fraud in the state.

How the Fraud Worked

The sophisticated scheme involved purchasing personal information of individuals, often from the dark web, and using it to enroll them in hospice care. These individuals, who were often healthy and lived out of state, were unaware they were listed as patients. Straw owners then bought hospice companies and billed Medi-Cal for services that were never provided. Fake records, non-existent offices, and fabricated diagnoses were used to support these fraudulent claims. The stolen money was then laundered through more than 130 shell companies, bank accounts, payment apps, and cryptocurrency to avoid detection.

“This was a brazen, calculated, criminal scheme that exploited the medical health system, stole from the state of California and Medicaid, and prevented services and care from going to sick individuals who actually need it,” Attorney General Bonta stated during a press conference.

Operation Skip Trace Details

Operation Skip Trace began with a tip from the California Department of Health Care Services (DHCS). The Attorney General’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) investigated the tip, expanding the probe to include a billing company and individuals suspected of money laundering. Authorities executed search and arrest warrants at 10 locations across Southern California, arresting five suspects so far. The operation has already recovered over $30 million in fraudulent funds, with efforts underway to stop an additional $40 million in payments.

California’s Long-Standing Fight Against Fraud

Attorney General Bonta emphasized that California has been actively combating hospice and Medi-Cal fraud for decades, long before it became a prominent political issue. He highlighted the DMFEA’s track record, noting nearly 300 hospice-related investigations, 19 criminal cases filed, and 51 convictions secured since he took office in 2021. Over the past decade, the DMFEA has recovered $1.54 billion in civil and criminal Medi-Cal fraud cases.

“Protecting taxpayer dollars and protecting programs sick and vulnerable Californians rely on have been our priority for nearly five decades,” Bonta said. He stressed that tackling fraud is not a partisan issue but a matter of protecting public funds and ensuring vital services reach those in need.

Partnership and Collaboration

The success of Operation Skip Trace was attributed to strong partnerships between state agencies. Key collaborators included the Governor’s office, the Department of Health Care Services, and the California Health and Human Services Agency. Attorney General Bonta expressed gratitude for this collaborative approach, stating that such efforts are crucial for effective law enforcement.

Broader Implications and Public Involvement

The Attorney General stressed that healthcare fraud is a national problem, not unique to California. He encouraged the public to report any suspected fraud. Californians can submit complaints online through the Attorney General’s website or call a toll-free hotline. Information on reporting fraud and the DMFEA’s work is available on the Attorney General’s website.

Those convicted in this scheme face prison sentences of 10 to 16 years. The Attorney General’s office is committed to prosecuting perpetrators to the fullest extent of the law, sending a clear message that fraud against California’s healthcare programs will not be tolerated.

What’s Next

As Operation Skip Trace continues, authorities are focused on apprehending remaining suspects and recovering additional funds. The case underscores the need for continued vigilance and robust enforcement efforts to protect taxpayer money and ensure that vital healthcare services are available to those who truly need them. The California Department of Justice remains dedicated to its long-standing mission of fighting fraud, waste, and abuse across the state.

Source: $267 million hospice fraud ring busted in California (YouTube)