CALIFORNIA STOPS MAJOR IDENTITY THEFT AND HOSPICE FRAUD SCHEME AND BRINGS CRIMINAL CHARGES TO HOLD PERPETRATORS ACCOUNTABLE

SACRAMENTO — The California Department of Health Care Services (DHCS) and the California Department of Justice (DOJ), working in close coordination with the California Department of Public Health (CDPH), have taken decisive action to dismantle a large-scale identity theft and hospice fraud scheme targeting the Medi-Cal program. This coordinated enforcement effort underscores California’s commitment to protecting Medi-Cal members and safeguarding taxpayer dollars from fraud, waste, and abuse.

Working together, DHCS and DOJ’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) confirmed that transnational criminal networks used stolen identities to fraudulently enroll individuals in Medi-Cal and bill for hospice services that were never provided. The scheme involved 14 fraudulent hospice providers and resulted in more than $267 million in improper billing. DHCS is working closely with federal partners to determine any required repayment obligations under Medicaid rules, and will pursue recovery from the fraudulent actors wherever possible, with recovery efforts already underway, including the recovery of more than $70 million to date in coordination with state and federal law enforcement.

“For years, California has led the charge to protect public programs from fraud and abuse. We hold accountable to the fullest extent of the law anyone who tries to rip off taxpayers and take advantage of public programs, particularly those as sensitive as hospice care. I thank DHCS and DOJ for their swift work to bring these charges forward. Since these are state charges, Donald Trump cannot pardon these individuals in exchange for campaign donations,” said Governor Gavin Newsom.

California acted swiftly to protect Medi-Cal and taxpayer dollars by:

“This investigation demonstrates what California can accomplish when our state agencies work together with urgency and purpose," said California Health and Human Services Secretary Kim Johnson. "Protecting the millions of Californians who depend on Medi-Cal to meet their health needs is our priority, and we will not tolerate bad actors. DHCS moved swiftly to stop these payments, disenroll fraudulent accounts, and refer perpetrators for criminal prosecution. Our work is not done, and we will continue strengthening the safeguards that keep Medi-Cal sound and trustworthy for the people it was designed to serve.”

Large-scale fraud involving identity theft and coordinated criminal networks requires careful, evidence-based investigation. DHCS and its partners must confirm each affected identity, avoid alerting perpetrators, and build cases that meet legal standards for suspensions, license actions, and prosecution. DOJ has executed search warrants, made arrests, and filed criminal charges to dismantle the network and ensure the perpetrators face full accountability under state law. This deliberate approach protects legitimate Medi-Cal members and ensures enforcement actions are strong enough to hold bad actors fully accountable. 

This action builds on California’s statewide hospice enforcement efforts, including the CDPH-led California Hospice Fraud Task Force, which strengthens coordination among state departments to identify fraud, share information, and act quickly to stop bad actors. These efforts have resulted in more than 280 hospice license revocations and hundreds of ongoing investigations.

“Fraud is a direct attack on the health and well‑being of Medi‑Cal members, and we will not hesitate to act,” said DHCS Director Michelle Baass. “Our safeguards worked quickly and effectively—identifying suspicious activity, stopping improper payments in their tracks, and prompting immediate suspension of the providers involved. In coordination with the California Department of Justice’s Division of Medi‑Cal Fraud and Elder Abuse, California’s Medicaid Fraud Control Unit, we are pursuing full accountability while reinforcing our oversight systems to protect Medi-Cal members and the taxpayers who fund this program.”

“This isn’t a political game for us. This is about protecting taxpayer dollars, protecting programs sick and vulnerable Californians rely on, and protecting our state,” said Attorney General Rob Bonta. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided, yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud. This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists.”

A MULTIPRONGED APPROACH TO FRAUD PREVENTION: DHCS’ program integrity safeguards were critical in detecting and stopping this scheme, and the Department is implementing additional measures to prevent similar fraud from occurring in the future. The comprehensive strategy includes:

DHCS manages more than $200 billion annually to serve more than 14 million Californians who rely on Medi-Cal. Protecting program integrity ensures that every dollar goes to those who truly need care. To proactively combat hospice fraud, Governor Gavin Newsom signed legislation in 2021 that banned new hospice licenses in California, a moratorium that remains in effect. He also created the statewide Hospice Fraud Task Force to ensure rapid information-sharing and support license revocation, payment suspension, and criminal case development. Learn more about DHCS program integrity.

REPORTING SUSPECTED FRAUD: DHCS encourages anyone who suspects Medi-Cal fraud to report it immediately: