CBS News Blows Up the Los Angeles Ghost Hospice Fraud Scam [WATCH]

CBS News correspondent Adam Yamaguchi reported on a widespread hospice fraud scheme in California that investigators say is costing taxpayers hundreds of millions of dollars each year while preventing some patients from receiving legitimate medical treatment.

During his report, Yamaguchi described how the fraud operates, explaining that criminals obtain Medicare identification numbers and use them to enroll people in hospice care without their knowledge.

Once the individuals are falsely registered as hospice patients, companies bill Medicare for services that are never provided.

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“The government thinks this woman is dying in hospice care, but she just humiliated me, schooled me on the pickleball court. She’s definitely not dying. She is a victim, though, of hospice fraud,” Yamaguchi said while describing one case that highlighted the problem.

He said the scheme has become a significant financial drain on the federal health care program.

“So hospice fraud costs taxpayers hundreds of millions of dollars every year, and California is ground zero,” Yamaguchi said, adding that the fraud typically begins with stolen Medicare numbers.

“So basically, people steal Medicare numbers. They enroll them in hospices and then Bill for 10s, sometimes hundreds of 1000s of dollars.”

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According to Yamaguchi’s investigation, a large number of hospice providers operating in Los Angeles County show signs that they may be involved in fraudulent activity.

“So over 700 of the roughly 1800 hospices in LA County trigger multiple red flags for possible fraud,” Yamaguchi said.

His team attempted to verify the operations of those businesses by visiting listed locations across the county.

“So we went door to door, and what we found was empty office spaces, piled up mail and not a single health care worker in sight,” Yamaguchi said.

The concentration of hospice companies in certain areas raised additional concerns.

In one area of Los Angeles County, hundreds of hospice agencies appear to be clustered within a small geographic area.

“There’s even a stretch in LA with 500 registered hospice companies within just three miles of each other,” Yamaguchi said.

He also reported that investigators found a single building listing dozens of hospice companies.

“In fact, there’s even a single building with 89 registered hospice companies.”

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