Ghost Hospice Scam Drains $100M

California’s “ghost hospice” scandal at a single Van Nuys building exposes how Newsom’s lax oversight drained over $100 million in taxpayer Medicare dollars, now prompting President Trump’s federal crackdown.

Story Highlights

One dilapidated 32,000 sq ft building houses 89-197 hospice agencies, far exceeding physical capacity and violating federal office requirements.
LA County hospice providers surged 1,500% since 2010, six times national average, fueling organized fraud networks billing Medicare without patients.
Assemblywoman Macedo demands emergency regulations from Gov. Newsom after finding no patients or staff in the overcrowded site.
President Trump launches fraud task force led by VP Vance to combat $100M+ scam, overriding state failures.
State license moratorium extended to 2027 amid 400+ federal violations and minimal CDPH enforcement.

Van Nuys Building: Epicenter of Hospice Fraud

Merabi Professional Medical Plaza in Van Nuys, California, registers 147 agencies including 50 hospices and 97 home health providers, per state records. Reports vary from 89 to 197 hospice agencies alone. The three-story, 32,000-square-foot structure markets virtual offices, yet federal rules demand physical presence for hospice operations. Investigators observed no patients, staff, or accessibility features like ramps. Building owner Kambiz Merabi claims only 12 agencies operate physically, defending the rest as legitimate virtual setups. This extreme concentration signals “ground zero” for Los Angeles County fraud.

Explosive Growth and Regulatory Failures

Los Angeles County hospice agencies exploded 1,500% from 2010 to 2019, reaching 1,800 providers by 2026—six-and-a-half times the national average relative to elderly population. Medicare billing soared, with up to $74,000 per patient amid weak California Department of Public Health (CDPH) licensing. A 2022 State Auditor report flagged over 150 agencies at Merabi Plaza, organized fraud networks using sham providers, straw owners, and stolen identities. CDPH ignored 2,100 complaints from 2015-2021, including 350 fraud allegations, issuing just seven enforcement actions since 2022.

Federal Scrutiny and State Inaction

Centers for Medicare & Medicaid Services (CMS) inspected the building multiple times from 2021-2025, citing 400 violations across 75 companies. Federal probes uncovered $16 million schemes, with Van Nuys hosting violators for years. On March 11, 2026, Assemblywoman Alexandra Macedo (R-Tulare) probed the site, counted 197 agencies, deemed it dilapidated, and urged Gov. Gavin Newsom for overdue emergency regulations promised by January 2026. Republican lawmakers co-signed her letter, criticizing Newsom’s administration for delays despite 280 revocations touted in January.

Trump Administration Steps In

President Trump authorized a federal fraud task force on March 16, 2026, led by VP JD Vance, targeting ghost hospices nationwide. A March 13 PGurus report linked Van Nuys to over $100 million in suspicious Medicare billing. Statewide hospice license moratorium extends to 2027. Over 700 LA County hospices show three or more fraud flags like shared staff and zero patients yet active billing. This federal action protects taxpayers and vulnerable seniors from state-level mismanagement eroding trust in essential care.

Impacts on Taxpayers and Patients

Terminal patients and families in LA County face risks from unqualified providers amid 29,000 hospices versus national norms. Taxpayers bear $100 million-plus losses from overbilling. Short-term probes disrupt scams but highlight patient endangerment; long-term regulations curb fraud yet burden legitimate rural operators. The scandal underscores national ghost hospice patterns, with California as epicenter, demanding stronger identity verification and complaint investigations to safeguard Medicare integrity and conservative values of fiscal responsibility.