The California Department of Justice (CalDOJ), along with multiple state agencies, arrested five individuals on Wednesday as part of a massive crackdown on an alleged hospice fraud network. Officials said that more arrests are expected as multiple suspects have received notices to appear in court.
In total, 21 suspects have been charged with conspiracy to commit health care fraud, health care fraud, identity theft, and money laundering. Additional charges include aggravated white-collar crimes, which involve financial harm rather than physical force.
Officials said suspects who fail to appear in court could face additional penalties. California Attorney General Rob Bonta said the network is suspected of defrauding the state of $267 million through fraudulent billing to Medi-Cal, California’s Medicaid program.
According to AOL. Americans contribute to the program through taxes and premiums, so such fraud effectively steals from taxpayers across the United States.
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According to GoodRx, Medicare is a federal health insurance program in the United States for people age 65 or older and younger people with disabilities. Some people may choose to keep Medicare as their primary form of insurance after retirement. In contrast, others can make it their secondary payer.
A citizen’s Social Security history, managed by the Social Security Administration (SSA), usually determines if they can acquire it. Those who qualify can apply before they turn 65.
Similarly, Medi-Cal is California’s Medicaid program. It provides free or low-cost health insurance to low-income individuals or families at 138% of the Federal Poverty Level (FPL) and children at or below 266% FPL, including pregnant women. Consequently, Bonta highlighted the importance of crackdowns made possible by proper police enforcement, caution, and courage.
“What will address fraud is us doing the hard work — heads down, sleeves rolled up, doing the investigation, doing the arrests, doing the prosecutions, holding folks accountable,” he told CBS News.
Bonta further said the accused collected funds without providing any legitimate hospice care services. The coordinated law enforcement initiative, dubbed Operation Skip Trace, hunted down 10 sites across Southern California and busted their network.
During the search, investigators revealed that individuals obtained personal identifying information of non-California residents via the dark web and used it to falsely enrol in Medi-Cal. They then used these identities to purchase 14 hospice businesses, and billers submitted claims for hospice services.
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All of the hospice companies named in the complaints were officially licensed and approved by the California Health and Human Services Agency to bill Medi-Cal.
“There were no real services, no actual hospice facilities, and no legitimate documentation—it was entirely fabricated as part of a criminal operation,” General Bonta said.
Meanwhile, Tyler Sadwith, chief deputy director of health care programs and the state’s Medicaid director, told CBS News that more than 300 providers are currently under investigation and could face license revocation in case they are found guilty.
“Taxpayers have every right to expect that this program is managed with integrity,” Sadwith said as CBS News reviewed records for months and found that over 700 of the approximately 1,800 hospices in Los Angeles County showed multiple warning signs consistent with potential fraud.
On February 6, Donald Trump announced the launch of TrumpRx, a website that aims to help people buy prescription drugs directly at slashed prices.
The 79- year old president called the initiative “transformative” and claimed that “dozens of commonly prescribed prescription drugs will be available at dramatic discounts for all consumers.”
“You’re going to see numbers that you’re not going to believe,” Trump said of the lower drug prices available on the website, he added.
