HOSPICE FRAUD

Emily K. Abel

Mehmet Oz, formerly a widely ridiculed TV presenter who failed to disclose the millions of dollars he made from hawking supplements and now the Administrator of the Centers for Medicare and Medicaid Services, has set his sights on hospices. In line with JD Vance’s campaign against fraud, he recently announced a six-month moratorium on new hospices. “We’ve seen systematic and deeply troubling fraud,” he explained, “with bad actors exploiting some of our most vulnerable Medicare patients and stealing money from the American taxpayer. This is about protecting patients, restoring integrity, and safeguarding taxpayer dollars.”

Living in Los Angeles, I am acutely aware of the problem of hospice fraud. According to a March 2026 CBS News report, the number of hospice organizations in the county increased 1,500 percent between 2010 and 2022—more than six times the national average. In one year alone, LA county hospices overbilled Medicare by approximately $105 million. CBS investigators found 89 licensed hospice companies in one three-story building in Van Nuys, a neighborhood in the San Fernando Valley. Some are “ghost agencies,” charging Medicare for patients who receive no care.

What Oz fails to examine is a major reason why fraud is so prevalent in the hospice industry—the corporatization of long-term care services and especially the rapid growth of private equity (PE), a trend the Trump administration encourages. For-profit entities, including national chains and private equity firms, now own 72 percent of nursing homes, 84 of home-health agencies, and 74 percent of hospices. The growth of for-profit hospices is especially disturbing because hospices emerged from the social reform movements of the 1960s and early 1970s and for many years embodied the high ideals of the founders, delivering a compassionate alternative to high-tech hospital care for people near the end of life.

The history of US hospices begins with the 1963 visit by the British doctor Cecily Saunders. Saunders lectured widely about her research on pain control and her vision for St. Christopher’s in the Field, the hospice she soon established in England. Her talk at Yale had a profound impact on Florence Schorske Wald, the dean of the Yale School of Nursing, who remained in contact with Saunders for many years. In 1974 Wald and her colleagues established Hospice, Inc. (soon renamed the Connecticut Hospice) in New Haven. Wald then traveled frequently throughout the country, promoting the hospice philosophy. By the early 1980s, hundreds of hospices were in existence throughout the country.

We can explain the eager embrace of the hospice ideal in several ways. Elisabeth Kubler-Ross’s On Death and Dying appeared in 1969, publicizing longstanding critiques of American care for dying people, which hospices sought to address. Moreover, the hospice movement arose during a period of widespread social reform. Wald and her colleagues participated actively in social movements. As Wald later remarked, “during the course of our original research [for Hospice, Inc.], we were as apt to meet at vigils for peace, meetings in the black ghettoes of New Haven on behalf of their civil rights as we were in corridors, clinics, and meeting rooms of the medical center.” And various other groups challenged the established order by organizing what were called “counterinstitutions,” such as free schools, food cooperatives, and alternative newspapers.

One especially important similarity between hospices and other counterinstitutions was an initial indifference to finances. That cavalier attitude stemmed partly from a belief that a crass concern with money was antithetical to the hospice mission. Moreover, hospice leaders understood that all money comes with strings attached. Believing that traditional third-party payers had distorted the health care system, some of the first hospices relied entirely on volunteers and philanthropic funding.

But hospices could never separate completely from the health care system because they relied on it for resources, political acceptance and personnel. As a result, hospices gradually accommodated themselves to the established order and lost much of their distinctiveness.

More than any other event, the addition of hospices as a covered Medicare benefit in the 1983 Tax, Equity and Fiscal Responsibility Act (TEFRA) moved hospices into the mainstream. The legislation created a bureaucratic structure, imposing rigid rules on programs that had prided themselves on innovation and diversity. Growing popular support for hospice ideals undoubtedly facilitated the passage of the benefit. But that outcome was ensured by a Congressional Budget Office report, concluding that the government could save as much as $1,120 for each Medicare recipient who enrolled in hospice. Legislators set the hospice payment at 75 percent of the average cost for Medicare beneficiaries in the hospital, subsequently reducing it to 40 percent. The savings were to come from family carers. Robert Dole, who introduced the hospice provision in the Senate, later asserted that its passage “was possible because many believe, as I do, that it is less costly to care for a patient at home, foregoing expensive hospital treatment.” To many advocates of the hospice benefit, family members primarily represented a cheap form of labor. (Today, family members are often shocked to realize how inadequate hospice services are. “We send very, very sick, complicated patients [home] under the care of family members who are not trained professionals,” stated Diane Meier, a physician and professor of geriatrics and palliative care. “They are on call 24/7 and have to be alert to changes at all times. They don’t get to go home after an eight-hour shift.” Most hospices provide just one hour of care a day. The rest of the time, Meier concluded, “The family is on its own.”)

TEFRA also accelerated the transformation of a movement into an industry. Shortly after TEFRA’s enactment, a former president of the National Hospice Organization announced plans to open a chain of for-profit hospices. Since then, the number of for-profit institutions has steadily grown. By 2012, more than half of the agencies then in existence were for-profits; since then, the proportion has steadily increased.

As the number of for-profit hospices has grown, criticisms of their quality of care steadily accumulate. Megan Stainer, a licensed practical nurse, told New York Times reporter Paula Span that she always knew whether the dying people she cared for were enrolled in for-profit hospices or nonprofit ones. “There really were stark differences,” she said, “the nonprofit patients always had the most visits: nurses, chaplains, social workers.” Moreover, the nonprofit facilities always responded quickly to requests for medical equipment and supplies: “If you called and said, ’I need a specialized bed,’ with for-profits it could take days—days when the patient is in a bed that’s uncomfortable.” A 2023 RAND Corporation study helped to substantiate Stainer’s charges. The researchers found that family carers reported “substantially worse” experiences in for-profit hospices than in nonprofit ones. An October 2025 article in Health Affairs reported that private equity-owned hospices earn higher profits while spending less on patient care than other for-profit hospices.

Other reports have found that fraud occurs most frequently in for-profit hospices, especially those owned by private equity firms. The political scientist Laura Katz Olson explains why that is the case: “Hospice reimbursements are based on a fixed daily rate, regardless of a patient’s needs or what services are actually delivered. This is fodder for PE firms, which can seek out the most profitable patients, curtail services, and turn a blind eye to quality, all without financial or other penalties. Hospice is heaven-sent for the PE model.”

Oz’s battle against hospice fraud should begin by focusing on the financial incentives that encourage unscrupulous providers to enroll people who are not terminally ill, offer kickbacks to physicians, and promise services that fail to arrive. By encouraging the growth of for-profit organizations and attacking non-profit ones, the Trump administration encourages the fraud the regime claims it wants to eliminate.

Sources:

Andrea Sankar with C. M. Cassady, Dying at Home: Family Guide for Caregiving, third edition (Johns Hopkins University, 2024).

Emily K. Abel, Elder Care in Crisis: How the Social Safety Net Fails Families (New York University Press, 2022).

Emily K. Abel, Living in Death’s Shadow: Family Experiences of Terminal Care and Irreplaceable Loss (Johns Hopkins University Press, 2017).

Emily K. Abel, Prelude to Hospice: Florence Wald, Dying People, and Their Families (Rutgers University Press, 2018).

Laura Katz Olson, Ethically Challenged: Private Equity Storms US Health Care (Johns Hopkins University Press, 2022), 158.

Kim Christensen and Ben Poston, “End-of Life Care Has Boomed in California. So has Fraud Targeting Older Americans,” Los Angeles Times, December 9, 2020.

Ava Kofman, “How Hospice Became a For-Profit Hustle,” New Yorker, December 5, 2020.

Paula Span, “Hospice Is a Profitable Business, but Nonprofits Mostly Do a Better Job,” New York Times, July 10, 2023.

RAND Corporation, “Care Experiences Are Worse in For-Profit Hospices than in Not-for-Profit Hospices,” February 27, 2023, www.rand.org.

Laura M. Waters and Patricia Moyle Wright, “Hospice Fraud: Predicting Ability and Intent,” Illness, Crisis, and Loss, 3, no. 2 (1924).

Alexander Soltoff, Dunc Williams, and Robert Tyler Braun, “Private Equity-Owned Hospices Report Highest Profits, Lowest Patient Care Spending Compared with Other Ownership Models,” Health Affairs, 44, no. 10 (October 2025).

Rachel Gold, et al., “We Visited “Ground Zero” for Hospice Fraud: Los Angeles California,” CBS News, March 10, 2026.

Laura Geller, et al., “State Records Show 89 Hospice Companies at One Los Angeles Office Place. We Went to Look for Ourselves,” CBS News, March 19, 2026.

Emily K. Abel is Professor Emerita at the UCLA Fielding School of Public Health. Her book, Listening to Dementia: Advocating for Dignity and Autonomy, is forthcoming New York University Press in August 2026.