On February 25th, 2022

Fourteen Arrested in $4.2 Million Hospice Scam in Inland Empire A California DOJ-led investigation with assistance from EDD

“State agents and investigators, along with assistance from federal investigators worked this case to protect our citizens from harm and to protect state and federal programs that are designed to assist.  These investigations can be lengthy and complicated.  In this case, the investigative work resulted in the arrests of 14 individuals.” -CSLEA President Alan Barcelona

RANCHO CUCAMONGA – On February 24, 2022, the California Attorney General’s Office announced the arrests of 14 people who were charged in San Bernardino County Superior Court in connection with two hospice companies accused of stealing more than $4.2 million from the federal Medicare and state Medi-Cal programs.

Based on an investigation, New Hope Hospice, Inc. and Sterling Hospice Care, Inc. in San Bernardino County, are accused of enrolling patients who were not terminally ill into hospice care, many of whom told investigators that they were enrolled without their knowledge or understanding of what hospice was.

All of the arrested defendants face multiple felony counts including conspiracy to commit insurance fraud, insurance fraud, grand theft, and fraudulent insurance claims, with some defendants also facing charges related to identity theft, money laundering, and tax evasion. Two defendants remained at large.

“End-of-life care is a difficult process for families to endure, and patients should be able to trust that their hospice providers are acting in good faith,” said Attorney General Rob Bonta. “The crimes allegedly committed by the defendants against their patients, Medicare, and our state’s Medi-Cal program will not be tolerated. My office is committed to protecting the well-being of Californians and prosecuting those who abuse the financial integrity of our healthcare system.”

An investigation led by the California Department of Justice and assisted by the U.S. Department of Health and Human Services Office of the Inspector General and the California Employment Development Department revealed that from 2015 to 2021, the defendants allegedly billed Medicare and Medi-Cal for millions of dollars, fraudulently claiming that they were providing hospice care to patients who had less than six months to live when in fact these patients were not terminally ill. Each of the defendants allegedly played a role in the scam, which consisted of: paying illegal kickbacks to recruit patients for hospice care, including patients who did not qualify for hospice because they were not terminally ill; taking patient identity information and using it to put them in hospice without their knowledge; falsely representing to patients what services they would be receiving; and billing patients with one company, only to switch them to the other company in order to avoid detection.

When a patient is enrolled in hospice care, they give up their opportunity under the Medicare and Medi-Cal programs to receive medical treatment to prolong their life, such as chemotherapy for cancer patients. As a result of the defendants’ alleged actions, numerous ineligible patients were incorrectly certified as terminally ill and tricked into receiving hospice services, which would have made access to potentially lifesaving medical care difficult in the event that any of them required it.

The case was investigated by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA).

A copy of the complaint is available here.

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