Federal and CMS Crackdowns Target Southern California Hospice and Health‑Care Fraud Schemes
Federal prosecutors and CMS have intensified crackdowns on Southern California hospice and health‑care fraud after investigations exposed schemes that allegedly lured healthy patients into a roughly $50 million hospice scam, paid cash kickbacks and submitted millions in improper Medicare and Medi‑Cal claims. Actions include the guilty plea of Paul Richard Randall for a scheme that billed Medi‑Cal more than $269 million (paid over $178 million) by exploiting a temporary drug pre‑approval waiver and laundering proceeds, and CMS’s revocation of Dr. Rajiv Bhuva’s Medicare billing privileges after his name was tied to $71.7 million in 2024 hospice claims across 126 hospices—part of a broader pattern of prosecutions and hospice suspensions in California.
📌 Key Facts
- Paul Richard Randall, 66, of Orange, California, pleaded guilty to one count of wire fraud for a scheme that billed California’s Medi‑Cal program more than $269 million and was paid over $178 million; prosecutors say he laundered proceeds through a third party to pay kickbacks and conceal transactions, he faces a statutory maximum of 30 years and is scheduled to be sentenced in August.
- Prosecutors say Randall’s scheme exploited a temporary Medi‑Cal rule change that removed pre‑approval requirements for certain expensive drugs, using a controlled pharmacy to submit massive claims for non‑contracted drugs that were not medically necessary, not provided, or both.
- Federal officials and prosecutors described Randall’s conduct as using a public health program as a “personal piggy bank,” linked the case to President Trump’s broader 'war on fraud,' and said it fits a pattern of California health‑care fraud investigated alongside efforts such as “Operation Never Say Die” and increased hospice/provider suspensions under an anti‑fraud task force led by Vice President JD Vance.
- CMS Administrator Dr. Mehmet Oz revoked Medicare billing privileges in March 2026 for Los Angeles physician Dr. Rajiv Bhuva after his name was tied to 2,791 hospice claims in 2024 across 126 hospices (115 in Los Angeles County), generating $71.7 million in Medicare reimbursements — a volume far above benchmarks.
- Audit benchmarks (CBS/California) show an average California hospice doctor manages about 140 patients annually, and state auditors warn that physicians or administrators working for more than three hospice providers at once is an indicator of potential fraud — factors cited in scrutiny of high‑volume hospice billing.
- California’s role is contested: Gov. Gavin Newsom’s office framed the matter as a federal responsibility because it involves Medicare billing, while critics note the state licenses hospices that can enroll in Medicare and point to state oversight responsibilities.
- Social media and conservative commentators reacted by branding California the “Fraud Capital” and describing Governor Newsom’s system as an “empire of fraud,” reflecting political backlash to the enforcement actions.
- Separately, another high‑billing California hospice doctor, Domingo Barrientos, received about $90.3 million in reimbursements and was convicted in 2024 of conspiracy to commit health‑care fraud, cited by officials as part of the broader pattern of hospice fraud in the state.
📊 Relevant Data
In 2023, hospice use rates among Medicare decedents increased across racial and ethnic groups, with rates at 53.8% for White individuals, 41.2% for Black individuals, 38.9% for Hispanic individuals, 47.1% for Asian American individuals, and 41.5% for North American Native individuals, compared to a national average of 51.6%.
Hispanic and non-Hispanic Black individuals had the lowest odds of receiving hospice care among Medicare decedents from 2016 to 2020, with adjusted odds ratios of 0.57 for Hispanic and 0.65 for non-Hispanic Black compared to non-Hispanic White, and Hispanic individuals had the highest odds of short hospice stays (OR 1.34).
Racial and Ethnic Differences in Hospice Use Among Medicare Fee-for-Service Decedents: 2016-2020 — JAMA Network
California's weak controls over hospice licensing and oversight have created opportunities for fraud, including the use of stolen medical provider identities and billing for ineligible patients, with over 500 hospices flagged for fraud indicators in a 2022 state audit.
Report 2021-123 - California State Auditor — California State Auditor
Nationally in fiscal year 2024, 55.0% of individuals sentenced for health care fraud were White, 19.2% Hispanic, 15.4% Black, and 10.4% other races, with population percentages approximately 59% White, 19% Hispanic, 13% Black, and 9% other, indicating a per capita overrepresentation for Black individuals (1.18 times population share).
Quick Facts on Health Care Fraud Offenses — United States Sentencing Commission
📰 Source Timeline (3)
Follow how coverage of this story developed over time
- CMS Administrator Dr. Mehmet Oz revoked California physician Dr. Rajiv Bhuva’s ability to bill Medicare in March 2026.
- Bhuva’s name was tied to 2,791 hospice claims in 2024 across 126 hospices (115 in Los Angeles County), generating $71.7 million in Medicare reimbursements.
- CBS/California audit benchmarks show an average California hospice doctor handles about 140 patients annually, highlighting how Bhuva’s volume far exceeded norms.
- California state auditors have warned that physicians or administrators working for more than three hospice providers at once is an indicator of potential fraud.
- Gov. Gavin Newsom’s office publicly framed the matter as a federal responsibility on Medicare billing while critics note the state’s role in licensing hospices that can enroll in Medicare.
- Another high‑billing California hospice doctor, Domingo Barrientos, received about $90.3 million in reimbursements and was convicted in 2024 of conspiracy to commit health‑care fraud.
- Reports that Paul Richard Randall, 66, of Orange, California, pleaded guilty to one count of wire fraud for a scheme that billed Medi‑Cal more than $269 million and was paid over $178 million.
- Details that the scheme exploited a temporary Medi‑Cal rule change eliminating pre-approval requirements for certain expensive drugs, allowing use of a controlled pharmacy to submit massive claims for non-contracted drugs that were not medically necessary, not provided, or both.
- Describes laundering of proceeds through a third party to pay kickbacks and conceal transactions; notes Randall faces a statutory maximum of 30 years in federal prison with sentencing scheduled for August.
- Includes a quote from First Assistant U.S. Attorney Bill Essayli saying the defendant used a public health program as his "personal piggy bank" and links the case to President Trump’s 'war on fraud.'
- Notes that federal officials tie this case to a pattern of California health-care fraud, alongside "Operation Never Say Die" and an uptick in hospice and provider suspensions under Vice President JD Vance’s anti-fraud task force.
- Captures social media reaction, with conservative politicians and commentators branding California the "Fraud Capital" and calling Gov. Gavin Newsom’s system an "empire of fraud."