Federal and California Crackdowns Target Massive Southern California Hospice and Health‑Care Fraud Schemes
Federal and California authorities have launched coordinated crackdowns on sprawling Southern California hospice and health‑care fraud schemes, including the guilty plea of Paul Richard Randall for a Medi‑Cal scheme that billed more than $269 million (paid over $178 million), state charges in "Operation Skip Trace" alleging $267 million stolen through straw‑owned licensed hospices and fake patient enrollments, and CMS’s revocation of Dr. Rajiv Bhuva’s Medicare billing rights tied to $71.7 million in hospice reimbursements. Prosecutors say fraudsters bought identities on the dark web, laundered kickbacks, exploited temporary Medi‑Cal rule changes to submit massive claims for unnecessary or unprovided drugs and services, and enrolled non‑existent patients at dozens of facilities, and authorities are now investigating hundreds of hospices amid intensified federal‑state enforcement and political scrutiny.
📌 Key Facts
- Paul Richard Randall, 66, of Orange, 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; prosecutors say he exploited a temporary Medi‑Cal rule that removed pre‑approval requirements to submit massive claims for non‑contracted, unnecessary or unprovided drugs through a controlled pharmacy, laundered proceeds to pay kickbacks and conceal transactions, and faces a statutory maximum of 30 years (sentencing scheduled for August).
- California Attorney General Rob Bonta announced state charges against 21 suspects and the arrests of five people in 'Operation Skip Trace,' an alleged hospice fraud ring that prosecutors say stole $267 million from Medi‑Cal by buying out‑of‑state identities on the dark web, enrolling those identities in Medi‑Cal, using straw owners to acquire 14 licensed hospice companies, and billing for hospice services never provided at non‑existent facilities.
- Officials emphasized that the hospice companies named in the state complaints were properly state‑licensed and approved to bill Medi‑Cal—highlighting that fraudsters exploited gaps in licensing and oversight rather than operating entirely outside the system.
- California’s Department of Health Care Services is investigating more than 300 hospices for possible license revocation; a CBS analysis found over 700 of roughly 1,800 Los Angeles County hospices trigger multiple state‑defined fraud red flags, and state auditors warn that physicians or administrators working for more than three hospice providers is an indicator of potential fraud.
- CMS Administrator Dr. Mehmet Oz revoked Los Angeles physician Dr. Rajiv Bhuva’s ability to bill Medicare after he was tied to 2,791 hospice claims in 2024 across 126 hospices (115 in LA County), which generated $71.7 million in Medicare reimbursements—far above the California audit benchmark of about 140 patients per hospice doctor annually.
- Another high‑billing physician, Domingo Barrientos, received about $90.3 million in reimbursements and was convicted in 2024 of conspiracy to commit health‑care fraud, illustrating a broader pattern of large‑scale hospice billing abuses that have prompted federal and state enforcement actions.
- Federal officials link these cases to a broader pattern of California health‑care fraud (including 'Operation Never Say Die') and to an uptick in hospice/provider suspensions under a Republican‑led anti‑fraud push; the enforcement has generated partisan and social‑media backlash (labels such as 'Fraud Capital' and criticism of Governor Newsom), while state leaders contend health‑care fraud occurs across all 50 states regardless of party.
📊 Relevant Data
As of December 2025, Hispanic individuals comprise 51.7% of Medi-Cal certified eligibles in California (7,445,000 out of 14,403,770), compared to approximately 40% of the state's population; White individuals are 15.7% (2,256,003), versus 35% of population; African-American 6.7% (971,289) versus 6%; Asian/Pacific Islander 9.7% (1,395,393) versus 15%.
Medi-Cal Monthly Eligible Fast Facts — California Department of Health Care Services
Lower educational attainment, low household wealth, and Medicaid enrollment are associated with reduced odds of hospice use, with interaction effects showing these socioeconomic factors contribute to racial/ethnic disparities in hospice utilization among Medicare beneficiaries.
Racial and Socioeconomic Disparities in Hospice Utilization Among Medicare Beneficiaries — American Journal of Hospice and Palliative Medicine (SAGE Journals)
The Centers for Medicare & Medicaid Services administrator stated there was approximately $3.5 billion in fraud in the hospice and home health care industry in Los Angeles County alone.
Oz Says California's Not Fighting Health Care Fraud, but Data Shows It's Part of a Larger Battle — KFF Health News
📊 Analysis & Commentary (1)
"The piece criticizes California as a magnet for large‑scale hospice and health‑care fraud, argues federal CMS/DOJ crackdowns are justified, and calls for structural fixes—stronger audits, tighter rules and accountability—while warning against politicized or overbroad enforcement."
📰 Source Timeline (4)
Follow how coverage of this story developed over time
- California Attorney General Rob Bonta announced state charges against 21 suspects and the arrests of five people in 'Operation Skip Trace,' an alleged hospice fraud ring that prosecutors say stole $267 million from Medi-Cal.
- According to the California DOJ, the scheme involved buying non-California residents’ identities off the dark web, enrolling them in Medi-Cal, having straw owners acquire 14 licensed hospice companies, and billing for hospice services that were never provided at non-existent facilities.
- California’s Department of Health Care Services says it is actively investigating more than 300 hospices for possible license revocation, and a CBS News analysis found that over 700 of roughly 1,800 hospices in Los Angeles County trigger multiple state-defined fraud red flags.
- Officials detailed that all the hospice companies named in the state complaints were properly state-licensed and approved to bill Medi-Cal, underscoring how fraudsters exploited gaps in licensing and oversight rather than operating entirely in the shadows.
- State officials explicitly framed the crackdown as part of a tense federal–state environment in which a Republican-led federal government is publicly targeting fraud in Democratic states, while Bonta emphasized that health-care fraud crosses partisan lines and occurs in 'all 50 states, red and blue.'
- 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."