Graft in the Golden State

Minnesota child care fraud, meet California Medicaid fraud.

Taxpayers across America were rightly shocked several months ago when they learned about the rampant waste, fraud, and abuse taking place in Minnesota’s government-funded child care system, and by the potential complicity of government officials who should have known better and done something about it.

But in a state the size of California, the numbers are exponentially larger and even more shocking. Last week, thanks to an impressive bit of investigative journalism by the new crew at CBS News, we learned that hundreds of millions of dollars may be flowing through illegal hospice fraud in Los Angeles County.

Three years ago, a state audit “estimated LA County hospices overbilled Medicare by $105 million in a single year,” leading to 280 license revocations. CBS’s conclusion last week: “CBS News examined the business and financial records of every hospice currently operating in LA County, applying the same indicators identified by the state. Indications of fraud have not stopped. In fact, they’ve grown. The CBS News analysis reveals that over 700 of the roughly 1,800 hospices in LA County, trigger multiple red flags for fraud as defined by the state.” Let that sink in: Over one-third of hospices had multiple red flags for fraud, such as overlapping addresses or employees or high rates of hospice clients who were discharged alive.

CBS then went out and did the hard work of reporting: “CBS News reached out to the 56 hospice offices whose state and federal data indicate they have five or more red flags. Many of the phone numbers were either disconnected or went straight to voicemail. One instructed the caller to text a different number, which turned out to be invalid.” That’s not quite as bad as a day care named “Quality Learing Center,” but it’s close.

This isn’t the only such recent revelation. In late January, the Center for Medicaid & Medicare Services revealed it had found over $1.3 billion in federal funds spent on non-emergency care for illegal immigrants. As explained by California Republican Congresswoman (yes, a few of those still exist) Young Kim, “Federal law, including the Personal Responsibility and Work Opportunity Reconciliation Act, bars illegal aliens from accessing most federal benefits, including Medicaid.” The law she references is more popularly known as the 1996 welfare reform law, a bipartisan achievement signed by President Bill Clinton, back when blue-collar union Democrats opposed mass waves of illegal immigration. CMS is demanding a refund of the missed millions.

Sadly, widespread fraud is par for the course in California. In January, the state was rocked by revelations that Lifeline, the federal program for low-income people in need of phone service (anyone remember 2012’s “Obamaphone” lady?), was reimbursing phone service for scores of dead people. The inspector general’s report comes on the heels of a decision by the federal agency charged with overseeing Lifeline to strip California of its right to administer the program using its own systems separate from the federal eligibility verification checks. Federal Communications Commission Chairman Brendan Carr, a hard-charging agency head closely tied to President Trump, is now considering new rules to tighten eligibility and anti-fraud safeguards in the program nationwide.

All of this will doubtless continue to grab national headlines as California Gov. Gavin Newsom explores a run for the Democratic nomination for president in 2028.

As taxpayers, we should expect basic program integrity from our government. We work hard for our money and then turn over about a third of our income to fund all these programs. Even with a safety net, there’s no excuse for widespread fraud like this.

And it’s especially disappointing to see fraud in hospice programs. Hospice was a great gift from the church to our civilization, a dignified way to meet our Maker in the comfort of our own homes instead of hospitals, surrounded by care and compassion rather than tubes and white lab coats. We can hope this newest round of news stories will prompt better behavior across the industry, some jail time for the worst offenders, and a restoration of trust for a world craving peace and dignity at the end of life.