The landscape for hospice care in the United States has shifted dramatically. As of April 15, 2026, federal and state enforcement data signals a pivotal moment: the “light-touch” era is officially over. With over $530 million in alleged losses tracked in the last 12 months, providers are now under the most intense scrutiny in the history of the Medicare hospice benefit.
The Enforcement Epicenter: California’s Billion-Dollar Crackdown
While enforcement is nationwide, California remains the focal point for the most egregious schemes.
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Operation Skip Trace ($267M): In April 2026, state authorities dismantled a massive ring involving 14 sham hospices that billed for services never rendered. The scheme used stolen dark-web identities to enroll “patients” in Medi-Cal who were often unaware they were even in hospice.
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Massive Administrative Action: CMS simultaneously suspended billing for more than 221 Los Angeles-area providers in early April 2026—a move intended to halt the flow of taxpayer dollars to suspected “ghost” entities.
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A Growing Takedown: This effort was part of the Operation Never Say Die coordinated takedown, which involved five simultaneous California cases alleging over $50 million in fraud.
The “Non-Terminal” Epidemic and Dominant Fraud Schemes
A defining feature of the 2025–2026 enforcement cycle is the widespread abuse of the hospice benefit through specific, recurring criminal strategies.
The most pervasive fraud scheme, observed in nearly every tracked case, is the enrollment of non-terminal patients. These are patients who are not actually dying, yet they are signed up for hospice care—sometimes without ever being aware they are receiving end-of-life services. Closely tied to this is the widespread use of money laundering, occurring in 9 of the analyzed cases. In these instances, criminal proceeds are laundered through shell companies, real estate purchases, luxury vehicles, and even private school tuition payments.
Additionally, many schemes rely on illegal kickbacks paid to marketers and physicians. In 8 of the cases, investigators found that cash, checks, or monthly per-patient payments were given to recruiters and doctors in exchange for referrals and false medical certifications. “Sham” hospice operations and “ghost billing” also occurred in 7 cases, where entities operated as shells with no real clinical activity, billing for services and diagnostic testing that were never provided. Finally, identity theft and straw ownership were present in 5 cases, frequently involving the use of dark-web personally identifiable information (PII) to create fake Medicare beneficiaries or using foreign nationals as nominee owners.
The High Cost of Non-Compliance: Dr. Rajiv Bhuva
One of the most striking findings involves Dr. Rajiv Bhuva of Los Angeles. While no criminal charges have been filed, CMS took the rare step of revoking his Medicare billing privileges in March 2026. His name was tied to $71.7 million in claims in 2024 across 126 different hospices—a volume 20 times the state average. Most alarmingly, fewer than 2% of the 2,791 patients listed under his name actually died.
Looking Forward: A Warning for Providers
The massive scale of the 2025 National Health Care Fraud Takedown, which included 324 defendants and $14.6 billion in total fraud, shows that authorities are utilizing more data than ever to catch bad actors.
For legitimate hospice agencies, this environment demands a proactive approach. Compliance is no longer just about clinical quality; it is about rigorous documentation, auditing referral sources, and ensuring that every patient on service truly meets the terminal eligibility requirements.
Lund Person & Associates provides expert guidance for hospice providers navigating this complex regulatory landscape. We help you build a culture of compliance that protects both your agency and your patients.