California Hospice Fraud Scandal Boosts GOP Efforts to Secure Pivotal House Seat

Amid growing accusations of hospice fraud in California, Republican congressional candidate Jenny Rae Le Roux is criticizing state officials, accusing them of negligence in oversight that allowed the issue to spiral.

Le Roux stated to Fox News Digital, “Every dollar disbursed to these practice centers came from the State of California, and every oversight failure—100% of it—falls on the state. Although the federal government had to step in to address what Gavin Newsom should have, this remains primarily a California issue.”

Governor Gavin Newsom’s office has refuted claims of inaction, insisting that enforcement is a federal responsibility.

In a response to a CBS report on hospice fraud, Newsom’s press office tweeted, “FACT: The state has no role in the Medicare billing or payment process. We’re pleased the Trump Administration is tackling fraud. If only Trump would stop pardoning fraudsters and hold them accountable, that would be great!”

While California does not handle Medicare payments, it does license hospice providers, thereby determining which organizations can participate in the federal program.

The state has faced significant accusations of hospice fraud, leading to federal intervention. CBS News discovered that out of approximately 1,800 hospices in Los Angeles County, 742 continued to operate despite numerous warnings. In one specific area, nearly 500 hospice businesses were clustered within a three-mile radius.

In March 2022, the California state auditor warned Newsom and state lawmakers of “a rapid increase in the number of hospice agencies with no clear correlation to increased need,” along with concerns about geographic clustering, long patient stays, high discharge rates and the possible use of stolen identities.

Earlier this month, the U.S. Attorney’s Office for the Central District of California arrested eight people in a healthcare fraud sting. The office said in its announcement of the arrests, which were carried out in coordination with the Vice President’s Task Force to Eliminate Fraud, that the defendants allegedly “schemed to defraud the nation’s health care system out of more than $50 million.” Part of the scheme, according to the office, included “running sham hospice care facilities.”

On April 9, Newsom and California Attorney General Rob Bonta announced that the state was “taking decisive action to dismantle a large-scale identity theft and hospice fraud scheme targeting the Medi-Cal program in Los Angeles.” 

The governor’s office said in its announcement that the scheme involved “14 fraudulent hospice providers and resulted in more than $267 million in improper claims paid with state and federal funds.”

When reached for comment, Bonta’s office referred Fox News Digital to its press release on the matter.

“This isn’t a political game for us. This is about protecting taxpayer dollars, protecting the programs that sick and vulnerable Californians rely on, and protecting our state,” Bonta said. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud.”

Le Roux, a cousin of Democratic Virginia Gov. Abigail Spanberger, is running in the GOP primary for the 47th Congressional District, which covers part of Orange County. 

She dismissed the announcement as a publicity stunt and criticized the governor for not outlining broader changes to the state’s hospice oversight system.

“Gavin Newsom is not interested in actually fighting fraud in California, he’s interested in news headlines,” she told Fox News Digital. “He is trying to blame shift because it is his job to stop hospice fraud in California, even if the money comes from the federal government, and he is not taking responsibility for it.”

On Wednesday, Fox News Digital learned that the anti-fraud task force led by Vice President JD Vance suspended 447 hospices and 23 home health agencies suspected of fraud in Los Angeles. The total fraud estimate was over $600 million.

“There has been a lot of conversation about whose job it is to find fraud in California, and my answer, it is all of our job. So, as the director of Cal DOGE, we are looking into over 2,000 whistleblower tips across the state,” Le Roux said.

Download The California Post App, follow us on social, and subscribe to our newsletters

Cal DOGE, whose acronym is the same as the federal Department of Government Efficiency, is an organization aimed at tackling waste, fraud and abuse in the Golden State. Le Roux told Fox News Digital that the organization is taking a more aggressive approach than traditional oversight efforts by investigating whistleblower tips and exerting public pressure to expose potential fraud.

“Ten weeks ago, when we started DOGE, we said, hey, we’re going to flip the script on how we actually go after fraud in California. So, instead of being polite and doing Freedom of Information Act requests, we’re going to take public information and whistleblower tips, and we are going to announce investigations into fraud, exactly how the government itself should be doing it, and we’re going to catch the fraudsters,” she said.

Le Roux argued the scale of potential fraud in California far exceeds what has been seen in states like Minnesota, adding that recent findings suggest tens of billions of dollars in fraud and waste annually, though Fox News Digital was unable to independently verify the figure.

“California’s budget is the fourth-largest economy and one of the largest budgets in the world… And with these 2,000 tips that we are currently investigating, they cover every single department in the state of California,” she said. “Minnesota is a drop in the bucket compared to what we’re looking at in California.”

As she runs for office, Le Roux is hopeful that she can take her fight to the federal level and ensure that the government has a “full understanding” of where its funds go.

“If you are spending money in a place that clearly has fraudulent practices like California, we need to do a better job of oversight at the federal level,” she said. “That’s why I decided to run for Congress, because I started to ask, ‘Why are we doing Freedom of Information Act requests for dollars that are taxpayer dollars?’ Every dollar that we spend, with the exception of defense, should be made public.”

Fox News Digital reached out to Newsom’s office for comment.