89 Hospices, One Building, Zero Affected

Introduction

89 hospices are registered at a single two-story building in Van Nuys, California. More than 70 of them show multiple fraud indicators, according to a CBS News analysis. CMS's nationwide six-month freeze on new hospice enrollment does not apply to any of them. It applies to a hospice trying to open in rural North Carolina.

The hospices in that building already have their Medicare billing numbers, so the freeze only blocks the people who don't. The gap is baked into how the rule was written.

What CMS Actually Froze

On May 13, 2026, CMS Administrator Mehmet Oz signed the first nationwide hospice enrollment moratorium in the program's history. The Federal Register notice runs nine pages and leans on ACA Section 6401(a) authority. A companion notice did the same thing to home health agencies. Both run roughly through November 13, 2026, and can be renewed in six-month increments. There's no judicial review of the decision to impose one.

Here's the part that matters for who it touches. The moratorium blocks two things: brand-new hospice applicants, and "changes in majority ownership" of existing ones. The first is the rural North Carolina problem. The second is aimed at a specific fraud trick called license-flipping, where an operator buys a hospice that already has a license and a billing number rather than apply for a fresh one. What the moratorium does not do is reach the providers already enrolled and already billing. CMS said as much in its own notice, conceding it needs to "accelerate the removal" of operators already suspected of fraud. Removal is the job that touches the building in Van Nuys, and the freeze isn't doing it.

The fraud that triggered all this is real, and the receipts are ugly. CMS suspended payments to roughly 800 hospices and home health agencies in the Los Angeles area, providers responsible for $1.4 billion in Medicare spending the prior year, with $70 million already suspended as of the announcement. Oz has put the total LA hospice and home care fraud at $3.5 billion, a figure CMS hasn't tied to a published audit but has repeated in press appearances. The crisis is real. The open question is whether the tool CMS reached for can do the thing it was sold to do.

There's also a hard rule buried in the operational guidance that makes the freeze even blunter than it sounds. CMS told state survey agencies that "CMS regulations do not permit exceptions to a moratorium for individual providers or suppliers." No case-by-case relief. A rural county with a documented need and zero fraud history can't apply for a carve-out, because the rule was written to forbid carve-outs. The same memo says a new hospice's accreditation by a CMS-approved body "will not serve as the basis for Medicare participation" during the freeze. Doing everything right buys you nothing until November.

The Receipts From 14545 Friar Street

The building is the whole story in miniature. CBS News applied California's six state-defined fraud indicators to every hospice in LA County and found 742 companies, about 42% of the roughly 1,800 in the county, tripping multiple red flags. At 14545 Friar Street in Van Nuys, the state database lists 89 hospices. Seventy-two of them show multiple fraud indicators. A follow-up by the Southern California News Group found 15 hospices incorporated in a single day in Suite 205 alone, which together collected $12.3 million in Medicare and Medi-Cal billings across 2023 and 2024.

Then look at the money. The LA Times reported that about 40 of the hospices actively billing from that one address pulled more than $38 million from Medicare in 2023, roughly $28,000 per patient, against a national average of $13,200. When a single building bills at double the national rate per patient, it's selling something other than end-of-life care.

The criminal cases fill in the mechanics. In Operation Never Say Die, federal prosecutors charged 15 people across nine investigations totaling more than $50 million in alleged fraud. According to the DOJ charging documents, Lolita Beronilla Minerd allegedly ran Topanga Hospice Care, submitted $9.17 million in claims, and recorded an 85% non-death discharge rate against a national average of 17.2%. Prosecutors say that 85% live-discharge rate means the "terminal" patients kept walking out alive — evidence, in their telling, that the patients were never dying. Prosecutors allege she paid $300 a month for each beneficiary recruited at markets. Gladwin and Amelou Gill allegedly billed $5.2 million through a Glendale hospice; Nita Almuete Palma and Adolfo Cezar Catbagan allegedly ran three hospices while Palma was legally barred from Medicare. None have been convicted.

Then there's the variant that should make every Medicare beneficiary sit up. In California's Operation Skip Trace, Attorney General Rob Bonta charged 21 people in a $267 million Medi-Cal scheme. According to the charging documents, the operators bought stolen identities off the dark web, enrolled them in coverage, purchased 14 existing hospice companies through straw owners, and billed for care that never happened. The identity theft is the part that reaches ordinary people. Take Lynn Ianni, a 69-year-old who plays pickleball and got denied Medicare coverage for physical therapy because her number had been stolen and enrolled in hospice. She testified before the House Ways and Means Committee. If your Medicare number is sitting inside a fraud mill right now, the moratorium does nothing for you, because the hospice billing under your name is already enrolled.

One more number frames the absurdity. CMS estimated in its own notice that non-outlier states see about 500 new hospice enrollments across three years combined, roughly 166 a year, against the 7,000 hospices already operating. So the freeze blocks about 166 legitimate would-be providers a year in clean states to address a fraud problem the agency admits is concentrated in a handful of LA zip codes.

Who Benefits

Follow the competition. The hospice market runs north of $88 billion and grows 8-9% a year. For six months, no new hospice can open in any market in America. For a large established chain, that freeze is a moat around every market it already operates in.

The named beneficiaries are the big incumbents: VITAS (owned by Chemed), Gentiva, Amedisys, Enhabit (the home health spinoff of Encompass). They already have their billing numbers, so the freeze doesn't slow them down. What it does is remove the one thing that disciplines an incumbent in a growing market: a startup competitor opening down the road. VITAS opened a new inpatient hospice facility in Florida in March 2026, the same window in which no de novo competitor could file to do the same. The benefit isn't a check, it's the absence of competition, which in a market growing at 9% is worth more than one.

The industry's own lawyers said the quiet part in trade press. Michelle Huntsman of Holland & Knight told Hospice News the moratorium would mean "more flow of acquisition dollars in M&A activity" and called a limit on new growth "a propellant for expansion among established operators." So the remedy for fraud routes acquisition money toward the players already big enough to buy their way through it. And notice who didn't object: the trade groups representing larger nonprofit and established providers, NPHI and LeadingAge, supported the moratorium. The operators who would have faced new competition were fine with the door closing behind them.

Oz benefits too, in a currency that isn't money. The moratorium was announced jointly with Vice President JD Vance's anti-fraud task force. Oz filmed himself in Van Nuys narrating the fraud from an SUV, and appeared on camera at an April raid, which is not how CMS administrators usually spend a Tuesday. The action generated national coverage and a clean headline: the agency took one of the biggest fraud-prevention steps in its history. A targeted, six-state freeze would have done more to the actual fraud and generated a fraction of the attention.

Forward-Facing Tool, Past-Facing Problem

Here's the structural flaw. The fraud in LA is being committed by operators who are already enrolled, and the moratorium freezes enrollment. You can't freeze your way out of a problem caused by people who already got in.

CMS knew this, which is why it paired the freeze with site visits, payment suspensions, and a promise to speed up removals. Those are the tools that actually reach the building on Friar Street. The moratorium is the part that doesn't, and it's the part that got the press release. The agency had a real menu of targeted options and chose the one with the widest blast radius. Its own notice considered limiting the freeze to six high-fraud states and rejected it, arguing fraud is "viral" and migrates. There's something to that, Nevada's hospice count did jump 36% from 2023 to 2025. But migration is an argument for watching Nevada and Georgia, not for blocking a startup in Montana.

And the harm concentrates exactly where capacity is thinnest. Tim Rogers, who runs the home care associations for North Carolina and South Carolina, called it a "sledgehammer approach" that "will allow for no new growth in rural areas." The associations for North Carolina, South Carolina, and Florida raised joint concerns. The American Hospital Association warned that rural hospitals already struggle to find places to discharge patients, and that hospice providers are how those patients get a safe next step. A fraud ring in Los Angeles exhausted Washington's patience, and the bill came due in counties that never had a hospice problem.

The freeze is also already cloning itself at the state level, which compounds the access squeeze in exactly the places that can least afford it. Ohio stood up a parallel Medicaid moratorium running May 14 through November 14 and suspended payments to 49 Medicaid home health agencies on June 4. Nevada paused new state hospice licenses and Medicaid enrollments on June 5 for "at least six months." Arkansas aligned its state moratorium with the federal one and set no end date. California has had its own license freeze since 2021, extended through January 1, 2027. Each layer is defensible on its own. Stacked together, they mean a provider trying to serve an underserved market now faces a wall at both the state and federal door, and there's no single agency you can ask to open one.

There's a precedent that should worry anyone betting this stays temporary. The last CMS moratorium on home health agencies, in Miami-Dade and Cook County, was supposed to be short, and it ran from 2013 to 2019. Six years for a two-county freeze. This one is national.

The Bottom Line

The fraud is genuine, the receipts are overwhelming, and CMS had every reason to act. What it didn't have was a tool matched to the problem. It reached for a freeze on new entry to fight a crisis run by operators who already entered, and the gap between those two things is where everyone who wasn't part of the fraud now lives: the legitimate hospice that can't open in a rural county, the beneficiary whose stolen number is still billing from an office park in Van Nuys, the small operator who would have competed against an incumbent that no longer has to worry about competition.

Congress has noticed. H.R. 8883 advanced out of Ways and Means 27-16 on May 22, and a separate bill, the Hospice CARE Act, would codify targeted geographic moratoria instead of blanket national ones, which is the more surgical version of the thing CMS chose not to do. So the real test arrives around November 13. The removal tools, the site visits and payment suspensions, are what reach the building on Friar Street, and CMS can run those without a single nationwide freeze. If the agency instead renews a national block on new entry for another six months while those Van Nuys billing numbers stay live, that tells you which job it was actually prioritizing. Watch which one it picks when the renewal date comes.