$3.5B Hospice Fraud–WHO Newsom BLAMES

Person holding credit card near laptop displaying Fraud.

California’s hospice-fraud mess is so big that when Dr. Mehmet Oz put a spotlight on it, Gov. Gavin Newsom’s office rushed to file a civil-rights complaint instead of answering the fraud questions.

Story Snapshot

CMS Administrator Dr. Mehmet Oz alleged a $3.5 billion hospice and home-care fraud problem centered in a small Los Angeles area, calling it a national worst-case.
Gov. Gavin Newsom’s office filed a complaint with HHS’ Office for Civil Rights, arguing Oz’s video used discriminatory, racially charged language that harmed Armenian businesses and community trust.
California officials point to years of state action, including a 2021 law pausing new hospice licenses, 280+ license revocations, and hundreds more under review.
Federal-state tensions are escalating as Oz demands detailed Medi-Cal program integrity data and Congress schedules a House hearing on Medicare and Medicaid fraud.

Oz’s Fraud Allegation Puts Los Angeles Hospice Providers Under a National Microscope

Dr. Mehmet Oz, now serving as Administrator of the Centers for Medicare & Medicaid Services, traveled to Los Angeles’ Van Nuys neighborhood and posted a video alleging $3.5 billion in hospice and home-care fraud tied to a tight four-block area that he described as unusually dense with providers. Oz said 42 hospices operated in that radius and claimed much of the activity was run by a “Russian Armenian mafia,” language that became the flashpoint.

Oz’s video also drew attention because it was filmed in front of an Armenian bakery rather than at a medical facility. Reporting on the episode said the video highlighted Armenian script on nearby signage, intensifying the perception that an entire ethnic community was being implicated rather than specific suspects. The bakery owner, Movses Bislamyan, publicly rejected any criminal association and said the fallout was immediate, including a reported 30% drop in business after the clip circulated.

Newsom Shifts the Fight to Civil Rights Enforcement at HHS

Gov. Gavin Newsom’s office responded by filing a civil rights complaint with the Department of Health and Human Services’ Office for Civil Rights. The complaint argued that Oz’s wording and presentation were discriminatory and racially charged, and that they harmed Armenian Americans and local businesses while discouraging participation in public programs. The Armenian National Committee of America filed a similar complaint, adding more political and community pressure as the dispute widened beyond fraud enforcement.

Newsom’s team also emphasized that California has not ignored hospice fraud, pointing to multi-year investigations and enforcement actions. California previously acknowledged widespread abuse, and Newsom signed a 2021 law halting the issuance of new hospice licenses as the state tried to get control of the sector. State officials have said California revoked more than 280 hospice licenses and was examining roughly 300 more cases, evidence that the problem is real even if blame for it is contested.

The Paper Trail: Oz’s Medi-Cal Integrity Letter and the Coming House Hearing

The conflict is not limited to one viral video. On Jan. 27, 2026, Oz sent Newsom a letter requesting detailed information on Medi-Cal program integrity, including oversight and eligibility controls tied to hospice and home health. The request reportedly contained more than 40 questions, signaling a federal push for specifics rather than general assurances. Industry observers described the exchange as an escalation, especially with Congress preparing to spotlight the issue.

The House Energy and Commerce Committee scheduled a Feb. 3, 2026 hearing titled “Common Schemes, Real Harm: Examining Fraud in Medicare and Medicaid,” with a focus that includes California. That timing matters because it suggests the dispute is moving from social media and press offices into formal oversight channels where sworn testimony and document production can sharpen the factual record. Oz has also said publicly that fixing California’s problem would help the rest of the country.

What’s Clear, What’s Unproven, and What Taxpayers Should Watch Next

Available reporting supports several core facts: California has faced years of hospice-fraud investigations; the state has revoked hundreds of licenses; and Oz publicly described Los Angeles as an epicenter while citing a multi-billion-dollar figure and an unusually tight cluster of providers. At the same time, the evidence underlying Oz’s “42 hospices in four blocks” framing and the “Russian Armenian mafia” claim has not been fully documented publicly in the cited coverage.

Gavin Newsom Press Office Tries to Blame Dr. Oz for Massive Medicare Fraud in California https://t.co/Q9e4bkOIXH

— Bob, east coast Bruin (@TuneMan7761) March 13, 2026

Conservatives who care about limited government and responsible spending should separate two issues that can both be true: law enforcement must pursue fraud aggressively, and government officials should avoid language that appears to paint innocent communities with a broad brush. The next measurable markers will be OCR’s handling of the complaints, any CMS enforcement actions or audits tied to Medi-Cal and Medicare-certified providers, and what the House hearing reveals about schemes, safeguards, and accountability.