Earlier this month, the California Attorney General’s Office charged 21 individuals in connection with a massive $267 million Medi-Cal hospice fraud scheme known as Operation Skip Trace.

According to prosecutors, the group allegedly purchased stolen personal data from dark web marketplaces and used those identities to fraudulently enroll individuals in Medi-Cal through Covered California. They then operated 14 shell hospice companies, billing the state for end-of-life care that was never provided.

The so-called “patients” were not terminally ill — and in many cases, they didn’t even live in California. Instead, they were victims of identity theft, reduced to names and Social Security numbers used to generate fraudulent medical claims.

How the Scheme Worked

Investigators say scammers recruited individuals to register hospice businesses in their names, masking the true operators behind the scheme. Meanwhile, others obtained stolen personal information — including names, birthdates, and Social Security numbers — from data breaches and illicit online markets.

Using that data, the group allegedly enrolled victims into Medi-Cal and falsely classified them as hospice patients. The shell companies then submitted claims for services such as daily care, prescriptions, and medical visits — none of which ever occurred. Because hospice care is reimbursed at a fixed daily rate, the fraud could continue as long as the identity remained active in the system.

Why Los Angeles Is a Hotspot

Authorities say Los Angeles County has become a major center for hospice fraud. The average hospice provider in the area bills about $29,000 per patient — more than double the national average. Of roughly 1,800 hospice providers in the county, over 700 have triggered multiple fraud warnings, according to state auditors.

Federal officials have also raised concerns. In March 2026, members of Congress requested documentation from California officials regarding oversight of hospice programs, citing a long history of fraud, including unauthorized enrollments and excessive billing.

The Centers for Medicare & Medicaid Services estimate that hospice fraud in Los Angeles County alone may total around $3.5 billion. In response, California has revoked hundreds of hospice licenses, imposed a moratorium on new providers, and continues to investigate additional cases.

Impact on Victims

Unlike traditional identity theft, hospice fraud often goes unnoticed because it does not appear on credit reports or trigger financial alerts. Victims may not realize their identities have been used until they receive unexpected medical statements or are denied coverage due to fraudulent enrollment records.

Warning signs can include Medicare or Medi-Cal statements listing services never received, enrollment confirmations for unfamiliar programs, or benefits explanations from unknown providers.

Protecting Yourself

Officials recommend regularly reviewing Medicare Summary Notices and monitoring Medi-Cal or Covered California accounts for unusual activity. Suspected fraud can be reported through federal and state hotlines, including Medicare and the Department of Health and Human Services Office of Inspector General.

Experts also stress the importance of identity monitoring services, which can help detect stolen personal data circulating on the dark web and provide early warnings of suspicious activity.