SACRAMENTO, California— Dr. Mehmet Oz believes Los Angeles is rife with Medicaid fraud and he's been hitting the streets to find it himself.
Since being appointed by President Donald Trump to the head of the Centers for Medicare and Medicaid Services, Oz has made uncovering fraudulent billing by nursing homes, in-home health agencies, and other health care providers a centerpiece of his agenda. And he’s taken the issue on the road, traveling to Minnesota and Florida, and then Los Angeles to spotlight the issue.
“In California, there has not been a lot of attention on these problems, but that’s going to change,” Oz said in one video posted to X, shot in front of the shuttered offices of a hospice company in Van Nuys that he claimed had been improperly charging the federal government.
To Gov. Gavin Newsom, who has established himself as one of Trump’s main antagonists and has been trading insults with Oz on social media, the former TV personality is performing political theater. A spokesperson for Newsom likened it to the recent situation in Minnesota, where activists brought renewed attention to well known instances of fraud by childcare centers run by Somali-Americans. The Trump administration seized on the issue, freezing federal childcare payments and changing the reporting requirements for those programs.
“We don’t take Dr. Oz seriously,” Newsom spokesperson Izzy Gardon told POLITICO. “We will respond as appropriate, but nothing he says is worth our time. If there’s something substantive, then we’ll consider it.”
Oz has ruffled feathers in LA’s large and politically active Armenian community by focusing on it in his videos, pointing out Cyrillic letters on storefronts and blaming much of the alleged fraud on Armenian and Russian organized crime groups.
Why is Dr. Oz on social media driving around LA?
Oz was in San Francisco for the JP Morgan Healthcare Conference earlier this month and, while on the west coast, went down to Los Angeles to shoot videos for his social media campaign.
California’s Medicaid program, called Medi-Cal, has been the target of federal fraud investigations since President Donald Trump retook office. In response to questions from POLITICO about Oz’s time in LA, his office stressed that California isn’t being singled out, but did claim that its Medicaid program, which is one of the largest in the country, has patterns of fraud in some areas like hospice and home health. Oz said CMS identified $1.6 billion in federal funds that California spent on care for undocumented immigrants and is currently recouping from the state.
Oz says he has been working with Bill Essayli, the acting US Attorney in Los Angeles. Essayli said CMS is conducting audits of health care providers and flagging suspicious billing to federal investigators, who can seek criminal charges from Essayli’s office if there is evidence of misconduct.
“I've dubbed Newsom the king of fraud, because he reigns over more fraud than any other state in the nation,” Essayli told POLITICO without providing evidence to support the claim. “I think there's probably more fraud in California than anywhere in the world.”
What does Oz say he is looking for?
As part of his investigation, Oz sent a letter to Newsom this week with pages of questions and data requests, demanding he provide a “comprehensive program integrity action plan” within three weeks.
In it, he flagged several service areas in which he claimed his office had found signs of waste and fraud. One of the largest is the state’s in-home supportive services program, or IHSS, which provides low-income or disabled people with help on tasks around the house like cooking, bathing and cleaning. According to Oz, the program’s budget has ballooned 348 percent in the last decade.
The program’s expenditures are growing, Newsom’s office said, because costs are going up. It’s not fraud, a spokesperson said, for people to use benefits to which they’re entitled.
CMS spokesperson Christopher Krepich, said data analysis and ongoing investigations show the problem goes beyond normal cost growth and includes billing anomalies and misuse of services.
What about hospice fraud?
In addition to IHSS and other Medicaid issues, Oz has been highlighting California’s well-documented problems with hospices. State Attorney General Rob Bonta has called hospice fraud an “epidemic” in the state. Operators have been found to bill for services that were not provided, enroll ineligible patients who don’t need hospice and received kickbacks for patient referrals.
In 2020, the Los Angeles Times published an investigation uncovering widespread fraud throughout the booming hospice industry in LA County. Since then, the state has been cracking down.
Newsom’s office put out a statement this week noting the governor paused issuing new hospice licenses and his administration has revoked 280 existing ones in the last two years. The state has identified another 300 outfits to be reviewed.
“When he was still hawking horse supplements on late night TV, the governor in 2021 banned all new hospices because of fraud, while the Trump administration has walked back measures to prevent fraud ” Gardon said. “It’s great to see that he’s a fraud fighter. It’s unfortunate that his attention is directed the wrong way.”
But Essayli and Oz both say Newsom’s actions have not been tough enough to deter bad actors. Oz highlighted a case in which he said a person convicted of stealing $16 million was incarcerated for just two years. Effective fraud prevention, Krepich said, needs earlier detection, stronger oversight, faster enforcement and closer coordination with the federal government.
“CMS stands ready to work with California to strengthen safeguards and improve results,” Krepich said. “But protecting federal health care dollars requires more than incremental steps.”
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