Transcript of Billions Missing: Dr. Oz Takes On California Healthcare Fraud | 2.7.26

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La County should be ashamed of the 2022 California State Auditor Report showing that their number of hospice agency increased by 1,500% since 2010. Yes, you heard that right, 1,500%. That exceeds the 40% increase in the senior population during that same period.

That was Dr. Mehmet Oz, Administrator for the centers for Medicare and Medicaid Services discussing allegations of widespread fraud centered in Deep Blue, California. While Minnesota has come under fire amid evidence of massive fraud, new reports found that in-home Medicare billings have exploded in LA County, and evidence points to the influence of criminal networks.

In this episode, we sit down with Dr. Oz to discuss what his agency has uncovered in California and his public battle with its progressive governor. I'm Daily WIRE executive editor, John Bickley with Georgia Helm. This is a weekend edition of Morning Wire.

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Joining us now to talk about the federal fraud investigations in California and other states as Dr. Mehmet Oz, Administrator for the Center for Medicare and Medicaid services. You put out some pretty explosive videos alleging potentially tens of billions of dollars in fraud in California. La County, in particular, is a hub for this activity. Can you explain to us what exactly is happening in California?

This is an example of what happens if you don't deal with fraud in a timely fashion. We've known for years that there's been a problem with fraud, starting probably most obviously in hospice, which is designed for people at the very end of their life. It's a very delicate They're very fragile, and you can trick them. You can get them to do things they probably shouldn't do. And so we began to notice, this is before I came into the administration, but that there was an increase, about a sevenfold increase in the available hospice in California. That doesn't make any sense. You don't have seven times more people dying, what's going on. Then you begin to look at the individual hospices. Again, it's for end of life. So not everyone should survive. 100% survival rate in these hospices. Then you begin to see some very small, gentle baby steps towards fixing the problem by Governor Newsom. Immediately, you see the same problems sprout up in Nevada, which I went to, same issue, massive increase in hospices now. It's like a virus. It spreads. It's in Texas. It's in Arizona. I went back to the hub. What's going on in Los Angeles.

In Los Angeles, I met with patient groups. I met with companies that were suffering because they're being taken advantage of by these guys. I met with law enforcement, and they all said the same thing. We've been making noise about this for years. Nobody will listen. Even the prior administration in Washington would not listen. Well, we listen and we hear. And what we saw was individuals involved in organized criminal efforts. The Mafia Don was actually a Russian origin. When he was indicted, he fled back to Russia. But we saw this now Having to be weaponized outside of these communities where it started and it spread across Los Angeles. I'll give you a number, it's going to chill you. We have about one in $10 spent in America on home health care just in Los Angeles. So other home health care systems around the country, they're all suffering because the money gets pulled. So they're losing money because these guys are taking it all. And obviously, you don't need that much home health care in Los Angeles. What we've really witnessed is a weaponization of this criminal effort that has been tolerated. And the key question we should all be asking ourselves is why?

Why would Governor Newsom tolerate this degree of fraud in his state? And I have lots of ideas, but I do believe there's an element of political patronage, which is why they're circling the wagons really quickly and trying to defend the way and obfuscate what's really going down, which is a severe dereliction of duty. The people who get hurt are our most vulnerable. Yes, worry about the money, worry about taxpayers being taken advantage of. But what about those poor souls who no longer get access to care or are losing care because they've been caught up in these congaves?

Right. Taxpayer are victims, of course, but also the seniors involved in this. Can you elaborate a little bit on how they are victimized in this situation?

I met many patients. One woman, I just can't forget, get her out of my mind, had He had a brother that she loved dearly, and he had some health problems, but he was fine. He was living by himself. He was approached by a young woman who said, Hey, listen, I got some things I can bring you to help you out if you want to just sign this document. Signs a document. What the document said was that you're giving up all your health care to go into hospice, which is, by the way, that's the deal. If you're going to pass away anyway within a few months because you've got metastatic cancer, you don't need to have all those ICU protections and all these extra crazy things about to happen. You just want to be able to be made comfortable. Signs of documents, and lo and behold, he has a health problem. He doesn't have access to care because he gave up his insurance, and the man died. He died. He could not get in to the system. She was angry, livid, and made worse by the fact that no one was hearing her pleased for help.

She tried to identify the problem. When she finally realized what had happened, she couldn't reverse it. These are the kinds of things we want to prevent. But then let me take it one step further.

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A state that doesn't have a hypercapit income, it's a blue state, by the way, politically similar side is as California, taxpayers in New Mexico have to pay extra federal taxes so that we can divert the money to LA. Is that right? I mean, please. Let's be honest about the real pathology here. It's deep, the rot stinks, and we've got to deal with it.

Now, you've said the FBI is looking into this, do we know of any known referrals or investigations by the DOJ or FBI at this point?

Well, we've been referring cases to the US attorney in Los Angeles. I spoke to Pam Bondi, Cash Patel. This It's on everyone's radar. Again, we're just looking for the bad guys to make sure they stop hurting the American people. But I've got to say, my focus is not on putting people in jail. My focus is on stopping the money from leaving the building. I'm sitting here in Washington at the Health and Human Services Building. We dole out close to $2 trillion of money. I just don't want the money going outside the building because once it leaves here, we don't get it back and it ends up overseas.

You're publicly battling now with Governor Newsom here. What would compliance from do some look like to CMS?

Well, we have sent the governor a corrective action plan, as we have with Governor Walsh in Minnesota, demanding that certain actions be taken, both to show that they're credibly going after these problems, but also to ensure that this fraud has not been going on for a period of time that I think is tolerable without someone taking action. Some of these are going to require some decisions by the governor to see how much he's willing to discuss this with his legislature, with other regulators in the state. But they've got to get serious about this. They've got to turn loose some of the weapons that they have to deal with fraud and abuse and criminal activities in their own state. Our job, at least in Medicaid, is to pay the states back when they spend money wisely. But if they don't spend the money the right way, sometimes I've got to pay money anyway. That's not fair. We want everybody in America to be treated equally, and California has gotten away with this. Again, I don't think the average person in California wants this either. They want their state to be on the right side of this decision.

For some reason, we are having trouble getting the attention of the leadership of California.

Like in Minnesota, we're seeing claims from Newsom, specifically that looking into this is racist. His accusation is directed directly at you, in fact. What do you make of Newsom's response to your letter?

I wrote a letter and I visited because I care. I want him to care as much as I do about the most vulnerable people in California. Why would you allow this fraud to take place in Los Angeles? When even the people who live in that beautiful city don't want it to take place. I do think political patronage might be part of this. These are issues that he should deal with internally. Frankly, all I care about is stopping the hemorrhage of money into this area and making sure people aren't hurt.

Final question. Are there any updates on potential Medicare or Medicaid fraud cases in Minnesota or other states?

We're making progress, auditing all the things we're getting from Minnesota. The good news is they've asked for a hearing. What we've done, which is to defer payments, has gotten their attention. But there's a lot of problems there. We're just now unraveling that we're getting access to data. California has not responded yet. We've sent them a similar letter that we sent to Governor Walsh, just obviously customized for California. I'll tell you, there's going to be more letters going out. There are states that have just not been taking this issue seriously. I bet you people in those states, when they hear what's going on, will be very upset.

I'm sure they will be as they have been in Minnesota and now California. Dr. Oz, thank you so much for joining us.

That was Dr. Mehmet Oz, CMS Administrator, and this has been a weekend edition of MorningWire.

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