The Paper Patients

The CBS News article had a photograph of the building directory. I studied it for a moment. A salon. A law office. A modeling agency. And eighty-nine licensed hospice companies, all registered to the same three-story stucco office building in Van Nuys.

I had to read it twice. Not because it was confusing.

The building’s name is the Merabi Professional Medical Plaza. It is 32,000 square feet. It has a long tiled hallway. The directory on the wall lists the tenants. One of those tenants is a modeling agency. Eighty-nine of them are in the business of caring for people in the final six months of their lives. The building’s owner told CBS News his tenants appear to be legitimate—they provide standard documentation showing they are valid. He also said he’s “not a police or keeper of what they do, how they do business.”

I found that framing interesting. Standard documentation.

Medicare pays for hospice care based on certification. A doctor certifies that the patient is terminally ill and expected to die within six months. The hospice then bills for services. This is the whole mechanism. The paperwork is the care, as far as Medicare is concerned. The documentation is the product. Regulators found nearly 400 violations at 75 companies in that one building between 2021 and 2025. One inspection found a nurse who reported that a patient’s family was satisfied with care—despite indications that no one from the hospice had ever visited the patient. Another inspection found a social worker had documented a family’s grief about their loved one passing. There was no evidence the patient was actually dead.

The patient was not dead. The social worker had documented the grief anyway. The system was presented with the documentation and—from the only vantage point the system has—everything was in order.

Wow, what a scam.

Not the fraud. The underlying structure that the fraud reveals. The government decided, at some point, that paperwork about dying people is equivalent to caring for dying people. They wrote those rules. They built a system in which the documentation is the reality. And then they were surprised when people figured out that you can generate documentation without generating the underlying thing the documentation is supposed to describe. This is not a failure of human ingenuity. It is human ingenuity, applied to the only problem that actually needed solving.

Los Angeles County has experienced a 1,500% increase in hospice companies since 2010. Six times the national average. California had over 2,800 licensed hospice agencies as of 2022. Nobody looks at the terminal illness market and thinks: we need more competitors here. The industry is underserved. There is unmet demand. Except apparently 2,800 people looked at that market and concluded exactly that. Or rather, they looked at a payment system that disbursed funds in exchange for documentation about dying people and concluded that documentation about dying people was obtainable at reasonable cost.

Dr. Mehmet Oz blamed the Russian-Armenian mafia. His own agency then clarified that not all billing activity referenced in his remarks was presumed to be improper. The U.S. attorney’s office for Central California said it doesn’t track whether hospice fraud defendants are alleged to be foreign nationals—and pointed to their public announcements, none of which allege foreign organized crime. The actual documented fraud schemes, per the Los Angeles Times, involved hospice operators who recruited patients who weren’t terminally ill, paid kickbacks to doctors who falsely certified them as dying, and billed Medicare. No foreign element. Domestic entrepreneurs, operating within the structure of the system, optimizing for the thing the system actually measures.

The system measures documentation. They provided documentation.

The building’s owner says many of the agencies have since moved out. The public records don’t reflect this yet, he explains, because hospices are required to notify authorities when they move. The notifications haven’t come in. This is either because the hospices are slow with their paperwork—or because the hospices are not the sort of entities that have paperwork problems. They are paperwork. The filing is the product. When there’s nothing left to file, the entity simply ceases to exist, without formality, like a name on a form that no one checks anymore.

I scrolled back up to the building photograph. Long tiled hallway. Directory on the wall. Salon. Law office. Modeling agency. Eighty-nine end-of-life care providers, certified by the state, licensed to comfort the dying.

Klang stepped onto the tablet and sat down on the lower half of the screen, which is his way of indicating he would like me to close whatever I’m reading and pay attention to him instead. He has no opinion on hospice fraud or the documentation requirements of the Centers for Medicare and Medicaid Services. He has an opinion about the ambient temperature of the desk and whether I am currently useful as a heat source, and that opinion is: probably yes, if I would stop moving.

I closed the tab.