Morning Wire – Billions Missing: Dr. Oz Takes On California Healthcare Fraud

Date: February 7, 2026
Hosts: John Bickley, Georgia Howe
Guest: Dr. Mehmet Oz (Administrator, Centers for Medicare and Medicaid Services)

Overview

This episode of Morning Wire focuses on a burgeoning federal investigation into massive Medicare and Medicaid fraud in California, with particular emphasis on Los Angeles County. Dr. Mehmet Oz, now Administrator for the Centers for Medicare and Medicaid Services (CMS), joins John Bickley to detail what his agency has uncovered: allegedly tens of billions in fraudulent billing, possible political patronage, and how vulnerable seniors are being caught in this scheme. The discussion also touches on the spread of similar fraud to other states, responses from state leaders like Governor Gavin Newsom, and efforts to halt further abuse of public funds.

Key Discussion Points and Insights

1. Scope and Nature of Fraud in California

• Hospice Fraud Epidemic:
  • California saw a 1,500% increase in hospice agencies since 2010, despite only a 40% rise in the senior population ([00:33]).
  • Dr. Oz points out, “You don’t have seven times more people dying. What’s going on?”
• Unusual Survival Rates:
  • Some hospices report 100% survival, which is inconsistent and suspicious for end-of-life care ([02:49]).
• Criminal Networks:
  • Organized crime, including allegedly Russian-led groups, has infiltrated the system.
  • Quote: “The mafia don was actually of Russian origin. When he was indicted, he fled back to Russia.” ([04:22])
• Expanding Problem:
  • Initially rooted in California, similar fraud is now found in Nevada, Texas, and Arizona—“like a virus, it spreads” ([03:16]).

2. Impact on Taxpayers and Patients

• Financial Toll:
  • “We have about 1 in $10 spent in America [for] in-home health care just in Los Angeles.” ([04:44])
  • Loss of federal funds hurts other states: “Taxpayers in New Mexico have to pay extra federal taxes so that we can divert the money to LA. Is that right?” ([06:55])
• Human Toll:
  • Seniors manipulated and losing access to care.
  • Dr. Oz shares a poignant anecdote about a man who inadvertently signed away his traditional insurance and “could not get in to the system… and the man died.” ([05:26])
  • “What about those poor souls who no longer get access to care or are losing care because they’ve been caught up in these con games?” ([05:09])

3. Institutional and Political Challenges

• Regulatory Inaction and Political Patronage:
  • Dr. Oz suggests state leadership has been aware but slow to act, possibly due to “political patronage” ([04:58]).
  • “Why would Governor Newsom tolerate this degree of fraud in his state?...There’s an element of political patronage, which is why they’re circling the wagons.” ([04:58])
• Difficulties in Getting Attention:
  • Repeated efforts to alert both state and federal authorities initially ignored.
  • “We’ve been making noise about this for years. Nobody will listen.” (Dr. Oz paraphrasing law enforcement and patient groups, [04:01])

4. Federal Response and Investigations

• DOJ & FBI Engagement:
  • Multiple referrals have been made to the U.S. Attorney in Los Angeles.
  • “I spoke to Pam Bondi, Cash Patel. This is on everyone’s radar.” ([07:24])
  • Primary focus is not prosecution—“My focus is on stopping the money from leaving the building.” ([07:37])
• Demands for Compliance:
  • CMS has sent corrective action plans to both California and Minnesota, requiring proof of good-faith efforts to combat fraud ([08:03]).
  • “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.” ([08:28])
• Penalizing Non-Compliance:
  • CMS has deferred payments to Minnesota and issued similar warnings to California ([09:45]).

5. Political Backlash and Accusations

• Newsom’s Response:
  • California Governor Newsom has labeled the federal probes as “racist” ([09:01]).
• Dr. Oz’s Reaction:
  • “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.” ([09:13])
  • Dismisses the racism accusation as political deflection and re-emphasizes concern for patients and taxpayers.

Notable Quotes and Memorable Moments

• Dr. Oz on the Spread and Severity ([03:16]):

  • “It’s like a virus. It spreads. It’s in Texas, it’s in Arizona.”

• On Political Patronage ([04:58]):

  • “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.”

• Human Impact ([05:26]):

  • “He was fine. He was living by himself. …He signs a document. What the document said was that you’re giving up all your healthcare to go into hospice. …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 pleas for help.” – Dr. Oz

• On Cross-State Impact ([06:55]):

  • “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.”

• On Fraud Prevention ([07:37]):

  • “My focus is on stopping the money from leaving the building. …Once it leaves here, we don’t get it back and it ends up overseas.”

• On Upcoming Action ([09:45]):

  • “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.”

Timestamps for Important Segments

• [00:33] – Dr. Oz gives staggering stats about hospice fraud in LA County
• [02:49] – Dr. Oz explains explosive growth in hospice fraud and patient manipulation
• [04:44] – 1 in 10 U.S. dollars for home healthcare spent in LA
• [05:26] – Real story of a victim caught in the fraud
• [06:55] – Other states’ taxpayers are impacted by diversion of federal funds
• [07:24] – Federal referrals and investigations discussed
• [08:03] – CMS corrective action plans for states
• [09:01] – Discussion of Governor Newsom’s “racist” accusation
• [09:45] – Updates on investigations and consequences for non-compliance

Conclusion

This episode delivers a deep dive into one of the largest alleged Medicare fraud schemes in U.S. history, involving tens of billions of dollars. Dr. Oz outlines a multifaceted crisis: systemic criminal activity, patient victimization, cross-state consequences for taxpayers, and significant resistance from state leadership. The investigation is ongoing, with CMS taking increasingly aggressive steps to force compliance, audit expenditures, and halt the loss of federal healthcare dollars.