The last month has brought renewed attention to crime lords allegedly stealing $3.5 billion from California’s hospice system. Congress and the Trump administration are investigating, and rightly so. The dying deserve dignity, not to have their safety net looted.
But hospice is not the only target — and not every thief wears a ski mask.
The federal government does not have to accept California’s bookkeeping tricks.
Across California, politicians and their allies exploit Medicaid — a federal program meant to help the poor — to paper over budget holes they created. They do it through a bureaucratic “shell game” that shifts billions while patients and taxpayers pick up the tab.
The mechanism is called an intergovernmental transfer. Local public providers or government agencies spend Medicaid funds. The state then counts that spending as its own and uses it to draw matching federal dollars. When that money arrives, the state sends it back to the same providers as higher reimbursements. Those providers end up receiving more than they originally spent, even though the state did not put up additional state funds.
This scheme has driven ambulance reimbursements into the stratosphere.
Between 2022 and 2024, the cost of publicly funded ambulances in California soared from $339 to $1,168 per trip. The state now asks for 2026 reimbursements to rise to more than $1,600. That increase means more than $1,200 per ambulance ride that does not go to patient care. It pads the state’s books and props up obligations like California’s failing pension system.
This is not a straightforward street scam. It is worse: legalized looting with official letterhead.
Families pay the price. Patients pay the price. Honest providers pay the price.
Imagine what that extra $1,200 per ride could do if it went where Medicaid dollars are supposed to go: patient care, staffing, equipment, response times. Now imagine what happens when ambulance companies that are not connected to the right politicians cannot compete and start shutting down. When that happens, the people harmed will not be the insiders who designed the system. It will be the sick, the poor, and the vulnerable.
I know what it means to depend on a functioning safety net.
My brother has level 3 autism spectrum disorder — the most severe diagnosis. He is nonverbal. He cannot feed himself, dress himself, or use the bathroom without help. My parents cannot leave him home alone because he can wander into danger. Keeping him safe requires 24-hour supervision.
My parents knew what that meant. They also knew they wanted him at home, not in an institution.
Medicaid and In-Home Supportive Services, which helps cover the cost of at-home care, made that possible. Those programs kept our family together. They gave my parents a way to provide love and stability that no facility can replicate.
It has still been hard. The work never ends.
Photo by Alex Wong/Getty Images
My brother’s diagnosis hit my parents like a crisis. They answered with courage. They had more lucrative opportunities elsewhere, but they stayed with the Army because it was the only employer that could guarantee my brother’s access to health care.
We are a military family. We understand service and sacrifice. We also understand the moral bargain behind safety-net programs: Taxpayers step up so that families in crisis do not collapse.
That bargain fails when politicians treat Medicaid as a slush fund.
These financial shell games cost taxpayers billions and create nightmares for families like mine who follow the rules. This is not robbing Peter to pay Paul. This is robbing Peter and leaving Paul on the street.
Americans should be sickened by the heartlessness of anyone who steals from programs designed to serve the vulnerable — whether the thieves are organized crime syndicates or the well-connected insiders who know how to work California’s bureaucracy. Hospice exists so that people can die with dignity. Ambulances exist to get patients to care quickly. Neither exists to generate money for the state and its chosen beneficiaries.
Here is the good news: Congress and the Trump administration have started digging into hospice abuse. The bad news is that those investigations and policy changes can take years.
Ending Medicaid ambulance intergovernmental transfer abuse could be done in a matter of days.
The federal government does not have to accept California’s bookkeeping tricks. President Trump can direct federal agencies to stop approving these inflated reimbursement schemes and demand reforms that put patients first. One signature could force California to stop gaming Medicaid and start serving the people the program was built to help.
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