Concerns Over Hospice Fraud at Merabi Plaza: A Case Study

The Merabi Professional Medical Plaza in Los Angeles, a 32,000-square-foot office building, is home to a range of businesses, including 89 licensed hospice companies. A patient advocate has raised concerns about potential Medicare fraud issues within this hospice sector, highlighting the building as an "extreme example of clustering." This term denotes the high concentration of hospice agencies in a single area, which state auditors consider a potential indicator of fraudulent activities.

Located at the Van Nuys address, Merabi Plaza often appears in state records related to licensed hospices. While the building's directory lists numerous hospice agencies, the owner claims that many have vacated the premises. Experts caution that the clustering of agencies exceeds the demand for such services in this Los Angeles County region. A 2022 report from the California State Auditor showed a staggering 1,500% increase in hospice companies in the county since 2010, far above the national average for regions with comparable elderly populations.

Auditors have pinpointed additional fraud indicators, such as multiple agencies operating from one location, low patient volumes, high discharge rates among supposedly terminally ill patients, and staff shared across different companies. A CBS News investigation revealed that 72 out of 89 hospices at Merabi Plaza showcased at least three of these warning signs, intensifying concerns about regulatory compliance and integrity.

Regulatory visits to the building from 2021 to 2025 resulted in nearly 400 violations across 75 companies, including false patient visit reports and unwarranted prescriptions. Discrepancies exist between government records and the current number of active hospice businesses, with building owner Kambiz Merabi indicating only 12 such companies remain.

There is growing demand for stricter scrutiny of "ghost hospices," businesses that bill Medicare without providing substantial care. California Attorney General Rob Bonta reaffirms commitment to combating hospice fraud, expressing dissatisfaction with current fraud prevalence. Additionally, Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services, emphasized heightened focus on claim verification before Medicare payments are issued.

Kambiz Merabi has voiced support for these regulatory efforts, highlighting the importance of proper use of taxpayer money. Ongoing investigations underscore the need for robust oversight on hospices within Merabi Plaza and the broader industry to ensure compliance and prevent further fraudulent practices.