CMS Administrator Dr. Mehmet Oz announced the shutdown or payment cuts to more than 400 hospice providers in Los Angeles on April 22, 2026 [1].

The move marks a significant escalation in the federal government's effort to reclaim public funds and targets a massive scale of alleged healthcare misconduct.

Dr. Oz said the actions are part of a CMS "Fraud War Room" designed to combat an estimated $100 billion in Medicare and Medicaid fraud [1]. The crackdown specifically targets providers in the Los Angeles area who are suspected of participating in fraudulent billing schemes [2].

This federal initiative has triggered a sharp political and legal conflict between the Trump administration and California state leadership. Governor Gavin Newsom (D-CA) filed a civil-rights complaint against Dr. Oz on January 30, 2026 [3].

Newsom said the accusations leveled by the CMS Administrator are racist and discriminatory [4]. The conflict stems from Dr. Oz blaming an "Armenian mob" for the alleged fraud schemes [1].

While CMS officials frame the crackdown as a necessary war on criminal enterprises, the civil-rights complaint suggests the targeting of specific ethnic groups is unfounded [4]. The administration continues to defend the crackdown as a measure to protect the integrity of federal healthcare spending [2].

The scale of the alleged fraud, totaling $100 billion [1], represents one of the largest suspected healthcare fraud cases in U.S. history. The sudden loss of payments for over 400 providers [1] could disrupt end-of-life care services for thousands of patients across Southern California.

“Dr. Oz announced the shutdown or payment cuts to more than 400 hospice providers in Los Angeles.”

This confrontation highlights a deepening rift between federal health oversight and state governance, where the pursuit of massive financial recovery clashes with civil rights protections. By linking systemic fraud to a specific ethnic group, the CMS Administrator has shifted a regulatory enforcement action into a broader legal battle over racial profiling and administrative overreach.