The Merabi Professional Medical Plaza, a three-story, 32,000 square foot stucco and glass office building in Los Angeles, is home to a salon, a law office, a modeling agency, a realty corporation and, also, 89 licensed hospice companies.
Patient advocate Sheila Clark, who has worked to expose allegations of widespread Medicare fraud in the hospice industry, calls this building “ground zero” for the issue.
“This particular building I noticed, I’m like, ‘dang, how can there be that many licensed and certified hospices in this tiny little building?,'” Clark said.
The building is among the most extreme cases of what’s known as “clustering” to turn up in a sweeping CBS News investigation — a grouping of large numbers of hospice offices that state auditors consider a major red flag for potential fraud.
The Van Nuys address for Merabi Plaza appears dozens of times in state records for licensed hospice companies. Inside the building’s entry hall, a directory lists numerous hospice agencies that line the long tiled hallways, although the building’s owner claims many are no longer there.
Clark said it makes “no sense” to find so many licensed and certified hospice company offices operating inside a single building. Auditors said the clustering of so many firms raised concerns because it suggests that “the number of agencies in these areas likely exceeds the number of patients who need services.”
Concerns about clustering appear in a 2022 California State Auditor’s report, which found that Los Angeles County had experienced a 1,500% increase in hospice companies countywide since 2010. That’s six times more hospice providers than the national average, relative to the county’s elderly population.
Auditors said other warning signs for potential fraud included multiple hospices in one building, geographic clustering, low patient counts, high rates of terminally ill patients later discharged alive, excessive billing and staff shared across multiple companies.
Hospice facilities by number of fraud indicators (Column Chart)
CBS News found that 72 of the 89 registered hospices in Merabi Plaza have at least three of those six potential warning signs.
CBS News wasn’t the first to visit the building with questions. Federal records show regulators visited multiple suites in Merabi Plaza between 2021 and 2025. They found nearly 400 violations at 75 companies, those records show.
One inspection cited a nurse who reported that a patient’s family was satisfied with care, despite indications that no one from the hospice ever visited that patient.
Another inspection of a patient’s chart listed medications for malaria and diabetes. The patient told inspectors he wasn’t taking either drug. At that same company, a hospice social worker wrote about a family’s grief when their loved one passed, but there was no evidence the patient was actually dead.
Many of the hospice companies in Marabi Plaza have been billing Medicare for years and collecting reimbursements that come from federal tax dollars.
On a recent visit to the building, CBS News encountered the building’s owner, Kambiz Merabi. He said officials from Medicare came to his building two years ago specifically looking for hospice agencies, and he allowed them to conduct their inspections.
Merabi said to him, the businesses appear to be legitimate – noting that his tenants are required to provide standard documentation that shows they are valid.
“I’m not a police or keeper of what they do, how they do business,” Merabi said.
Merabi said the numbers that appear in government records differ from those on his tenant list. He shows only 12 hospice companies operating in his building. He explained that a number of the agencies had recently moved out of the building, though public records don’t yet reflect that, and hospices are required to notify authorities if they move.
Advocates say the discrepancy raises questions about what they call “ghost hospices.” Those are paper companies that bill the government for patients, even if they don’t actually provide any real care.
California Attorney General Rob Bonta, whose office is responsible for investigating the industry in the state, said hospice fraud rates remain “unacceptable.”
“We’re committed to tackling the issue until we root it out and extinguish all fraud,” Bonta said.
Medicare is federally administered, and Dr. Mehmet Oz, who heads the Centers for Medicare and Medicaid Services, said the agency has “dramatically accelerated our ability to take out the bad guys by stopping their payments.”
“I want to make it clear, we’re not going to pay you money just because you sent me a piece of paper with a bill on it. We’re going to check to make sure that’s legitimate, and that document is evidence that you actually performed something that’s helpful to the American people,” Oz said. “Or you’re not getting money from us.”
Merabi said he, for one, supports that effort.
“I’m all for it because at the end of the day, you and I are paying for all those things that are not right,” Merabi said.
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