Exclusive | Gavin Newsom asks taxpayers for another $1 million to fight Medi-Cal fraud probes

Gov. Gavin Newsom wants another $1 million in taxpayer money to defend his administration as Congress probes California’s Medi-Cal fraud crisis and alleged oversight failures.

A letter obtained by the California Post shows state legislators were alerted last week that Newsom is seeking a $1 million infusion to respond to legal issues around Medi-Cal program integrity, hospice fraud and emergency healthcare coverage provided to undocumented immigrants.

The money will pay for legal defense as California faces federal scrutiny of fraudulent billing in government-funded healthcare programs.

The funding request via the Department of Finance — which follows previous allocations to the governor’s office of $500,000 in September 2025 and another $750,000 in April — comes after the House Oversight Committee launched an investigation in March demanding records from Newsom about California’s licensing and oversight of hospice providers.

Assemblymember David Tangipa (R-Fresno) accused Newsom of sticking taxpayers with the cost of answering questions about fraud that festered under his watch.

“Newsom might want to get Medi-Cal under control before he starts measuring the drapes anywhere else,” Tangipa said, alluding to the Democratic governor’s presidential ambitions. “California lost hundreds of millions to hospice fraud, and now taxpayers are being forced to pay a million-dollar legal bill to defend the mess.”

Newsom’s office said California is cooperating with Congress but accused Republican investigators of pursuing a partisan campaign against states that oppose President Donald Trump.

“Despite the transparent political motives of these investigations, as they have targeted states that did not vote for the President, California respects the gravity of congressional investigations and is working in good faith to be transparent and responsive to congressional requests,” Diana Crofts-Pelayo, a spokesperson for the governor, told The Post in an email.

“We take fraud very seriously — and we believe that careful oversight and accessible critical care are not mutually exclusive. California cares about our communities and we will continue defending our healthcare systems from political sideshows,” Crofts-Pelayo continued.

Newsom’s new funds are coming out of a $25 million pot of money the state approved for legal defense efforts involving the Trump administration, according to the Department of Finance. The latest allocation would bring its total funding to the governor’s office to $2.25 million.

“This appropriation to multiple state agencies is a reflection of the legal fishing expeditions that Washington has waged against California under this administration and this Congress,” H.D. Palmer, a spokesperson for the Department of Finance, told The Post.

The congressional probe may intensify in Newsom’s final months as governor, as he and his wife are both the subject of Department of Justice probes.

Federal lawmakers have alleged that state officials failed to properly monitor hospice operators in California who were falsely billing Medicare for patients who were not terminally ill, as well as registering multiple hospices at the same Los Angeles-area addresses.

“The committee is concerned your administration does not have sufficient internal controls to prevent and detect fraud and is not conducting proper oversight of these hospice programs,” House Oversight Committee Chairman James Comer (R-Ky.) wrote to the governor.

Scrutiny of hospice and Medi-Cal fraud intensified in April when state Attorney General Rob Bonta announced charges against 21 people accused of buying stolen identities on the dark web, using them to enroll unsuspecting out-of-state residents in Medi-Cal and billing the program for hospice services that were never provided.

Prosecutors said the defendants acquired 14 hospice companies and submitted approximately $267 million in fraudulent claims. The supposed patients were healthy, lived outside of California and did not know they had been enrolled in end-of-life care, authorities said.

Newsom and Bonta have argued that the case shows California is confronting the problem, pointing to a moratorium on new hospice licenses and the revocation of hundreds of licenses as evidence of the state’s broader crackdown.

But critics and federal officials have countered that California has a history of turning a “blind eye” to fraud during Newsom’s two terms as governor.

The Department of Finance said it intends to approve the governor’s new funding request no sooner than 10 days after its notice was sent to lawmakers Thursday. 

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