S2 E2 Start with Trust...then Double Check

Seven Texas hospices reported a 100 percent live-discharge rate last year. Twenty-five more reported above 90 percent. The national average is 17 percent. Every patient enrolled in end-of-life care at those seven hospices walked out alive.

One Texas hospice executive testified before the state Senate that an investigator she worked with found a single owner operating fifteen hospices out of one building. A ten-patient hospice generates approximately $60,000 a month in Medicare billing. Fifteen hospices in one building. Roughly $11 million a year. From a single doorway.

And some patients, according to documented testimony, do not know they have been enrolled.

This week, Edge of the Story goes to Texas. Where the same fraud architecture that drained Los Angeles County migrated after California began aggressive enforcement. ProPublica documented buildings in LA that once housed more than 100 hospices simultaneously. CMS Administrator Dr. Mehmet Oz said at the National Press Club in April 2026 that fraudulent operators shift jurisdictions as enforcement tightens. Texas hospice licenses have doubled since 2020.

Last week we asked whether the money changed the diagnosis. This week we ask a harder question. What happens when Medicare pays the same daily rate whether a nurse goes to the bedside or whether nothing happens at all? And what happens to the patient — the actual dying patient, the one the program was designed to serve — when no one is checking?

The Company Moment is a fruitcake bakery in Corsicana, Texas. Where a CPA earning $50,000 a year stole approximately $17 million over nine years. He bought 38 cars. Neiman Marcus ran out of things to sell him. He took 223 private jet trips. The bakery hurt itself trying to solve a problem that was sitting at a desk inside the building writing checks to itself. When the fraud was finally discovered, the bakery's president did not become bitter. He wrote twelve words that became the bakery's new credo — and the season's closing argument.

Start with trust. Then double-check.

THE TEXAS HOSPICE TESTIMONY

Lisa McNair testimony — Texas Senate Health and Human Services, April 8, 2026

https://senate.texas.gov/cmte.php?c=535

“You don’t go on hospice to leave alive” — KFDM

https://kfdm.com/news/local/you-dont-go-on-hospice-to-leave-alive-waste-watch-exposes-signs-of-texas-hospice-fraud

15 hospices in one building — Breitbart Texas

https://www.breitbart.com/border/2026/05/09/report-medicare-scams-in-texas-15-hospices-in-one-building-patients-signed-up-without-knowing/

Local hospice leader exposes fraud — KBTX

https://www.kbtx.com/2026/05/08/local-hospice-leader-exposes-fraud-draining-millions-taxpayer-dollars-across-texas/

THE CALIFORNIA-TO-TEXAS MIGRATION

CMS Administrator Oz at the National Press Club, April 28, 2026 — Morgan Lewis brief

https://www.morganlewis.com/pubs/2026/05/cms-trains-its-program-integrity-sights-on-texas-hospices

ProPublica investigation — 100+ hospices at single LA addresses

https://www.propublica.org/article/hospice-fraud-medicare-end-of-life-care

DOJ — 8 Arrested in California $267M Hospice Fraud Takedown, April 24, 2026

https://www.justice.gov/usao-cdca/pr/8-arrested-health-care-fraud-takedown-including-owners-hospices-billed-taxpayers

THE NUMBERS

Phantom Hospices Texas investigation — May 10, 2026

https://voz.us/en/society/260510/35588/phantom-hospices-fraud-scheme-that-drained-millions-from-medicare-in-texas-under-investigation.html

Texas hospice licenses doubled since 2020 — Texas Department of Health

https://www.hhs.texas.gov/services/aging/long-term-care/hospice

Hospice Medicare per diem payment rates — CMS

https://www.cms.gov/medicare/payment/prospective-payment-systems/hospice

THE COMPANY MOMENT — COLLIN STREET BAKERY

The Collin Street Bakery embezzlement story — Texas Monthly

https://www.texasmonthly.com/articles/the-great-fruitcake-heist/

Sandy Jenkins federal sentencing — DOJ Eastern District of Texas

https://www.justice.gov/usao-edtx/pr/corsicana-couple-sentenced-fraud

Fruitcake Fraud documentary — Amazon Prime Video

https://www.amazon.com/Fruitcake-Fraud-Season-1/dp/B09NXHL5XX

Collin Street Bakery — Corsicana, Texas (since 1896)

https://www.collinstreet.com

IF YOU OR A LOVED ONE NEEDS HOSPICE CARE

National Hospice and Palliative Care Organization — Find a Provider

https://www.nhpco.org/find-hospice

Medicare Hospice Compare — Official quality data

https://www.medicare.gov/care-compare/?providerType=Hospice

Veterans Crisis Line — Call 988 and Press 1  ·  Text 838255

https://www.veteranscrisisline.net

SAMHSA National Helpline — 1-800-662-HELP (4357)

https://www.samhsa.gov/find-help/national-helpline

Have you ever been in a room where something shifted—but no one said it out loud?

Share your story at www.edgeofthestory.com/heard
.
If we feature it, we’ll send you an Edge of the Story notebook—because some observations are worth writing down.

Transcript

Shocking Hospice Discharge Numbers

0:04

In Texas last year, seven hospices reported a 100% live discharge rate. 100%. Every patient enrolled in end-of-life care walked out alive. Twenty-five more Texas hospices reported live discharge rates above 90%. The national average for hospice live discharge rates is approximately 17%. That number reflects what is supposed to happen. Sometimes a patient stabilizes, sometimes a family changes their mind, sometimes a misdiagnosis is corrected. 17% is normal. 90% is not normal. 100% is mathematically impossible to defend. One Texas hospice executive testified before the state senate on April 8, 2026, that an investigator she worked with had found a single owner operating 15 hospices out of a single building. A single 10-patient hospice can generate approximately $60,000 per month in Medicare billing. 15 hospices in one building means roughly $900,000 a month, roughly $11 million a year from one building. And some of the patients, according to documented testimony, do not know they have been enrolled. Whether you're in your car, out on a run, somewhere in the middle of your day, or in the shop bending wire, there are moments that don't announce themselves. They don't raise their voice, they don't stop the room, but they change everything. This is Edge of the Story Season 2, Episode

The Question Behind The Headline

2:00

2. I'm Daryl Best. Last week we asked whether the money changed the diagnosis. This week we ask a harder question. What happens when the reimbursement structure pays the same daily rate, whether a nurse goes to the bedside or whether nothing happens at all? And what happens to the patient? The actual dying patient, the one the program was designed to serve when no one is checking? We're not investigating the headline. We're investigating how the headline got in the room. Last week we traced a chain from the legislation no one could oppose to the rulemaking that paid forty percent of whatever providers charged, to the private equity firms that acquired 500 autism therapy centers in a decade, to the conference in Scottsdale, where the lack of regulation was described as an opportunity. The same week a fraud bust was announced in Minneapolis. The word that built the room was medically necessary. This week, the room is different. The patients are not children, they are dying. The word is different, it is not medically necessary. It is end-of-life care. And the architecture, the legislation, the rulemaking, the reimbursement structure, the private equity acquisitions, the migration from one state to another as enforcement titans is the same architecture, running in a different industry with a different word, doing the same work.

Three Headlines Point To Texas

3:40

So, Julia, what headlines are you tracking this week? Well, Daryl, our first headline comes from the Morgan Lewis brief on May 26th. The headline reads: CMS trains its program integrity sites on Texas hospices. CMS Administrator Dr. Mehmet Oz spoke at the National Press Club on April 28, 2026. He made the point that fraudulent actors operating in one jurisdiction often shift their activities to others as enforcement intensifies. He indicated that as hospice fraud scrutiny increases in California, similar schemes may emerge in Texas, making it a growing focus for federal enforcement. California has seen hundreds of hospice takedowns and Medicare payment suspensions, particularly in Los Angeles County. ProPublica reporting documented that certain buildings in Los Angeles once housed more than 100 registered hospices simultaneously. More than 100 hospices in a single building in Los Angeles. Documented. When California cracked down, the operations moved. Texas hospice licenses have nearly doubled since 2020. With 833 of the state's current 1,366 licenses issued between 2021 and 2025. A 100% increase in five years. Our second headline was reported by KFDM KBTX back in April. Seven Texas hospices reported 100% live discharge rates. 25 more above 90%. Lisa McNair, president and CEO of Hospice Brazos Valley and treasurer of the Nonprofit Hospice Alliance, testified before the Texas Senate Committee on Health and Human Services. She told lawmakers, seven Texas hospices reported live discharge rates of 100%, 25 more reported rates above 90%. The national average is approximately 17%. She said, you don't go on hospice to leave alive. When you have a live discharge rate of 100%, that means every patient that you've brought on service, you're discharging them alive. Why would you do that? Why does that look suspicious? It's because you're bringing them on. You're billing for services. They were never appropriate for hospice. She also testified that 61% of Medicare certified hospices in Texas did not report any quality data in 25, and that 139 Medicare certified hospices treated 10 or fewer patients last year, small enough to avoid certain federal reporting requirements. And finally, our third headline comes from the Department of Justice, U.S. Attorney's Office, Central District, California, in April. California federal indictment, 21 charged in $267 million. Hospice fraud ring. Federal prosecutors charged 21 people in a hospice fraud ring that allegedly cost taxpayers $267 million. The defendants used stolen identities and created fake hospice companies to bill Medicare for care meant for terminally ill patients. The DOJ also arrested the CEO of Simi Valley-based Valley Pacific Hospice. In 22, that company's live discharge rate was over 75%, more than four times the national average. CMS revoked the company's Medicare enrollment in August 2024. Three headlines, same architecture, same week. All three sources are in our show notes.

How Medicare Pays Hospices

7:21

Medicare's hospice benefit was created in 1982. Congress wanted to make sure that dying Americans, patients with terminal illness with six months or less to live according to their physician, could receive compassionate care in their final months without bankrupting their families. The premise was simple and compassionate. A nurse comes to the bedside, a social worker checks on the family, a chaplain offers spiritual support, a home health aide helps with bathing, a doctor manages pain medication, the patient dies at home or in a hospice facility, surrounded by people who care with their pain managed and their family supported. That is hospice care as Congress designed it. That is hospice care as it still exists in legitimate facilities run by genuine clinicians who do this work because it is hard and necessary. Now, here's how Medicare pays for it. Medicare pays hospice providers on a per diem basis, a flat daily rate for every day a patient is enrolled in hospice care. The rate is the same whether a nurse visits the patient every day or once a week or never. The rate is the same whether a chaplain comes by or a social worker or nobody. The rate is the same whether the patient dies in three days or lives for two years. Routine home care, the most common category, reimburses approximately $200 per patient per day for the first 60 days, then steps down to approximately $158 per day after that. A 10-patient hospice generates approximately $60,000 per month in Medicare billing. That is the number Lisa McNair gave the Texas Senate. Multiply by 12, that is $720,000 a year from 10 patients, whether anyone visits them or not. And now we arrive at the room one investigator described 15 hospices, one building, one owner, 15 separate Medicare provider numbers, 15 billing operations, each one billing $60,000 a month from the same building, approximately $900,000 a month, approximately $11 million a year from one building, with no requirement that any specific service be delivered, because the per diem pays the same rate whether the service happens or not.

California Crackdown And Texas Surge

9:50

This story has happened before in California, huh? Starting around 2019, ProPublica and the Los Angeles Times documented an explosion of hospice fraud in Los Angeles County. Hundreds of new hospice licenses were issued. Buildings in Los Angeles contained dozens of registered hospices at the same address. Some buildings had more than 100. The fraud became so brazen that CMS finally imposed a moratorium on new hospice licenses in four states California, Texas, Nevada, and Arizona. California began aggressive enforcement, takedowns, payment suspensions, criminal indictments like the 21 people charged this April in the $267 million ring, and the operations migrated. Texas hospice licenses doubled. The same pattern that ProPublica documented in Los Angeles. Multiple hospices at the same address, low patient counts to avoid quality reporting, live discharge rates that defy the medical purpose of the program began appearing in Houston, in Dallas, in the Rio Grande Valley. CMS administrator Dr. Mehmet Oz told the National Press Club on April 28th that fraudulent actors shift jurisdictions as enforcement intensifies. That is the documented pattern. The same architecture moved from California to Texas, the same way McKinse moved from the FDA to Earcott, the way private equity moved from autism in North Carolina to autism in Indiana, the way the playbook moves wherever the next reimbursement stream opens and the next state's enforcement has not yet caught up.

Patients Enrolled Without Consent

11:40

Lisa McNair testified to something else before the Texas Senate, something that should stop the conversation. Some Texas hospice operators are enrolling patients in hospice care without the patient's knowledge. Families who request a specific legitimate hospice are being approached by competing operators. The competing operators sign the patient up under a different Medicare provider number. The family thinks they hired the hospice they actually wanted. They did not. Someone else is now billing Medicare, and in some cases the patient is not receiving any care at all. McNair testified We have examples all the time of people that come and go. We asked for you and before we knew it someone else had come in. We thought they were you, but then we signed papers and realized we were with a different hospice. Stop and consider what that means. A family with a dying loved one calls the hospice they trust. Someone shows up at the door. The family signs papers believing they are working with the hospice they requested. The paperwork enrolls the patient in a different hospice. One the family did not choose, did not vet, did not consent to. That hospice now bills Medicare $200 a day for the patient's care. Whether or not that hospice actually provides care. Whether or not anyone visits the patient, whether or not the patient is even told what they sign. The reimbursement flows, the patient is on the books, the room is paid, and the family, in the most vulnerable moment of their lives, with a parent or a spouse dying, is processing grief while a hospice they never hired is making thousands of dollars a month off a patient they may never see. The word covering all of this is end-of-life care. Nobody can argue against compassionate care for the dying. Nobody can oppose a Medicare benefit designed to let terminally ill Americans die with dignity instead of in hospital corridors. The word pre-wins the argument before the argument begins. And inside that word, 15 Medicare provider numbers operate from one building. Patients are enrolled without their knowledge. Discharge rates of 100% prove that the people on the books were never dying. 61% of Texas hospices do not report quality data. 139 of them are small enough to avoid the reporting requirements entirely. The architecture is the same architecture last week's episode documented. A reimbursement structure that pays per claim, with no verification at the point of service that the claim matches reality. A word end-of-life care, medically necessary, home health, training, free. That makes the arrangement impossible to oppose. And a verification gap wide enough to drive 15 hospices through a single doorway.

Trust Without Verification And The Bakery

14:45

Here is the question the season has been asking applied to this episode. Who designed a Medicare hospice reimbursement system that allows 15 hospices to operate from one building? Who wrote the rules that let live discharge rates of 100% persist for years before anyone notices? Who built the verification process that does not verify whether the patient on the books even knows they are on the books? The answer is not one person, it is not a conspiracy. It is the same answer as autism, the same answer as ABA, the same answer as the two hundred eighty eight shell companies in Columbus and the cosmetic Botox doctor billing for migraine treatments on patients in federal prison. The system was built on trust. Medicare trusts the hospice to send the bill only for services it actually provided. The state trusts the autism provider to bill only for therapy actually delivered. The federal meal program trusts the daycare to claim only meals actually served. The trust is the design. The trust is what makes the system work for the legitimate provider. The actual hospice, the actual therapy center, the actual daycare? Because verification at the point of service would be expensive and intrusive and slow. And the trust is also the doorway, through which fifteen hospices walk into a single building, through which a Botox doctor bills for migraines, through which a daycare submits 13,000 fraudulent claims over three years. The system was built on trust, and nobody double checked. Our company moment this week comes from a fruitcake bakery in Corsicana, Texas. Corsicana is a small town 55 miles south of Dallas, about 24,000 people, the kind of place where neighbors wave as they pass on the road, and children still say ma'am and sir, and the same family has been making fruitcakes for over a hundred years. The Collins Street Bakery opened in 1896, fourth generation family business. They ship their famous deluxe fruitcake to all 50 states and to every country on earth that allows the import of dried fruit. Bill Clinton sent them to foreign heads of state. Frank Sinatra ordered them every Christmas. The bakery employs about 200 people in a town where 200 jobs matters. In 1998, the bakery hired a corporate controller. His name was Sandy Jenkins. He was a CPA. He came with good references. He was earning $50,000 a year. He sat in an office in the building, managing the books, writing the checks, balancing the accounts. Bob McNutt, the bakery's president, trusted him. Why wouldn't he? It was Corsicana, Texas. Everyone knew everyone. The accountant came from a good family. He had a wife named Kay. He sat in the same office for years. He was part of the building. Over the next nine years, Sandy Jenkins stole approximately 17 million from the Collins Street Bakery. $17 million on a $50,000 salary. The method was not sophisticated. He wrote checks to himself. Nobody compared the cleared checks to the general ledger. Nobody asked the bank for confirmations. He controlled the books, the bank reconciliation, and the check signing authority. One man. Soul authority. He was not subtle about the money. He and his wife Kay spent over $11 million on a black American Express card alone, about $98,000 a month, on a household with a legitimate income of $50,000 a year. They bought 38 vehicles during the scheme, Lexus after Lexus, a Mercedes, a Bentley, a Porsche. The prosecutors documented that the Jenkins family bought a new car every time they needed an oil change. They spent approximately $1.2 million at Neiman Marcus in Dallas, where they had nicknames. The staff called them fruitcake and cupcake. The government later proffered evidence at sentencing that the Jenkins family stopped shopping at Neiman Marcus when Neiman's ran out of things to sell them. 223 private jet trips, $3.3 million to Santa Fe, Aspen, Napa. On a $50,000 salary in Corsicana, Texas, where everyone knows everyone's business. And nobody asked. Management could not figure out why. They restructured operations, they cut costs, they laid off employees, people in Corsicana lost their jobs. Because Sandy Jenkins was flying to Aspen on a private jet. The bakery hurt itself trying to solve a problem that was sitting at a desk inside the building writing checks to itself. In 2013, nine years after the theft began, a newly hired accountant discovered the fraud. Sandy Jenkins was sentenced to 120 months in federal prison. Kay Jenkins received five years probation and was ordered to write a formal apology in writing to the bakery. Sandy Jenkins died in federal prison in Seagaville, Texas in 2019. Bob McNutt, the bakery's president, the man who had trusted Sandy Jenkins for nine years, wrote his own account of what happened. He did not become bitter. He did not stop trusting. He said something else. What some might call naivety, we call faith. Faith that your neighbor does unto you what you do unto them. We don't regret trusting Sandy, but it has led to us modifying our credo. Start with trust, then double check. Start with trust, then double check. That is what the Medicare hospice system needed and did not do. The Collins Street Bakery trusted Sandy Jenkins. So does Medicare trust the hospice. So does the state trust the autism provider. So does the federal meal program trust the daycare. The bakery learned. They hired a forensic accountant, they installed dual signature requirements, they restructured the controls, they modified the trust. They did not abandon it. They protected it by making it possible to verify. The Medicare hospice system has not done this. The Autism Reimbursement System has not done this. The Medicaid daycare system has not done this. The architecture is still built on trust without verification. And fifteen hospices walk into a single building because the system still pays the per diem without ever asking whether the patient on the books was ever actually visited. The bakery in Corsicana still ships fruitcakes. It still employs about 200 people. It is still owned by the same family that opened it in 1896. It survived because Bob McNutt understood the lesson. Trust is not the problem. The absence of double checking is Sandy Jenkins is dead. The hospice patients who were enrolled without their knowledge. Some of them are dead too. The difference is that the bakery got to write the second sentence. The patients did not. This episode is about people who are dying. It is about a system that is supposed to care for them, and it is about what happens when the system stops looking. Many of you have sat with a parent, with a spouse, with a friend in their final weeks. You may have called a hospice, you may have signed papers in a hallway, you may have been grateful that someone came to the house, gave you a number to call when the pain got worse, told you what to expect. The legitimate hospice nurses, social workers, chaplains, and home health aides in this country do some of the hardest work that exists. They sit with strangers in the last hours of their lives, they hold hands, they explain death to children, they show up at three in the morning when a family does not know what to do. This episode is not about them. This episode is about a system that has allowed bad actors to operate inside the same word that protects the people doing the real work.

Listener Stories And What Comes Next

23:34

We want to hear from you. Have you been at the bedside of someone you loved and noticed something? A nurse who never came, a bill that listed services you do not remember anyone providing, a family member who turned out to be enrolled with a hospice the family had never heard of, a signature on a form that came from a person you did not invite to your home. Or maybe the opposite. Maybe the system worked. Maybe a hospice nurse changed how your family experienced loss. Maybe a chaplain said the right thing at the right time. Maybe the home health aid who came every Tuesday was the closest thing your mother had to a friend in her last months. Both stories matter. The architecture is failing the people doing the real work as much as it is failing the dying. The legitimate hospices in Texas are competing for patients with operators billing Medicare from a building that contains fifteen hospices at the same address. Find us at edge of the story dot com slash herd. We read everything. Here is what this season is building toward. Last week we asked whether the money changed the diagnosis. We documented that an autism provider in Indiana billed three hundred forty thousand dollars per child per year. We documented that when the state set a uniform rate, spending dropped by one hundred and sixty six million dollars without reducing the number of children served. The difference was not care, the difference was billing. This week we asked what happens when the reimbursement structure pays the same daily rate whether anyone visits the patient or not. We documented seven Texas hospices with one hundred percent live discharge rates. We documented fifteen hospices in a single building. We documented patients enrolled in care they did not know they were receiving in the most vulnerable moment of their lives. Different room, different industry, different word, same architecture, a government program with a compassionate purpose, a reimbursement structure built on trust, a word medically necessary, and of life care that makes the arrangement impossible to oppose, and a verification gap wide enough to drive the architecture through. And in both episodes, the same answer keeps appearing the patient, the actual patient, the child with autism, the parent dying in hospice, the person the program was designed to serve, that patient is on a wait list, or enrolled in care they did not consent to, or receiving therapy at six and forty dollars an hour from a technician with a high school diploma, or being approached at home by a competing provider who signs them up without their knowledge. The room is paid, the patient is not seen. Next week we go a layer deeper. To the people who got caught. Phantom employees in empty offices, and a cosmetic Botox doctor who billed Medicare $45 million for migraine treatments while on vacation in Cabo, and bought a $12,000 17th century crossbow with the proceeds. These are the people who get caught. And the question we will ask is the question every fraudbus press conference does not ask. The names on the indictments are real, the schemes are real, the arrests are real, two hundred and eighty-eight defendants, twenty-one people charged in California, fifteen indicted in Minnesota. But the private equity firms acquiring 500 autism centers, the hospital systems paying $345 million to settle kickback cases and keeping their $340 B discount the next day, the consulting firms advising both sides of every regulated transaction. Those names are not on the indictments. Next week we ask why. Why the people who get arrested are always the small operators with the crossbows and the empty offices and the shell companies, and why the institutions that designed the systems that made the empty offices possible, the ones that profit from the architecture every day, legally, never get the press conference. Next week on Edge of the Story, 288 companies, seven buildings, $250 million billed to Medicaid, and one office with no doorknob. Edge of the Story is produced high atop Chalk Mountain. If this episode reminded you of someone you lost, hold them. If it reminded you of a hospice nurse who made the unbearable a little less so, thank them. And if this episode changed how you hear the word end of life care, share it. With a parent, with an adult child, with someone navigating a difficult decision right now. Every source is in our show notes. Every name, every number, every filing. We don't hide our work. We're not investigating the headline, we're investigating how the headline got in the room. See you next week.