Audit: L.A. County Failed To Properly Regulate Drug Treatment Clinics
Authorities have failed to properly regulate drug treatment centers in Los Angeles County that receive Medi-Cal funding, according to an audit released Friday by the county's auditor-controller, the Center for Investigative Reporting reports.
Medi-Cal is California's Medicaid program.
The report was commissioned by the county Board of Supervisors after an investigation by the Center for Investigative Reporting and CNN found fraud across Southern California in the Drug Medi-Cal program (Evans/Jewett, Center for Investigative Reporting, 10/22).
In July, an investigation by the Center for Investigative Reporting and CNN found that $94 million has been awarded over the past two years through the Drug Medi-Cal Treatment Program to 56 clinics in Southern California that have engaged in fraudulent activities.
The $94 million represents half of all public funding for the Drug Medi-Cal program.
The CIR/CNN investigation also raised concerns about the oversight of drug rehabilitation clinics in the state, including:
- The frequency of inspections; and
- Regulators' failure to act when signs of possible fraudulent activity were discovered (California Healthline, 7/30).
Details of Audit
The L.A. County audit found that county authorities have failed to follow their own policies requiring the immediate closure of drug rehab clinics that falsify paperwork.
In addition, there were lapses in communication between state and county officials once fraud was discovered at such clinics, according to the audit.
The audit also found that L.A. County Substance Abuse Prevention and Control -- the agency responsible for oversight of the clinics -- collected only 11% of nearly $452,000 that it sought in refunds for questionable claims from clinics in the previous fiscal year.
In addition, clinics that have been closed owe the county $6.4 million, but the agency has referred $1.7 million of that total to the county treasurer.
Leo Busa -- the agency's finance director -- said such claims are "almost impossible to recover."
The audit recommended that state regulators:
- Review whether clinic managers are listed in the U.S. Department of Justice's criminal database; and
- Implement alerts for when new convictions are added to the system.
The report also said that the county should conduct a background check on clinic managers if the state fails to do so.
Reaction to Audit
David Sommers -- a spokesperson for the county CEO -- in an email said the county Department of Public Health will use the findings to "identify additional opportunities to enhance oversight" of drug rehab clinics.
Meanwhile, Norman Williams -- a spokesperson for the state Department of Health Care Services -- said that the agency is working closely with counties to "enhance communication and to improve the effectiveness of provider background checks" (Center for Investigative Reporting, 10/22).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.