California Officials Suspend Medi-Cal Payments To 29 Clinic Operators
This week, the California Department of Health Care Services completed investigations of 66 companies that operate alcohol and drug treatment clinics in the state, resulting in the suspension of Medi-Cal payments to 29 companies operating a total of 83 clinics, CNN reports (Jewett/Evans, CNN, 8/1).
Medi-Cal is California's Medicaid program.
The actions coincide with a Center for Investigative Reporting and CNN investigation, which found evidence of fraudulent billing practices at such centers (Megerian, Los Angeles Times, 8/1).
Details of CIR/CNN Investigation
For the CIR/CNN investigation, the news groups reviewed thousands of pages of government records and conducted dozens of interviews with counselors, patients and regulators.
Investigators 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, such as:
- Diagnosing people with addictions they did not have;
- Collecting state residents with mental illnesses from board-and-care centers to receive therapy from which they could not benefit;
- Enticing individuals from the street with cash, cigarettes and food; and
- Persuading patients to sign in for days they did not visit the clinics.
The CIR/CNN investigation raised concerns about the oversight of drug rehab clinics in the state, including:
- The frequency of inspections; and
- Regulators' failure to act when signs of possible fraudulent activity were discovered.
According to investigators, 12 clinics that were found to have engaged in fraudulent activity under the Drug Medi-Cal program were allowed to remain in business and awarded additional public funding (California Healthline, 7/30).
Details of DHCS Investigation
Meanwhile, DHCS conducted investigations that included:
- Reviews; and
- Onsite visits (California Healthline, 7/19).
State officials found that some clinics:
- Billed Medi-Cal for services that were not provided or not medically necessary; and
- Hired individuals who previously were convicted of fraud in government programs, which violates Medi-Cal regulations.
The facilities have not been named because the investigation is ongoing.
The centers have 60 days to appeal the payment suspension.
The cases have been transferred to the state Department of Justice (California Healthline, 7/30).
DHCS Director Toby Douglas said the agency is "deeply concerned" about the suspected fraud, adding, "We have to put all our resources into fighting fraud in this program."
Lynda Gledhill -- a spokesperson for California Attorney General Kamala Harris (D) -- said the cases are being taken "very seriously" (Los Angeles Times, 8/1).
Meanwhile, Douglas discussed the investigaton on CNN’s "Anderson Cooper 360." ("Anderson Cooper 360," CNN, 8/2).
Lawmaker Calls for Audit
Meanwhile, state Sen. Ted Lieu (D-Torrance) is calling for an audit into the rehabilitation program.
"I'm very concerned that if the fraud is not remedied, it would jeopardize the public's support for this very vital program," Lieu said, adding that fraud "takes tax dollars away from legitimate clinics" (Los Angeles Times, 8/1).
Lieu said he wants to determine:
- How long fraud has occurred;
- How pervasive fraud is in the program; and
- How laws or regulations can be used to prevent fraud from occurring (CNN, 8/1).