Davis Signs Bill Intended To Reduce Medi-Cal Fraud
Gov. Gray Davis (D) on Wednesday signed a bill (SB 857) intended to reduce Medi-Cal fraud, the Los Angeles Times reports. The law, sponsored by Sen. Jackie Speier (D-Hillsborough), requires the Department of Health Services to hire 160 new employees to conduct an "intensified campaign" against fraud in the program, whose cost Harvard University professor Malcolm Sparrow estimates at $2 billion annually, according to the Times. The law creates more stringent eligibility standards for health care providers to participate in Medi-Cal. The law also requires managed care providers to finance their own fraud investigation services and report their investigative activities, staffing levels and other findings to DHS. In addition, Speier said the law should serve as a benchmark for future lawmakers to determine how much funding should be allocated to prevent, detect and prosecute fraud in Medi-Cal. The state currently spends about $40 million annually for support staff who investigate fraud; existing efforts should result in about $854 million in savings this year in addition to "cost avoidance" savings of $458 million, the Times reports (Ingram, Los Angeles Times, 10/2).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.