Department of Health Services Overstated Amount Saved From Efforts To Reduce Medi-Cal Fraud, Audit Finds
A state audit of the Department of Health Services found that department officials "significantly overstated" the almost $1 billion saved in the past five years from efforts to reduce Medi-Cal fraud, auditor Elaine Howle announced on Friday, the AP/Contra Costa Times reports (Chorneau, AP/Contra Costa Times, 3/29). The Legislature has added more than 250 positions to DHS since 1999 as part of an effort to reduce the estimated $2 billion that the state loses each year as a result of Medi-Cal fraud. In addition, Gov. Arnold Schwarzenegger (R) has proposed hiring 41 additional auditors and to transfer 20 auditors from the Controller's Office to DHS to help reduce Medi-Cal fraud (Chorneau, AP/Orange County Register, 3/29). However, the audit, conducted in December, raises "big questions about how resources aimed at the problem have been used in recent years," the AP/Times reports. The audit found that in the calculation of the amount that the state saved through efforts to reduce Medi-Cal fraud, DHS officials, rather than only "counting only the value of the specific fee or service found to be improper," included the "value of all other bills submitted by that fraudulent provider during the entire year," the AP/Times reports. The practice led to a "significant" overstatement of the amount saved, the audit found. In addition, the audit found that DHS auditors assigned to identify Medi-Cal fraud "are poorly managed" and that efforts to reduce fraud in the program are "spread out across several units at the department" and have "no central oversight," the AP/Times reports. The report also found that DHS officials do not have a priority system to ensure that Medi-Cal fraud investigators focus on areas that would provide the largest returns. The audit concluded that DHS should establish a comprehensive strategy to reduce Medi-Cal fraud.
"We took a bunch of money and threw it at the problem, and it hasn't worked so far," Howle said. Assembly member Rick Keene (R-Chico) added, "People have been asleep at the wheel. There seems to be very little accountability out there." Diana Ducay, deputy director of audits at DHS, said that her staff is "already largely assigned to the highest-priority areas" of Medi-Cal fraud, but she added that she "wants to conduct a comprehensive study of the system to ensure her resources are being applied properly," the AP/Times reports. Nicole Evans, a spokesperson for DHS Secretary Kimberly Belshe, did not comment on whether the department disputes the results of the audit. Evans said, however, that DHS officials have agreed to consider "reevaluating the model" that the department uses to calculate the amount saved from efforts to reduce Medi-Cal fraud based on the results of the audit (AP/Contra Costa Times, 3/29).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.