L.A. County Officials Approve Review of Drug Treatment Clinics

On Tuesday, the Los Angeles County Board of Supervisors unanimously approved a motion calling for a review of the county's authority over taxpayer-funded drug treatment clinics and its ability to stop payments to such facilities when they commit fraud, the Los Angeles Times' "L.A. Now" reports.

The move is in response to a yearlong investigation by CNN and the Center for Investigative Reporting, which found that several drug treatment centers in Southern California that receive Medi-Cal funding have participated in fraudulent billing practices.

Medi-Cal is California's Medicaid program (Mehta, "L.A. Now," Los Angeles Times, 8/13).

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 $94 million represents half of all public funding for the Drug Medi-Cal program.

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.

Since the findings were released, state officials have stopped payments to 38 companies that operate 108 drug treatment clinics in California.

Details of Motion

Los Angeles County Supervisor Zev Yaroslavsky (D) introduced the motion, which requires attorneys and auditors to issue a report within 30 days about the county's oversight of the centers.

The motion also directs the county to:

• Perform an audit of the Drug Medi-Cal program;
• Develop a protocol for determining the severity of problems in drug treatment clinics; and
• Require notification of top county leaders when severe problems are found (California Healthline, 8/9).

The motion also requires the county to develop safeguards for ensuring that parolees, troubled adolescents and parents dealing with substance misuse disorders are not sent to clinics that have been suspended because of fraud.

Mark Ridley-Thomas -- chair of the board -- said members voted for the motion because they "want to make sure we don't trip over our own feet" ("L.A. Now," Las Angeles Times, 8/13).