Lockyer Releases 10-Point Plan for Reducing Fraud, Abuse in Medi-Cal
As expected, Attorney General Bill Lockyer (D) on Wednesday released a 10-point plan for addressing fraud and abuse problems in Medi-Cal, the Los Angeles Times reports (Reiterman, Los Angeles Times, 4/22). On Tuesday, Lockyer released data showing that Medi-Cal has overpaid prescription drug makers by hundreds of millions of dollars by relying on potentially fraudulent pricing practices. Collin Wong, chief of the attorney general's Medi-Cal fraud bureau, said the program has reimbursed pharmacies and doctors up to 10 times more than it should have for drugs. Stan Rosenstein, deputy director of medical services for Medi-Cal, said that the Medi-Cal reimbursement rates for pharmaceutical products is equal to the average wholesale price of a product less 10%, but said that pharmaceutical companies can overstate wholesale prices to increase Medi-Cal reimbursement for some products (California Healthline, 4/21).
Under Lockyer's plan, patients, care providers and referring physicians would receive questionnaires asking them to verify whether the products and services billed to Medi-Cal were supplied. Doctors or patients who report fraudulent activity would be eligible for 10% of the money recovered up to $1,000. The "confirmation of services" questionnaire, which would be in both English and Spanish, would be tailored to individual patients based on their health care needs and would provide a hotline to report fraud, the Times reports. According to Lockyer's office, the reward system and questionnaire could have prevented about 80% of the fraud cases that his office has prosecuted in recent years. Lockyer also proposed performing a comprehensive assessment of the scope of fraud in Medi-Cal, as well as the creation of a clearinghouse for data on fraud to be shared among state and federal agencies. In addition, Lockyer said he wants to establish a task force composed of academics, technology experts and law enforcement officials to investigate Medi-Cal's efforts to combat fraud and to make recommendations for improvements. Lockyer also wants legislative authority to conduct visits and searches of providers' offices, laboratories and other health care facilities without warrants and wants to make obstruction of any investigation into health care fraud a felony. Another provision in the plan would require pharmaceutical companies to submit to the state accurate information on average wholesale prices for prescription drugs.
Health and Human Services Agency Secretary Kim Belshe said Gov. Arnold Schwarzenegger (R) supports the proposal but added that its cost and logistics need to be studied. Angela Gilliard, legislative advocate for the Western Center on Law and Poverty, expressed concerns about the whistleblower proposal, saying that it could "burden disabled beneficiaries who go to the doctor" frequently, as well as families with several children, the Times reports. She added, "The whole idea of the reward gets tricky. If the beneficiary gets $1,000, is that income? Does it change their eligibility status? Do we change the income rules?" (Los Angeles Times, 4/22).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.