MEDI-CAL FRAUD: Four State Employees Under Bribery Investigation
In the "first indication that the FBI has evidence of direct government complicity" in Medi-Cal fraud, state officials revealed today that four workers may have accepted bribes to expedite the "assignment of official Medi-Cal numbers" to certain medical supply companies, which then used fake billing to bilk the state government out of $1 billion. After discovering "questionable practices," the state Department of Health Services launched an internal investigation, turning the findings over to the FBI. According to health department spokesperson Ken August, the federal investigation "is ongoing" and the "four employees were removed from their positions and later transferred to positions outside of Medi-Cal." It is not clear if the workers provided the numbers with the understanding that they would be used for fraudulent activity, the Los Angeles Times reports.
Insiders said the revelation was not surprising, since it is "widely known that one could 'purchase' a provider number and start billing Medi-Cal within several days." The application process normally takes weeks. Explained one FBI informant, "This whole (fraud) wasn't just being done by providers. ... The fish stinks from the head down." He detailed several scams, noting that one supply store owner had "bragged to him of paying $15,000 to get the number in two days." In another case, a state employee, whose boyfriend participated in the fraud, "was well known for taking payoffs in exchange for provider numbers." In response, state officials are working to "tighten the application process" and have issued a moratorium on new medical supplier provider numbers. New Director of Health Services Diana Bonta stressed, "(We are) committed to protecting and preserving the integrity of the Medi-Cal program. We have dedicated the necessary resources to ensure Medi-Cal funds are spent providing much needed health care to low-income and needy Californians" (Ellis/Mozingo, 12/3).