MEDI-CAL FRAUD: State Hits Molina With Sanctions
Modern Healthcare reports that investigators in California "are taking serious action against alleged managed care fraud." Long Beach-based Molina Medical Centers was recently "sanctioned" for sending out "false and materially misleading" information to nearly 22,000 of its Medi-Cal members, according to state officials. The state Department of Health Services charged that Molina's marketing activities violated state and federal laws, and DHS and Medi- Cal guidelines. Modern Healthcare reports that the letters told the Medi-Cal members that "they had to re-enroll in the Molina plan to ensure staying with their primary-care physician." DHS contended that neither the department nor network doctors approved the letter and slapped Molina with a $6,000 fine and 60 days of suspended enrollment.
Yes, No, Or Maybe
But Molina has appealed the case, and "those sanctions have been stayed until an administrative law judge hears" the appeal at a hearing scheduled for Oct. 26. "Obviously, we have a difference of opinion with the department," said Molina Vice President John Molina, explaining that the company "did not intend to break any laws or guidelines" and does not think it "violated the terms of [its] contract with DHS." He said that Molina believed it was operating in its role as a provider, not an HMO, and as such was not "operating under guidelines approved by state regulators." But Ken August, spokesperson for DHS, said that federal Health Care Financing Administration officials have forwarded information regarding the charges to the Health and Human Services' inspector general's office. In addition to the initial sanctions, the state's Medi-Cal managed care division informed Molina that "it would not be eligible to compete for a new Medi-Cal contract in Sacramento." While Molina won't have its hearing before final bids for the county contracts are due, state officials said if the judge rules in Molina's favor it could then be allowed to compete for the contract (Hallam/Rauber, 9/14 issue).