MEDI-CAL FRAUD: State Uncovers Another ‘Sophisticated’ Scam
State Attorney General Bill Lockyer (D) announced last Wednesday that his staff has uncoverd another multimillion-dollar Medi-Cal scam involving stolen doctor and patient records, the Los Angeles Times reports. The "sophisticated scheme" in question involves stolen medical records from hospitals and clinics that were used to set up phony medical operations of ghost doctors and phantom patients. In some cases, hospital and state government employees are suspected of taking bribes from scam artists to provide them with patient lists. In turn, the lists allegedly were used to bill Medi-Cal for never-rendered medical services, the amount of which Lockyer would only estimate to be in the "millions of dollars." Lockyer added, "It's a continuing investigation. When you get deeper into it, it appears to get larger and larger." Collin Wong, the new director of Lockyer's Bureau of Medi-Cal Fraud and Elder Abuse, said at least 20 doctors' names have been confirmed stolen by what is thought to be a tight-knit crime ring. He said that, "we've only scratched the surface." As a result of the new allegations, hospitals around the state are being encouraged to review their document security procedures, including limiting internal employee access to medical records. "They're using that information to go out and set up fictitious businesses. They set up storefronts, they obtain mail drops, they contract with billing services, they create the facade that this is actually a legitimate business," Wong said. Over time, the swindlers' veils of anonymity have worn away, Lockyer said, adding, "We've caught them, and they're going to be prosecuted." The U.S. General Accounting Office estimates that nationwide about 10% of Medicaid money -- including $1.8 billion in California -- is lost to fraud (Pyle, 12/30).
Fraud Suspect Escapes to 'Life of Ease' in Spain
In other Medi-Cal fraud news, the Los Angeles Times reports that Faustino Pascual "lives comfortably" on $6.5 million that officials say he stole from the Medi-Cal system. According to federal court records, Pascual is accused of defrauding the program out of more than $20 million between 1988 and 1990, but state officials say they can only prove he stole $6.5 million before fleeing the United States. Between 1988 and 1990, Pascual billed the state Department of Health Services for $22.4 million worth of adult diapers, underpants, bed pads and other products in a scam dubbed "Diapergate" by the press in 1990. The scam proved so lucrative that a former Pascual crony ventured off to start her own crime ring, which bilked the state of another $13 million in phony Medi-Cal supplies. She and her brother were eventually convicted of the scam (Tempest, 12/24).