Drug, Alcohol Clinics Stay Open Despite Fraud, Report Finds

A dozen drug and alcohol rehabilitation clinics that recently have been found to have committed fraudulent billing practices under the Drug Medi-Cal Treatment Program remain open in Los Angeles County, according to an analysis by the Center for Investigative Reporting, CIR reports. Medi-Cal is California's Medicaid program.

The analysis comes after dozens of clinics were shut down following an investigation by CIR and CNN (Evans, Center for Investigative Reporting, 2/26).

Background on CIR/CNN Report

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 was awarded over the past two years through the Drug Medi-Cal program to 56 clinics in Southern California that had engaged in fraudulent activities.

The $94 million represents half of all public funding for the Drug Medi-Cal program (California Healthline, 8/2/13).

Since the investigation, about half of Drug Medi-Cal treatment centers in Los Angeles County have been involved in regulators' crackdown.

Details of Clinics That Remain Open

However, a recent analysis by CIR found that about 12 clinics in Los Angeles County that were found in audits to have engaged in fraudulent activity have been allowed to remain in business and have been awarded additional public funding.

For example, CIR noted that U-Turn Alcohol and Drug Education Program remains open despite audits that found:

• Fraudulent billing for therapy sessions when counselors' time sheets noted they were off work; and
• Client treatments being approved before the treatment planning occurred.

In addition, the Plaza Community Center also remained open after audits found a physician had backdated records and billed the Drug Medi-Cal program for clients who were marked as absent.

Reaction

A California Department of Health Care Services spokesperson said that some facilities require multiple audits before the state can pull their funding.

DHCS Director Toby Douglas said, "We are uncovering things all the time and working through them," adding, "There will continue to be more audits and more actions taken."

However, CIR noted that many counselors are reluctant to talk about their experiences at Drug Medi-Cal clinics because shuttering more clinics could reduce access to care for California residents.

The L.A. Department of Public Health said it has not yet received any complaints and believes the clinics still in operation can handle the increased demand (Center for Investigative Reporting, 2/26).