State, Los Angeles County Settle Allegations of Improper Medicaid Billing with Federal Government
The state and Los Angeles County have agreed to pay the federal government $73.3 million to settle allegations that they improperly billed the federal Medicaid program for services provided to some minors, the Los Angeles Times reports. The allegations resulted from a whistle-blower lawsuit filed in 1999 by Gurubanda Singh Khalsa, director of financial services for the county Department of Mental Health. According to the lawsuit, Khalsa warned officials in 1998 that the county overbilled Medicaid by $7.5 million for services provided to minors ineligible for the program. The lawsuit alleged that county and state officials did not return the $7.5 million to the federal government and "made false statements and records in order to conceal their obligation to return" the funds. The Times reports that the Medicaid billing problems resulted from a "minor consent program" administered by Medi-Cal that allows minors to receive services for conditions related to sexual assault, illicit drug or alcohol abuse, pregnancy, family planning, sexually transmitted diseases and mental health without parental consent. State law prohibits Medi-Cal officials from "contacting the parents about the application" for the services. As a result, Medi-Cal officials cannot confirm family income, a requirement for federal reimbursement for Medicaid services.
State and county officials "deny any wrongdoing" in the case. "The overpayment was not the result of fraud. This is part of a larger misunderstanding between the state and federal government," Principal Deputy County Counsel Anita Lee said. State officials attributed the alleged improper Medicaid billing to "honest mistakes" made in 1998 and 1999. "The settlement resolves those mistakes, which were made in the previous administrations," Barbara Yonemura, deputy director and chief counsel for the Department of Health Services, said (Ornstein, Los Angeles Times, 6/21). As part of the settlement, Los Angeles County will pay $6.8 million to the federal government and $140,646 to Khalsa's attorneys. In addition, the settlement requires the state to pay the federal government $66.5 million, as well as $18.7 million in interest, over nine years, beginning in 2003 (AP/Fresno Bee, 6/21).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.