2 Medical Services Raided, 10 Arrested in Medi-Cal Fraud : Crime: Authorities say billing scams are costing the state millions of dollars. Van de Kamp calls for better controls over providers.

Authorities raided two Los Angeles-area medical services Thursday and arrested 10 people as part of a six-month probe into Medi-Cal fraud that has cost the state tens of millions of dollars in illegal orders for adult-size diapers, rubber sheets and similar supplies used to cope with incontinence.

As part of a continuing campaign to end what officials describe as one of the biggest Medi-Cal fraud scams, Romero S. Policar of Diamond Bar, who allegedly ran a major fraud operation, also surrendered to authorities on Thursday, state Atty. Gen. John K. Van de Kamp said at a news conference.

Van de Kamp, who is running for the Democratic nomination for governor, said that officials have already recovered $3.5 million in illegal billings--the largest single recovery in the history of the state’s Medi-Cal fraud squad--from Policar, operator of Emooko Medical & Surgical Supplies on Larga Avenue, just east of Griffith Park.

Policar, officials said, is among a group of Medi-Cal providers whom investigators have dubbed “‘sticker bandits,” referring to the practice of purchasing or otherwise obtaining from Medi-Cal recipients paper stickers used to buy prescription drugs and other medical products.

The stickers are then used to bill Medi-Cal for products that may or may not have been delivered. The items most often billed are so-called “incontinent supplies,” such as diapers and similar products, officials say, because they are quickly used and hard to trace.

Medi-Cal’s expenditures for incontinent supplies skyrocketed from $20 million in 1986 to $160 million in 1989, Van de Kamp said in announcing the latest arrests. In 1989, he said, Emooko alone billed Medi-Cal for more than $9.6 million.

“In retrospect, we believe that one or two con artists spotted a gaping hole in the Medi-Cal billing system in 1986 or 1987 and proceeded to drive a truck through it,” Van de Kamp said. “Then, as usually happens with successful fraud schemes, employees of the original operators . . . began to leave and set up their own shops.”

Soon afterward, he said, dozens of such operations were “bilking taxpayers at a breathtaking rate.”

Van de Kamp estimated that as much of $120 million of claims for incontinent supplies in 1986 were fraudulent. He was critical of the accounting system that allowed such staggering fraud, acknowledging that the Department of Health Services, the agency that administers Medi-Cal, needs to institute better controls over providers and the amounts each Medi-Cal recipient is allowed for medical products.

“These are the kinds of things you’ve got to watch for,” he said, referring to the extensive abuse of the system. “It’s fair to say in some ways that a hole was left open.”

Steven Adler, Van de Kamp’s assistant in charge of Medi-Cal fraud, said that, in the past, the Department of Health Services has accepted anyone who wanted to be a provider and placed no maximum on the amount each medical sticker was worth. Those practices are being reviewed, Adler said.

Before Thursday and in the six months since authorities began cracking down on the scams, 23 people have been arrested and nearly 40 businesses shut down, according to figures provided by Van de Kamp’s office.

The two businesses raided Thursday were identified as Primary Health Services Corp. of Cerritos and Home Health Medical Supplies Inc. of Glendale. The 10 people arrested were identified as Romula M. De Jesus, 52, of Glendale; Plaridel I. Posis, 57, of Los Angeles; Socorro and Teofilo Santos, both 43, and both of Garden Grove; Minna Velasco, 45, of Glendale; Isoline Harper, 47, of Los Angeles, Asaad Far, 43, of Los Angeles; Martin Calavnan, 50, of Cerritos; Jose Tamaro, 47, of San Dimas, and Sonny Namath, 42, of Fullerton.