O.C. Medical Lab Suspected of Improper Billing

As part of an ongoing investigation into possible abuses of Medi-Cal, the state controller’s office said Friday it suspects a Garden Grove medical laboratory of improperly billing the state medical program for at least $3 million.

Inter Health Medical Laboratory submitted bills to Medi-Cal that listed fictitious patients and presented inflated claims for services for actual patients, according to a state controller’s review released Friday. The review was initiated after Inter Health billed Medi-Cal $1.4 million per month in June, July and August--an “alarming” jump, the controller’s office said, from the company’s $20,000 bill just six months earlier.

Officials with Inter Health could not be reached for comment.

The controller’s office has suspended payments to Inter Health and has alerted the Department of Health Services and the state attorney general’s office of its findings. State officials say criminal charges could result from the review.

Inter Health, which became a Medi-Cal provider in May 1995, never billed for more than $20,000 a month until 1996, said the review. But this year, the laboratory’s Medi-Cal billings rose from $227,743 in January to $610,939 in May before peaking at $1.4 million each in June, July and August.

In September, state auditors began reviewing Inter Health and found evidence of false claims and overbilling, according to the controller’s office. In the first week of that month, Inter Health submitted bills of $349,070 to Medi-Cal. But after the auditors’ visits, the bills fell to just $2 for the third week, said the controller’s office.

Auditors say they also found abuses at six other medical labs elsewhere in the state.

The reviews follow a wide-ranging audit of Medi-Cal billings in March by the controller’s office. Auditors concluded at the time that Medi-Cal was being charged hundreds of millions of dollars for improper medical and pharmacy work.