16 Medi-Cal substance abuse treatment centers are under investigation


Sixteen drug and alcohol treatment centers that provide rehabilitative services to Medi-Cal patients are suspected of fraud and of hiring providers with felonies on their records, officials from the California Department of Health Care Services announced this week.

The centers, whose names have not yet been released because of an ongoing criminal investigation by the state’s Department of Justice, are temporarily barred from receiving money from the Drug Medi-Cal program, said Bruce Lim, deputy director of the audits and investigations division at Health Care Services.

The Drug Medi-Cal program, a service paid for by state and federal taxes, covers Medi-Cal recipients’ treatment of substance use disorders. . Medi-Cal is the state’s health insurance plan for people on welfare and other low-income residents who qualify.


The 2012-13 budget set for the Drug Medi-Cal program was $110 million. Anthony Cava, a Health Care Services spokesman, said it’s not known how much of that amount went to the 16 health centers suspected of fraud. The department doesn’t track money given to Drug Medi-Cal treatment centers or calculate how much is sent to each of the state’s 58 counties, he said. Each county is responsible for dispersing the funds to qualified centers in its area.

Allegations against the clinics include billing the Medi-Cal program for services not medically necessary as well as charging for services they didn’t offer. Workers at the centers also allegedly hired some employees who had been convicted of neglecting and abusing patients at other health centers.

Health Care Services representatives would not say whether the 19 complaints they received over the last three years about possible criminal activity within the program involved allegations of current patient abuse or neglect at the centers being investigated.

Some staff members at the 16 centers also are accused of having felony or misdemeanor convictions on their records for fraud in other government programs.

Lim said the department found out about these alleged violations while investigating 22 drug and alcohol treatment centers last year. Several media outlets made public records requests about the Drug Medi-Cal program, partly prompting the investigation, he said.

Late last year, Health Care Services inherited several treatment programs, including Drug Medi-Cal, when the 2013-14 Budget Act passed and did away with the Department of Alcohol and Drug Programs.


The department’s findings show a broad need for a “greater level of oversight, greater level of protection not only for the dollars of the Drug Medi-Cal program but also for the patients, to make sure the services are delivered in a quality manner,” Lim said.

Norman Williams, who runs the communications office at the department, said part of the goal of the investigation is “to minimize patient harm because it’s not just about the money, but the people, to make sure they’re getting adequate care. We want to make sure that people know that we’re monitoring this closely and ensuring the safety of our members.”

The 16 centers, managed by the counties where they operate, will remain open but won’t receive money from the Medi-Cal program for their services while the investigation proceeds.

The counties will work with Medi-Cal recipients who might be affected by actions that could result from the investigation, Williams said. “No one will be left high and dry,” he said.