County official calls for review of taxpayer-funded rehab clinics

In response to a scathing report about a lack of government oversight and improper payments to taxpayer-funded rehabilitation clinics, a local official is calling for a review of Los Angeles County’s authority over such contracts and its ability to end payments to clinics that are breaking the law.

“This is an embarrassment to all concerned, the notion that contacts were being awarded and renewed to contractors who had deficiencies and we didn’t know about it,” said county Supervisor Zev Yaroslavsky.

“It’s been called to our attention that we had significant deficient contractors who were defrauding the system,” he said. “The Board of Supervisors did not know about it. We cannot continue to sustain contractors performing illegally, deficiently.”

Yaroslavsky was referring to a report by CNN and the Center for Investigating Reporting in late July that found rampant fraud in California’s substance-abuse programs for the poor. Such programs receive federal and state money, and the contracts are awarded through the counties.

With Los Angeles County being the state’s largest, many of the allegations of fraud in the report, such as billing for nonexistent clients, occurred here. In the most recent fiscal year, which ended June 30, the county contracted with 143 firms for rehabilitation, serving 30,000 people at a cost of $99.5 million.

In response to the report, state officials launched a review and stopped payments to 38 firms operating 108 clinics.

Yaroslavsky submitted a motion that is scheduled to be considered Tuesday by the Board of Supervisors that would require county attorneys and auditors to report back in 30 days about the county’s oversight authority and ability to end contracts with clinics. The motion also calls for an audit of the Drug Medi-Cal program that provides the services to the county’s poor, and the development of a protocol to determine the severity of problems in such clinics, with a requirement that top county leaders are notified about the most troubled.

Yaroslavsky said the role of the county and the state in the auditing process is unclear, with some in the county health department believing that the county did not have an oversight role, but rather served as a conduit for the funding.

“Someone in the bowels of the bureaucracy made certain assumptions and decisions -- I’m not saying they weren’t made in good faith -- the decisions made apparently suggested they did not have the authority to cut bad contractors loose,” he said. “I believe we have authority we haven’t used to audit the contractors and if we find they’re not operating ethically and legally, we should have the authority cut them loose as we do other contractors in the county.”

[For the record, Aug. 10, 2:49 p.m.: An earlier version of this post incorrectly spelled Supervisor Zev Yaroslavsky’s last name as Yaroslovsky.]

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Twitter: @LATSeema

seema.mehta@latimes.com