Senate Budget, Health Committees Must Call for Immediate Hearings to Investigate Rampant Drug Medi-Cal Fraud

Senators Emmerson, Anderson Call Recent News Reports "Scathing - Taxpayers Deserve Answers"
Wednesday, August 14, 2013

Senate Budget Committee Vice-Chairman Bill Emmerson (R-Redlands) and Senate Health Committee Vice-Chairman Joel Anderson (R-San Diego) today called for a joint hearing of their respective committees to examine the lack of oversight in the Drug Medi-Cal program.  As the nation has learned through recent media reports, an apparent lack of institutional control by state agencies allowed for a complex and massive system of fraudulent billing by clinics throughout California, costing taxpayers nearly $100 million.

“Taxpayers rightfully expect the Legislature to ensure their money is properly spent,” said Senator Emmerson.  “That’s why we are requesting that the Senate Budget and Health Committees hold a hearing so we can begin the process to determine the cause of this fraud and find answers to why it has occurred for so long.  While a Legislative Audit has been requested, there’s no guarantee it will be approved or begin anytime soon.  We must act now and I’m confident my colleagues who chair our committees will agree.”

 “Like my constituents, I was outraged to learn that convicted felons were allowed to fraudulently bill for treatments to deceased or incarcerated patients,” Senator Anderson said.   “It’s disturbing that these clinics were padding their client rolls by diagnosing people with addictions they didn’t have and even luring mentally ill residents and patients in from the street by handing out cash, cigarettes and snacks.  These patients signed in for treatment they never received on days the clinics were closed.  My constituents and I intend to find out how this could happen."

As outlined in a letter to Senate Budget Chairman Mark Leno (D-San Francisco) and Senate Health Committee Chairman Ed Hernandez (D-West Covina), the proposed witness list should include senior administrators from the California Department of Alcohol and Drug Programs, California Department Health Care Services Director Toby Douglas, and California Health and Human Services Agency Secretary Diana Dooley. 

Among the most critical questions:

  • How pervasive is the alleged fraud and abuse in the Drug Medi-Cal program, and how much state funding is at risk?

  • When did Department of Alcohol and Drug Program (DADP), Department of Health Care Services (DHCS), and Health and Human Services Agency (HHSA) officials first learn of the fraud allegations?

  • Some of the examples cited in the CNN/CIR reports have allegedly been going on for years. Why did state officials fail to act sooner?

  • What steps are DHCS and HHSA now taking to eliminate existing fraud and prevent future fraud from occurring?

A copy of Senator Emmerson and Senator Anderson’s letter is here (pdf).