Sen. Cannella Legislation to Combat Medi-Cal Treatment Program Fraud Passes Senate

Wednesday, May 28, 2014

SB 1339, by State Senator Anthony Cannella (R-Ceres), to reduce fraud in California’s Drug Medi-Cal (DMC) outpatient treatment program, was approved by the Senate on a 36-0 vote. The bill is in direct response to a yearlong investigation by CNN’s Special Investigations Unit and the Center for Investigative Reporting (CIR) which uncovered a widespread “rehab racket” in the DMC program, allowing fraud and abuse.

“It is unconscionable that there are bad actors taking advantage of a program that is looking to give people a second chance.” said Cannella. “While the majority of DMC treatment centers follow the rules and truly care about their patients, the reputations of legitimate clinics are ultimately damaged by these deceptive practices. SB 1339 aims to provide more safeguards to protect taxpayers, people in need of rehabilitative services, and honest DMC clinics that place patients over profits.”

In the 2013 report by CNN and the CIR, undercover reporters witnessed a Los Angeles drug and alcohol treatment center that received Drug Medi-Cal funds accept fewer than 30 people in one operating day. Records revealed that the center billed the state for 179 patients that day, which was paid using taxpayer dollars. The investigation led to an audit which resulted in the suspension of 43 clinics.

SB 1339 combats this fraud by providing the Department of Health Care Services administration or a contracted county with the criminal background information on clinic owners and medical directors. The legislation also requires a fingerprint to become a contracted provider.