California launches plan to crack down on Medi-Cal fraud

The state attorney general says the proposal would help catch those who steal physician identification.

By Tanya Albert, AMNews staff. May 17, 2004.

California officials want to get even tougher on Medi-Cal fraud, which they say costs as much as $3 billion annually -- 10% of the program's $30 billion budget.

The state has increased prosecutions by 199% over the past five years. Now it wants to take that experience and create an even more targeted and aggressive approach against those who abuse the system.

The plan, if approved by the Legislature, would result in more scrutiny of doctors but also could help physicians who are fraud victims.

The California Medical Assn. said it supports fair and reasonable ways to root out fraud. "We support programs to catch fraud and abuse, whether it is by a patient or a physician," said CMA spokesman Peter Warren. Only a small number of doctors are involved in fraud, he noted.

The 10-point proposal, announced by California Attorney General Bill Lockyer in late April, already has the support of a bipartisan group of legislators. It would be implemented by passing six proposed bills.

"[The plan] will help us more aggressively detect, investigate and prosecute Medi-Cal fraud, protecting the system for the taxpayers who pay for it and for the beneficiaries who depend on it for vital health care," Lockyer said.

Lockyer and lawmakers are suggesting reforms that would:

• Give the Dept. of Health Services the right to make unannounced visits to businesses that bill Medi-Cal to inspect records.
• Create a more accurate way to track how drug manufacturers price pharmaceuticals so that the state is billed fairly.