Investigation Uncovers Fraud by California Rehab Clinics

An investigation by The Center for Investigative Reporting (CIR) and CNN has uncovered fraud by California rehab clinics that receive government funds to assist clients who are poor and addicted.

According to CNN, these clinics diagnose people with addictions they don’t have, so they can increase client rolls. The clinics recruit mentally ill residents from group homes to attend therapy sessions. They attract patients from the street through incentives of cash, food and cigarettes, and have them sign in for days they do not attend sessions. One clinic billed for clients who could not have attended sessions, either because they were in jail or dead.

The state’s Drug Medi-Cal program paid $94 million in the past two fiscal years to 56 Southern California clinics that CNN says showed signs of deceptive or questionable billing practices. This represents half of all public funding to the program. The findings come from a review of government records and interviews with counselors, patients and regulators.

Earlier this month, the California Department of Health Care Services announced an investigation of 16 substance abuse treatment centers for patients on Medi-Cal, the state’s insurance plan for people on welfare and other low-income residents. The centers are suspected of fraud and hiring providers who have felonies on their records.

According to the department, the clinics billed Medi-Cal for services that were not medically necessary, and charged for services they did not offer. The department is also investigating whether workers hired some employees who had been convicted of neglecting and abusing patients at other health centers. The centers will remain open, but will not be receiving funds from Medi-Cal during the investigation.