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.

    User Picture


    October 4, 2015 at 5:12 PM

    How should I go about having a treatment center investigated? There are allegations that staff or residents are putting drugs (pills), to residents that aren’t authorized.

    User Picture

    Jayze Nolana

    March 23, 2014 at 1:44 AM

    How about investigating California’s troubled 21 Regional Centers? There are years and years of media reports on how these regional centers are failing families. Now, recently, these regional centers, whose overseer is the equally ineffective California Dept. of Developmental Services, is to shift all the work onto families by conning them into signing up for the “self determination” option. What these poor families don’t know is that this is a Regional Center’s way of still getting federal funds, but then shifting ALL the responsibility onto the already burdened families, so the Regional Centers can avoid most of the liability that goes on in hiring caregivers for disabled regional center clients. Parents BEWARE!!!!!!!!!!!!!!!!!!!!!!!!!! Don’t do it. Make these employees at these regional centers and at the Ca. Dept. of Developmental Services do their JOBS!!!!!!!!!! Don’t become the people they blame when things go wrong. Do not be conned into becoming a self determination participant. These regional centers apply for FEDERAL money AND GET paid lots and lot of money because of your disabled child, so do NOT let them shift all the responsibility of hiring caregivers onto YOU. Don’t do it. You will regret it. It’s a scam.

    User Picture

    Gonzalo Gonzalez

    August 11, 2013 at 11:33 PM

    Why only 16 treatment centers? There are so many fraudulent places out there it’s pitiful! If you work for a place that is doing this, do your part and report them. The ADP set up a medi-cal fraud hotline and it seems that they are serious about looking into these matters. I think the CNN news report will now open up more investigations. I see one big onion, that will keep on peeling, and peeling, and peeling!

Leave a Comment

Please leave a comment below to contribute to the discussion. If you have a specific question, please contact a Parent Specialist, who will provide you with one-on-one help.

Your email address will not be published. Required fields are marked *