Assemblymembers Jim Frazier and Dr. Richard Pan Hold Legislative Hearing on Massive Drug Rehabilitation Fraud

Thursday, September 26, 2013

Latest in Series of Oversight Hearings Focuses on Fraud Reported by CNN and Center for Investigative Reporting

SACRAMENTO, CA – Today, a joint hearing of the California Assembly’s Accountability and Administrative Review Committee and Health Committee brought together administrators responsible for the state’s Drug Medi-Cal program to get to the bottom of fraud allegations at rehabilitation centers that take taxpayer dollars from the low-income drug rehabilitation program.

Assemblymember Jim Frazier (D-Oakley), Chair of the Assembly Accountability and Administrative Committee, and Dr. Richard Pan (D-Sacramento), Chair of the Assembly Health Committee, sought answers to questions regarding the lack of oversight by agencies responsible for administering the Drug Medi-Cal program.

“As Chair of the Accountability and Administrative Review Committee, I take our legislative oversight role very seriously,” stated Assemblymember Frazier. “Today's hearing looked at what led to allegations of fraud in the Drug Medi-Cal program.  I look forward to revisiting the issues raised today so that we can hold the Department of Health Care Services accountable for putting in more long-term safeguards against fraud. It is important that we ensure that the state honors its commitment to providing valuable addiction treatment services to Californians who need them.”

“As a physician who cares for Medi-Cal patients, I understand the value and importance of Medi-Cal for the most vulnerable Californians. I am outraged to learn of the widespread and long-term fraud in the Drug Medi-Cal program,” said Dr. Pan. “I appreciate the steps now being taken by the Department of Health Care Services and counties to stop this fraud and punish the wrongdoers. We need to ensure that taxpayer dollars in Drug Medi-Cal are protected in the future.”

The Drug Medi-Cal fraud allegations were brought to light in a series of reports by CNN and the Center for Investigative Reporting (CIR).  Over the past two years, CNN and CIR found that $94 million, or half of all the funding for the Drug Medi-Cal program, went to 56 Southern California drug rehabilitation centers where allegations of deception or questionable billing practices have been levied.

Click here for the report by CNN and the Center for Investigative Reporting

Click here for the Assembly Video