Thursday, August 1, 2013

California Department of Health Care Services (DHCS) Issues Temporary Suspensions Against 16 Alcohol And Drug Treatment Centers - More Suspensions To Come

On July 18, 2013, the California Department of Health Care Services (DHCS) announced temporary suspensions against 16 alcohol and drug treatment centers that are suspected of operating in violation of state and federal Drug Medi-Cal (DMC) laws. The disciplinary measures resulted from preliminary investigations of alcohol and drug treatment programs by DHCS’ Audits and Investigations Division. The investigations included reviews and onsite visits last week of 22 treatment centers.

It is believed that a total of 66 companies have been audited and that additional treatment centers have been suspended since July 18 based on reports by the Los Angeles Times. According to the Times, 29 companies that operate a total of 83 clinics have been temporarily suspended.

As DMC-certified clinics, they are reimbursed by the state for substance use disorder services provided to eligible Medi-Cal members. As a result of the investigations, the 16 centers received temporary suspensions of their Medi-Cal provider numbers, preventing them from submitting claims for reimbursement of services until investigations are complete.

"Temporary" suspensions can take over one year while the criminal investigation is pending. Temporary suspensions can result in the facility closing given that most of these programs are fully reliant on Medi-Cal payments. All 16 cases have been referred to the California Department of Justice for further investigation, which may lead to permanent sanctions (such as termination of provider number) or the filing of a criminal action.  However, the temporary suspension can be lifted early if the treatment centers can show that there is not reliable evidence of fraud or abuse. This action is the first phase of DHCS’ ongoing review of DMC, which came fully under its purview earlier this month.

 Allegations received by DHCS regarding DMC include claims that providers have hired individuals who are on the federal list of excluded providers. These individuals have been convicted of a felony or misdemeanor involving fraud or abuse in any government program, or they have been convicted of neglect or abuse of a patient while providing a health care item or service. Some centers are suspected of violating state and federal laws by providing services that are not deemed medically necessary and of fraudulently billing DMC for services that were not rendered. DHCS is working with counties, which contract directly with these clinics to provide services, to resolve any discrepancies between the actions of the centers and their billing of Medi-Cal.

On July 1, 2013, all substance use disorder programs from the Department of Alcohol and Drug Programs completed their transfer to DHCS. This allows for better coordination of the licensing, certification and program management of substance use disorder services to the benefit of individuals with substance use disorders.

Attorney Commentary Having represented Medi-Cal providers, including alcohol and drug treatment centers, who received temporary suspensions, it is critical to act quickly in assessing the merit of the allegations.  There are opportunities to seek a settlement conference and resolution with the Department especially where the allegations are weak or with little merit.

Posted by Tracy Green, Attorney
Green and Associates


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