Medi-Cal

CA hospitals raided on fraud charges

Anne Zieger — Thu, 07 Aug 2008 10:39:31 -0400

Three hospitals in the Los Angeles area are facing lurid charges that they recruited homeless people on the city's skid row and subjected them to unnecessary tests and procedures in an effort to generate extra income. The hospitals are accused of bilking both Medicare and Medi-Cal, the state's Medicaid program. In addition to facing state and federal charges, the three facilities have also been sued by Los Angeles City Attorney Rocky Delgadillo, whose suit accuses the hospitals of fraudulent business practices.

The alleged scheme appears to have involved the CEO of City of Angels Medical Center, and executives with two suburban facilities, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center. While federal, state and local investigators are still tallying the dollars generated by these schemes, at present it appears that City of Angels alone collected $5 million in federal healthcare reimbursements.

To recruit sham patients, the hospitals used "runners" who canvassed the streets of the city's skid row section. Homeless people were offered $20 to $30 when they finished a needless hospital stay of one to three days. The runner would get $40 for each homeless recruit eligible for Medicare and $20 for each recruit with Medi-Cal benefits, according to Delgadillo's lawsuit. One hospital, meanwhile, worked with a sham "Assessment Center" that reached out to potential patients and attempted to bring them in to City of Angels, offering money, food or even a pack of cigarettes.

To learn more about the scandal:
- read this Los Angeles Times piece

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CA court won't delay 10 percent Medicaid rate cut

Anne Zieger — Fri, 01 Aug 2008 11:34:47 -0400

A California state court has dashed the hopes of the state's providers, ruling that the state's new 10 percent cut in its Medicaid should move ahead. A group of powerful medical associations, including the California Medical Association and the California Hospital Association, had sought a preliminary injunction to stop the cut. In its ruling, the court found that even though the plaintiffs had shown that actual patient harm could result from the cut, federal law bars private parties from suing over rate cuts to Medi-Cal, as the state's Medicaid program is known.

Not everyone's been shot down, however. The California Pharmacists Association, which filed a separate suit, is also hoping to stop the rate cut. Meanwhile, the California Medical Association is considering filing an emergency appeal with an appellate court. Also, a state legislative committee has recommended shrinking the Medi-Cal cuts, though the recommendations wouldn't take effect unless the full legislature and governor pass a budget including those changes.

To learn more about this conflict:
- read this California Medical Association press release
- read this Modern Healthcare article (reg. req.)

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CA Medicaid payments to hospitals stalled

CA Medicaid payments to hospitals stalled

Anne Zieger — Thu, 31 Jul 2008 10:03:52 -0400

With the state's $2 billion contingency fund now tapped out, hospitals in California are facing an extended wait for Medicaid payments as legislators wrangle over the state budget. Though some payments were issued this week, many hospitals are out of luck until state legislators resolve their issues. They're wrangling over methods to resolve the state's $17 billion budget shortfall, notably the governor's proposed cuts to social-service and healthcare programs.

Medicaid, which is known as Medi-Cal there, accounts for 20 percent of revenue for the state's hospitals overall. Some, however, are much more dependent on Medicaid income, with rural and safety net facilities often counting on Medi-Cal for 60 percent or more of revenue. The budget impasse has already led to a month-long delay in payment, and checks could be delayed another four weeks even after the budget issue is resolved due to provisions of state law. It makes you wonder whether the state legislature thinks that rural and safety-net hospitals, in particular, don't really need their income.

To find out more about the state's Medicaid issues:
- read this Modern Healthcare piece (reg. req.)

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CA low-income medical providers denied payments

Sterling Meyers — Thu, 24 Jul 2008 12:32:25 -0400

Payments from Medi-Cal's insurance program for the poor will cease today, rattling healthcare facilities across California. Until a budget is approved, Medi-Cal payments for low-income patients will not be paid because lawmakers failed to pass a budget, causing the state to prohibit payments.

CA law requires payment for private doctors and pharmacists treating Medi-Cal patients, but healthcare "institutions," as the state calls them, will no longer be funded. These medical businesses and organizations, including 1,200 homes for the developmentally disabled--which have previously relied on funding from Medi-Cal entirely--will be cut off immediately. While most facilities don't plan on turning Medi-Cal patients away, healthcare institutions are racing to find funding from foundations, banks and their own reserves--the emergency funding that state officials had set aside in case of a budget delay is spent.

In 2007, a similar budget freeze occurred, but this year brings a tighter budget for struggling banks that are less willing to offer bridge loans. Some managers of healthcare institutions that previously received payments from Medi-Cal are paying premiums for their secured loans, and are facing a dwindling amount of cash because of today's news from state officials.

To learn more about the freeze:
- read this LA Times article