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September 3, 2010
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California Medi-Cal officials paid $273,000 to health providers who claimed to have rendered care to 35 dead people, raising questions about the agency's accounting and potential health provider fraud. The findings came out in June 2010 in a report by the Department of Health and Human Services' office of inspector general. That agency sent auditors to Sacramento to review $46 billion in claims for health services paid by the Medi-Cal agency from Jan. 1, 2007 to June 30, 2008.

Doctors and other health providers tend to render services to patients, such as a prostate exam or psychotherapy, and bill Medi-Cal later.

The report showed that an unspecified number of health providers sought and received a total of $273,000 in services that they claimed to have given to patients who were already dead at the purported time of the service.  In a response to auditors, California officials said they would send money back to federal funders to cover their half of the claims paid for dead people, since half of the Medi-Cal program's funding comes from federal dollars and half from state funds. The state will send nearly $137,000 back to Washington, D.C., according to the report.

Medi-Cal leaders also said they had systems in place to stop payment for care rendered to dead people and had sent letters demanding health providers to send back $7,300. But the Department of Health Care Services, which operates Medi-Cal, also noted there were potential delays in updating their data files that enabled the payments in question. The state also described how it would deal with health providers who claim to help the dead get better. They said they would temporarily cut off Medi-Cal payment to caregivers who bill more than $50,000 for services to the dead.

Barry Zalma, Esq. CFE, is a Certified Fraud Examiner and an expert witness for insurance fraud cases.  He can be found at www.zalma.com