LOS ANGELES, Calif. — The Board of Supervisors called today for an audit of Los Angeles County’s Drug Medi-Cal program following reports of widespread fraud among California operators of substance abuse treatment clinics.

State officials have already suspended operations at dozens of clinics statewide. Those shutdowns were prompted by a joint investigation by CNN and the Center for Investigative Reporting, which found operators billing for dead, jailed and non-existent addicts.

During the course of a yearlong investigation, reporters staked out rehab clinics, at least one of which was run by a convicted felon, and found centers billing for scores of clients who never walked through the clinic doors.

Supervisor Zev Yaroslavsky, who proposed the audit, said the county’s Department of Health contracted with 143 agencies serving about 30,000 participants under the Drug Medi-Cal program in fiscal year 2012-13, at a cost of $99.5 million.

The state had suspended 46 clinics statewide as of Aug. 2. Officials did not say how many of those operations were in Los Angeles County, but former state officials said the Los Angeles region was “ground zero for the rehab racket,” according to the CIR-CNN report. The two outlets concluded that roughly half of the money paid out over the last two years was subject to fraud and cited 56 clinics as showing “signs of deception or questionable billing practices.”

Enough local clinics were affected to prompt Supervisor Mark Ridley-Thomas to worry that people in need of treatment, nearly half of whom are age 25 or younger, would go without it.

“Recent efforts to suspend numerous providers inadvertently places thousands of patients at risk for disruption of care,” Ridley-Thomas said, adding that Drug Medi-Cal represents 44 percent of the drug and alcohol treatment programs administered by the DPH.

The scope of the program has grown in recent years and is expected to grow even more dramatically once the Affordable Care Act extends benefits to an estimated 400,000 Angelenos come Jan. 1.

Drug treatment under the program is funded 50-50 with federal Medicaid funds and county dollars. But confusion over how county and state regulators split monitoring responsibilities has opened up a window for fraud.

In a July 26 memo to the board, the county’s top health official said the state’s Department of Health Care Services was “solely responsible for reviewing and certifying eligible providers to participate in the DMC program,” leaving the county working with operators it didn’t vet.

But the memo also makes plain that Dr. Jonathan Fielding’s county department acts a state contractor for the program, paying bills and monitoring clinics.

Even the board seemed uncertain of the department’s legal obligations and authority. In addition to the audit, the supervisors asked for an analysis of what oversight the county must provide and whether it has the authority to terminate contracts.

Some clinic operators are fighting back against state shutdowns, saying officials are moving too quickly to suspend law-abiding facilities.

A report to the board is expected back in 30 days.

Elizabeth Marcellino | City News Service