Los Angeles Federal Grand Jury Indicts Four in $20 Million Medi-Cal Scam
On Dec. 20, a Los Angeles federal grand jury indicted two laboratory owners and two clinic operators for allegedly defrauding Medi-Cal, California's Medicaid program, by billing it for "$20 million worth of bogus blood tests," the Los Angeles Times reports. The 23-count indictment named Luisa Gonzalez and Juan Carlos Ciraolo, owners of the "now-defunct" Los Angeles Bio-Clinical Laboratory, and Roberto Calderon and Alfredo Morales, operators of La Guadalupana Clinic. According to the indictment, the defendants "obtained confidential information about patients and doctors enrolled in Medi-Cal" over a three-year period. Then, the laboratory performed tests on blood bought from donors off the street and used the confidential information to bill Medi-Cal for the tests. The defendants "typically" billed for the "most expensive" blood tests, reimbursable at $550 per test. Until its closure in 1997, the lab submitted reimbursement bills totaling $40 million, of which half were fraudulent, the indictment charges. The clinic, according to Assistant U.S. Attorney Maurice Suh, "appears to have been the lab's main supplier" of blood. "This is the largest case ever involving fraudulent medical bills submitted by a California laboratory," he said. In addition, Dr. Luis Lombardi, who operates a San Gabriel clinic, has agreed to plead guilty in connection with the "alleged scam." The FBI charges that Lombardi "fabricated reports" showing that he had examined Medi-Cal patients and ordered "comprehensive blood tests" from the Bio-Clinical Laboratory, for which he received a $30 "kickback" for each blood test (Rosenzweig, Los Angeles Times, 12/21).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.