State officials moved Thursday to suspend Medi-Cal payments to 16 alcohol and drug treatment centers across California, after uncovering suspected fraud in raids last week.
The action by the state Department of Health Care Services came after investigators raided 22 facilities in response to tips from the media and public.
The agency alleges that providers billed Medi-Cal for services that were not rendered or medically necessary. Operators have 60 days to appeal the suspension.
"We took the complaints and performed some data analytics. That's what led us to the red flags," said Bruce Lim, deputy director for audits and investigations at Health Care Services.
Using data mining software, Lim said his team looked into trends such as billing spikes and other commonalities in paid claims.
Some providers also are suspected of hiring individuals previously convicted of fraud in government programs a violation of state Medi-Cal laws.
Lim declined to name the suspended facilities, noting that the investigation is still ongoing.
"It's a very fluid process. We have to protect the integrity of the operation," he said.
The case has been referred to the state Department of Justice for further investigation. Lynda Gledhill, a spokeswoman for Attorney General Kamala Harris, confirmed that the department has received the information.
When asked what types of charges would be filed, Gledhill said, "There's no way to say. I couldn't speculate."
California has about 1,000 alcohol and drug treatment centers, most owned by nonprofits or private citizens.
Call The Bee's Richard Chang, (916) 321-1018. Follow him on Twitter @RichardYChang.