California falls short on Medi-Cal fraud, state report says

In summary

The state has not investigated 26,000 of its 28,000 highest-risk Medi-Cal providers, the report says. Health officials dispute it.

Is California doing enough to curtail Medi-Cal fraud?

The state auditor doesn’t think so.

A report released Thursday by Grant Parks, the state auditor, suggests the Department of Health Care Services is ill-equipped to stop pervasive abuse in Medi-Cal, a program that serves about 14 million Californians and pays out $200 billion annually.

The report described a “history of concern” about the department’s oversight of Medi‑Cal providers and classified it as “high-risk” for fraud, waste and abuse. The Department was first given the designation in 2007 for other reasons, including concerns about organizational restructuring and policymakers’ calls for increased accountability and program effectiveness.

In its response, the department disagreed with the auditor’s findings, saying the report “omits critical information and context, resulting in an incomplete analysis” and that it highlights “isolated anecdotes while ignoring system-wide data showing effective systems and controls.”

The report listed several concerning examples:

• Two medical providers billed almost $1.6 million in Medi-Cal services in 2024-25, despite having been deemed ineligible to participate in the program several years earlier.
• One transportation provider claimed to have driven 35 people in a single day, nine of them traveling more than 340 miles apiece. If this info was legitimate, the report said, the transportation provider would have traveled more than 3,000 miles on a single day in a single vehicle for those nine trips alone, not to mention the other 26. The provider took in more than $11 million in 2024-25.
• Of the 28,000 Medi-Cal providers considered at highest risk of fraud or abuse, the report said, the Department had not begun investigations into 26,000.