California Healthline: State Officials Get Earful About ‘Temporary’ Medi-Cal Provider Moratorium from 1999

by David Gorn

On Wednesday, legislators directed the Department of Health Care Services to revisit its policy to regularly extend a moratorium on certain fee-for-service Medi-Cal providers that dates back to 1999.

At yesterday’s Senate Committee on Health hearing, DHCS officials said the moratorium policy has worked well and they’re loathe to abandon it.

“We believe the moratorium has been an effective measure to reduce fraud,” said Karen Johnson, chief deputy director at DHCS. “It has been an effective measure to address program integrity issues and monitor provider types.”

Three kinds of providers are affected by the moratorium: clinical laboratories in four counties; durable goods suppliers; and non-pharmacist-owned pharmacies in Los Angeles County. The first moratorium went into effect in 1999, after an FBI investigation and “60 Minutes” exposé detailed up to $1 billion in Medi-Cal fraud, and the state ordered a halt on issuing new provider numbers for medical equipment.

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