Some California rehabilitation clinics are ripping off taxpayers by diagnosing people with addictions they don’t have, reports the Center for Investigative Reporting and CNN. Government records and interviews with counselors, patients, and regulators reveal a widespread scheme to bilk the state's Medicaid system, the nation's largest. One clinic fabricated notes and billed for “ghost clients” who never came in.
They couldn't show up, a counselor discovered: Some were behind bars; one was dead. The populous Los Angeles region is ground zero for the rehab racket. After a year of public records requests and questions from the investigative reporting center and CNN, state regulators announced a crackdown in mid-July. The action came two and a half weeks after reporters submitted a final list of their findings. The state temporarily suspended 16 clinics suspected of flouting the law and pledged to tighten oversight.