Medi-Cal policies waste millions each year, state audit concludes

From: The Desert Sun, CA - 13 Dec 2002

By Jessica V. Brice
The Associated Press
December 13th, 2002

SACRAMENTO -- If the Department of Health Services had "shopped around" to find the best prices for Medi-Cal medical equipment and supplies, it could have saved the state millions of dollars, an audit has concluded.

The news comes just days after Gov. Gray Davis proposed cutting Medi-Cal services, including some of the benefits cited in the audit.

Budget conservatives pushing for the cuts say it is a perfect example of why the state needs to clamp down on spending.

"A lot of different programs have various forms of waste," said Assemblyman John Campbell, R-Irvine, vice chairman of the Assembly Budget Committee. "That's as much of a problem as anything."

The audit, released Thursday by State Auditor Elaine Howle, found that the Department of Health Services failed to make sure it was not being overcharged for medical equipment and supplies under Medi-Cal, the state's low-income public insurance plan.

More than $356 million in state and federal money was spent on medical equipment, supplies and hearing aids for Medi-Cal patients in 2001, according to the audit.

Medical equipment includes canes, crutches, wheelchairs, hospital beds and respiratory equipment, while medical supplies include take-home items such as bandages, contraceptives, diabetic tests, gloves and waterproof sheets.

The department is supposed to survey the market for such products every 60 days and set maximum price caps based on the lowest prices.

However, the department "has not updated the prices for many of its medical supplies for more than 15 years," the report said.

As a result, "the state is paying whatever price the seller is charging," Howle said.

It's unclear just how much the state could have saved in recent years if the department had shopped around for the best price, but the audit cites numerous examples of wasteful spending.

Now, lawmakers will consider a proposal to stop paying for medical supplies altogether. The state spent nearly $10 billion for about 6 million people enrolled in Medi-Cal during the 2001-02 fiscal year.

Last week, however, Davis proposed rolling back Medi-Cal benefits as part of a plan to cut $10 billion in education, health care and other programs over the next 18 months.

The plan includes cutting optional Medi-Cal benefits, such as medical supplies.

© 2002 The Desert Sun