A Southern California doctor with a history of run-ins with regulators has approved treatment for more than 1,550 patients at publicly funded drug rehabilitation clinics now under investigation for fraud.
Dr. Howard Oliver acknowledged that he never saw most of the rehab patients he approved for counseling. The law doesn't require it. But his signature on their paperwork triggered the taxpayer funding that kept the private clinics in business.
Oliver is the most prolific medical director linked to suspect drug and alcohol counseling facilities in the Los Angeles region. State officials recently suspended 16 of the 19 clinics he oversaw as part of an anti-fraud crackdown, prompted by a yearlong investigation by The Center for Investigative Reporting and CNN. Most of the cases have been referred to the state Department of Justice.
"I'd hate to think that they go after these people because they want to get me," Oliver said following the suspensions. "I hate to think I'm that important. I haven't done anything wrong."
The CIR and CNN investigation found widespread scamming and ineffective government oversight in California's rehabilitation system for the poor, called Drug Medi-Cal and paid for with a combination of state and federal Medicaid dollars.
The 16 suspended clinics Oliver served over the past year reaped more than $15 million in public funds, according to Los Angeles County records. Documents show he works as a contractor, charging most clinics $1,000 to $1,500 a month -- an annual income of at least $160,000.
Oliver once was barred from billing Medi-Cal in his private practice due to allegations of fraud, back in 2002. Two of his clinics have been prosecuted for false billing, out of only five Drug Medi-Cal prosecutions in recent years. Others were shut down by Los Angeles County after serious violations.
Oliver was the target of a state investigation as recently as 2009, under suspicion of shirking his medical responsibilities. State officials say they dropped the probe in 2010 because of a change in agency leadership.
But his business has continued to boom.
Medical directors are Drug Medi-Cal's gatekeepers. In counseling centers typically run by entrepreneurs and staffed with former addicts, they often are the only medical professionals, charged with determining whether each patient can benefit from counseling. By law, clinics cannot collect any taxpayer money without their signed approval of patient forms.
Yet regulators lack clout to deal with problematic doctors. County officials say they are unable to override a doctor's recommendation -- even when they doubt its veracity. And with no state standards other than a physician's license, the rehab racket has become a haven for doctors with questionable records.
Medical directors have been accused of "robo-signing" stacks of records and backdating records used to bill the government, CIR and CNN have found.
The Medical Board of California accused one rehab clinic doctor in Burbank of overprescribing drugs at his private practice, giving large amounts of Vicodin to a woman addicted to the popular painkiller. A South Los Angeles doctor, now in prison, carried on as medical director at three clinics while waging a losing battle against criminal charges of sexually abusing a dozen patients, one of them 15 years old. Yet another rehab doctor stands accused by the medical board of running a Northern California medical marijuana clinic that coached an undercover agent on how to get a cannabis recommendation.
State law requires that a physician verifies Drug Medi-Cal counseling is "medically necessary" -- when a new patient is admitted, when treatment plans are updated every 90 days and whenever treatment continues longer than six months. A doctor either must physically examine patients or review their medical and substance abuse history and sign a waiver stating why an in-person exam wasn't necessary.
Oliver says he doesn't need to see rehab center patients in person, preferring to sign waivers because virtually anyone can get treatment. He said even "a brick can undergo counseling."
"No, I don't see them. It's not necessary," Oliver said. "Nothing's being done to cause them bodily harm."
Dr. Jeffery Wilkins, president of the California Society of Addiction Medicine, said meeting with patients is crucial to understanding and helping them.
"Every new case is complicated; it takes all of my knowledge to put together a new case," Wilkins said.
Oliver acknowledged that he might be signing off on patients who don't exist but said it isn't his job to check. Instead, he said he operates on trust.
"I have certain duties. I adhere to those duties," he said. "But my duty is not the policeman."
Criminal prosecutions and years of damning audits targeting clinics where Oliver was the medical director show he has approved many services that turned out to be shams. But when authorities cracked down, Oliver walked away unscathed. He told CIR and CNN that he's fulfilled his duties under the law.
That is not unusual in the rehab racket, CIR and CNN found. Another Southern California medical director, Dr. Charles Okoye, avoided prosecution even though five staff members at GB Medical Services in Long Beach -- from the clinic director to the van driver -- were charged with false billing or bribing patients to show up. Three pleaded no contest and the clinic's director pleaded not guilty.
One client told investigators that she didn't have an addiction but went to counseling for the $5 the clinic gave her. Anyone with a blue-and-white Medi-Cal card would be admitted, another said.
Okoye had to sign off on each patient but said he should not be held accountable for the staff's actions.
"I was never really there when they do what they're supposed to do. I review the books," he said. "I don't work there per se; I'm only a medical director."