Gov. Jerry Brown, seen in 2013.Beck Diefenbach/Associated Press

Gov. Jerry Brown wants to add some firepower to the crackdown on fraud in California’s drug and alcohol rehabilitation program for the poor.

The governor’s budget proposal for the next fiscal year, officially announced today, includes $2.2 million for 21 new positions to help health officials with their overhaul of the Drug Medi-Cal program. The budget notes that “concerns about program integrity” led the state Department of Health Care Services to cut off funding to 177 rehab clinic sites and refer dozens to the California Department of Justice for criminal probes.

The state offensive was sparked by CIR and CNN’s Rehab Racket investigation, which revealed an epidemic of fraud amid weak government oversight. Rehab clinics billed for patients who didn’t have addictions, were bribed to attend counseling or didn’t come in at all, CIR and CNN found. In the previous two fiscal years, Drug Medi-Cal sent $94 million to clinics that had shown signs of fraud or questionable billing, about half of total state funding.

The budget boost, Brown’s proposal stated, will “continue the state’s intensive focus on program integrity and expansion of drug treatment services by recertifying all providers in the state.” Half of the $2.2 million will come from the state’s general fund and will be matched with federal funds.

The additional money will add a variety of new positions to the existing Drug Medi-Cal staff, to scrutinize individual clinics as well as the health department’s own procedures, said department spokesman Norman Williams.

Some staffers will comb through applications from rehab clinics seeking to be recertified by the state, a new requirement prompted by the fraud revelations. Others will analyze data to make sure clinic billing matches the services provided. Still others will look at the department’s policies and make recommendations for improvement.

“These are positions that will make the (Drug Medi-Cal) program stronger,” Williams said. “This amount gives us the support necessary to continue our efforts … in a way that we will ultimately be able to improve the integrity of the program.”

State Sen. Ted Lieu, a Los Angeles County Democrat, said he was pleased the governor’s budget beefed up staff to battle Drug Medi-Cal fraud.

Last year, Lieu called for an independent state audit of Drug Medi-Cal in response to the CIR/CNN investigation. He said he got involved because of his belief in rehabilitation programs. The audit is expected in June.

“We will analyze his (Brown’s) proposal during the budget process to see if it is sufficient, but it is a good start,” he said.

Brown’s budget puts the entire Medi-Cal agency, the Department of Health Care Services, at $76.1 billion, with nearly 3,700 positions. The budget proposal undergoes legislative scrutiny and is supposed to be approved in June.

Christina Jewett

Christina Jewett is a reporter for Reveal, covering labor and workplace issues with a focus on the workers' compensation system. With reporting partner Will Evans and CNN, she exposed widespread fraud and failed government oversight of California’s network of addiction treatment centers for the poor. The stories led to the defunding of more than 200 rehab clinics and changes in state law. The Emmy-nominated series won the 2013 broadcast award from Investigative Reporters and Editors. Jewett – as part of California Watch, a project of The Center for Investigative Reporting – won the 2011 George Polk Award for medical reporting with Lance Williams and Stephen K. Doig. The series exposed outsized rates of rare but lucrative medical conditions at a rapidly growing hospital chain and spurred a federal investigation. She was also a Livingston Award finalist in 2010. Previously, Jewett worked at ProPublica and The Sacramento Bee, where a story she broke about contracting malfeasance led to arrests and convictions. She and a colleague also chronicled jail abuse and medical mistreatment, spurring countywide policy reforms. Those stories were honored with awards from the John Jay College of Criminal Justice and the National Council on Crime and Delinquency. Jewett is based in Sacramento, California.

Will Evans is a senior reporter and producer for Reveal, covering labor and tech. His reporting has prompted government investigations, legislation, reforms and prosecutions. A series on working conditions at Amazon warehouses was a finalist for a Pulitzer Prize and won a Gerald Loeb Award. His work has also won multiple Investigative Reporters and Editors Awards, including for a series on safety problems at Tesla. Other investigations have exposed secret spying at Uber, illegal discrimination in the temp industry and rampant fraud in California's drug rehab system for the poor. Prior to joining The Center for Investigative Reporting in 2005, Evans was a reporter at The Sacramento Bee. He is based in Reveal's Emeryville, California, office.