Rep. Jay Obernolte led members of the California delegation in pressing California Department of Health Care Services Director Michelle Baass over Medi-Cal oversight after a state audit found major gaps in how the program handles potentially improper billing and recovers overpayments. The letter asked DHCS what it is doing to strengthen oversight, stop fraudulent billing and protect taxpayer dollars.
The push comes after the October 15 audit said DHCS had identified about 28,000 Medi-Cal providers as high risk for potentially improper billing in fiscal year 2024–2025, but had not initiated referrals or investigations for more than 26,000 of them. Those providers accounted for at least $12 billion in Medi-Cal services, making the failure to act on the audit findings a question of scale, not just procedure.
Obernolte said Medi-Cal provides critical care to millions of Californians and that every dollar lost to fraud is a dollar not available to help vulnerable patients access care. He also said the California State Auditor’s findings raise serious concerns about oversight and that taxpayers deserve to know their money is being used wisely and appropriately. The letter was signed by Representatives Ken Calvert, Tom McClintock, David Valadao, Young Kim, Vince Fong and James Gallagher.
The audit added more pressure by finding that DHCS identified more than $2 billion in provider overpayments between fiscal years 2020 and 2025, with about $300 million still unrecovered. On October 20, CMS said it would defer an additional $1.2 billion in federal Medicaid payments to California over documentation concerns tied to certain Medi-Cal expenditures. That left DHCS facing questions on two fronts: why so many high-risk providers were not referred or investigated, and what it will do now to recover money already lost.
For now, the letter is the clearest sign that California Republicans want a public accounting of how DHCS plans to respond. Whether the agency answers with tighter screening, more investigations or faster recovery efforts will determine if the audit becomes a warning shot or the start of a broader cleanup.
