UCSD Fraud Inquiry Nears Settlement : Health Care: Medical center will repay as much as $1 million to Medi-Cal and assure that employees don’t encourage Mexican citizens to seek state-paid care, officials said.

California Medi-Cal fraud investigators are close to a settlement to require UC San Diego Medical Center to repay as much as $1 million and to assure that UCSD employees will never again help Mexican citizens come to this country for state-paid care, a state official acknowledged Thursday.

In a meeting Tuesday, negotiators for the state Department of Health Services and the university moved closer to a resolution, said Eugene Lynch, head of audits and investigations for the department.

“Hopefully we’re on the track to a real positive conclusion here,” Lynch said. “I’m hoping it will take no more than 30 days, and I’d like it to be a lot faster.”

The repayment would culminate a year-old inquiry by the department’s Medi-Cal fraud investigators.

The investigation found evidence that some employees in the pediatric cardiology program at UCSD were helping Mexican parents establish residency in the United States so that their children could receive life-saving treatment under Medi-Cal at no cost.

The allegations were that some employees of the department provided the parents with inaccurate border-crossing letters and advice on how to establish an address in the United States, even if they were still living in Mexico.

Still unresolved in the negotiations, Lynch said, are the steps the university must take to prevent people from qualifying for Medi-Cal with phony U.S. addresses, and just how much money UCSD should repay.

“Money is always a big problem. We want as much as we can get, and they want as little as they can give us,” Lynch said.

Last fall, investigators said about $1 million in care was in question, and another $4 million might be involved. Lynch would not specify how much UCSD may be paying back, but said the amounts in question were “in the $500,000 category.”

The inquiry into UCSD pediatric cardiology program was part of a state effort to identify Medi-Cal fraud along the border.

Any agreement between the state and UCSD would not label what happened there as fraud, but instead it would be an administrative procedure aimed at assuring compliance with Medi-Cal rules, Lynch said.

“The other way of going would be to send them a demand (for repayment), and they would sue us, and we would have to go to court,” Lynch said. “Two state agencies battling each other in the courts doesn’t make a lot of sense. It’s government money no matter which way it goes.”

Last fall, the health investigators referred the matter to the California attorney general’s office for possible prosecution. However, the office declined to prosecute because of inadequate evidence.

UCSD has consistently denied institutional wrongdoing and said any improprieties were isolated events.

Although he had no direct involvement with any of the incidents the state was investigating, Dr. David J. Sahn was replaced as head of pediatric cardiology after the irregularities became publicized.

Contacted Thursday, the hospital’s chief press spokeswoman, Leslie Franz, declined to comment about the negotiations to repay Medi-Cal money. “At this point, we have no announcement or update to make,” she said.