A year-long investigation by 2 Investigates revealed a non-emergency medical transportation company is still operating a fleet of beat-up vans with lapsed or suspended registrations and, in some cases, no proof of insurance, according to the DMV.
Despite owing the state more than $1.7 million in fraudulent Medi-Cal claims, KTVU has learned that Med Express Transportation could still be receiving public money under a sub-contract, and the state department that regulates the program claims they are powerless to stop it.
Hit from behind
The sudden jolt of being rear-ended shocked Justin Nguyen, as he sat behind the wheel at the intersection of Story Road and McLaughlin Avenue in San Jose last November. He said he was waiting for the light to change when a beat-up, green passenger van slammed into his Honda Civic, forcing the car forward a few feet.
“It just looked like a really janky car,” Nguyen said, “not suitable to transport anyone around.”
That van, he later discovered was owned by Med Express Transportation, a non-emergency medical transport company that was the subject of a state audit and Medi-Cal fraud probe and a KTVU investigation. Nguyen said the van was carrying a patient, so he followed the driver to a nearby dialysis clinic before exchanging insurance information.
“The driver kept complaining that the brakes just don't work. I don't know if he was just trying to make an excuse, but he said the brakes were terrible, he's been in multiple accidents before in that car,” said Nguyen.
He gave Nguyen an insurance card that listed the company and owner Nathan Rabah, 48, as a policy-holder. But Nguyen said when he contacted Progressive, the carrier listed, he felt rear-ended again.
“At first I just thought it was an accident, it was an honest mistake, so insurance can cover it,” he said, “but then I found out that the insurance was either fraudulent or expired.”
Nguyen said that’s when he started researching Med Express and Rabah, and discovered KTVU’s investigation last year, which revealed the company was operating at least six vans without valid registrations or proof of insurance. Back then, another driver complained that his 1971 Camaro had also been rear-ended by a Med Express van, causing $19,000 in damage. That driver, who didn’t want to be identified, also told 2 Investigates that Med Express could not provide him any proof of insurance for the van, the driver, and the company.
Nguyen said his own insurance company estimated the damage at $4,000 – enough to have his car deemed totaled. He said his own insurance company helped cover some costs to buy a replacement car, but that other drivers may not be so lucky.
"I'm just shocked that a company like this exists,” he said. "The owner, or whoever is running this company, should get convicted."
“I just think it's outrageous.”
Public money, persistent problems
Over the past ten months, KTVU has watched Med Express drivers picking up and dropping off patients at dialysis clinics in vans with body damage, broken mirrors, missing headlights, no proof of insurance, expired or suspended registrations, and in one case, no license plates.
Rabah, has billed the state for more than $3.6 million in Medi-Cal claims between 2010 and 2015, according to the California Department of Health Care Services (DHCS). But according to a state audit, investigators discovered that Rabah couldn’t provide proof of services for more than $1.7 million of those claims. The company also billed for transporting some patients after their "date of death," according to records. Last March, a judge ordered Med Express to pay back that money.
2 Investigates brought our footage to the attention of DHCS spokesman Norman Williams in May of last year. At the time, Williams said, “It's never a small thing when records don't reflect what is billed to Medi-Cal. These are taxpayer dollars. We take it very seriously and we work to make sure these dollars are spent the way they're intended.”
But nearly a year later, 2 Investigates discovered Med Express was still operating at least eight vans with registration and insurance issues, apparently without any oversight from the state.
Williams claims DHCS, which is charged with regulating non-emergency medical transportation companies like Med Express, is powerless to stop Rabah from operating.
"We feel that we've done as much as we can at this point," said Williams.
He said that DHCS only has oversight powers over companies that are providers of Medi-Cal services, and DHCS terminated its “fee-for-service” contract with Med Express on May 30, 2015, and that the company has no involvement or connection to DHCS anymore.
“Our role now is the make sure that no more Medi-Cal funds go to Med Express,” Williams said. “We have the oversight authority to ensure they comply with Medi-Cal rules when they transport Medi-Cal members. That’s the extent of our authority over that.”
But off camera, Williams and DHCS Public Affairs Officer Adam Weintraub later admitted that Med Express may still be receiving Medi-Cal money as a sub-contractor, through a health care provider that contracts with the state as an intermediary.
In addition to its direct pay agreement, providers like Med Express may also sub-contract through “managed care” health companies that receive a lump sum of Medi-Cal funds from the DHCS. Those companies may then fulfill the claims from providers like Med Express using public funds, with little oversight from the state, according to DHCS.
DHCS told 2 Investigates that Med Express was contracted with three managed care companies in Alameda County, and two of those contracts have since been terminated. Williams said the third contract was set to expire next month, so it is possible that Rabah is still receiving public Medi-Cal funds, without the agency’s knowledge.
When asked why DHCS was unable to confirm whether or not Med Express is still in fact submitting new Medi-Cal claims despite owing the state nearly $2 million, the spokesman cited strict “managed care” contract terms and privacy rules for tying the agency’s hands.
DHCS says the agency has successfully recouped about $231,000 from Med Express, by refusing to pay out the company’s pending Medi-Cal claims. The state has also filed paperwork with the Franchise Tax Board, and was granted a judgment in Sacramento Superior Court against Rabah. However, DHCS admits the agency has been unable to actually collect the rest of the taxpayer money owed. According to the agency, the current balance owed by Med Express and Rabah has grown to $1.85 million, including accrued interest.
Slipping through the cracks?
It’s only a matter of time before a patient or another motorist gets hurt by a Med Express van that shouldn’t be on the road, according to a driver who no longer works for Rabah.
“They need to be shut down. The state needs to shut them down because it's not safe in these vehicles,” said former driver Leslie Dunbar. “I don't see why he's still out there if he keeps hitting people.”
Non-emergency transport companies enrolled as Medi-Cal providers legally have 35 days to report “any addition or change in the drivers, equipment, or other information previously submitted in the application package,” according to DHCS. The agency says according to their records, Rabah was initially licensed to have only one van on the road, and he was listed as the sole driver. But 2 Investigates has captured hours of video showing multiple vans and drivers working for the company.
DHCS denies that it still has any responsibility to monitor the company, so 2 Investigates turned to other state departments looking for answers.
The DMV also said that the agency “does not have any authority to regulate medical transportation companies” and referred KTVU to law enforcement. However, CHP says they do not conduct sweeping registration checks on motorists at random, and would only be alerted to a larger problem if a Med Express van was pulled over by an officer. The Alameda County Sheriff’s Department also confirmed that their agency is prohibited from conducting traffic stops, and would not likely get involved in vehicle registration or insurance issues.
DMV records show that many of the Med Express vans recorded on the road by 2 Investigates had their registrations suspended for lacking proof of insurance at the time they were spotted. Several license plates were also flagged for parking violations. One van recorded by KTVU with a suspended registration and no proof of insurance has since been reregistered with the DMV under a different business name, and has been issued a new, valid title.
When asked whether the DMV would ever alert CHP to registration violation, spokesman Artemio Armenta said no such mechanism currently exists to monitor the millions of drivers and cars across the state. He sent KTVU an email statement that said, in part, “If there were to be evidence of DMV title/registration fraud then the matter would enter into our jurisdiction and we would investigate.”
The Alameda County District Attorney’s Office has opened an insurance fraud investigation, but would confirm little else. KTVU cameras were there in December when Sheriff’s deputies, the California Department of Insurance, and the FBI raided Rabah’s $1.5 million home in Castro Valley and removed boxes of evidence, as part of the DA’s investigation.
Records show that deputies also arrested Rabah and his two sons, Aimen Rabah, 24, and Mohmoud Rabah, 25. The younger Rabah brother was booked on two felonies for receiving stolen property and a weapons violation, and one misdemeanor for driving on a suspended license. The elder brother was booked on five weapons-related charges, according to an arrest report. Their father was booked on three weapons-related charges. None of the charges were related to Med Express vans or vehicle code violations, according to records.
When asked whether someone should step in to address the chronic problems with Med Express, Williams said, "I would hope that someone would step in.”
"This is a problem that probably falls through the cracks."