California pledges to combat healthcare supply fraud

California Governor Gavin Newsom said that the state has launched an official website to deal with the shortage of medical supplies and help combat rampant healthcare fraud amid the spread of COVID-19.

The website would allow individuals and companies to donate, sell and offer to manufacture essential medical supplies including N95 masks and testing materials, which are badly needed by local hospitals, Xinhua news agency quoted Newsom as saying at a daily briefing on Saturday.

The Governor disclosed that the state was working with the Federal Bureau of Investigation on a number of fraud allegations involving medical supplies, saying some people, taking advantage of the shortage, claimed that they could deliver medical supplies that they don't have.

On Friday, local health care provider Kaiser Permanente said it had cooperated with federal law enforcement in investigating a failed deal for 39 million N95 masks.

Service Employees International Union (SEIU) United Healthcare Workers West, a California health care workers' union, announced last month that it had found these masks somewhere and could sell them to hospitals at $5 each, but the delivery was never implemented.

This week, the union distanced itself from the arrangement, saying that the union only connected the supplier to the hospitals and had no involvement afterwards.

Kaiser spokesman Marc Brown told the Los Angeles Times that his company backed out of a planned purchase of 6 million masks after learning that the supplier never had possession of the masks.

The company decided to cooperate with federal law enforcement in their investigation of suspected fraud in this case, Brown was quoted as saying.

There was no indication that SEIU was a target of the investigation, and the exact reasons why the masks didn't come through remain unclear, the report said.