FRESNO, Calif. — In July, Dr. Francis Lagattuta, a physician who operated a network of pain clinics throughout Central California known as Lags Medical Centers, paid $11.4 million to settle a case alleging Medi-Cal and Medicare insurance fraud.
Following a four-year investigation, state and federal agencies in both California and Oregon accused Lagattuta of routinely performing medically unnecessary procedures in order to obtain insurance reimbursements.
“Thousands of Medi-Cal patients trusted Dr. Lagattuta to take away their pain,” wrote California Attorney General Rob Bonta in a July press release. “Instead he exploited their trust by carrying out arrays of unnecessary tests and billing for them over the objections of the doctors he employed.”
The payout concludes the investigation without any admission of wrongdoing. According to a statement from Lagattuta spokesperson Dan Kramer, the settlement “clearly states that the doctor specifically denies the government insurers’ claims in this billing dispute.”
While that investigation was ongoing, Lagattuta was simultaneously working for a state agency. As a contractor, he operated the pain management clinic at Coalinga State Hospital, a state-run psychiatric facility.
In response to a public records request, the Department of State Hospitals (DSH) confirmed Lagattuta ran the hospital clinic from 2011 until April 2023, which is when a KVPR investigation revealed the clinic closed after a small number of patients of the clinic tested positive for hepatitis C.
An internal email distributed to hospital staff in May that was obtained and verified by KVPR spoke of “a possible exposure to pathogen” at the pain management clinic.
“Given that we have had several hundred patients visit the clinic, we are set to begin testing for Hepatitis and HIV for all patients who utilized those services within a specific target window,” the email read.
At least one patient received a lab slip informing him that he may have been exposed to contaminated needles at the clinic.
A statement from DSH confirmed the agency has uncovered fewer than 11 cases of hepatitis C but has otherwise revealed few details about the situation.
“The Department is conducting an ongoing public health investigation related to the Department of State Hospitals – Coalinga. The Department is working with state and local authorities and remains in close contact with these regulatory bodies as the investigation continues. The event has been isolated and contained,” the statement reads.
When asked why Lagattuta remained employed during the investigation into his alleged insurance fraud, a DSH spokesperson wrote that the agency was not aware of the allegations until an investigative report by KFF Health News brought it to light in early 2022.
“Once aware, DSH monitored the billing practices of the pain clinic for over a year. DSH found nothing unusual,” the statement reads.
Through spokesperson Dan Kramer, Lagattuta declined to comment on the situation.
“While I can’t discuss the specifics of any pending inquiries at the hospital, I can say that any allegations about contaminated needles are entirely false,” Kramer said.
Public health officials have not indicated when they expect their investigation to conclude.
