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California Department of Health Care Services
July 8, 2019
Ms. Elaine M. Howle
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Dear Ms. Howle:
The California Department of Health Care Services (DHCS) hereby confirms receipt of the California State Auditor's (CSA) draft report entitled, Gold Coast Health Plan: Its Reimbursements to Pharmacies are Reasonable, but Its Pharmacy Benefits Manager Did Not Always Process Claims Correctly. The CSA conducted this audit and issued no findings or recommendations for DHCS.
DHCS appreciates the work performed by CSA. If you have any questions, please contact Nicole Jacot, External Audit Coordination Manager, at (916) 713-8812.
Sincerely,
Jennifer Kent
Director
Gold Coast Health Plan
July 9, 2019
Ms. Elaine M. Howle
State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
RE: Response to California State Auditor's Draft Report: Gold Coast Health Plan: Its Reimbursements to Pharmacies are Reasonable, but its Pharmacy Benefits Manager Did Not Always Process Claims Correctly
Dear Ms. Howle:
Gold Coast Health Plan (GCHP) appreciates the work performed by the California State Auditor (CSA). Enclosed here is GCHP’s response to the recommendations stated in the draft report, titled "Gold Coast Health Plan: Its Reimbursements to Pharmacies are Reasonable, but Its Pharmacy Benefits Manager Did Not Always Process Claims Correctly".
If you have any questions, please contact GCHP’s Chief Compliance Officer, Brandy Armenta at (805) 437-5660 or barmenta@goldchp.org.
Sincerely,
Dale Villani
Chief Executive Officer
Enclosure
Gold Coast Health Plan’s Response to CSA Audit 2018-124
Gold Coast Health Plan: Its Reimbursements to Pharmacies are Reasonable
but Its Pharmacy Benefits Manager Did Not Always Pay Claims Correctly
Recommendation #1: To ensure that the public clearly understands the commission’s decision, the commission should report its reasoning for awarding contracts or the legal basis, if any, for choosing not to do so.
GCHP’s Response:
GCHP values transparency and understands some actions taken may require formal findings by the commission as a whole. Many contract awards, however, do not require formal findings. For example, the award of the pharmacy benefit manager contract discussed in the report did not require formal findings. In most circumstances, California law does not require commissioners to disclose their own subjective motivations or mental processes. This is called the deliberative process privilege and the recommendation should recognize this privilege.
Recommendation #2: To ensure that it addresses any significant performance issues by its contractors in a timely manner, Gold Coast should establish a process to immediately require contractors to take necessary corrective action to resolve issues and ensure that they do not recur.
GCHP’s Response:
GCHP supports as a best practice the prompt identification of any deficiency and the formal request for a corrective action plan. To that end, GCHP is evaluating existing policies and procedures regarding the issuance of corrective active plans. GCHP will promptly issue a request for corrective action plans in accordance with the severity and impact of any future errors by the pharmacy benefits manager which will include necessary penalties and remediation efforts.
Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM GOLD COAST HEALTH PLAN
To provide clarity and perspective, we are commenting on Gold Coast’s response to our audit. The number below corresponds to the number we have placed in the margin of Gold Coast’s response.
Gold Coast misinterprets the intent of our recommendation, which is intended to serve the public interest by increasing transparency in government decision making. Thus, our recommendation is not limited to complying with legal requirements for the commission to report formal findings of its decisions. Moreover, our recommendation pertains to the commission as a whole rather than the reasoning of individual commissioners. We trust the commission can establish a process that will both promote transparency in its decision-making process while preserving the rights and privileges of individual commissioners afforded by law. For example, once the commission has voted for a specific contractor, the commission chair could publicly summarize, to the best of his or her understanding, the factors that led to the commission’s overall decision. If the commission chooses not to do so, the chair should provide the legal basis and authority, if any, for that decision.