Report 2006-501 Recommendations

When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below, is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor's assessment of auditee's response based on our review of the supporting documentation.

Recommendations in Report 2006-501: California Department of Corrections and Rehabilitation: It Needs to Improve Its Processes for Contracting and Paying Medical Service Providers as Well as for Complying With the Political Reform Act and Verifying the Credentials of Contract Medical Service Providers (Release Date: April 2007)

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Recommendations to Corrections and Rehabilitation, Department of
Number Recommendation Status
1

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should ensure that staff receive proper training on bidding methods, including the appropriate application of the small business preference, so that bidders are awarded contracts in the correct order.

2

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should establish policies and procedures regarding the methodology for determining the cost threshold used to limit the number of awards made to registry contractors.

3

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should implement a quality control process to ensure staff calculate the cost threshold correctly and retain documentation to support their calculations in the contract files.

4

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should notify potential bidders of its use of a cost threshold to determine the awards to be made and its methodology for calculating the threshold.

5

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should implement a quality control process to identify errors in the ranking of bidders before awarding contracts.

6

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should fully comply with state policy, including justifying and documenting the reasonableness of its contract costs, when it receives fewer than three bids or when it chooses to follow a noncompetitive process.

7

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should retain documentation of its efforts to solicit all known potential contractors when it advertises in the California State Contracts Register.

8

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should adhere to the price analysis and methodology approved by General Services when using the special category noncompetitively bid request process. For example, it should use Medicare rates as a benchmark for determining the reasonableness of its rates paid to contractors.

9

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should reevaluate the regional conversion factors used to establish its standard RVP rates.

10

To ensure that it protects the State?s interests and receives the best possible services at the most competitive prices, Corrections should conduct periodic market surveys.

11

To ensure that it protects the State's interests and receives the best possible services at the most competitive prices, Corrections should ensure that it establishes internal control processes that prevent prisons from allowing contractors to perform services before receiving General Services' approval of the contract.

Fully Implemented
12

To ensure that it minimizes the risk of authorizing prison spending that exceeds its master contracts, Corrections should ensure that contract staff periodically reconcile the master contracts and outstanding NTPs and conduct random audits to verify the reconciliation process.

13

To protect the best interests of the State, all contracts that Corrections enters into with medical registries should contain express provisions related to the required notice period for cancellation.

Fully Implemented
14

To protect the best interests of the State, all contracts that Corrections enters into with medical registries should include Business Associate Agreements in all contracts subject to HIPAA and amend existing contracts to include those agreements.

Fully Implemented
15

To protect the best interests of the State, all contracts that Corrections enters into with medical registries should contain clear and consistent requirements related to the standard of care called for under the contract. At a minimum this standard of care must meet the standard of care needed in order to satisfy Corrections? obligations under the Plata settlement agreement.

16

To protect the best interests of the State, all contracts that Corrections enters into with medical registries should require medical registries to submit proof that their insurance company has agreed explicitly to insure them against civil rights claims.

17

To protect the best interests of the State, all contracts that Corrections enters into with medical registries should require registry contractors to monitor and assess the quality of services they provide under the contract.

18

To ensure that there is no uncertainty surrounding the legal status of contract employees, Corrections should seek expert advice and legal counsel to determine whether its current treatment of certain medical registry service providers is such that those medical registry service providers should be considered employees rather than independent contractors.

19

To ensure that Corrections? contracts contain terms for standard of care that meet its constitutional obligations as well as the standard of care that a practicing physician would provide if adhering to generally accepted ethical norms, Corrections should seek legal and other expert advice to determine whether the standard of care currently prescribed in state regulations allows contracting physicians to provide medical care in a manner that is consistent with the generally accepted standard of care in the medical community. If the standard of care is not consistent with the generally accepted standard of care in the medical community, Corrections should revise its regulatory standard to require that the standard of care called for in the State?s prisons is, at a minimum, consistent with medical ethics and with the State?s constitutional obligations.

20

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should ensure that prison staff consistently follow procedures requiring them to document their efforts to obtain services from registry contractors.

21

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should reevaluate its policy of allowing prisons to send out service requests concurrently to all registry contractors listed in the hierarchy.

22

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should ensure that prisons verify the services they receive from registry contractors before authorizing payment of invoices.

23

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should continue to implement the draft of a departmentwide policy reiterating the need for prison medical staff to adhere to proper procedures for verifying registry contractors? hours before authorizing payment.

24

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should ensure that prisons obtain the necessary documentation for the services they were unable to verify or seek reimbursement from the registry contractors for the overpayments identified in this report.

25

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should establish a quality control process to ensure that prisons pay rates that are consistent with contract terms.

26

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should ensure that prison staff responsible for authorizing overtime adhere to Corrections? overtime policies and contract terms.

27

To improve its procedures and practices for requesting registry services and paying for these services, Corrections should evaluate its prisons and regional accounting offices? processes for paying invoices and identify weaknesses that prevent it from maximizing the discounts taken and complying with the CPPA.

28

To ensure that it complies with the political reform act, Corrections should establish an effective process for tracking whether its designated employees, including consultants, have filed their statements of economic interests timely.

29

To ensure that it complies with the political reform act, Corrections should review the statements of economic interests to ensure their accurate completion and to identify potential conflicts of interests.

30

To ensure that it complies with the political reform act, Corrections should ensure that the chief executive officer retains his or her written determinations for consultants.

31

To ensure that it complies with the political reform act, Corrections should require wardens to enforce its policy prohibiting outside employment or activities without seeking prior approval.

32

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should require the credentialing unit to verify the credentials of contracted providers who work in non-Corrections facilities or, at a minimum, verify that these facilities have a rigorous process for verifying the credentials of their providers.

33

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should establish a policy to define allied health professionals and to identify professionals who will be credentialed by the credentialing unit versus those credentialed by the prisons.

34

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should require the credentialing unit to determine whether the credentials of those medical and allied health providers who are performing services at prisons under registry contracts have been verified. If not, the credentialing unit should verify them.

35

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should establish criteria to use when approving or denying potential medical providers, including whether to hire registry contractors with restricted licenses.

36

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should ensure that prisons request NPDB searches from the credentialing unit before allowing providers to perform services.

37

To improve its oversight of registry contractors and their providers who provide medical services to inmate patients, Corrections should seek clarification from the U.S. Department of Health and Human Services regarding the criteria for eligible entities and whether or not all prisons can be combined into one eligible entity.



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