Report 2013-119 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 2013-119: California Department of Health Care Services: Its Failure to Properly Administer the Drug Medi-Cal Treatment Program Created Opportunities for Fraud (Release Date: August 2014)

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Recommendations to Health Care Services, Department of
Number Recommendation Status
1

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately coordinate with the appropriate counties to recover inappropriate payments to ineligible providers and for services purportedly rendered to deceased beneficiaries.

Fully Implemented
2

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately develop and implement new procedures for routinely identifying and initiating recovery efforts for payments that it authorizes between the effective date of a provider's decertification and the date it became aware of the decertification, in addition to the payments it authorizes between a beneficiary's death date and its receipt of the death record.

Fully Implemented
3

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately direct its investigations division to determine whether it authorized any improper payments to program providers for deceased beneficiaries outside of our audit period. It should also determine whether it authorized such payments through its other Medi-Cal programs. Health Care Services should initiate efforts to recover such payments as appropriate.

Pending
4

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately direct its investigations division to determine whether it should recover any overpayments for the high-risk payments we identified in Table 7 on page 28 and Appendix A beginning on page 63. It should also take the appropriate disciplinary action against the affected providers, such as suspension or termination.

Fully Implemented
5

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately direct its investigations division to further enhance its analysis of program claims data to identify the type of high-risk payments we identified on a monthly basis.

Fully Implemented
6

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately direct its fiscal management and accountability branch to work with Fresno, Los Angeles, and Sacramento counties to recover the specific overpayments we identified during our visits.

Fully Implemented
7

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately instruct the counties to remind their providers to adhere to the record retention policies stated in their contracts.

Fully Implemented
8

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately ensure that each county has a process in place to follow up on their providers' implementation of corrective action plans aimed at resolving program deficiencies.

Fully Implemented
9

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately ensure that Fresno County strengthens its provider contract monitoring process, including revising its report format and conducting follow-up visits to providers.

Fully Implemented
10

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately ensure that Los Angeles County strengthens its provider contract monitoring process, including fully implementing its RATE system to track and respond to provider deficiencies, and that it imposes appropriate responses when warranted, such as withholding payment or suspending or terminating a contract.

Fully Implemented
11

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately ensure that Sacramento County strengthens its provider contract monitoring process, including tracking provider deficiencies and conducting follow-up visits to providers.

Fully Implemented
12

To prevent the certification of ineligible providers, Health Care Services should immediately instruct its staff to compare the names of the managing employees whom applicant providers identify in their program applications to those whom they identify in their disclosure statements.

Fully Implemented
13

To prevent the certification of ineligible providers, Health Care Services should immediately train its staff regularly on the program requirements, including the certification standards and the federal Medicaid provider enrollment requirements.

Fully Implemented
14

To prevent the certification of ineligible providers, Health Care Services should immediately develop a provider agreement for program providers.

Fully Implemented
15

To prevent the certification of ineligible providers, Health Care Services should immediately update its procedures to include searches of the Social Security Death Master File.

Fully Implemented
16

To prevent the certification of ineligible providers, Health Care Services should immediately develop procedures on how to evaluate provider applicant license database searches.

Fully Implemented
17

To prevent the certification of ineligible providers, Health Care Services should immediately instruct its enrollment division to conduct all required database searches of individuals that provider applicants identify as their owners or managing employees.

Fully Implemented
18

To prevent the certification of ineligible providers, Health Care Services should immediately ensure that its enrollment division conducts LEIE and EPLS database searches of program providers at least monthly.

Pending
19

To prevent the certification of ineligible providers, Health Care Services should immediately designate provider applicants as moderate or high risk in accordance with federal regulations.

Fully Implemented
20

To prevent the certification of ineligible providers, Health Care Services should immediately establish a mechanism to identify the number of program sites the provider applicants' medical directors work at, and ensure that the physician ratio does not exceed 1-to-3 in accordance with state law and the certification standards.

No Action Taken
21

To prevent the certification of ineligible providers, Health Care Services should immediately identify and perform an immediate recertification of providers that signed the Compliance Agreement to ensure that these providers are currently meeting all program requirements.

Pending
22

To prevent the certification of ineligible providers, Health Care Services should immediately use a risk-based approach for recertifying program providers.

Fully Implemented
23

To prevent the certification of ineligible providers, Health Care Services should immediately develop policies and procedures for its program recertification process.

Fully Implemented
24

To prevent the certification of ineligible providers, Health Care Services should immediately develop a schedule for recertifying all program providers every five years.

Pending
25

To prevent the certification of ineligible providers, Health Care Services should immediately continue its implementation of an automated provider enrollment system.

Pending
26

To prevent the certification of ineligible providers, Health Care Services should immediately complete its program recertification on or before March 24, 2016, as federal regulations require.

Pending
27

To prevent the certification of ineligible providers, Health Care Services should immediately establish a plan for eliminating its backlog of applications for new sites and services and changes to existing certifications.

Pending
28

To ensure that it appropriately and consistently reviews provider applications and conducts site visits, Health Care Services should update its program checklists to reflect the current federal and state laws and regulations.

Fully Implemented
29

To ensure that it appropriately and consistently reviews provider applications and conducts site visits, Health Care Services should retain the documentation, such as checklists, that it uses to support its certification decisions in accordance with its retention policy.

Fully Implemented
30

To ensure that it appropriately and consistently reviews provider applications and conducts site visits, Health Care Services should ensure that supervisors perform detailed reviews of all provider applicants' files, including the application, disclosure statement, and checklists, and that they evidence their reviews by signing off on the appropriate forms.

Fully Implemented
31

To improve the coordination between its divisions, branches, and units and ensure that it addresses allegations of fraud in a timely manner, Health Care Services should continue its efforts to develop its provider risk assessment model for the PSPP unit.

Fully Implemented
32

To improve the coordination between its divisions, branches, and units and ensure that it addresses allegations of fraud in a timely manner, Health Care Services should continue its efforts to establish a mechanism for its PSPP unit to report the status of fraud referrals to SUD management and its investigations division.

Fully Implemented
33

To improve the coordination between its divisions, branches, and units and ensure that it addresses allegations of fraud in a timely manner, Health Care Services should fully implement the investigations division's recommendations shown in Appendix B. If it chooses not to implement a recommendation, it should document sufficiently the reasons for its decision.

Fully Implemented
34

To strengthen the coordination between the State and the counties, Health Care Services should amend the State-county contract to address any gaps in their collective monitoring efforts.

Fully Implemented
35

To ensure that beneficiaries have safe and reliable access to program services, Health Care Services should amend the State-county contract to allow a process for counties to notify their key partners of the providers that it has suspended.

Fully Implemented


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