Report 2011-104 Recommendation 6 Responses

Report 2011-104: Medi-Cal Managed Care Program: The Departments of Managed Health Care and Health Care Services Could Improve Their Oversight of Local Initiatives Participating in the Medi-Cal Two-Plan Model (Release Date: December 2011)

Recommendation #6 To: Health Care Services, Department of

Health Care Services should ensure that it performs annual medical audits of local initiatives as required by law.

Annual Follow-Up Agency Response From October 2016

MRB has fully implemented the annual medical audits for each of the previously existing 21 Medi-Cal managed care plans. A 22nd plan opened and will be audited in the subsequent year as well. DHCS is fully integrated with the Department of Managed Health Care (DMHC) to coordinate and conduct joint audits. As the DMHC is on a triennial cycle, approximately every third MRB audit is a joint endeavor. DHCS has published the reports on the Managed Care Quality and Monitoring Division's website.

  • Completion Date: June 2015

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented


Annual Follow-Up Agency Response From October 2015

MRB has fully implemented the annual medical audits for each of the previously existing 21 Medi-Cal managed care plans. A 22nd plan opened and will be audited in the subsequent year as well. DHCS is fully integrated with the Department of Managed Health Care (DMHC) to coordinate and conduct joint audits. As the DMHC is on a triennial cycle, approximately every third MRB audit is a joint endeavor. DHCS has published the reports on the Managed Care Quality and Monitoring Division's website.

  • Completion Date: March 2015

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although some medical audits have been conducted, Health Care Services has yet to conduct annual medical audits of all Medi-Cal managed care plans. Health Care Services stated it commenced the annual medical audits of all Medi-Cal managed care plans in fiscal year 2015-16. Therefore, we assessed this recommendation as partially implemented until Health Care Services can demonstrate it has performed annual medical audits of local initiatives as required by law.

  • Auditee did not substantiate its claim of full implementation

Annual Follow-Up Agency Response From October 2014

A&I, MRB is on track with its overall implementation plan which includes classroom training, field mentoring, ongoing Subject Matter Expert (SME) consultation for audit staff who perform medical audits of contracting health plans. As of May 2014, seven audit teams completed the classroom training; and by December 2014, those teams will have performed an audit under guidance from experienced managers and SMEs. Internal quality review of completed reports is conducted by senior management to assure report reliability and consistency.

Bi-monthly, Joint Audit meetings with DHCS, Medi-Cal Managed Care Division (MMCD), A&I, MRB and the DMHC, Plan Surveys Division serve to coordinate audit/survey schedules, obtain MMCD Corrective Action Plan (CAP) status reports, and policy & legislative updates.

Joint DHCS and DMHC on-site engagements are coordinated in accordance with Welfare & Institution Section 14457; the current DMHC focus is on health plan implementation of SPD; and starting in 2015, the CalMediConnect implementation.

Whenever possible, coordination of on-site schedules is achieved between DHCS & DMHC. However, two scheduled audits were postponed due to the financial circumstances of the health plans (one Local Initiative (LI) and one County Organized Health System (COHS)).

From September 2013 through to July 2014, an additional eight health plans (four LIs, three commercial plans, and one COHS) were audited

Upon completion of the CAPs, the issued Audit Reports, completed CAPs and corresponding MMCD Close out Letters are posted to the MMCD website's Monitoring page.

  • Estimated Completion Date: Fall 2015

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


Annual Follow-Up Agency Response From September 2013

The Medical Review Branch (MRB) is ramping up to full implementation of the annual medical audits. There are currently four of seven audit teams trained and functioning. We anticipate all seven teams functional by 2014 and have the capacity to conduct the annual audits for all Medi-Cal managed care plans. The Department of Managed Health Care (DMHC) reviews all managed care plans every three years. The MRB teams work with the DMHC teams in joint efforts on the Medi-Cal managed care plans.

In 2013, of the 10 operational Local Initiatives, 3 (Contra Costa Health Plan, CalViva, and Kern Family Health Plan) were audited. By the end of 2013 MRB, MRB will have audited 4 of the 10 operational Local Initiatives. An audit of the Tulare County LI which is operated by Anthem Blue Cross will start mid-November.

In 2012, 1 GMC Plan, Community Health Group, and 1 COHS, Gold Coast Health Plan were audited.

  • Estimated Completion Date: 2014

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


1-Year Agency Response

Health Care Services stated it is working with Managed Health Care to coordinate its efforts related to the medical audits. To ensure the work is leveraged, Health Care Services prepared a crosswalk of the departments' respective statutory and regulatory audit requirements. In addition, Health Care Services plans to phase-in the completion of annual medical audits of Medi-Cal managed care plans, including the local initiatives. Health Care Services indicated it completed two medical audits by the end of 2012 and it plans to continue to increase the number of medical audits completed each year, until full implementation is achieved in 2015. Health Care Services stated that this phase-in process is needed to allow it to increase the staffing required to conduct annual medical audits of all Medi-Cal managed care plans. To maintain a visible presence with managed health care plans, Health Care Services plans to conduct two types of more limited reviews to develop an ongoing understanding of what is occurring with each managed health care plan. (See 2013-406, p. 79)

  • Response Date: December 2012

California State Auditor's Assessment of 1-Year Status: Pending


All Recommendations in 2011-104

Agency responses received after June 2013 are posted verbatim.


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