Report 2013-119 Recommendation 10 Responses

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)

Recommendation #10 To: Health Care Services, Department of

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.

Annual Follow-Up Agency Response From August 2017

Los Angeles County has continued to improve their monitoring processes and expand monitoring activities illustrated within the County's monitoring reports of Drug Medi-Cal (DMC) providers and the results of DHCS's annual onsite review of the County. County reports submitted to the Department include tracking providers' repeat deficiencies and corrective action requirements based on severity of the deficiency. Additionally, the County implemented an "Early Watch" onsite monitoring review for new providers within the first 30 to 90 days of contract execution. This review determines the level of knowledge of a provider on the regulatory and contract requirements for DMC services. Los Angeles County staff then provide technical assistance and training and issue a monitoring report. For State Fiscal Year 2016-17, Los Angeles County terminated contract with five DMC providers as a result of their monitoring efforts and tracking prior unresolved deficiencies.

Status and Implementation Date: Fully Implemented, 6/30/2017.

  • Completion Date: June 2017

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

Health Care Services provided a copy of Los Angeles County's guide for contract monitoring, which includes the process changes described in Health Care Services response. In addition, Health Care Services provided examples of three monitoring reports, where the county identified several deficiencies with various Drug Medi-Cal providers.


Annual Follow-Up Agency Response From October 2016

DHCS approved Los Angeles County's corrective action plan for FY 2014-15 monitoring review on March 22, 2016 (Attachment 2016-2). To date, Los Angeles County has corrected five of the fifteen contractual deficiencies cited. Los Angeles has strengthened its monitoring protocols and regularly submits compliance monitoring reports on subcontracted providers to DHCS. The county has terminated multiple contracts on non-compliant SUD treatment providers.

  • Estimated Completion Date: December 2016

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


1-Year Agency Response

Questions requiring documentation that demonstrates County provider monitoring procedures including follow up with providers were added to the 14/15 County Monitoring Instrument. DHCS' conducted an on-site monitoring review of Los Angeles County in December 2014. The County's RATE system and the policies/sanctions developed for responding to provider deficiencies were reviewed and documented in the revised county monitoring report issued on July 15, 2015. Los Angeles County has 60 days to submit their corrective action plan (CAP) to the Department. DHCS staff will ensure implementation of the CAP with Los Angeles County during the on-site monitoring review, which will occur in November 2015.

  • Estimated Completion Date: November 2015
  • Response Date: August 2015

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

Date of implementation is set for November 2015.


6-Month Agency Response

Several questions requiring documentation that demonstrates County provider monitoring procedures including follow up with providers have been added to the 14/15 County Monitoring Instrument. The review of Los Angeles County will be conducted in December 2014. The County's RATE system and the policies/sanctions developed for responding to provider deficiencies will be reviewed for consistent implementation and appropriateness.

  • Completion Date: December 2014
  • Response Date: February 2015

California State Auditor's Assessment of 6-Month Status: No Action Taken

Although Health Care Services indicated that it has fully implemented this recommendation, it did not provide us documentation to support its claim.

  • Auditee did not substantiate its claim of full implementation

60-Day Agency Response

Several questions requiring documentation that demonstrates County provider monitoring procedures including follow up with providers have been added to the 14/15 County Monitoring Instrument (attached and beginning on page 38). The review of Los Angeles County will be conducted in December 2014. The County's RATE system and the policies/sanctions developed for responding to provider deficiencies will be reviewed for consistent implementation and appropriateness.

  • Estimated Completion Date: December 31, 2014
  • Response Date: October 2014

California State Auditor's Assessment of 60-Day Status: Pending

Based on its response, the department has not yet implemented this recommendation.


All Recommendations in 2013-119

Agency responses received are posted verbatim.


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