Report 2013-119 Recommendation 2 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 #2 To: Health Care Services, Department of

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.

Annual Follow-Up Agency Response From October 2016

Post implementation of the system edit to deny services post date of death as identified on the claim or MEDS, deployed November 2013, EITSD staff created a report from the adjudication system that reflects no incorrect approval from November 2013 - September 2016. This report is ongoing and on request of the program.

  • Completion Date: April 2016

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

Health Care Services provided copies of its new procedures and a summary of the payments it recouped.


1-Year Agency Response

FMAB developed and implemented new procedures for identification and recoupment of overpayments to decertified providers. A system edit was included in the Medi-Cal Eligibility Data System (MEDS) to prevent improper payments for dead beneficiaries. However, the Enterprise Innovation Technology Services Division (EITSD) has not yet developed the automated query in the Short Doyle Medi-Cal system that will identify any approved services after a "death date" to ensure that the edit in the system is working as designed. The anticipated completion is in early 2016.

  • Estimated Completion Date: Early 2016
  • Response Date: August 2015

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

Date of implementation is set for early 2016.


6-Month Agency Response

A. Receipt of Decertification Notice - Ongoing

Update as of 1-15-15: There were 6 providers that were decertified since September 1, 2014. According to SMART, there is not any billing data submitted for services after the decertification date. As a result, there is no recovery of overpayment.

B. Death Record Quarterly Checks

Update as of 1-15-15: FMAB staff has been working with staff from the Information Technology Division on the development of a query to generate the report. The query is expected to be completed by January 30, 2015. Upon completion of the query, a report will be generated to determine if there is any billing data for FY 2013-14 and FY 2014-15 to identify if there is any billing data for beneficiaries after a "death date."

  • Estimated Completion Date: September 30, 2015
  • Response Date: February 2015

California State Auditor's Assessment of 6-Month Status: Pending


60-Day Agency Response

No update.

  • Estimated Completion Date: 09/30/2015
  • Response Date: October 2014

California State Auditor's Assessment of 60-Day Status: No Action Taken

Health Care Services indicated that it has not taken any action and will not do so until September 2015.


All Recommendations in 2013-119

Agency responses received are posted verbatim.


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