Report 2013-119 Recommendation 27 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 #27 To: Health Care Services, Department of

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.

Annual Follow-Up Agency Response From August 2017

The backlog of applications received from the DMC program have been processed. New DMC clinic applications received in PED are assigned within two weeks of receipt.

  • Completion Date: October 2015

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

Although Health Care Services asserts that it fully implemented this recommendation, it did not provide any documentation to support its assertion.

  • Auditee did not substantiate its claim of full implementation

Annual Follow-Up Agency Response From October 2016

Of the 121 backlog applications, 73 were approved and 48 were decertified, denied, or terminated the application review.

  • Completion Date: October 2015

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

Although Health Care Services asserts that it fully implemented this recommendation, it did not provide any documentation to support its assertion.


1-Year Agency Response

As of July 21, 2015, PED has approved 71 (59%), decertified/denied 15 (12.4%) and terminated the review of 30 (25%) of the 121 backlog applications, for a total of 116 (96%) applications completed. PED has 1 application returned as incomplete, 1 back from the applicant to review, and 3 pending the A&I onsite referral, to complete the backlog inventory.

  • Estimated Completion Date: End of 2015
  • Response Date: August 2015

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

Date of implementation is set for the end of 2015.


6-Month Agency Response

As of January 6, 2015, PED has approved 37 (30.6%), decertified/denied 7 (6.6%) and terminated the review of 27 (22.3%) of the 121 backlog applications, for a total of 71 (58.7%) applications completed. PED has 37 applications, returned as incomplete, back from the applicants to review, with another 5 pending a response from the applicants, and a balance of 8 either being reviewed or on hold for various reasons, to complete the backlog inventory.

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

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

Based on its response, Health Care Services has not fully eliminated the preexisting backlog of applications. In addition, it has provided no context about whether or not it is keeping up with new work and thus preventing the backlog from growing.


60-Day Agency Response

As of September 16, 2014, PED staff has completed the initial review of all backlog applications received prior to January 1, 2014. The initial review of the 121 backlog applications resulted in 94% of the applications being returned to the applicants because the applications were incomplete. PED has received 43% of the applications, which were returned incomplete, back from the applicants. PED has approved 22 sites and denied 1 site to date. In addition, for applications received since January 1, 2014, PED has approved 16 sites, and denied 6. In total, PED has approved 38 new Drug Medi-Cal program sites.

  • Completion Date: March 2014
  • Response Date: October 2014

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

As we explain on page 49 of the report, Health Care Services reported that it received 298 applications as of June 24, 2014. However, its response is primarily focused on only 121 of these applications it received prior to January 1, 2014. Health Care Services' response fails to explain that it received an additional 177 applications between January 1, 2014 and June 24, 2014. In addition, the response fails to provide context for any additional applications it may have received between June 24, 2014 and the date of its 60-day response, October 20, 2014. Moreover, Health Care Services has approved or denied only 45 of the 298, or roughly 15 percent, of the applications it had received as of June 24, 2014. Because Health Care Services processes such a low percentage of its applications, it may continue to encounter a growing backlog of program applications.


All Recommendations in 2013-119

Agency responses received are posted verbatim.


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