The Bureau of State Audits (BSA) presents the seventh in a series of semiannual reports concerning the way the Department of Health Services (department) processes reimbursement requests for certain prescribed drugs under the California Medical Assistance Program (Medi-Cal). These requests are known as drug treatment authorization requests (TARs).
In response to Chapter 716, Statutes of 1992, we have obtained from the department statistical information, compiled each month, concerning the number of TARs received and processed from June 1990 through May 1994. This report focuses on the drug TARs processed during the six months from December 1993 through May 1994. The first four reports on this subject were prepared by the Office of the Auditor General (OAG). The fifth and sixth reports were prepared by the BSA, which assumed responsibility for this audit pursuant to Government Code Section 8546.8 in May 1993.
The department received approximately 156,600 drug TARs from December 1993 through May 1994. This represents an increase of approximately 78,100 (99 percent) drug TARs since June through November 1990, the first six months of the OAG's review. According to the chief of the department's Medi-Cal Operations Division Northern Field Operations Branch, the increase in the number of drug TARs received was partly due to a reduction in the number of drugs on the Medi-Cal list of contract drugs. Removing drugs from the list of contract drugs causes the number of drug TARs to increase, since any drug not on the department's list of contract drugs requires a TAR. The increase in the number of drug TARs received may also have occurred because of the addition of 1,380,323 (a 38 percent increase since June 1990) Medi-Cal beneficiaries eligible to obtain drugs through Medi-Cal.
From December 1993 through May 1994, the department processed 152,114 drug TARs. This represents an increase of more than 75,000 (97 percent) drug TARs since the first six months of our review, and the highest level of activity since June through November 1990. However, the department also increased its total backlog of drug TARs from 1,452 TARs at the end of November 1993 to 5,970 TARs at the end of May 1994.
During the six-month period December 1993 through May 1994, the department generally did not meet the state requirement to process mailed-in drug TARs within five days. The Stockton drug unit met the requirement in four of the six months, while the Los Angeles drug unit met the five-day requirement in only two of the six months. The extended processing time in the Los Angeles drug unit was primarily caused by the effects of the Northridge earthquake on January 17, 1994.
Based on samples of drug TARs that we randomly selected at each drug unit, we found that the Stockton drug unit processed 80 percent of the TARs received by FAX within 24 hours of receipt. The Stockton drug unit processed the remaining 20 percent of the TARs in no more than two hours beyond the 24-hour requirement. We also found that the Los Angeles drug unit processed 81 percent of the drug TARs received by FAX within 24 hours of receipt, and processed 74 percent of the drug TARs received by the department's audio response telephone system-Voice Drug TAR System (VDTS) within 24 hours of receipt. The Los Angeles drug unit does not stamp drug TARs with the exact time of the day when they are returned to the provider. Consequently, we could not be as precise in our measurement of the time it took to process TARs received by FAX and VDTS at Los Angeles as we were for Stockton.
In response to Section 14105.42 of the Welfare and Institutions Code, the department provided us with information regarding the number of fair hearing requests beneficiaries made to appeal a denied drug TAR and the number of complaints received from providers. Thirty-three fair hearing requests were submitted to the Department of Social Services from December 1993 through May 1994. Of those, three were dismissed due to beneficiaries' failure to appear at the hearing. Nine of the remaining requests were withdrawn before the cases were heard, leaving 21 requests for fair hearings. Four of those requests were approved, one was denied, and decisions on the remaining 16 were still pending at the time of our review. The Los Angeles drug unit reported that it received multiple complaints about its processing of drug TARs for the six-month period of our review. The complaints were primarily caused by effects of the January 1994 Northridge earthquake.