The Bureau of State Audits (BSA) presents the eighth 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 obtained from the department statistical information, compiled each month, concerning the number of drug TARs received and processed from June 1990 through November 1994. This report focuses on the drug TARs processed during the six months from June 1994 through November 1994. The first four reports on this subject were prepared by the Office of the Auditor General (OAG). The remaining reports were prepared by the BSA, which assumed responsibility for this audit under the Government Code, Section 8546.8, in May 1993.
The department received 210,677 drug TARs from June through November 1994. This represents an increase of 132,179 (168 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 MediCal Operations Division Northern Field Operations Branch, the increase in the number of drug TARs received was primarily due to recently adopted policy changes including the reduction of the number of drugs on the Medi-Cal list of contract drugs and changes in the governing code which reduced the number of prescriptions allowed per month for most contract drugs. Whenever the monthly prescription limit is exceeded, a drug TAR is required to obtain reimbursement. Also, drugs that do not appear on the list require drug TARs for reimbursement. The increase in the number of drug TARs received may also have occurred because of the addition of approximately 1,433,254 Medi-Cal beneficiaries (a 39 percent increase since June 1990) eligible to obtain drugs through Medi-Cal.
From June through November 1994, the department processed 214,303 drug TARs. This represents an increase of 137,021 (177 percent) drug TARs since the first six months that we reviewed. It also represents the highest level of activity since that time. The department's backlog of unprocessed drug TARs was 2,311 drug TARs in November 1990. In comparison, its backlog of unprocessed drug TARs in November 1994 was 2,344 drug TARs.
Further, we found that the department was not able to process its drug TARs in a timely manner from June 1994 through November 1994. According to the department's own calculations, in five of the six months at the Stockton drug unit and in all six months at the Los Angeles drug unit, the department was not able to process mailedin drug TARs within five working days as required by law (see Figure 7 on page 15 of this report for more details). Our review of samples of drug TARs randomly selected at each drug unit for the months of August and November 1994 confirmed that mailed-in drug TARs were not always processed within five working days. In August 1994, for example, neither of the drug units met the five-day state requirement for processing drug TARs. However, in November 1994, according to our samples, the Los Angeles drug unit took an average of five working days, and the Stockton drug unit took an average of one to two working days to process mailed-in drug TARs.
We also found that the drug units generally did not process drug TARs received by FAX within 24 hours of receipt, as federal law requires. Based on samples of drug TARs randomly selected at each drug unit, an average of 107 hours was required to process a FAX TAR in the Los Angeles drug unit and an average of 29 hours was required to process a FAX TAR in the Stockton drug unit in August 1994. During that month, the department processed only 5 percent of the FAX TARs in our sample within 24 hours. In November 1994, 26 percent of the FAX TARs in our sample were processed within 24 hours. Finally, during August and November 1994, the Los Angeles drug unit did not meet the 24-hour turnaround requirement for drug TARs received via the department's audio response telephone system-the Voice Drug TAR System (VDTS). For our sample of 53 VDTS TARs, only 65 percent of the VDTS TARs were processed within 24 hours.
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. The department also provided the number of complaints received from providers. Sixty-four fair hearing requests were submitted to the Department of Social Services from June through November 1994, which represents a 94 percent increase over the six months ending May 1994. Of those, 4 were dismissed, 28 were withdrawn before the cases were heard, 6 were denied, 3 were approved, and the decisions on the remaining 23 were still pending at the time of our review In addition to fair hearing requests, the department received numerous complaints from providers about its processing of drug TARs from June through November 1994. Because this represented an increase in the number of complaints, we contacted a sample of ten pharmacists to ascertain the impact of processing delays on patient care. All ten pharmacists stated they had experienced processing delays. Each pharmacist, however, stated such delays had not affected patient care because when the department took a long time to process a drug TAR, the pharmacist went ahead and filled the patient's prescription in advance of receiving the drug TAR approval.
As mentioned previously, the increase in the number of drug TARs received during June through November 1994 was largely due to changes in the governing code. To keep pace with the increasing workload, 79 new positions were added in the drug units in October 1994. For that reason, we selected samples from the months of August and November 1994, during which time we noted differences in the department's processing capabilities.