Report 2014-130 Recommendations

To ensure that it provides claiming units with reasonable opportunities to address concerns with its decisions or actions, Health Care Services should, within three months, begin preparing regulations to establish and implement a formal appeals process that allows claiming units to directly appeal Health Care Services' decisions.

To ensure that it provides claiming units with reasonable opportunities to address concerns with its decisions or actions, Health Care Services should, within three months, inform all stakeholders, including claiming units, of the existence of this appeals process.

Until the Legislature implements our recommendation in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should update its site review and desk review procedures to include the following steps:
* A risk-based approach to selecting entities for review.
* Verification that local educational consortia and local governmental agencies are adequately meeting the oversight and administrative responsibilities described in their contracts with Health Care Services.
* Verification that contracts between local educational consortia or local governmental agencies and their claiming units do not include provisions that could result in disallowed costs, such as allowing Health Care Services' participation fee to be included in the claim calculations.
* Examination of local educational consortia and local governmental agencies' records to ensure that:
-- Costs they claim for federal reimbursement are necessary and reasonable.
-- The entities are not inappropriately earning a profit based on the fees they collect from claiming units.
-- The coding performed by local educational consortia that charge claiming units a percentage of their federal reimbursement is reasonably accurate.

Until the Legislature implements our recommendation in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should complete the oversight reviews for at least three high-risk local educational consortia or local governmental agencies by December 31, 2015, and post the results to its website.

Until the Legislature implements our recommendation in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should complete the oversight reviews for any remaining high-risk local educational consortia or local governmental agencies by June 30, 2016, and post the results to its website.

To minimize the risk that claiming units could include unallowable costs when calculating their reimbursement claims, Health Care Services should encourage the Los Angeles County Office of Education (Los Angeles County) to revise its contracts with its claiming units to make it clear that claiming units cannot include Health Care Services' participation fee as part of their claims.

To minimize the risk that claiming units could include unallowable costs when calculating their reimbursement claims, Health Care Services should do the following immediately for all claims that Los Angeles County received and reviewed under its current contracts with its claiming units:
* Determine whether claiming units included Health Care Services' participation fee as part of the claim.
* For those paid claims that included the participation fee, identify the inappropriate amount paid and take appropriate action to resolve the improper payment including, if necessary, obtaining a refund from the claiming unit.
* For those submitted claims that have not yet been paid, instruct Los Angeles County to reject the claims and direct claiming units to revise the claims to omit Health Care Services' participation fee.

To minimize the risk that claiming units could include unallowable costs when calculating their reimbursement claims, Health Care Services should remind all local educational consortia and local governmental agencies that contracts with their claiming units should prohibit claiming units from seeking federal reimbursement of Health Care Services' participation fee.

To streamline the organizational structure of its administrative activities program and to improve the program's cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and develop and implement a plan to take over responsibility for conducting quarterly time surveys and performing related activities as soon as reasonably possible.

To streamline the organizational structure of its administrative activities program and to improve the program's cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and develop and issue a request for proposals to identify a responsible vendor to assist in implementing a statewide quarterly random moment time survey.

To streamline the organizational structure of its administrative activities program and to improve the program's cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and draft revisions to regulations as appropriate and to applicable documents, including the manual, oversight strategies and plans, and policy and procedure letters.

To the extent that local educational consortia and local governmental agencies are no longer involved in the administrative activities program, Health Care Services should develop and issue a standard contract for claiming units to sign to participate in the program.

To improve the clarity and effectiveness of program communication, Health Care Services should develop and implement feedback mechanisms, such as organized, up-to-date FAQs, through which it can communicate results of relevant inquiries to other stakeholders, including claiming units.

To better ensure that some claiming units do not unfairly disadvantage other claiming units in the receipt of interim payments, Health Care Services should explore opportunities to expedite consistent, timely, and fair interim payments to those claiming units with no overpayments. Health Care Services should involve representatives of local educational consortia, local governmental agencies, and claiming units in these efforts and communicate the results to interested stakeholders.

To better maximize federal reimbursements for the administrative activities program, Health Care Services should, within six months, develop and implement a method to oversee and track the outreach efforts that local educational consortia and local governmental agencies use for ensuring that nonparticipating claiming units understand the benefits and consider participating in the administrative activities program.

To better maximize federal reimbursements for the administrative activities program, Health Care Services should, within six months, revise reimbursement rates to authorize claiming units to claim the 75 percent reimbursement rate for translation activities as federal law allows.

To better maximize federal reimbursements for the administrative activities program, Health Care Services should, within six months, determine the extent to which claiming units can claim the unreimbursed difference between the 50 percent and 75 percent reimbursement rates for translation activities for past years and inform claiming units of the findings.

Should the Legislature implement our recommendation in Chapter 2 to allow claiming units to submit reimbursement claims directly to it, Health Care Services should develop and implement its own outreach functions to ensure that claiming units that do not currently participate understand the benefits and consider participating in the administrative activities program.

To provide the public with the ability to participate fully in developing the rules governing the administrative activities program, Health Care Services should, in accordance with California's Administrative Procedure Act (APA), immediately develop and adopt the regulations cited in the four subdivisions of Section 14132.47 of the California Welfare and Institutions Code.

To ensure that it provides stakeholders with timely access to information regarding the billing option program, Health Care Services should issue the required annual report covering April 2012 to May 2013 immediately.

To ensure that it provides stakeholders with timely access to information regarding the billing option program, Health Care Services should issue the required annual report covering April 2013 to May 2015 by December 2015 as promised.

To ensure that it provides stakeholders with timely access to information regarding the billing option program, Health Care Services should issue all future annual reports in a timely manner.

To streamline the organizational structure of Health Care Services' administrative activities program and to improve the program's cost-effectiveness, the Legislature should amend state law to allow claiming units to submit reimbursement claims directly to Health Care Services.

To help improve and maximize the benefits of the administrative activities program, as well as to provide enhanced transparency to stakeholders, the Legislature should enact legislation as soon as possible that requires Health Care Services to prepare a report annually for the administrative activities program similar to the annual report state law requires for the billing option program.