Report 2006-110 All Recommendation Responses

Report 2006-110: Department of Health Services: It Needs to Improve Its Application and Referral Processes When Enrolling Medi-Cal Providers (Release Date: April 2007)

Recommendation #1 To: Health Services, Department of

To ensure that it does not prevent or delay some eligible providers from delivering services to Medi-Cal beneficiaries, the branch should ensure that it promptly notifies applicants that it has automatically enrolled them as provisional Medi-Cal providers when the branch has not processed the applications within the required time periods.

Agency Response*

The branch reports that it has developed a letter and implemented a process to immediately notify applicants who have been automatically enrolled. Further, the branch states that it has updated its procedure manual with formal written procedures regarding the immediate notification of applicants who have been automatically enrolled and reports that it has implemented the procedures. (2009-406, p. 188)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #2 To: Health Services, Department of

The branch should modify PETS data to track the length of time applications it recommends for denial remain in the policy section for review, to ensure that it does not automatically enroll or pay the claims of ineligible providers when the review does not occur in a timely manner.

Agency Response*

The branch states that it has modified the PETS and created a policy denial report that is reviewed on a weekly basis and now includes a tracking capability to ensure that no applications subject to denial are allowed to default. (2009-406, pp. 188-189)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #3 To: Health Services, Department of

Branch management should include in the secondary reviews of applications periodic reviews to ensure that staff are accurately and consistently entering the correct dates the branch received, processed, or returned the application into PETS.

Agency Response*

The branch reports it updated its procedure manual in December 2007 to ensure correct dates are entered into the PETS and asserts that managers are reviewing the accuracy of all data entered into the PETS throughout the application process. (2009-406, p. 189)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #4 To: Health Services, Department of

To protect the integrity of PETS data, the branch should remove all staff training and branch testing data from PETS and include it in an environment that simulates PETS, thus protecting the integrity of the production data.

Agency Response*

The branch states that the training and testing data was removed from PETS in August 2007. (2009-406, p. 189)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #5 To: Health Services, Department of

To ensure that the branch does not unnecessarily increase its workload or prolong the enrollment process for eligible applicants, it should increase its efforts to notify applicants that they must use the current and appropriate application forms to avoid being denied enrollment into Medi-Cal.

Agency Response*

Chapter 693, Statutes of 2007, effective January 1, 2008, was signed by the governor on October 14, 2007, and extends the former 35-day time period applicants had to remedy deficiencies in their applications to 60 days. Additionally, the branch has updated the Medi-Cal Web site to provide notification to applicants that they must use the current and appropriate forms to avoid being denied enrollment into the Medi-Cal program and has updated the Top Reasons Provider Enrollment Applications are Denied to include this information. (See 2008-406 p. 207)

  • Response Type†: 6-Month
  • Response Date: October 2007

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #6 To: Health Services, Department of

The department should seek legislation to revise state law to extend the 35-day time period applicants have to remedy deficiencies in their applications to 60 days.

Agency Response*

Chapter 693, Statutes of 2007, effective January 1, 2008, was signed by the governor on October 14, 2007, and extends the former 35-day time period applicants had to remedy deficiencies in their applications to 60 days. Additionally, the branch has updated the Medi-Cal Web site to provide notification to applicants that they must use the current and appropriate forms to avoid being denied enrollment into the Medi-Cal program and has updated the Top Reasons Provider Enrollment Applications are Denied to include this information. (See 2008-406 p. 207)

  • Response Type†: 6-Month
  • Response Date: October 2007

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #7 To: Health Services, Department of

The department should seek legislation to revise state law to eliminate preferred provider status. However, if it chooses to keep this status and to increase the number of applicants that could benefit from the shorter processing period that preferred provider status offers, the department should increase its efforts to notify applicants of the reasons it denies applications during the prescreening for preferred provider status.

Agency Response*

The department asserts that while the majority of physicians have elected not to enroll under preferred provider status, the California Medical Association?s intent for introducing the status under Senate Bill 857 remains valid. Thus, the department recommends allowing physicians to weigh the cost/benefit of enrolling as preferred providers. To promote awareness of preferred provider status, the branch posted a bulletin to its Web site describing how physicians can request, and provide documentation and verification for, consideration for enrollment in the Medi-Cal program as a preferred provider. Additionally, the branch indicates that it plans to update the Top Reasons Provider Enrollment Applications are Denied on its Web site to include the reasons preferred provider applications are denied in the prescreening process. Further, Chapter 693, Statutes of 2007 reduces from 90 days to 60 days the time within which the branch must notify applicants of the reasons it denies applications during the prescreening for preferred provider status. The branch reports that the shorter processing period may encourage qualified providers to apply for preferred provider status. (See 2008-406 p. 208)

  • Response Type†: 6-Month
  • Response Date: October 2007

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #8 To: Health Services, Department of

The branch, with direction from the department, should align the reasons available in PETS for which it may refer an application with its fraud indicators and high-risk checklists to better track the appropriateness of its high-risk checklists and update the fraud indicators as trends in fraud change over time.

Agency Response*

The branch reports that it is working collaboratively with the Medical Review Branch to evaluate the fraud indicator checklists on a quarterly basis using findings from the ongoing risk assessment analyses and the annual Medi-Cal Payment Error Study. (2009-406, p. 191)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #9 To: Health Services, Department of

To ensure that it is referring those applicants at greatest risk of committing fraud and not preventing eligible Medi-Cal providers from providing services to beneficiaries, the branch and the Medical Review Branch, with direction from the department, should reevaluate the appropriateness of the branch's high-risk fraud indicators periodically by consistently communicating and collaborating with one another.

Agency Response*

The branch states that it established a workgroup, consisting of branch and Medical Review Branch staff, which has reviewed the current list of high-risk indicators and identified changes that need to be made to PETS. (2009-406, p. 191)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #10 To: Health Services, Department of

The branch and the Medical Review Branch, with direction from the department, should place increased emphasis on processing those applications referred for further review within a reasonable time period, to ensure that some eligible Medi-Cal providers are not unreasonably delayed from providing services to beneficiaries.

Agency Response*

The branch reports that it updated the reasons applications are referred in the PETS to accurately reflect the referral indicators, which it asserts was completed in March 2008. Further, the branch asserts that it implemented new procedures in June 2007 to ensure that applications referred for comprehensive review are processed within 60 days of receipt of the onsite report from the Medical Review Branch. Finally, the branch claims that it will contact the Medical Review Branch within six months after a referral has been made to obtain status of any outstanding issues and perform a quarterly reconciliation of outstanding cases between the branch and the Medical Review Branch. (2009-406, p. 191)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #11 To: Health Services, Department of

The branch should monitor the implementation of Medicare's revalidation process in which it verifies the enrollment information for all its providers to identify opportunities for streamlining its application and verification procedures, and should make modifications as appropriate for Medicare providers seeking enrollment in Medi-Cal.

Agency Response*

The branch indicates that it continues to monitor Medicares implementation of its revalidation process to identify opportunities for streamlining its application and verification procedures as appropriate, with a specific focus on the implementation of Medicares federal regulations governing its accreditation and competitive bidding process for furnishing durable medical equipment, prosthetics, orthotics, and medical supplies. In fact, the branch asserts that it attended a Medicare conference to discuss the potential for federal and state uniformity in the use of provider applications. (2009-406, p. 192)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


Recommendation #12 To: Health Services, Department of

The branch should continue its plans to reenroll all its Medi-Cal providers and add any resources freed up by its streamlining of its enrollment process.

Agency Response*

The branch states that it continues to focus on completing current reenrollment phases that are near conclusion and claims it will continue to reenroll providers that were enrolled in Medi-Cal prior to 1999 and that do not have disclosure statements on file. (2009-406, p. 192)

  • Response Type†: 1-Year
  • Response Date: April 2008

California State Auditor's Assessment of Status: Fully Implemented


All Recommendations in 2006-110

Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.


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