Report 2007-122 All Recommendation Responses

Report 2007-122: Department of Health Care Services: Although Notified of Changes in Billing Requirements, Providers of Durable Medical Equipment Frequently Overcharged Medi-Cal (Release Date: June 2008)

Recommendation #1 To: Health Care Services, Department of

To maintain control over the cost of reimbursements, Health Care Services should develop an administratively feasible means of monitoring and enforcing current Medi-Cal billing and reimbursement procedures for medical equipment. If unsuccessful, Health Care Services should consider developing reimbursement caps for medical equipment that are more easily administered.

Annual Follow-Up Agency Response From October 2012

The California Department of Health Care Services (DHCS) continues to maintain control over the cost of reimbursement through the application of edits and audits to claims for payment submitted to the fiscal intermediary consistent with Medi-Cal policy. Additionally, DHCS conducts a variety of post-payment audits to monitor and enforce Medi-Cal billing and reimbursement procedures for medical equipment. As a result of these efforts it is not necessary to implement reimbursement caps for medical equipment.

  • Completion Date: October 2012

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


Recommendation #2 To: Health Care Services, Department of

If Health Care Services continues using audits to ensure that providers comply with Medi-Cal billing procedures for medical equipment, including the upper billing limit, it should design and implement a cost-effective approach that adequately addresses the risk of overpayment and ensures that all providers are potentially subject to an audit, thereby providing a deterrent for noncompliance.

Annual Follow-Up Agency Response From October 2012

Audits & Investigations (A&I) has completed all Upper Billing Limit (UBL) reviews except for which which is in progress. The UBL audits were effective in identifying providers who were out of compliance with the billing requirements and in identifying for recovery amounts overpaid. All identified providers received Civil Money Payment letters which identified the billing errors and the consequences of future non-compliance. All providers will be subject to re-audit in six months to verify compliance. Providers who are not in compliance with the billing requirements will be subject to administrative and financial sanctions. A&I considers this matter as being resolved.

  • Completion Date: October 2012

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


Recommendation #3 To: Health Care Services, Department of

To better ensure its provider manual represents a comprehensive guide for medical equipment providers, Health Care Services should amend the manual to include the current methodology for calculating reimbursements for speech generating devices.

6-Month Agency Response

Health Care Services added the reimbursement methodology for speech-generating devices to its provider manual. According to Health Care Services, it released a provider bulletin in July 2008 informing providers of the change. (2009-406, p. 215)

  • Response Date: June 2008

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


All Recommendations in 2007-122

Agency responses received after June 2013 are posted verbatim.


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