Report 2013-119 Recommendation 20 Responses

Report 2013-119: California Department of Health Care Services: Its Failure to Properly Administer the Drug Medi-Cal Treatment Program Created Opportunities for Fraud (Release Date: August 2014)

Recommendation #20 To: Health Care Services, Department of

To prevent the certification of ineligible providers, Health Care Services should immediately establish a mechanism to identify the number of program sites the provider applicants' medical directors work at, and ensure that the physician ratio does not exceed 1-to-3 in accordance with state law and the certification standards.

Annual Follow-Up Agency Response From November 2017

Health Care Services did not provide an updated response to this recommendation.

  • Estimated Completion Date: Unknown

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


Annual Follow-Up Agency Response From October 2016

The requirement to enroll all medical directors of DMC clinics became effective 8/17/2015. On 11/2/2015, PED solicited a medical director application for all certified DMC providers and any DMC applications pending certification. Of the 926 DMC's solicited, 21 locations were deactivated for failure to comply with the solicitation and an additional 68 were denied, withdrawn, or decertified for other reasons. This will remain an ongoing requirement for any new DMC applicant. DHCS is able to identify the medical director to their specific DMC affiliations through current reporting mechanisms.

  • Completion Date: March 2016

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

Although Health Care Services asserts that it fully implemented this recommendation, it did not provide any documentation to support its assertion.


1-Year Agency Response

Welfare and Institutions Code section 14043.47 applies to providers doing business as sole proprietorships, partnerships, professional corporations under section 14301 of the Corporations Code, or as rendering providers in a group practice that utilizes nonphysician medical staff. Section 14043.47(c), which establishes the prohibition on providers enrolling at more than three business addresses unless there is at least a ratio of one physician supervisor per three locations, applies to the foregoing types of practices. Upon implementation of the automated enrollment system for all PED approved certified DMC providers, DHCS will be able to automatically identify the medical directors and their specific DMC affiliations. To the extent that any DMC medical director falls within the scope of section 14043.37(c), DHCS will take action to enforce the stated physician ratio.

  • Estimated Completion Date: May 2016
  • Response Date: August 2015

California State Auditor's Assessment of 1-Year Status: Pending

Date of implementation is set for May 2016.


6-Month Agency Response

Welfare and Institutions Code section 14043.47 applies to providers doing business as sole proprietorships, partnerships, professional corporations under section 14301 of the Corporations Code, or as rendering providers in a group practice that utilizes nonphysician medical staff. Section 14043.47(c), which establishes the prohibition on providers enrolling at more than three business addresses unless there is at least a ratio of one physician supervisor per three locations, applies to the foregoing types of practices. Upon implementation of the automated enrollment system for all PED approved certified DMC providers, DHCS will be able to automatically identify the medical directors and their specific DMC affiliations. To the extent that any DMC medical director falls within the scope of section 14043.37(c), DHCS will take action to enforce the stated physician ratio.

  • Estimated Completion Date: May 2015
  • Response Date: February 2015

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


60-Day Agency Response

No update.

  • Estimated Completion Date: May 2015
  • Response Date: October 2014

California State Auditor's Assessment of 60-Day Status: No Action Taken

Based on its response, the department has not yet implemented this recommendation. In addition, it has not provided any information to indicate that it has taken any action on this recommendation.


All Recommendations in 2013-119

Agency responses received are posted verbatim.


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