Report 2013-119 Recommendation 5 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 #5 To: Health Care Services, Department of

To ensure that the providers receive reimbursement for only valid services, Health Care Services should immediately direct its investigations division to further enhance its analysis of program claims data to identify the type of high-risk payments we identified on a monthly basis.

1-Year Agency Response

A&I's data analytics contractor has implemented flags for all criteria stated on the 6 month update, except for the "Provider Services Multiple Beneficiaries at Same Address" but added flags for beneficiaries sharing the same address.

  • Completion Date: February 2015
  • Response Date: August 2015

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

DHCS provided documentation demonstrating that it has incorporated flags for high-risk payments into its Pondera system.


6-Month Agency Response

Audits and Investigation (A&I) has worked with its data analytic contractor to implement flags indicating when providers bill Medi-Cal for

-Holiday Dates of Service

-Excessive Drug Medi-Cal Visits Per Week

-A High Percentage of Beneficiaries Who Receive More Than One Visit Per Week

-Provider Excessive Weekly Dates of Service, Provider Services Multiple Beneficiaries at Same Address, and

-Excessive Denied Claims.

The contractor will deploy the flags beginning January 30, 2015. A&I staff will continuously review the flags to determine if A&I should initiate an investigation of any provider identified by the flags.

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

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


60-Day Agency Response

A&I continues to work closely with its data analytics contractor to expand and improve the algorithms used in its data analytics tool. At the same time, A&I is continually updating its audit programs and field review checklists to better identify areas of greatest risk within the program including those identified by the CSA. For example, Drug Medi-Cal providers will now receive a high risk-score if the claims data indicates concurrent substance use disorder and inpatient hospital billings. Through these efforts, claims data will continue to be monitored each month to ensure that the providers are submitting accurate claims and are not exceeding program allowances.

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

California State Auditor's Assessment of 60-Day Status: Pending

Health Care Services indicated that it will not implement this recommendation until February 2015.


All Recommendations in 2013-119

Agency responses received are posted verbatim.


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