Report 2014-134 Recommendation 13 Responses

Report 2014-134: California Department of Health Care Services: Improved Monitoring of Medi-Cal Managed Care Health Plans Is Necessary to Better Ensure Access to Care (Release Date: June 2015)

Recommendation #13 To: Managed Health Care, Department of

To increase the efficiency of statutorily required reviews by eliminating duplicative work, Managed Health Care should complete by September 2015 its planned assessment of the extent to which it can rely on Health Care Services' annual audits.

6-Month Agency Response

The DMHC has completed its assessment of the extent to which it can rely on DHCS Medi-Cal managed care health plan audit reports in meeting the DMHC's statutory obligation to conduct triennial on-site medical surveys. The DMHC concluded that the work of the DHCS and the DMHC is not so duplicative that the DMHC may meet its obligations by relying on DHCS audit report findings. Notably, DHCS has begun to audit each Medi-Cal managed care health plan annually as of July 2015. The DMHC cannot now determine if the DHCS audit reports are sufficient for it to rely on. The categories of review by each department overlap, but the focus, methods, and conclusions of DMHC surveys and DHCS audits differ. While many of the DHCS health plan audit areas overlap with the Knox-Keene Act, the DHCS audit tools and reports cite DHCS contract provisions which often do not cite the Act or its implementing regulations. To rely on DHCS audit reports, the DMHC would need to "cross-walk" to determine: 1) if a finding was based on a section of the Act or regulations and 2) which provisions of the Act or regulations were violated. Moreover, the DHCS corrective action plan process is different than the DMHC corrective action plan process. The DHCS has provisionally closed its recommendations to health plans regarding contract deficiencies as early as 60 days from the issuance of audit reports. In contrast, if any deficiencies remain uncorrected at the completion of the triennial survey, the DMHC is required to conduct a follow-up review within 18 months of issuance of its triennial report to report on the status of the plan's efforts to correct deficiencies. The DMHC does not find any deficiency corrected until the health plan has fully demonstrated compliance. DMHC's follow-up review includes corrective action plan monitoring, including review of policies and procedures and/or a statistically valid and random selection of files to determine if the deficiencies have been corrected.

  • Completion Date: September 2015
  • Response Date: December 2015

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


60-Day Agency Response

The DMHC expects its assessment to be completed by September 15, 2015. As part of our assessment, DMHC is reviewing the preliminary and final audits reports prepared by DHCS, as well as the corrective action plans developed by the contracted health plans. Also, to ensure consistency, the DMHC is comparing the methodologies for on-site file review employed by the two Departments. Lastly, DMHC is assessing whether DHCS findings of health plan non-compliance will support DMHC enforcement action without independent (DMHC) review.

  • Estimated Completion Date: September 15, 2015
  • Response Date: September 2015

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


All Recommendations in 2014-134

Agency responses received are posted verbatim.


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