Report 2014-134 Recommendation 14 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 #14 To: Managed Health Care, Department of

To increase the efficiency of statutorily required reviews by eliminating duplicative work, if Managed Health Care determines that Health Care Services' work is sufficient to meet Managed Health Care's responsibility under the Knox-Keene Act, it should coordinate with Health Care Services to eliminate the duplication of work.

1-Year Agency Response

Since June 2013, DMHC's Division of Plan Surveys, DHCS' Medical Review Branch of its Audits and Investigations Division, and DHCS' Managed Care Quality and Monitoring Division developed a joint audit process that allows both departments to conduct onsite reviews at health plans simultaneously. This eliminated some duplication of work by allowing both departments to be present at each other's investigatory interviews of health plan officers. The divisions have held regular joint audit meetings and developed a joint schedule of DMHC surveys and DHCS audits as part of the joint audit coordination process between the departments. Both departments share preliminary investigative findings on joint audits and the DMHC receives corrective action plans from DHCS pertaining to contract deficiencies.

While DMHC has benefitted from coordination, its statutory responsibilities can never be fully met by DHCS. DMHC is statutorily mandated to conduct onsite surveys of each health plan at least every three years pursuant to Health and Safety Code Section 1380. Additionally, DMHC is directed to coordinate with DHCS on its surveys, but in a manner that does not result in DMHC's failure to conduct surveys. Health and Safety Code Section 1380.3.

Therefore, DMHC is unable to rely entirely on DHCS for its surveys. DMHC's and DHCS' missions reflect their differing statutory responsibilities. DHCS' role focuses on providing health care services, while DMHC's mission is to regulate the provision of health care services to protect consumers. However, DMHC coordinates with DHCS regarding DMHC's regulatory oversight of DHCS' health plan contractors in the ways discussed above.

DMHC will continue to coordinate survey activity with DHCS, use annual DHCS audit findings and corrective action reports to inform DMHC survey activity through the joint audits process, and explore ways to eliminate duplication of work as appropriate through the ongoing joint audit coordination process.

  • Completion Date: June 2016
  • Response Date: June 2016

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

Managed Health has concluded that it is unable to rely entirely on Health Care Services' audits to meet Managed Health's responsibilities under the Knox-Keene Act. During our follow-up, Managed Heath provided documentation demonstrating that it coordinates with Health Care Services when deciding the scope of its work. As a result, we consider this recommendation to be resolved.


6-Month Agency Response

At this time there is no specific area covered in the DHCS annual audits where the DMHC can completely rely on DHCS' audit, and thereby completely eliminate its own assessment. However, the DMHC can rely upon DHCS audit reports to spot issues and identify where more or less intensive review may be required by the DMHC during its triennial surveys, particularly in areas such as utilization management, quality management and grievance and appeal. Accordingly, the DMHC will continue to coordinate its audits with DHCS and share findings. Moreover, the DMHC is committed to continually evaluating the findings of the DHCS annual audits. As it becomes more familiar with these reports, the DMHC believes there will be additional opportunities to rely upon their findings.

  • Estimated Completion Date: June 2016
  • Response Date: December 2015

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


60-Day Agency Response

The DMHC has already identified several areas where duplicative work could potentially be eliminated by relying upon the findings of annual audits performed by DHCS. These potential areas include utilization management, quality management and grievance and appeal.

  • Estimated Completion Date: December 2015
  • Response Date: August 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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