Report 93012 Summary - October 1993
The Department of Health Services' Information on Drug Treatment Authorization Requests (Letter Report), (Contract audit by The Thornton Group)
The Bureau of State Audits and its contractor, The Thornton Group, present the fifth in a series of semiannual reports concerning the way the Department of Health Services (department) processes reimbursement requests for certain prescribed drugs under the California Medical Assistance Program (Medi-Cal). These requests are known as drug treatment authorization requests (TARs).
In response to Chapter 716, Statutes of 1992, we obtained from the department statistical information, compiled each month, concerning the number of TARs received and processed from June 1990 through May 1993. This report focuses on the drug TARs processed during the 12 months from June 1992 through May 1993. The past four reports on this subject have been prepared by the Office of the Auditor General (OAG). However, the OAG closed in December 1992 because of budget reductions, but in May 1993, the Bureau of State Audits began operation and assumed responsibility for this audit pursuant to Government Code Section 8546.8.
The department received approximately 211,400 drug TARs from June 1992 through May 1993. This represents an increase of more than 47,300 (29 percent) drug TARs since June 1990 through May 1991, the first year of the OAG's review. The increase in the number of drug TARs received, as stated in the OAG's last report, may have occurred partly because of the addition of approximately 1,423,000 (a 39 percent increase since June 1990) Medi-Cal beneficiaries eligible to obtain drugs through Medi-Cal.
Furthermore, from June 1992 through May 1993, the department processed approximately 53,000 (33 percent) more drug TARs than it did during the first year of our review. In addition, the department's monthly backlog of drug TARs received by mail had risen to approximately 5,000 in May 1993. In comparison, at the end of May 1991, the department's backlog of drug TARs received through the mail was approximately 2,900.
From June 1992 through May 1993, the department reported that its average time for processing mailed drug TARs exceeded the 5 working days state law requires. More specifically, the department reported that, in May 1993, it took an average of 16 days to process mailed-in drug TARs. In the OAG's first report on drug TARs, it reported that in December 1990 the department took an average of 15 days to process mailed-in drug TARs. Five of the six pharmacists we contacted stated the delays in obtaining a response to their mailed-in drug TARs had not caused lapses in medication or problems for patients.
The department processes drug TARs in drug units located in Stockton, Los Angeles, and San Bernardino. According to the chief of the department's Medi-Cal Operations Division Northern Field Operations Branch, the department contracted with nine pharmacist consultants in April 1993 to enable the drug units to process drug TARs more effectively and promptly. The department entered into 18-month contracts with three pharmacist consultants in the Stockton drug unit and six pharmacist consultants in the Los Angeles drug unit. In addition, the department hired two full-time pharmacist consultants to staff a newly created satellite drug unit in San Bernardino.1 Before the increase in staff, the Los Angeles drug unit included two pharmacist consultants and the Stockton drug unit included seven pharmacist consultants. The role of the pharmacist consultants, who are licensed pharmacists, is to process drug TARs by either approving, denying, modifying, or returning the TARs to the providers (to request additional information).
We sampled drug TARs to determine if TARs received by FAX and by the department's audio response telephone system -- Voice Drug TAR System (VDTS) -- were processed within 24 hours of receipt, as federal law requires. From June through November 1992, we found the department was not processing these drug TARs within 24 hours. However, based on another sample we selected from drug TARs received during May 1993 (after the department contracted with nine pharmacist consultants), we found the department met the 24-hour requirement.
Finally, in response to Section 14105.42 of the Welfare and Institutions Code, the department provided us with information regarding the number of fair hearing requests beneficiaries made to appeal a denied drug TAR and the number of complaints received from providers. Nineteen fair hearing requests were submitted to the Department of Social Services from June 1992 through May 1993. Of those, 7 were withdrawn before the cases were heard. Two of the remaining 12 fair hearing requests were approved, 2 were denied, 2 were dismissed, and the decisions on the remaining 6 were still pending at the time of our review. The department reported that it did not receive any complaints about its processing of drug TARs from June 1992 through May 1993.