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Report 93032 Summary - March 1995

The Medical Board Needs to Maximize Its Recovery of Costs

Results In Brief

The Division of Medical Quality within the Medical Board of California (medical board) is responsible for enforcing the disciplinary and criminal provisions of the Medical Practice Act. To carry out its responsibility, the Division of Medical Quality uses its enforcement program to conduct activities such as processing complaints against physicians and surgeons, investigating the complaints to see if they warrant disciplinary action, and referring such cases to the Health Quality Enforcement Section (HQES) of the Attorney General's Office. The division also refers cases involving criminal complaints to the District Attorney's Office. The Office of Administrative Hearings (OAH) within the Department of General Services is responsible for adjudicating all administrative actions taken against physicians and surgeons and for proposing disciplinary decisions for consideration by the medical board.

Chapter 1267, Statutes of 1993, required the Bureau of State Audits to conduct an audit of the disciplinary system administered by the medical board and established to enforce the provisions of the Medical Practice Act. Our review focused on the enforcement and disciplinary activities that occurred during fiscal years 1992-93 and 1993-94. During our review we noted the following:

  • During fiscal year 1993-94, the medical board spent more than $25 million on enforcement and disciplinary efforts. Of those costs, we determined that under current law, the medical board could have attempted to recover more than $6.3 million. Furthermore, if the medical board had sought to change the Business and Professions Code to allow it to recover costs incurred during administrative hearings, the medical board could have attempted to recover an additional $3.1 million. However, the medical board reported that it recovered only $94,053 of its costs for the same period.
  • Before January 1, 1995, the HQES of the Attorney General's Office did not have a system to identify the types of activities the HQES performed for the medical board. In addition, the medical board does not have a process to ensure the invoices it pays are only for active medical board cases. As a result, the HQES cannot assure the medical board that the charges it billed for HQES services were reasonable or necessary, and the medical board cannot ensure that it is only paying for services it receives.
  • The OAH overcharged the medical board for court reporter services and also failed to reimburse the medical board for the costs of some transcripts. As a result, the OAH may owe the medical board a total of $283,000. In addition, the OAH owes the medical board an undetermined amount for the cost of transcripts and copies of transcripts ordered by third parties for appealed cases from January 1, 1991, through June 30, 1994.

Corrective Actions of the Medical Board, HQES, and OAH

The medical board has begun to track its investigative costs and some of the costs charged by its expert medical consultants to seek recovery of those costs. In addition, the HQES of the Attorney General's Office enhanced its Legal Time Reporting System in January 1995 to enable its attorneys and legal assistants to record their activities into 13 different categories. Finally, in July 1994, the OAH of the Department of General Services began charging third parties the correct rates for transcripts and copies of transcripts for appealed cases.

Recommendations

To maximize its recovery of costs, the Medical Board of California should take the following actions:

  • Be more aggressive in recovering disciplinary costs through stipulated settlements and as part of the proposed disciplinary decisions rendered by administrative law judges;
  • Include in its recovery of costs the costs for prosecuting cases, costs of administering psychiatric competency examinations by expert consultants, and a portion of the costs to administer the diversion program that represents the number of participants ordered to participate in the program as an alternative to other disciplinary action; and
  • Seek a change in the Business and Professions Code to allow recovery of disciplinary costs incurred once the administrative hearing process begins.

To assure the medical board that the hours charged are reasonable and necessary, the Attorney General should require supervisors in each of the HQES offices to review the number of hours and types of tasks that attorneys and legal assistants are charging for their cases.

To ensure that the tasks for which it is billed are appropriate and necessary, the medical board should develop a process to review all invoices that it receives from the Attorney General's Office.

To avoid overcharging the medical board in the future and compensate it for past overcharges, the OAH should take the following actions:

  • Change the method used to calculate the hours worked by court reporters from private firms so that computations are carried out to tenths of hours;
  • Using the above methodology, recompute all hours worked by private court reporters since January 1993 and reimburse the medical board the amount of the overcharge;
  • Reinitiate the practice of quarterly reimbursing the medical board the amounts collected for transcripts ordered by third parties;
  • Review invoices received for transcripts ordered by third parties not involving appealed cases that were received from January 1, 1993, through January 31, 1995, and reimburse the medical board for the total amount collected on its behalf; and
  • Review the invoices received from January 1, 1991, through June 30, 1994, for transcripts of appealed cases ordered by third parties and reimburse the medical board the amount the OAH failed to collect from third parties as required by law.

Agency Comments

With one exception, the Medical Board of California, the Attorney General's Office, and the Office of Administrative Hearings concur with the conclusions and recommendations contained in our report. The medical board disagreed with one of our recommendations.















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