Report 2014-130 Recommendation 7 Responses

Report 2014-130: California Department of Health Care Services: It Should Improve Its Administration and Oversight of School‑Based Medi-Cal Programs (Release Date: August 2015)

Recommendation #7 To: Health Care Services, Department of

To minimize the risk that claiming units could include unallowable costs when calculating their reimbursement claims, Health Care Services should do the following immediately for all claims that Los Angeles County received and reviewed under its current contracts with its claiming units:
* Determine whether claiming units included Health Care Services' participation fee as part of the claim.
* For those paid claims that included the participation fee, identify the inappropriate amount paid and take appropriate action to resolve the improper payment including, if necessary, obtaining a refund from the claiming unit.
* For those submitted claims that have not yet been paid, instruct Los Angeles County to reject the claims and direct claiming units to revise the claims to omit Health Care Services' participation fee.

6-Month Agency Response

DHCS conducted a site visit of LACOE on September 30, 2015. During the site visit, DHCS identified language within LACOE's contract that allows LEAs within LACOE's jurisdiction to claim participation fees. DHCS has subsequently documented this issue under the Summary of Findings document pertaining to the LACOE site visit. Additionally, DHCS has advised LACOE to remove specific language from their contract that allows LEAs to claim participation fees within Los Angeles County. DHCS is reviewing all past claims to identify unallowable costs. For any paid claims that include a participation fee, DHCS will take appropriate action to recoup those funds. For those submitted claims that have not yet been paid, DHCS will instruct Los Angeles County to reject the claims and direct claiming units to revise the claims to omit DHCS' participation fee. In February 2016, DHCS sent LACOE an official site visit response letter including the Summary of Findings from the site visit DHCS conducted on September 30, 2015 and the results of the subsequent invoice review.

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

Health Care Services subsequently told us that its review did did not reveal any evidence of participation fees being claimed by local educational agencies and that LACOE has since removed the language from its contracts that previously allowed local educational agencies to claim participation fees.

60-Day Agency Response

DHCS performed a site visit for LACOE on September 30, 2015. A Summary of Findings of the site visit will be issued by October 30, 2015. As part of the audit file, a schedule details all "other costs" claimed on the LEA invoice. DHCS will ensure that any participation fees will not be listed as part of the invoice. DHCS will review all past claims to identify unallowable costs. For any paid claims that include a participation fee, DHCS will take appropriate action to recoup those funds. For those submitted claims that have not yet been paid, DHCS will instruct Los Angeles County to reject the claims and direct claiming units to revise the claims to omit DHCS' participation fee. DHCS has reviewed the LACOE contract with their LEAs and identified specific language that allows the LEAs to claim the participation fees. DHCS will include the recommendation to amend the contract to remove this language when the Summary of Findings from the site visit is issued. Additional site visits are scheduled with Stanislaus on October 18, 2015; and for Tulare LGA on October 27, 2015.

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

All Recommendations in 2014-130

Agency responses received are posted verbatim.