Report 2019-046 Recommendation 12 Responses

Report 2019-046: Proposition 56 Tobacco Tax: State Agencies' Weak Administration Reduced Revenue by Millions of Dollars and Led to the Improper Use and Inadequate Disclosure of Funds (Release Date: January 2021)

Recommendation #12 To: Health Care Services, Department of

To ensure that it awards funds to applicants who address the need for providers in health professional shortage areas, Health Care Services should amend its application selection process to require by June 2021 that all participants practice in geographic areas that have shortages of such health care professionals, and annually verify that participants continue to practice in such areas.

1-Year Agency Response

No change from the Six-Month update. As reported in our audit response and previous update, the statute only requires DHCS prioritize, among other things, limiting geographic shortages of services. DHCS continues to believe the current methods employed accomplish the goal, and elevating the priority of a consideration for geographic shortage areas may eliminate awards to qualified providers outside a geographic shortage area who, for example, significantly increase the provider's caseload or speak another language, which ensures more timely access or a heightened quality of care for certain beneficiaries. As such, DHCS continues to disagree with the recommendation to further emphasize or make limiting geographic shortages a program requirement. As part of the Fiscal Year 2019-20 Cohort 2 awardee process, DHCS increased utilization of additional standards for prioritization of geographic shortage. Out of the 318 Cohort 2 awardees, 252 of the awardees fall into "geographic shortage" category, or 79.2 percent of Cohort 2 awardees. For further detail, the Specialists Ratios by County utilized a data set for both adult and pediatric specialists, which included a baseline of 1 provider per 1,200 Medi Cal beneficiaries to address need. A ratio was then created with the number of active providers of eligible beneficiaries multiplied by 1,200. The Alternative Access Standards utilized a data set, which examined the average time and distance to the nearest three providers for Medi-Cal Managed Care and beneficiaries enrolled in a managed care plan.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Based on the data at our disposal, Health Care Services' decision not to implement this recommendation is not in the best interests of California residents. As the report describes, the lack of health care professionals in shortage areas has a significant impact on Medi-Cal beneficiaries who do not have adequate access to the providers they need. Health Care Services could better address this impact by prioritizing applicants in shortage areas. Further, requiring that applicants be located in a geographic area with a provider shortage would not preclude Health Care Services from taking other factors into consideration.

Health Care Services states that its current process prioritizes, among other things, limiting geographic shortages of services. However, it did not provide supporting documentation for this statement or the numbers in its response.

6-Month Agency Response

As reported in our audit response and previous update, the statute only requires DHCS prioritize, among other things, limiting geographic shortages of services. DHCS continues to believe the current methods employed accomplish the goal, and elevating the priority of a consideration for geographic shortage areas may eliminate awards to qualified providers outside a geographic shortage area who, for example, significantly increase the provider's caseload or speak another language, which ensures more timely access or a heightened quality of care for certain beneficiaries. As such, DHCS continues to disagree with the recommendation to further emphasize or make limiting geographic shortages a program requirement. As part of the Fiscal Year 2019-20 Cohort 2 awardee process, DHCS increased utilization of additional standards for prioritization of geographic shortage. Out of the 318 Cohort 2 awardees, 252 of the awardees fall into "geographic shortage" category, or 79.2 percent of Cohort 2 awardees. For further detail, the Specialists Ratios by County utilized a data set for both adult and pediatric specialists, which included a baseline of 1 provider per 1,200 Medi Cal beneficiaries to address need. A ratio was then created with the number of active providers of eligible beneficiaries multiplied by 1,200. The Alternative Access Standards utilized a data set, which examined the average time and distance to the nearest three providers for Medi-Cal Managed Care and beneficiaries enrolled in a managed care plan.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

Health Care Services' decision not to implement this recommendation is not in the best interests of California residents. As the report describes, the lack of health care professionals in shortage areas has a significant impact on Medi-Cal beneficiaries who do not have adequate access to the providers they need. Health Care Services could better address this impact by prioritizing applicants in shortage areas. Further, requiring that applicants be located in a geographic area with a provider shortage would not preclude Health Care Services from taking other factors into consideration.

Health Care Services states that its current process prioritizes, among other things, limiting geographic shortages of services. However, it did not provide support for this statement or the numbers in its response.

60-Day Agency Response

As reported in our audit response, the statute only requires DHCS prioritize, among other things, limiting geographic shortages of services. The current methods employed by DHCS accomplish the goal, and elevating the priority of a consideration for geographic shortage areas may eliminate awards to qualified providers outside a geographic shortage area who, for example, significantly increase the provider's caseload or speak another language which ensures more timely access or a heightened quality of care for certain beneficiaries. As such, DHCS disagrees with the recommendation to further emphasize or make limiting geographic shortages a program requirement. As part of the Fiscal Year 2019-20 Cohort 2 awardee process, DHCS increased utilization of additional standards for prioritization of geographic shortage. Out of the 318 Cohort 2 awardees, 252 of the awardees fall into "geographic shortage" category, or 79.2 percent of Cohort 2 awardees. The breakdown is listed below:

- 145* specialist providers paired with the specialist ratios by county shortage data

- 12* primary care providers paired with the 2018 Alternative Access Standards data

- 5* dentists matched with the Medi-Cal dentist shortage data

- 108* practice in a HPSA designated facility, region, or population served

*Note: 18 providers are included as both a HPSA and paired with one of the DHCS data provided (specialist ratios by county, Alternative Access Standards or Medi-Cal dentist shortage data)

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Health Care Services' decision not to implement our recommendation is not in the best interests of California residents. As we describe in our report, the lack of health care professionals in shortage areas has a significant impact on Medi-Cal beneficiaries who do not have adequate access to the providers they need. Health Care Services could better address this impact by prioritizing applicants in shortage areas. Further, requiring that applicants be located in a geographic area with a provider shortage would not preclude Health Care Services from taking other factors into consideration.

Health Care Services states that its current process prioritizes, among other things, limiting geographic shortages of services. However, as we describe on page 25 of our report, at the time of our audit Health Care Services' deputy director of financing stated that Health Care Services had not established a process to determine whether specialist applicants are located within a shortage area—although it awarded $28.4 million to repay student loans for 121 of them. Further, the majority of the 117 primary care physicians that were awarded funds were not in areas with geographic shortages.

Although Health Care Services states that it increased the use of standards for prioritizing geographic shortages, it did not provide sufficient information to evaluate this statement. The Cohort 2 awards that it describes occurred after the period our audit reviewed, and Health Care Services did not provide information regarding the location of the awardees, or the nature of the additional standards it is using to identify shortage areas and the location of shortage areas identified through these standards. Thus, it is not possible to determine whether the Cohort 2 awards better address the need for additional providers in geographic areas with a shortage of health care professionals.

All Recommendations in 2019-046

Agency responses received are posted verbatim.