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Scathing Auditor’s Report on Medi-Cal

On Tuesday, the California State Auditor issued its long-awaited audit of the Department of Health Care Services and Medi-Cal managed care plans, and found oversight by the department wanting.

In particular, the state auditor found inaccuracies in provider directories, raised concerns about access to care through Medi-Cal managed care plans and recommended stronger oversight and monitoring of DHCS and Medi-Cal managed care plans.

DHCS oversees the Medi-Cal program, which now has roughly 12.3 million beneficiaries, slightly under one-third of California’s population. About half of the children in California are Medi-Cal kids.   

Yesterday’s report said:

  • DHCS officials have not verified health plan data and can’t determine whether or not adequate provider networks exist;
  • DHCS hasn’t verified the accuracy of the provider network data it gets from Medi-Cal managed care plans, even though it passes that information to the Department of Managed Health Care for the state’s network adequacy assessments;
  • Provider directories were inaccurate (including 23% inaccurate data from one health plan), and the department’s review of those directories is inadequate and inconsistent;
  • The department’s ombudsman office, which handles Medi-Cal managed care complaints, is not equipped to handle the calls it receives;
  • The department has not adequately monitored health plans to make sure Medi-Cal patients’ needs are being met;
  • DHCS did not perform annual medical audits before 2012 and performed audits on less than half of the health plans in FY 2013-14;
  • The department failed to get quarterly assessments from the Department of Managed Health Care on provider networks; and
  • Neither DHCS nor DMHC collaborate enough on overlapping work efforts.

One of the biggest failings the state auditor found was the inaccuracy and inadequacy of provider directories.

“We found inaccuracies in the provider directories for three health plans in selected counties,” the audit report said, “yet [the Department of] Health Care Services had not identified any inaccuracies in its evaluations of those same directories.”

DHCS Director Jennifer Kent, who has been heading the department since January, released a written statement on Tuesday.

“DHCS ensures that Medi-Cal managed care health plans are meeting the important physician-to-member ratios required by law,” Kent said in her written statement. “We do so through the various tools in our comprehensive monitoring and oversight program.”

Kent said she agrees with many of the state auditor’s recommendations, and welcomes a critical look at what the department is doing.

“We appreciate [the] report from the California State Auditor that underscores the need for continuous improvement and enhancement of the state’s oversight of Medi-Cal managed care, some of which the Department of Health Care Services was well underway in addressing,” she said. “To date, we have not identified disparities in plan adherence to these network adequacy requirements, and in fact, most are surpassing them. The state auditor’s analysis will help inform our ongoing efforts to improve how we ensure that the plans maintain appropriate access to care for our Medi-Cal managed care members.”

The state auditor made four main recommendations for DHCS officials:

  • Verify accuracy of provider network data from managed care plans;
  • Ensure accuracy in provider directories by reviewing plans’ processes, establish best practices and require health plans to follow them to meet network adequacy requirements, and establish an improved review process to spot inaccuracies in provider directories;
  • Upgrade or replace the ombudsman office’s telephone system to handle the volume of calls it receives; and
  • Increase oversight of the Department of Managed Health Care and ensure it conducts quarterly reviews of health plans.

“Too few physicians and inaccurate provider directories leave patients unable to find the care they need,” said Jay Lee, president of the California Academy of Family Physicians. “This discriminates against people living in poverty. Patients’ access to care and Medi-Cal’s low payment rates to providers must be addressed.”

“This audit confirms longstanding concerns about the oversight of Medi-Cal managed care plans,” said Anthony Wright, executive director of Health Access California, in a written statement.

“These Medi-Cal managed care plans are how we are promising to deliver care to millions of Californians, but we need stronger oversight to ensure these commitments are being met,” Wright said. “…What’s troublesome is we don’t yet have the oversight in place to know where those problems are so we can resolve them. For the sake of the health of millions of Californians, we need to resolve these issues as soon as possible.”

State legislation that specifically addresses provider directories — SB 137 by Sen. Ed Hernandez (D-West Covina) — has passed the Senate and will soon be heard in the Assembly  Hernandez also authored a bill passed last year, SB 964, that was designed to improve network adequacy and limit narrow networks.

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Capitol Desk Medi-Cal