Report 2018-115 Recommendation 5 Responses
Report 2018-115: Department of Health Care Services: Although Its Oversight of Managed Care Health Plans Is Generally Sufficient, It Needs to Ensure That Their Administrative Expenses Are Reasonable and Necessary (Release Date: April 2019)
Recommendation #5 To: Health Care Services, Department of
Going forward, DHCS should conduct a comprehensive risk assessment and ensure that it reviews health plans' conflict-of-interest controls at least once every three years.
Annual Follow-Up Agency Response From October 2021
DHCS has completed its formal risk assessment which includes conflict of interest areas of review. DHCS currently reviews health plans' conflict of interest controls at least once every three years.
- Completion Date: January 2021
California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented
Although DHCS conducted a comprehensive risk assessment, it did not provide evidence demonstrating that it ensures that it reviews health plans' conflict-of-interest controls at least once every three years. Until it does so, we will continue to report this recommendation as not fully implemented.
- Auditee did not substantiate its claim of full implementation
Annual Follow-Up Agency Response From November 2020
DHCS is well underway in completing a risk assessment and comprehensive evaluation of contract areas. Related activities began in April 2020 and we continue to work towards finalizing the comprehensive review by January 1, 2021. As of July 8, 2020, DHCS will review health plans' conflict-of-interest controls at least once every three years.
- Estimated Completion Date: January 2021
California State Auditor's Assessment of Annual Follow-Up Status: Pending
1-Year Agency Response
A review of health plans' conflict-of-interest controls is included in the annual audit program and will be reviewed at least once every three years. DHCS is in the process of performing a comprehensive risk assessment to ensure the audit program and annual audit scopes address global areas of potential risks including conflict-of-interest.
- Estimated Completion Date: April 2020
- Response Date: March 2020
California State Auditor's Assessment of 1-Year Status: Pending
DHCS has not conducted a comprehensive risk assessment as we recommended and it has not provided evidence to demonstrate that it will review health plans' conflict-of-interest controls at least once every three years. Until it takes the necessary actions to implement our recommendation, we will assess this as pending.
6-Month Agency Response
DHCS conducts monthly meetings to discuss annual medical audit strategies. As a component of this process, DHCS maintains an "Audit Tool Updates" spreadsheet to determine each plan's associated risks. DHCS also performs a reassessment of risk associated with each respective health plan during its audit planning phase for annual medical audits.
DHCS will also perform a comprehensive risk assessment for health plans as a whole at least once every three years as recommended to ensure the audit program and annual audit scopes address global areas of potential risks, including conflict of interest.
- Estimated Completion Date: April 1, 2020
- Response Date: September 2019
California State Auditor's Assessment of 6-Month Status: Pending
All Recommendations in 2018-115
Agency responses received are posted verbatim.