Report 2018-122 All Recommendation Responses

Report 2018-122: Department of Health Care Services: It Has Not Ensured That Medi-Cal Beneficiaries in Some Rural Counties Have Reasonable Access to Care (Release Date: August 2019)

Recommendation #1 To: Health Care Services, Department of

To ensure that beneficiaries in Regional Model counties have adequate access to care, DHCS should identify by August 2020 the locations requiring additional providers and the types of providers required. It should also develop strategies for recruiting and retaining providers in those locations. If it requires additional funding to complete this assessment or to implement actions to address its findings, DHCS should determine the amounts it needs and request that funding from the Legislature.

Annual Follow-Up Agency Response From October 2021

DHCS obtained network recruitment strategies from two Regional Model Medi-Cal MCPs, Anthem and California Health & Wellness. The Regional Model MCPs identified their approaches on outreach to expand their networks, such as focused communications to specialists, providers that are contracted with other MCPs, and providers in bordering counties outside the MCPs' counties. They have also encouraged their commercial providers to offer services to Medi-Cal beneficiaries and have used provider incentives to attract new providers in the network, including offering contracts above standard Medi-Cal rates. Further, to promote provider relationships, the MCPs have established designated teams to onboard new providers, address provider concerns, and offer continuous support. Lastly, both MCPs have expanded their use of telehealth services. These strategies aim to improve access to care for their Medi-Cal members.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2020

DHCS does agree that increasing the number of physicians who practice in Regional Model counties is beneficial for all health care delivery systems.

Specific to Medi-Cal providers, Proposition 56 provided a one-time allocation of $340 million for a loan repayment program for recently graduated physicians and dentists. The selection of physicians and dentists for participation is based on eligibility criteria and prioritizing those agreeing to work in geographic shortage areas to increase access to care for Medi-Cal beneficiaries. In October 2019, DHCS provided network analysis data to Physicians for a Healthy California to assist with focusing the loan repayment program efforts on areas with access concerns. Additionally, DHCS will request the health plans conduct an assessment and submit to DHCS a recruitment strategy for areas in the Regional Model not compliant with time and distance standards. The assessment would be due to DHCS three months after the next annual network certification is completed.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

1-Year Agency Response

DHCS does agree that increasing the number of physicians who practice in Regional Model counties is beneficial for all health care delivery systems.

Specific to Medi-Cal providers, Proposition 56 provided a one-time allocation of $340 million for a loan repayment program for recently graduated physicians and dentists. The selection of physicians and dentists for participation is based on eligibility criteria and prioritizing those agreeing to work in geographic shortage areas to increase access to care for Medi-Cal beneficiaries. In October 2019, DHCS provided network analysis data to Physicians for a Healthy California to assist with focusing the loan repayment program efforts on areas with access concerns. Additionally, DHCS will request the health plans conduct an assessment and submit to DHCS a recruitment strategy for areas in the Regional Model not compliant with time and distance standards. The assessment would be due to DHCS three months after the next annual network certification is completed.

California State Auditor's Assessment of 1-Year Status: Pending

Although DHCS indicated that it will not implement our recommendation, the actions it describes appear to address the concerns underlying the recommendation. If DHCS follows through with its proposed actions or other similar efforts, we may subsequently be able to conclude that the recommendation has been sufficiently resolved. Accordingly, we have assessed the implementation status as pending.

6-Month Agency Response

DHCS continues to disagree with this recommendation for DHCS to identify strategies for recruiting and retaining providers in the regional model counties. However, Proposition 56 provided a one-time allocation of $340 million for a loan repayment program for recently graduated physicians and dentists. The selection of physicians and dentists for participation is based on eligibility criteria and prioritizing those agreeing to work in geographic shortage areas to increase access to care for Medi-Cal beneficiaries. DHCS contracted with Physicians for a Healthy California to administer the loan repayment program, CalHealthCares. To help with efforts to better target specific areas with access concerns, DHCS provided network analysis data to Physicians for a Healthy California in October 2019.

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

It remains unclear why DHCS disagrees with this recommendation. Although the efforts it describes may result in recruiting some additional providers, our recommendation focuses on DHCS performing a thorough assessment of the locations requiring such providers and developing strategies for their recruitment and retention.

60-Day Agency Response

DHCS continues to disagree with this recommendation. DHCS does agree that increasing the number of physicians who practice in California is beneficial for all health care delivery systems; however, such assessment is not in the purview of DHCS.

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

It is unclear why DHCS does not believe that addressing this recommendation is within its purview, given its role in overseeing the State's provision of Medi-Cal services and ensuring that Medi-Cal recipients have access to medical care that state law requires.

Recommendation #2 To: Health Care Services, Department of

To obtain assurance that health plans throughout the State exhaust all of their reasonable options to meet the access requirements before requesting alternative access standards, DHCS should immediately develop written guidance that specifies the conditions under which staff should approve, deny, or contact health plans for clarification regarding their alternative access standard requests.

6-Month Agency Response

DHCS has revised internal procedures so that they more clearly describe the conditions under which AAS are approved or denied.

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

60-Day Agency Response

DHCS continues to improve the Alternate Access Standards (AAS) review process, which includes adding more specific criteria to determine reasonability of AAS requests, such as zip codes identified as Health Professional Shortage Designation Areas. DHCS is currently creating a standardized review process for staff and will be providing in-person training to ensure compliance.

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

Recommendation #3 To: Health Care Services, Department of

To obtain assurance that health plans throughout the State exhaust all of their reasonable options to meet the access requirements before requesting alternative access standards, DHCS should immediately determine a specific minimum number of providers that health plans must attempt to contract with before requesting an alternative access standard.

1-Year Agency Response

DHCS issued All Plan Letter (APL) 20-003 in February 2020, which supersedes APL 19-002. The policy guidance addressed in the APL includes the requirement for Managed Care Providers (MCP) to detail the names, addresses, and driving time/distance to at least two of the nearest out of network providers when making an Alternative Access Standards (AAS) request.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

DHCS is finalizing stakeholder feedback on the APL 19-002, which will instruct MCP to provide information regarding attempts to outreach to a minimum of two out-of-network providers when submitting AAS requests. DHCS will publish the APL by February 2020.

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

60-Day Agency Response

DHCS is currently revising All Plan Letter 19-002 which will instruct Managed Care Providers to provide information regarding attempts to outreach to a minimum of two out-of-network providers when submitting AAS requests.

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

Recommendation #4 To: Health Care Services, Department of

To obtain assurance that health plans throughout the State exhaust all of their reasonable options to meet the access requirements before requesting alternative access standards, DHCS should immediately require health plans to report on their attempts to contract with providers when submitting their alternative access standard requests, including providing evidence of their efforts, such as the contact information for each provider with which they have attempted to contract.

1-Year Agency Response

DHCS issued APL 20-003 in February 2020, which supersedes APL 19-002. The policy guidance addressed in the APL include DHCS' AAS validation process wherein DHCS requests evidence of contracting efforts for approved AAS'. DHCS will compare the MCP's justification for the inability to contract with closer providers and review the supporting documentation requested. DHCS may rescind an approved AAS if the MCP cannot provide sufficient evidence of contracting efforts.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

DHCS is finalizing stakeholder feedback on the APL 19-002 which will require MCPs to describe their contracting efforts as part of their AAS submission and will instruct MCPs to provide information regarding attempts to outreach to a minimum of two out of network providers when submitting AAS requests. MCPs must include their contracting efforts to support their AAS request, including the date(s) of contact. DHCS will publish the APL by February 2020.

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

60-Day Agency Response

DHCS is currently revising All Plan Letter (APL) 19-002 to require Managed Care Plans (MCP) to describe their contracting efforts as part of their AAS submission. MCPs must include their contracting efforts to support their AAS request, including the date(s) of contact. DHCS will also use a sampling methodology to validate the MCP's AAS request. The AAS validation has already been completed for the July 2019 annual network certification. In addition, APL 19-002 is also being revised to instruct MCPs to provide information regarding attempts to outreach to a minimum of two out-of-network providers when submitting AAS requests.

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

Recommendation #5 To: Health Care Services, Department of

To obtain assurance that health plans throughout the State exhaust all of their reasonable options to meet the access requirements before requesting alternative access standards, DHCS should immediately establish a process for periodically verifying the health plans' efforts, such as contacting a sample of the listed providers and determining whether the plans attempted to contract with them.

60-Day Agency Response

DHCS implemented a validation process that requires MCPs with approved AAS to submit various documentation that demonstrates efforts made to contract with closer out-of-network provider(s). In addition, APL 19-002 is also being revised to instruct MCPs to provide information regarding attempts to outreach to a minimum of two out-of-network providers when submitting AAS requests.

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

Recommendation #6 To: Health Care Services, Department of

To obtain assurance that health plans throughout the State exhaust all of their reasonable options to meet the access requirements before requesting alternative access standards, DHCS should immediately require health plans to authorize out-of-network care if they do not demonstrate they have exhausted all of their reasonable options to meet the access requirements, unless the health plans can demonstrate that closer providers are demanding unreasonably high rates or have documented deficiencies in quality of care.

1-Year Agency Response

DHCS continues to disagree with the recommendation. Through the AAS validation process DHCS verifies the MCP's ability to demonstrate exhaustion of all reasonable contracting efforts. If MCPs are unable to demonstrate that they have exhausted all reasonable contracting efforts with a closer provider, DHCS denies that AAS request. MCPs that have denied AAS are considered to not be meeting access requirements and are placed under a corrective action plan (CAP). Through the CAP process, DHCS requires MCPs to authorize out-of-network access including the cost of transportation, initiate and document contracting efforts with out-of-network providers, and ensure that member services staff are providing members with accurate information on the availability of out-of-network services. Additionally, as required in Welfare and Institutions Code 14197.04, MCPs with approved AAS must assist requesting members in obtaining an appointment with an appropriate out of network (OON) core specialist including best efforts to establish a member-specific case agreement, or the MCP must arrange for an appointment with an in-network specialist. Further, DHCS reviews out of network requests as part of the quarterly monitoring process to monitor access concerns.

California State Auditor's Assessment of 1-Year Status: Resolved

DHCS has implemented specific procedures to ensure that health plans demonstrate their efforts to contract with health care providers prior to its approval of alternative access standards. Accordingly, we consider this recommendation resolved.

6-Month Agency Response

MCPs are contractually required to provide out-of-network access for medically necessary services. DHCS currently requires MCP reporting on out-of-network requests by county and provider specialty type. DHCS will compare the out-of-network requests with the MCP's approved AAS to see if there is a correlation. Trends identified by DHCS will be included in the quarterly monitoring process.

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

Although DHCS describes that health plans are contractually required to provide out-of-network access for medically necessary services, it does not address how it would handle situations in which the health plans are not able to demonstrate that they have exhausted all reasonable options for meeting the access requirements. Our recommendation specifies that DHCS should require those plans to authorize out-of-network care.

60-Day Agency Response

DHCS continues to disagree with this recommendation. DHCS does agree that MCPs must exhaust all of their reasonable options to contract with closer providers before an AAS is granted. However, DHCS already has existing processes in place to request supporting documentation for AAS and is further strengthening this process through a sampling and validation process.

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

Although DHCS references its processes for reviewing supporting documentation for requests for alternative access standards, it does not address how it would handle situations in which health plans are not able to demonstrate that they have exhausted all reasonable options for meeting the access requirements. Our recommendation specifies that DHCS should require those plans to authorize out-of-network care.

Recommendation #7 To: Health Care Services, Department of

To ensure that it promptly and sufficiently notifies counties and other stakeholders about health plans' quality of care deficiencies, DHCS should immediately post its medical audit reports to its website within one month after it issues the reports to the health plans.

60-Day Agency Response

DHCS has updated its internal processes to post the results of medical audits to its website within one month after the audit report is issued to the MCPs.

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

Recommendation #8 To: Health Care Services, Department of

To ensure that it promptly and sufficiently notifies counties and other stakeholders about health plans' quality of care deficiencies, DHCS should immediately include information about its recently published medical audit reports and other monitoring efforts in its communication with counties and other stakeholders on its mailing list.

60-Day Agency Response

DHCS included updates to audit report postings through the main DHCS stakeholder list. These updates are issued bimonthly. The subscribers are comprised of county associations and representatives, as well as health plans, state departments, providers, members of the media, health advocacy organizations, and other. In addition, DHCS has updated its internal processes to post the results of medical audits to its website within one month after the audit report is issued to the MCPs.

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

Recommendation #9 To: Health Care Services, Department of

To ensure that it promptly and sufficiently notifies counties and other stakeholders about health plans' quality of care deficiencies, DHCS should immediately ensure that relevant county officials are included on its mailing list.

60-Day Agency Response

DHCS reviews the subscribers on the DHCS main stakeholder mailing list on a regular basis. Interested parties are able to subscribe to the list in order to receive updates.

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

DHCS also subsequently requested the County Welfare Directors Association of California and the County Health Executives Association of California to notify their members of its email distribution list.

Recommendation #10 To: Health Care Services, Department of

To ensure that all counties are aware of the managed care model options available to them and of the steps necessary to implement those models, DHCS should provide by December 2019 information to all counties that clearly defines each managed care model and the steps and legal requirements needed to establish each model.

Annual Follow-Up Agency Response From October 2021

To further support the recommendation to ensure that all counties are aware of the managed care model options available to them and of the steps necessary to implement those models, DHCS held a webinar on February 8th, 2021 entitled Medi-Cal Managed Care Models: Technical Assistance for Counties. The purpose of the webinar was to provide guidance on the opportunity for counties to transition to a Managed Care Model that includes a local plan model, County Organized Health System (COHS) or Local Initiative, by January 2024. The webinar explained what options were available, information on County, State and Federal Authorization and a timeline. The webinar also described in detail the Letter of Intent Instructions that required various pieces of documentation to be submitted to DHCS for review and consideration of a possible Plan Model change in the county.

DHCS released the Letter of Intent Instructions to the County Health Executives Association of California and posted to the DHCS website to communicate the opportunity. In addition, DHCS provided technical assistance to Counties and Managed Care Plans by meeting with them when requested to address questions and provide guidance as needed.

In May 2021, DHCS released a Stakeholder Announcement informing them of the counties that submitted Letter of Intent documentation by the required deadline of April 30th, 2021.

In September 2021 DHCS launched the Managed Care Plan County Plan Model Change webpage on the DHCS website dedicated to County Plan Model change information.

The DHCS Model Fact Sheet remains as is, however, DHCS has described in its Letter of Intent Instructions and in the Conditional Approvals provided to Counties interested in changing the Plan Model that operate in their county, that Readiness Requirements can be located in the Managed Care Plan Boilerplate contract at MCP Boilerplate Contract.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From November 2020

In addition to the information on the DHCS website explaining the steps and legal requirements to establish each plan model type, DHCS has also held initial meetings with various county stakeholders as well as MCPs to discuss the process and timeline for counties to change the MCP model type operating in the county. DHCS is also planning a webinar for counties to attend and hear further details on steps counties must take to change the MCP model type in the county. DHCS will provide technical assistance as needed including necessary timelines and milestones counties must meet in relation to the final request for procurement.

The link on the DHCS website to where the document can be found is

https://www.dhcs.ca.gov/services/Documents/MMCD/MMCDModelFactSheet.pdf.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

The document that DHCS refers to was referenced in its previous responses. However, the information in the fact sheet is presented at a very high level and does not describe specific details that would direct counties on how to establish each model. DHCS subsequently informed us of additional available information, known as readiness requirements, that describes the requirements for health plans to contract under the various managed care model options. Accordingly, DHCS could add references to the readiness requirements in its fact sheet to provide additional context to the counties on how to implement the models. We will review DHCS' efforts during its next annual follow-up response to determine whether it has fully implemented this recommendation.

1-Year Agency Response

DHCS has created and posted to the DHCS website a document outlining the necessary information that explains the steps and legal requirements to establish each plan model type. DHCS has shared the link to the document with the County Health Executives Association of California and California State Association of Counties to distribute to its members. The document was also mailed out to the Managed Care Advisory Group and other groups as identified by DHCS. The link on the website to where the document can be found is

https://www.dhcs.ca.gov/services/Documents/MMCD/MMCDModelFactSheet.pdf.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

DHCS describes the same document that it referenced in its six-month response. Although that fact sheet defines the managed care models and presents required steps and legal references, the information it provides is at a very high level and does not describe specific details that would direct counties on how to establish each model. DHCS subsequently informed us of additional available information, known as readiness requirements, that describes the requirements for health plans to contract under the various managed care model options. Accordingly, DHCS could add references to the readiness requirements in its fact sheet to provide additional context to the counties on how to implement the models. We look forward to hearing from DHCS on its efforts to issue more specific guidance for that purpose.

6-Month Agency Response

DHCS has created and posted to the DHCS website a document outlining the necessary information that explains the steps and legal requirements to establish each plan model type. DHCS has shared the link to the document with the County Health Executives Association of California and California State Association of Counties to distribute to its members. The document was also mailed out to the Managed Care Advisory Group and other groups as identified by DHCS. The link on the website to where the document can be found is https://www.dhcs.ca.gov/services/Documents/MMCD/MMCDModelFactSheet.pdf.

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

Although DHCS' fact sheet defines the managed care models and presents required steps and legal references, the information it provides is at a very high level and does not describe specific details that would direct counties on how to establish each model. We look forward to hearing more from DHCS on its efforts to issue more specific guidance for that purpose.

60-Day Agency Response

DHCS is working internally to create the necessary information for posting to the DHCS website that explains the steps and legal requirements to establish each plan model type. In addition, DHCS has recently updated the DHCS website and has made improvements that allows the public easy access to information regarding information about health plans. Two improvements to the website include easily accessible links entitled "Medi-Cal Managed Care", as well as a direct link entitled "Finding your County Office". DHCS also continues to be committed to meet with counties when requested to discuss issues about managed care and answer questions regarding the models. Finally, DHCS will issue an information update letter to the County Health Executives Association of California and/or the CA State Association of Counties notifying them of changes to the DHCS website which may be of assistance to counties.

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

We look forward to reviewing DHCS' six-month response to evaluate the information DHCS is creating that will address the steps and requirements for establishing each plan model type.

Recommendation #11 To: Health Care Services, Department of

To ensure that it makes informed decisions regarding the extension or renewal of its contracts with managed care health plans, DHCS should immediately begin the practice of requesting annual feedback from the counties that the health plans serve and of using that feedback in its decision-making process.

Annual Follow-Up Agency Response From October 2021

DHCS has updated the implementation plan for Recommendation 11. In prior responses, DHCS had not yet released the DRAFT Request for Proposal (RFP) for Stakeholder feedback. Based on the DRAFT RFP feedback, DHCS is committing to implementing a 60 month contract term for MCP. Based on the 60 month contract term, it is the intent of the DHCS to include the updated Managed Care Plan contract as part of that RFP process and associated procurement activities. During the RFP process counties, stakeholders, advocates, etc. are able to provide feedback on the MCP contract.

DHCS will continue to work closely with MCP's through our contract amendment process and will continue to post the MCP boilerplate contract on the DHCS website. Additionally, DHCS is committed to meeting with Stakeholder groups and Advocates as requested to have listening sessions with them to hear feedback and address questions based on the MCP contracts. Information gathered from these listening sessions will be taken into consideration for future contract amendments.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2020

DHCS' response is unchanged. DHCS agrees to implement a practice of requesting annual feedback from the counties the health plans serve and use the feedback in decision-making processes when extending or re-procuring health plan contracts. Due to the current COVID-19 pandemic and associated impacts to workload and priorities within DHCS, the estimated implementation date has been adjusted to December 2020.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

DHCS agrees to implement a practice of requesting annual feedback from the counties the health plans serve and use the feedback in decision-making processes when extending or re-procuring health plan contracts. Due to the current COVID-19 pandemic and associated impacts to workload and priorities within the Department, the estimated implementation date has been adjusted to December 2020.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

DHCS agrees to implement a practice of requesting annual feedback from the counties that the health plans serve and use that feedback in its decision-making process when extending or re-procuring health plan contracts. DHCS will provide further details by July 2020 as to the process for providing feedback.

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

60-Day Agency Response

DHCS agrees to implement a practice of requesting annual feedback from the counties that the health plans serve and use that feedback in its decision-making process when extending or re-procuring health plan contracts.

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

Recommendation #12 To: Health Care Services, Department of

To ensure that beneficiaries in the Regional Model counties have reasonable access to care, DHCS should determine by June 2020 the specific causes of Anthem's and Health & Wellness's inabilities to provide reasonable access to care in the Regional Model counties.

1-Year Agency Response

DHCS has worked with the EQRO to finalize the report. The report includes a two-fold analysis to identify the specific Regional Model counties in which provider network coverage issues exist for each of the MCPs, and specific causes of provider network issues identified in the California State Auditor's report. The EQRO's final report was delivered to DHCS in July 2020.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

DHCS has engaged the External Quality Review Organization to conduct this analysis. The analysis will be completed by June 2020.

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

60-Day Agency Response

DHCS continues to work towards the analysis of the Regional Model and is on track to meet the June 2020 date.

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

Recommendation #13 To: Health Care Services, Department of

To ensure that beneficiaries in the Regional Model counties have reasonable access to care, DHCS should evaluate by June 2020 whether the structural characteristics of a COHS Model would be better suited to providing reasonable access to care in the Regional Model counties and notify the counties whether a COHS would improve beneficiaries' access to care. If some or all of these counties desire to transition to a COHS, DHCS should assist them in making that change after their current contracts expire.

Annual Follow-Up Agency Response From October 2021

On February 2, 2021, DHCS as part of the statewide procurement of commercial Medi-Cal managed care plans, released Letter of Intent instructions for counties that intend to transition to a local Medi-Cal managed care plan model by January 2024 (either a Two-Plan or COHS model). To begin the model change process, DHCS required counties to submit either a preliminary letter of interest or a full letter of intent by March 31. The purpose of the Letter of Intent is for the county to demonstrate understanding of the MCP's obligations as a new local plan, describe county engagement underway, and outline the necessary steps in order to meet the preliminary requirements prior to the finalization of the commercial plan procurement RFP in 2021. DHCS provided technical assistance to counties during this process. The implementation date for commercial plans procured in the RFP, and any new local plans, is January 1, 2024. See Letter of Intent Instructions for further detail.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

DHCS describes its efforts to assist counties that desire to transition to a COHS model, although it does not state any action taken to evaluate whether the structural characteristics of that model would be better suited to providing reasonable access to care in the Regional Model counties.

1-Year Agency Response

DHCS is reviewing the recommendations in the EQRO Regional Model Access Focused Study Report, and will determine any actionable steps.

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

Although DHCS states that it will not implement this recommendation, it indicates that it may take action to address access to care based on the results of the analysis cited in Recommendation 12.

6-Month Agency Response

DHCS continues to work towards the analysis of the Regional Model as noted in recommendation 12 and will determine next steps through that effort.

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

Although DHCS states that it will not implement this recommendation, it indicates that it may take action to address access to care based on the results of the analysis cited in Recommendation 12.

60-Day Agency Response

DHCS continues to work towards the analysis of the Regional Model as noted in Recommendation 12 and will determine next steps through that effort.

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

Although DHCS states that it will not implement this recommendation, it indicates that it may take action to address access to care based on the results of the analysis cited in Recommendation 12.

Recommendation #14 To: Health Care Services, Department of

To ensure that beneficiaries in the Regional Model counties have reasonable access to care, DHCS should evaluate by June 2020 whether it has the financial resources to provide assistance to counties interested in establishing a COHS or other managed care model after the current Regional Model contracts expire. If DHCS does not have the required financial resources, it should seek an appropriate amount of funding from the Legislature.

Annual Follow-Up Agency Response From October 2021

DHCS continues to disagree with the recommendation. As stated in the previous responses, DHCS' role is to monitor and ensure the compliance of each MCP. The counties are autonomous entities and are responsible for deciding on and pursuing the best model type for the service area.

However, based on current activities and guidance around potential County Plan Model Changes, DHCS has provided extensive technical assistance to counties, including various regional model counties, as well as to MCPs interested in expanding into the rural counties. DHCS will continue to be a resource to both Counties and Plans interested in changing the Plan Model type that operates in their county.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Because the Regional Model includes many counties that may desire to transition to a single multicounty COHS, we believe that it would be more effective for DHCS to submit a consolidated funding request to the Legislature rather than for each county to submit its own individual request. As we state on page 7 of the report, DHCS is the state agency responsible for administering Medi-Cal. Regardless of its position on its role, DHCS would help expedite authorization of such funding by submitting a single request and would also help ensure that all of the counties are treated equitably, despite differences in their size and resources. As we characterize on page 42 of the report, small and rural counties may not be able to develop the infrastructure required to change their managed care models without DHCS' assistance.

1-Year Agency Response

DHCS continues to disagree with the recommendation. DHCS' role is to monitor and ensure the compliance of each MCP. The counties are autonomous entities and are responsible for deciding on and pursuing the best model type for the service area. DHCS does not have the financial resources to provide direct monetary assistance, and requesting the Legislature to provide financial incentives for counties to pursue a single model type is outside DHCS' purview. However, DHCS will lead any statutory changes necessary to account for a plan model change in the counties.

Alternatively, the Legislature may decide to provide funding for a county or combination of counties and weigh against other budget priorities. The appropriate entity would have to be determined to conduct the work.

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

We continue to disagree with DHCS' perspective. Because the Regional Model includes many counties that may desire to transition to a single multicounty COHS, we believe that it would be more effective for DHCS to submit a consolidated funding request to the Legislature rather than for each county to submit its own individual request. As we state on page 7 of the report, DHCS is the state agency responsible for administering Medi-Cal. Regardless of its position on its role, DHCS would help expedite authorization of such funding by submitting a single request and would also help ensure that all of the counties are treated equitably, despite differences in their size and resources. As we characterize on page 42 of the report, small and rural counties may not be able to develop the infrastructure required to change their managed care models without DHCS' assistance.

6-Month Agency Response

DHCS continues to disagree with this recommendation. DHCS does not have the financial resources to provide direct financial assistance to counties to establish a Health Care Plan. Historically, the responsibility of establishing a COHS has been on the interested county to pursue. It is not within DHCS' purview to submit a request to the legislature, as it is not DHCS who dictates the plan model type that operates in the county, it is the DHCS' role to monitor and ensure compliance of each MCP. It is the counties' responsibility to initiate a request to change plan model types. However, DHCS will lead any statutory changes necessary to account for a plan model change in the counties. Alternatively, the Legislature may decide that it wishes to provide funding for a county or combination of counties and it would be weighed against other budget priorities of the administration. The appropriate entity would then have to be determined to conduct the work.

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

We continue to disagree with DHCS' perspective. Because the Regional Model includes many counties that may desire to transition to a single multicounty COHS, we believe that it would be more effective for DHCS to submit a consolidated funding request to the Legislature rather than for each county to submit its own individual request. As we state on page 7 of the report, DHCS is the state agency responsible for administering Medi-Cal. Regardless of its position on its role, DHCS would help expedite authorization of such funding by submitting a single request and would also help ensure that all of the counties are treated equitably, despite differences in their size and resources. As we characterize on page 42 of the report, small and rural counties may not be able to develop the infrastructure required to change their managed care models without DHCS' assistance.

60-Day Agency Response

DHCS continues to disagree with this recommendation. DHCS does not have the financial resources to provide direct financial assistance to counties to establish a Health Care Plan. Historically, the responsibility of establishing a COHS has been on the interested county. Alternatively, the Legislature may decide that it wishes to provide funding for a county or combination of counties and it would be weighed against other budget priorities of the administration. The appropriate entity would then have to be determined to conduct the work.

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

As we stated in our comments on DHCS' original response to the audit report, we disagree with DHCS' perspective. Because the Regional Model includes many counties that may desire to transition to a single multicounty COHS, we believe that it would be more effective for DHCS to submit a consolidated funding request to the Legislature rather than for each county to submit its own individual request. As we state on page 7 of the report, DHCS is the state agency responsible for administering Medi-Cal. By submitting a single request, DHCS would help expedite authorization of such funding and would also help ensure that all of the counties are treated equitably, despite differences in their size and resources. As we characterize on page 42 of the report, small and rural counties may not be able to develop the infrastructure required to change their managed care models without DHCS' assistance.

Recommendation #15 To: Health Care Services, Department of

To ensure that beneficiaries in the Regional Model counties have reasonable access to care, DHCS should provide these counties by June 2020 with reasonable opportunities to decide whether to change their managed care models after the expiration of the Regional Model health plan contracts. DHCS should provide counties that choose to do so sufficient time to establish their new models. DHCS should also include language in its 2020 RFP to allow Regional Model counties that can demonstrate their ability to implement a COHS Model in their county by 2023 to opt out of the RFP process.

Annual Follow-Up Agency Response From October 2021

Based on activities that DHCS has engaged in during 2020-2021, we have updated our response to Recommendation 15 to now show as Fully Implemented. Since the previous annual response was provided, DHCS has engaged in multiple discussions with various counties who have requested technical assistance related to changing their Plan model type, In addition, DHCS has engaged with Centers for Medicare and Medicaid Services (CMS) related to opportunities and steps for DHCS to take if counties request to change the Plan Model type in their county, and in February 2021, DHCS released Letter of Intent Instructions to the County Health Executives Association of California to communicate an opportunity for potential County Plan Model changes. The Letter of Intent Instructions provided counties with instructions on how to submit information to the DHCS by April 30th, 2021 in order to possibly change the MCP model type that operates in their county. The requested change, if approved by the DHCS, would take effect January 1, 2024 giving the counties sufficient time to establish their new models.

DHCS also included language in the DRAFT RFP that was released June 1, 2021, indicating potential County Plan Model changes that would occur effective January 1, 2024. The Final RFP will only include those counties that are part of the RFP process.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From November 2020

DHCS will provide all counties with reasonable opportunities to decide whether to change managed care models and intends to reach out to counties regarding important decision points related to the RFP timeline. Over the last year, DHCS has participated in discussions with various counties who have requested technical assistance related to changing their Plan model type. In addition, DHCS has engaged with Centers for Medicare and Medicaid Services (CMS) to determine the definition and parameters around the federal statute that identifies a 16% threshold for County Organized Health Plans. Lastly, DHCS has provided extensive technical assistance to the Legislature around Senate Bill (SB) 1029, which is a bill that seeks to provide Sacramento County the authority to establish a public health authority that will be allowed to put forward Plan recommendations as part of the RFP process.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

1-Year Agency Response

DHCS will provide all counties with reasonable opportunities to decide whether to change managed care models and intends to reach out to counties regarding important decision points related to the RFP timeline. Over the last year, DHCS has participated in discussions with various counties who have requested technical assistance related to changing their Plan model type. In addition, DHCS has engaged with Centers for Medicare and Medicaid Services (CMS) to determine the definition and parameters around the federal statute that identifies a 16% threshold for County Organized Health Plans. Lastly, DHCS has provided extensive technical assistance to the Legislature around Senate Bill (SB) 1029, which is a bill that seeks to provide Sacramento County the authority to establish a public health authority that will be allowed to put forward Plan recommendations as part of the RFP process.

California State Auditor's Assessment of 1-Year Status: Pending

Although DHCS indicates that it will not implement our recommendation, its response describes activity that partially addresses the recommendation. However, DHCS did not provide documentation to substantiate its efforts. Accordingly, we evaluated the implementation status of this recommendation as pending.

6-Month Agency Response

DHCS continues to disagree with this recommendation. DHCS will not be including a provision in its RFP regarding the allowance for a county or plan to change the model type operating in their county because the RFP is specific to the model type. We would expect that counties and plans interested in switching to another managed care model in any of the RFP counties to make DHCS aware between now and/or during the RFP process. It is not reasonable to include language in the actual RFP considering that the legislative process to change the plan model type in a county is lengthy and requires possible statutory changes. With that said, the DHCS would need to know prior to the RFP being posted if a county or plan is interested in changing the plan model type operating in that county. Once DHCS is made aware of such request, DHCS will work with the necessary parties on next steps.

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

We disagree with DHCS' response that it is not reasonable to include language in its RFP to allow counties to opt out of the RFP process if they can demonstrate their ability to implement a COHS model in their county by 2023. In particular, we are concerned that DHCS' approach will preclude counties that want to create a COHS from doing so. Requiring counties to notify DHCS of their intent prior to DHCS issuing the RFP does not allow the counties sufficient opportunities to decide whether to change their managed care models as we recommended.

60-Day Agency Response

DHCS will not be including a provision in its RFP regarding the allowance for a county or Plan to change the model type operating in their county because that RFP is specific to the model type. We would expect that counties and plans interested in switching to a COHS model in any of the RFP counties to make DHCS between now and/or during the RFP process. Once DHCS is made aware of such request, DHCS will work with the necessary parties on next steps.

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

DHCS states that it will work with parties when it is made aware of their desire to switch to a COHS model. However, by implementing our recommendation to include language in the 2020 RFP to allow counties to opt out of the Regional Model if they can demonstrate their ability to implement a COHS Model, DHCS would demonstrate its commitment to helping small and rural counties improve the access to care for their beneficiaries.

All Recommendations in 2018-122

Agency responses received are posted verbatim.