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.

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.

  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: July 2020
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: July 2020
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: July 2020
  • Response Date: October 2019

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.

  • Completion Date: August 2019
  • Response Date: October 2019

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.

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.

  • Response Date: October 2019

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.

  • Completion Date: July 2019
  • Response Date: October 2019

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.

  • Completion Date: September 2019
  • Response Date: October 2019

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.

  • Completion Date: August 2019
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: December 2019
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: July 2020
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date: June 2020
  • Response Date: October 2019

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.

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.

  • Estimated Completion Date:
  • Response Date: October 2019

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.

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.

  • Response Date: October 2019

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.

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.

  • Response Date: October 2019

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.