Report 2001-129 Summary - May 2002
Department of Health Services:
It Needs to Significantly Improve Its Management of the Medi-Cal Provider Enrollment Process
HIGHLIGHTS
Our review of the Department of Health Services' Provider Enrollment Branch's (branch) management of the Medi-Cal provider enrollment process revealed that:
- It lacks reliable data to determine the size of its backlog.
- It could not substantiate its decisions to designate certain providers as being at high risk for fraud.
- It did not always review disclosure statements required by the federal Health and Human Services Agency, aimed at identifying applicants with a history of defrauding or abusing the Medicaid system.
- It will continue to have difficulty effectively managing its operations until it develops a strategic plan and fully implements its data tracking system.
RESULTS IN BRIEF
In 1999, investigations by the governor's Medi-Cal Fraud Task Force and several media reports of Medi-Cal fraud in California led to the creation of units within the Department of Health Services (department) focused on stopping fraud by Medi-Cal providers. As part of this effort, the Provider Enrollment Branch (branch) was established in July 2000. Its top priorities were to reduce the backlog of physician applications and to perform a more thorough review of applications from providers seeking to participate in the Medi-Cal program.
Since its inception, the branch's primary function has been to review the roughly 2,200 applications it receives each month. The branch has worked to streamline its application review process, develop policy manuals, and gain additional staff.
We found that the branch lacks reliable data to determine the number of applications that are pending at any given time and thus cannot accurately determine the size of its backlog. In addition, its efforts to streamline the process did not always result in an improved ability to review applications promptly, equitably, and effectively. For example, the branch did not always comply with state regulations that require it to approve applications within 180 days and it could not substantiate decisions to designate certain providers as being at high risk for fraud, whose applications are subject to greater scrutiny. Futhermore, it did not always review disclosure statements required by the federal Health and Human Services Agency aimed at identifying applicants with a history of defrauding or abusing the Medicaid system, increasing the risk of enrolling dishonest providers.
In addition, the branch has not developed a strategic plan that would help it address its performance deficiencies. For example, the branch has not established benchmarks that show how long it takes, on average, to process applications so it can determine its staffing needs. The branch also has not fully implemented the Provider Enrollment Tracking System (PETS), which would assist its efforts to manage its workload better. Until the branch addresses these issues, it will continue to have difficulty meeting its regulatory timelines, securing additional staff, and effectively managing its operations.
RECOMMENDATIONS
To improve its management of the provider enrollment process, the branch should:
- Improve the reliability of its PETS database by requiring that staff enter data consistently and as accurately as possible. The branch also should exploit the capabilities of PETS by developing management reports to monitor its operations.
- Identify all providers whose disclosure statements were not reviewed and perform this review in accordance with federal requirements. The branch also should direct staff to continue to review all disclosure statements for all providers.
- Adopt a strategic plan to identify key responsibilities and establish priorities. This plan should clearly describe how the organization would address its many short- and long-term responsibilities, particularly those it has not fulfilled sufficiently. To do this, the branch first must determine how long it takes to process a typical application, identify its true workload, and assess whether it has sufficient staff.
In addition, the department should formalize the process whereby the branch determines which provider type should be subject to increased scrutiny and when, based upon the most recent anti-fraud trend information available.
AGENCY COMMENTS
The department generally agrees with our conclusions; however, it believes that a backlog of provider enrollment applications no longer exists. The department also believes that its efforts to hire employees to assist the branch in reducing the backlog met its contract terms and state standards for using personal services contracts. Nevertheless, the department agrees with our recommendations and states that it has already begun implementing many of them and will soon implement all others.
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