Scope and Methodology
The Audit Committee directed the California State Auditor to examine DHCS’ oversight of San Joaquin and similar health plans. Specifically, it directed us to identify the actions DHCS has taken to ensure that health plans provide quality of care that meets key state and federal standards. It also directed us to determine whether DHCS provides sufficient oversight of health plans’ administrative expenses and employee bonuses. The table below lists the objectives that the Audit Committee approved and the methods we used to address them.
|1||Review and evaluate the laws, rules, and regulations significant to the audit objectives.||Reviewed relevant laws and regulations related to DHCS’ oversight responsibilities for health plans.|
|2||Determine whether DHCS has conducted all required audits and rate adjustments of health plans, and evaluate its effectiveness in adjusting rates.||
|3||Identify and evaluate the results of actions taken by DHCS in the most recent two or three years to improve the quality of health care services delivered by San Joaquin and similar health plans, including any changes to Medi‑Cal payments.||
|4||Identify steps DHCS has taken to ensure that the quality of care by San Joaquin and similar health plans meets key state and federal standards, including, but not limited to, standards in the area of postpartum care and diabetes treatments.||
|5||Determine whether DHCS provides sufficient management and oversight of San Joaquin and similar health plans, including, but not limited to, oversight of administrative costs and bonuses paid to employees.||Interviewed DHCS staff to determine whether it evaluates health plans’ administrative expenses and employee bonuses to ensure that they are reasonable and necessary. Also, we determined whether DHCS provides guidance to health plans regarding what administrative expenses are reasonable and necessary.|
|6||Evaluate whether DHCS’ oversight ensures that San Joaquin and similar health plans have sufficient controls in place to detect and prevent waste, abuse, mismanagement, and conflicts of interest.
|7||To the extent possible, determine whether DHCS’ administrative costs, including its employee bonuses, are appropriate and allowable under Medi‑Cal funding conditions.||
|8||Review and assess any other issues that are significant to the audit.||We did not identify any other significant issues.|
Source: Analysis of the Audit Committee’s audit request number 2018‑115, as well as information and documentation identified in the column titled Method.