Report 2018-111 Recommendation 12 Responses

Report 2018-111: Department of Health Care Services: Millions of Children in Medi-Cal Are Not Receiving Preventive Health Services (Release Date: March 2019)

Recommendation #12 To: Health Care Services, Department of

To better ensure the accuracy of its data and ensure that California receives all available federal Medicaid funding, DHCS should require its EQRO to perform its encounter data validation studies annually using the most recent set of data available, and it should implement recommendations from its EQRO studies.

Annual Follow-Up Agency Response From September 2022

There is no agency response for this update. Government Code section 8546.1(d) authorizes the California State Auditor to conduct follow-up audit work on statutorily mandated or legislatively required financial and performance audits. Our office followed up on this March 2019 audit to assess DHCS's status regarding implementation of the eight outstanding recommendations from this report. Below is our assessment of the status of this recommendation based on work we performed during the follow-up audit. All future updates for this recommendation will be posted under the follow-up audit (2022-502).

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

DHCS suspended its FY 2019-20 and FY 2020-21 external data validation studies because of the public health emergency. DHCS stated that the next encounter data validation study will conclude in January 2023.

Annual Follow-Up Agency Response From October 2021

In July 2021, DHCS resumed annual EDV activities beginning in State Fiscal Year (SFY) 2021-2022 which will include normal medical record procurement processes. DHCS' contracted EQRO, Health Services Advisory Group, Inc. (HSAG), is hosting a webinar in November 2021 to go over the EDV requirements and provide general updates for the project. HSAG will send an email to all MCP EDV contacts once the date of the webinar has been finalized.

In lieu of the SFY 2020-2021 EDV study, DHCS and HSAG developed an administrative data analysis using encounter, provider, and eligibility data to measure encounter data quality. This study is known as the SFY 2020-2021 Encounter Data Administrative Profile and is currently in progress and will coincide with the resumption of the SFY 2021-2022 EDV activities.

DHCS released APL 20-004 to communicate the suspension of EDV during the Public Health Emergency and has revised the APL to communicate the resumption of the EDV for SFY 2021 2022.

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

As stated in previous assessments, DHCS will need to demonstrate that it has implemented recommendations from its EQRO studies to fully implement this recommendation.

Annual Follow-Up Agency Response From November 2020

DHCS continues to conduct the EDV study on an annual basis and to review and make decisions on whether or not to implement the recommendations made by the EQRO. Due to the COVID-19 pandemic, DHCS paused the 2020-21 EDV activities to reduce non-critical administrative burden on providers and anticipates a return to normal operation in early 2021 pending the state of the COVID-19 pandemic. DHCS will work with the EQRO to determine the best course of action to reactivate EDV activities.

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

1-Year Agency Response

DHCS has contractual authority to require its EQRO to complete an EDV study on an annual basis and has done so since State Fiscal Year 2017-2018. DHCS utilizes results from the EDV studies as one of many mechanisms to monitor and improve encounter data completeness and accuracy. In addition, DHCS reviews the recommendations made by the EQRO which are included in the annual EDV and makes a decision on whether or not to implement.

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

DHCS' updated EQRO contract incorporates the requirement to conduct the encounter data validation study for fiscal year 2019-20. DHCS will need to continue exercising this option annually and demonstrate that it is implementing the recommendations from these studies.

6-Month Agency Response

DHCS is currently evaluating the most recent recommendations provided by its EQRO in the 2017-18 EDV Study that was delivered on March 13, 2019. As recommended, DHCS is evaluating ways to improve study indicators by establishing EDV minimum performance thresholds which will be published in a future version of the Quality Measures for Encounter Data document—an extension of APL 14-020. DHCS is also in the process of investigating whether all diagnosis data in the encounter data is present in the DHCS data warehouse as recommended. Lastly, DHCS is developing contract language that will require MCPs to conduct regular audits of encounter data reported by their subcontractors and network providers.

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

Implementation of this recommendation will require a change to DHCS' contract with the EQRO and demonstration of a method to ensure that DHCS implements recommendations from the EQRO studies. DHCS did not provide evidence of either, although its response indicates that it intends to implement this recommendation.

60-Day Agency Response

DHCS has expanded its encounter data monitoring efforts in the completeness and accuracy categories through an Encounter Data Validation Study. This study is currently being conducted on an annual basis and brings DHCS into full compliance with new federal requirements. DHCS received the 2017-18 Encounter Data Validation Study in March 2019 and it will be published in May 2019. DHCS' EQRO has already initiated and begun collecting data for the next 2018-19 Encounter Data Validation Study which will be completed in March 2020.

In April 2019, DHCS released the second round of Encounter Data Stoplight reports which compares the amount of utilization reported through each MCP's Rate Development Template and the amount of encounter data submitted to DHCS. The third round of reports will be released in July 2019.

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

DHCS provided a schedule indicating the data validation study would be annual and stated they intended to make this part of the contract when they renew it in 2020, but it has not provided evidence that it is implementing the recommendations from its EQRO studies.

All Recommendations in 2018-111

Agency responses received are posted verbatim.