Report 2018-603 Recommendation 2 Responses

Report 2018-603: Department of Health Care Services: It Paid Billions in Questionable Medi-Cal Premiums and Claims Because It Failed to Follow Up on Eligibility Discrepancies (Release Date: October 2018)

Recommendation #2 To: Health Care Services, Department of

To recover inappropriately spent funds, prevent future erroneous payments, and ensure eligible individuals' access to care, Health Care Services should resolve the discrepancies we identified and recover erroneous payments where allowable by June 30, 2019.

DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with Statewide Automated Welfare Systems (SAWS), DHCS performed an automated match process between Medi-Cal Eligibility Database System (MEDS) and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions which contribute to the critical/high-volume alerts.

Due to the COVID-19 Public Health Emergency (PHE) and the federal requirement to delay renewals until the end of the PHE, DHCS was not able to implement the planned actions last year. DHCS will resume the stated plan in June 2024 when the unwind ends.

The Biden Administration declared the PHE was set to end on May 11, 2023. The continuous coverage requirements ended on March 31, 2023, and the unwinding of the continuous coverage requirement began April 1, 2023. CMS issued a series of State Health Official (SHO) letters (December 2020, August 2021, March 2022) detailing federal expectations and requirements of case processing timeliness and beneficiary communications for redetermining Medi-Cal coverage for individuals who had coverage continuously maintained during the PHE.

California State Auditor's Assessment of Status: Pending

DHCS does not expect to fully implement this recommendation until June 2024.

DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with Statewide Automated Welfare Systems (SAWS), DHCS performed an automated match process between Medi-Cal Eligibility Database System (MEDS) and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions that contribute to the critical/high-volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated a disaster relief state plan amendment that allows counties to focus on application-processing and access to care. Currently, the Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not fully implement this recommendation until March 2024.

The estimated implementation date was extended by four months and is now 3/1/2024, due to an extension of the PHE for COVID-19. No changes from 45-Month Program Update.\

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not implement this recommendation until March 2024.

The Estimated Implementation Date was extended by four months due to an extension of the PHE for COVID-19. Otherwise, no change from previous response. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 PHE, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, CMS granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the federal COVID-19 PHE declaration.

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not fully implement this recommendation until November 2023.

DHCS plans to move forward with the implementation plan provided in the previous update upon termination of the public health emergency with no modifications to the original plan. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. DHCS implemented additional measures:-DHCS and the five counties responsible for 85 percent of the discrepant records, are in the process of collectively strategizing to develop a path forward in reconciling records.-DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.-An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.-DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.-DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts. However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, CMS granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the federal COVID-19 public health emergency declaration.

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not fully implement this recommendation until July 2023.

Response is unchanged from 36-Month update: DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not fully implement this recommendation until December 2022.

Response is unchanged from 33-Month Update. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per Health Care Services' response, it will not fully implement this recommendation until December 2022.

Response is unchanged from 30-Month Update. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per the department's response, it will not fully implement this recommendation until December 2022.

Response is unchanged from 27-Month Update. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with SAWS, DHCS performed an automated match process between MEDS and SAWS to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per the department's response, it will not fully implement this recommendation until December 2022.

Response is unchanged. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with the Statewide Automated Welfare System, DHCS performed an automated match process between the MEDS and the Statewide Automated Welfare System to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per the department's response, it will not fully implement this recommendation until December 2022.

Response is unchanged. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with the Statewide Automated Welfare System, DHCS performed an automated match process between the MEDS and the Statewide Automated Welfare System to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions, which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 public health emergency, DHCS activated the disaster state plan amendment, which allows counties to focus on application processing and access to care. Currently, CMS granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

Per the department's response, it will not fully implement this recommendation until December 2022.

Response is unchanged. DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with the Statewide Automated Welfare System, DHCS performed an automated match process between the Medi-Cal Eligibility Data System (MEDS) and the Statewide Automated Welfare System to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

DHCS developed various exercises for counties to perform to gain a better understanding of actions which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 pandemic, DHCS activated the disaster state plan amendment which allows counties to focus on application processing and access to care. Currently, the Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

DHCS continues to work with counties to resolve all records identified as discrepant. To expedite the process, in collaboration with the Statewide Automated Welfare System, DHCS performed an automated match process between the Medi-Cal Eligibility Data System (MEDS) and the Statewide Automated Welfare System to reconcile beneficiary status in both systems. While effective, the effort remains labor intensive and protracted; consequently, DHCS implemented additional measures:

- DHCS and the five counties responsible for 85 percent of the discrepant records are in the process of collectively strategizing to develop a path forward in reconciling records.

- DHCS plans to meet with the five counties separately to further discuss the development of a reconciliation process.

- An in-person training session for the five counties was scheduled to address any issues attributing to the creation of new MEDS alerts at the county level, and to provide technical guidance on problematic records.

- DHCS requests counties provide best practices for resolving MEDS alerts for DHCS' review.

- DHCS developed various exercises for counties to perform to gain a better understanding of actions which contribute to the creation of critical/high volume alerts.

However, in response to the COVID-19 pandemic, DHCS activated the disaster state plan amendment which allows counties to focus on application processing and access to care. Currently, the Centers for Medicare and Medicaid Services granted DHCS authority to delay the processing of Medi-Cal redeterminations and allow beneficiaries to remain enrolled in the Medi-Cal program (with limited restrictions) regardless of any change in circumstance. DHCS has temporarily suspended the above efforts to allow counties the flexibility to modify business operations to ensure safety of staff and effectively meet the increase in community needs. DHCS will resume all efforts upon termination of the COVID-19 public health emergency.

California State Auditor's Assessment of Status: Pending

DHCS continues to work with counties to resolve all records identified as discrepant. Due to both the volume of records and "manual" effort that is needed to confirm the resolved records, and identify records that are pending resolution, this process is labor intensive and protracted. DHCS remains committed to correcting all records and recovering erroneous payments where allowable. DHCS will be able to provide evidence of progress by end of first quarter 2020.

California State Auditor's Assessment of Status: Pending

According to Health Care Services' response, implementation of this recommendation is still pending.

CSA cited five counties that are responsible for 85 percent of the system discrepancies. The Medi-Cal Eligibility Data System (MEDS) alerts pilot targets these 5 counties plus San Francisco. On August 1, 2019, DHCS sent each county a report that contains alerts that are indicative of a discrepancy between systems. Counties are asked to reduce the backlog alerts by ten percent. DHCS tracks progress by:

1. Refreshing the list on a monthly basis

2. Generating a report that does a comparison of the prior and current lists to

determine:

 The number of alerts resolved.

 The number of ongoing alerts.

 The number of new alerts.

The reduction requirement is met when the total number of alerts on the current list and the new alerts is ten percent lower than the previous list. DHCS will work with counties to develop and implement processes to ensure the requirement is met.

DHCS implemented an "Aid Code Clean-up" effort in November 2018. DHCS carefully monitors counties' progress and emails counties "progress reports" when sufficient progress is not demonstrated. Counties are required to provide a response that demonstrates how the county plans to increase the reduction rate. This effort targets aid codes that are most prone to causing discrepancies between systems.

On August 19, 2019, DHCS provided documentation to CSA substantiating that the pilot is fully implemented.

California State Auditor's Assessment of Status: Pending

Health Care Services did not provide evidence for us to substantiate its claim that it had fully implemented the recommendation.

DHCS is currently working with counties to resolve these records. DHCS will send counties an updated list of records that continue to be discrepant on a monthly basis, and will ensure that counties are making satisfactory progress by comparing the previous list to the current list, and calculating the number of records resolved each month. DHCS will increase oversight activities for counties that do not demonstrate sufficient progress by June 30, 2019.

California State Auditor's Assessment of Status: Partially Implemented

Health Care Services provided evidence that it is in the process of implementing a pilot program that aims to reduce backlogged alerts. However, Health Care Services' pilot program is only being implemented at a selection of counties and it will not yet address all of the discrepancies we identified in our report. In addition, the evidence that Health Care Services provided does not indicate what progress, if any, it has made in recovering erroneous payments.

DHCS is currently working with counties to resolve these records. DHCS will send counties an updated list of records that continue to be discrepant on a monthly basis, and will ensure that counties are making satisfactory progress by comparing the previous list to the current list, and calculating the number of records resolved each month. DHCS will increase oversight activities for counties that do not demonstrate sufficient progress by June 30, 2019.

California State Auditor's Assessment of Status: Pending

As of November 2018, DHCS implemented a monitoring process that is expected to assist in resolving the system discrepancies identified in this audit. In January 2019, DHCS will run these records against Medi-Cal Eligibility Data System (MEDS) to ensure that there is a sufficient decrease in the number of discrepant records, and implement any modifications as needed. The outcome of this run will assist DHCS in providing an estimated implementation date; at this point, this date is unknown. Due to the volume of records, DHCS cannot commit to resolving all discrepancies and recovering associated erroneous payments by June 2019, but does commit to demonstrating reasonable progress by this date.

California State Auditor's Assessment of Status: Pending

All Recommendations in 2018-603

Agency responses received are posted verbatim.