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Department of Health Care Services
Millions of Children in Medi-Cal Are Not Receiving Preventive Health Services

Report Number: 2018-111

March 14, 2019

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report regarding the Department of Health Care Services’ (DHCS) oversight of the delivery of preventive services to children in the California Medical Assistance Program (Medi-Cal). Medi-Cal makes medical services available for more than half of the State’s children, and this report concludes that millions of children do not receive the preventive services to which they are entitled. In fact, California ranks 40th for all states in providing preventive health services to children. Furthermore, utilization rates for these services vary widely throughout the State depending on region, age, and other demographic indicators. The interactive dashboard demonstrates these differences.

One key reason that children do not receive preventive services is that, in many parts of the State, access to providers who treat children in Medi-Cal is limited. Limited access is due, in part, to low reimbursement rates for Medi-Cal providers. California could address this problem through financial incentives, such as pay-for-performance programs, similar to those offered in states with higher utilization rates. Such programs would likely require additional funding, but they would lead to healthier children and reduced health care costs over time.

Another barrier to children receiving preventive health care services is DHCS’ deficient oversight of the managed care plans (plans) through which 90 percent of the children in Medi-Cal enroll. DHCS delegates much of its responsibility to ensure access and use of children’s preventive services to these plans, and this report recommends that DHCS improve its oversight by doing the following three things:

Overall, DHCS’ improved oversight of plans could help increase children’s use of Medi-Cal-provided preventive services and, thereby, improve the health of children and reduce long-term health care costs.

Respectfully submitted,

California State Auditor

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