October 30, 2018 2018-603
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
This report presents the results of our high risk audit concerning $4 billion in questionable California Medical Assistance Program (Medi-Cal) payments that the Department of Health Care Services (Health Care Services) made from 2014 through 2017 because it failed to ensure that counties resolved discrepancies between the state and county Medi-Cal eligibility systems. Counties are generally responsible for determining Medi-Cal eligibility and for recording this information in their eligibility systems, which then transmit the beneficiaries’ information and Medi-Cal eligibility to the State’s eligibility system. Health Care Services uses the information from the State’s eligibility system to determine the amount that it pays for Medi-Cal beneficiaries. Although Health Care Services has established a process for notifying counties of beneficiary records that require follow-up, gaps in this process allowed the problems we identified to persist.
Our statewide comparison of Medi-Cal beneficiary eligibility data identified pervasive discrepancies between the state and county systems. Specifically, our analysis of 10.7 million Medi-Cal beneficiary records from December 2017 revealed more than 453,000 beneficiaries marked as eligible in the State’s eligibility system although they were not listed as eligible in the counties’ eligibility systems for at least three months. Upon examining the data for these beneficiaries from 2014 through 2017, we found that 57 percent of these discrepancies had persisted for more than two years. Many of these discrepancies resulted from Health Care Services failing to ensure that counties had evaluated the Medi-Cal eligibility of beneficiaries transitioning from other programs. One reason counties failed to complete those evaluations promptly was because of the implementation of the federal Patient Protection and Affordable Care Act which created a backlog of Medi-Cal applications and eligibility redeterminations.
In addition to questionable payments, we identified more than 54,000 individuals who were not recorded as eligible for Medi-Cal in Health Care Services’ system, even though the counties’ records indicated that they were eligible. Because health care providers use Health Care Services’ records to authorize care for beneficiaries, eligible individuals may encounter hardship when their eligibility status is not accurately reflected in Health Care Services’ records. Further, there may be additional data discrepancies related to people who qualify for Medi-Cal benefits through other entitlement programs.
Respectfully submitted,
ELAINE M. HOWLE, CPA
California State Auditor