Report 2013-119 Recommendation 20 Responses
Report 2013-119: California Department of Health Care Services: Its Failure to Properly Administer the Drug Medi-Cal Treatment Program Created Opportunities for Fraud (Release Date: August 2014)
Recommendation #20 To: Health Care Services, Department of
To prevent the certification of ineligible providers, Health Care Services should immediately establish a mechanism to identify the number of program sites the provider applicants' medical directors work at, and ensure that the physician ratio does not exceed 1-to-3 in accordance with state law and the certification standards.
Annual Follow-Up Agency Response From November 2019
The physician ratio requirement in Welfare and Institutions (W&I) Code Section 14043.47 applies to physicians who are doing business as a sole proprietorship, partnership or professional corporation, or meets the definition of a rendering physician provider. To the extent that any DMC medical director qualifies as either a physician doing business as a sole proprietorship, partnership, or professional corporation, or a rendering physician provider as defined in California Code of Regulations (CCR) Section 51000.21, DHCS implemented, in October 2019, a new procedure to ensure compliance with the physician ratio in Section 14043.47. DHCS will deny a physician application that does not meet this requirement.
DHCS has implemented this recommendation to the extent applicable, but it is not applicable to DMC clinics or their medical directors, as recommended by CSA, because the medical directors do not own the clinic(s) as a sole proprietorship, partnership, or professional corporation, and are not rendering physician providers as defined in CCR, Title 22, Section 51000.21.
DHCS maintains our ability to identify medical directors and their specific DMC affiliations through current application and reporting mechanisms. However, WIC Section 14043.47 applies to physician practices that utilize non-physician medical practitioners, such as nurse practitioners and physician assistants, to ensure that these practices comply with statutory supervision requirements. For example, the Business and Professions (B&P) Code Section 2836.1(e) states, "no physician and surgeon shall supervise more than four nurse practitioners at one time." Physician assistants are also limited to four per supervising physician, pursuant to B&P Code Section 3516(b).
- Completion Date: October 2019
California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented
Health Care Services provided a copy of its new procedures which addresses cases in which medical directors either own the DMC clinic as a sole proprietorship, partnership, or professional corporation, or act within the capacity of a rendering physician provider.
Annual Follow-Up Agency Response From November 2018
The requirement to enroll all medical directors of DMC clinics became effective 8/17/2015. On 11/2/2015, PED solicited a medical director application for all certified DMC providers and any DMC applications pending certification. Of the 926 DMC's solicited, 21 locations were deactivated for failure to comply with the solicitation and an additional 68 were denied, withdrawn, or decertified for other reasons. This will remain an ongoing requirement for any new DMC applicant. DHCS is able to identify the medical director to their specific DMC affiliations through current reporting mechanisms.
- Completion Date: March 2016
California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented
Health Care Services provided a copy of a tracking spreadsheet that shows it has a mechanism for identifying the active Drug Medi-Cal providers and their associated medical directors. However, to the extent the physician ratio in Welfare and Institutions Code section 14043.47 applies to medical directors, DHCS has not taken steps to ensure the physician ratio has not been exceeded.
- Auditee did not address all aspects of the recommendation
Annual Follow-Up Agency Response From November 2017
Health Care Services did not provide an updated response to this recommendation.
- Estimated Completion Date: Unknown
California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken
Annual Follow-Up Agency Response From October 2016
The requirement to enroll all medical directors of DMC clinics became effective 8/17/2015. On 11/2/2015, PED solicited a medical director application for all certified DMC providers and any DMC applications pending certification. Of the 926 DMC's solicited, 21 locations were deactivated for failure to comply with the solicitation and an additional 68 were denied, withdrawn, or decertified for other reasons. This will remain an ongoing requirement for any new DMC applicant. DHCS is able to identify the medical director to their specific DMC affiliations through current reporting mechanisms.
- Completion Date: March 2016
California State Auditor's Assessment of Annual Follow-Up Status: Pending
Although Health Care Services asserts that it fully implemented this recommendation, it did not provide any documentation to support its assertion.
1-Year Agency Response
Welfare and Institutions Code section 14043.47 applies to providers doing business as sole proprietorships, partnerships, professional corporations under section 14301 of the Corporations Code, or as rendering providers in a group practice that utilizes nonphysician medical staff. Section 14043.47(c), which establishes the prohibition on providers enrolling at more than three business addresses unless there is at least a ratio of one physician supervisor per three locations, applies to the foregoing types of practices. Upon implementation of the automated enrollment system for all PED approved certified DMC providers, DHCS will be able to automatically identify the medical directors and their specific DMC affiliations. To the extent that any DMC medical director falls within the scope of section 14043.37(c), DHCS will take action to enforce the stated physician ratio.
- Estimated Completion Date: May 2016
- Response Date: August 2015
California State Auditor's Assessment of 1-Year Status: Pending
Date of implementation is set for May 2016.
6-Month Agency Response
Welfare and Institutions Code section 14043.47 applies to providers doing business as sole proprietorships, partnerships, professional corporations under section 14301 of the Corporations Code, or as rendering providers in a group practice that utilizes nonphysician medical staff. Section 14043.47(c), which establishes the prohibition on providers enrolling at more than three business addresses unless there is at least a ratio of one physician supervisor per three locations, applies to the foregoing types of practices. Upon implementation of the automated enrollment system for all PED approved certified DMC providers, DHCS will be able to automatically identify the medical directors and their specific DMC affiliations. To the extent that any DMC medical director falls within the scope of section 14043.37(c), DHCS will take action to enforce the stated physician ratio.
- Estimated Completion Date: May 2015
- Response Date: February 2015
California State Auditor's Assessment of 6-Month Status: Pending
60-Day Agency Response
No update.
- Estimated Completion Date: May 2015
- Response Date: October 2014
California State Auditor's Assessment of 60-Day Status: No Action Taken
Based on its response, the department has not yet implemented this recommendation. In addition, it has not provided any information to indicate that it has taken any action on this recommendation.
All Recommendations in 2013-119
Agency responses received are posted verbatim.