Report 2021-046 Recommendation 4 Responses

Report 2021-046: Proposition 56 Tobacco Tax: The Department of Health Care Services Is Not Adequately Monitoring Provider Payments Funded by Tobacco Taxes (Release Date: November 2022)

Recommendation #4 To: Health Care Services, Department of

To ensure that managed care plans issue Proposition 56 supplemental payments only when providers have actually performed the services in question, DHCS should do the following:

-By June 2023, begin annually selecting a sample of Proposition 56 supplemental payments of a sufficient size to ensure that it can project the results of its review to the population of services that receive supplemental payments, and requesting the underlying medical records to confirm that the services were provided.

1-Year Agency Response

DHCS has fully implemented this process. As stated in the prior update, DHCS has augmented its annual managed care program to specifically test for Prop 56 supplemental payments. See Attachment 2 in Substantiation folder for Exhibit 3-Audit Guide Cat 6. Specifically, subsection 6.3 within the exhibit. If there are findings of non-compliance in DHCS test work, specifically, MCP(s) unable to provide evidence of eligible medical services for reimbursement, DHCS would exercise its corrective action process and implement additional monitoring and oversight mechanisms.

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

DHCS has fully implemented this recommendation by requiring its staff to select a sample of encounters with Proposition 56 codes and requesting managed care plans to provide the corresponding medical records. DHCS then compares those records to the encounter data submitted by the managed care plans.

6-Month Agency Response

Health Care Services did not submit a response to this recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

60-Day Agency Response

Health Care Services did not submit a response to this recommendation.

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2021-046

Agency responses received are posted verbatim.