Summary

December 2014 California Department of Health Care Services Weaknesses in Its Medi‑Cal Dental Program Limit Children’s Access to Dental Care Report 2013‑125 COMMITMENT INTEGRITY LEADERSHIP The first five copies of each California State Auditor report are free. Additional copies are $3 each, payable by check or money order. You can obtain reports by contacting the California State Auditor’s Office at the following address: California State Auditor 621 Capitol Mall, Suite 1200 Sacramento, California 95814 916.445.0255 or TTY 916.445.0033 OR This report is also available on our Web site at www.auditor.ca.gov. The California State Auditor is pleased to announce the availability of an online subscription service. For information on how to subscribe, visit our Web site at www.auditor.ca.gov. Alternate format reports available upon request. Permission is granted to reproduce reports. For questions regarding the contents of this report, please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255. For complaints of state employee misconduct, contact the California State Auditor’s Whistleblower Hotline: 1.800.952.5665. Elaine M. Howle State Auditor Doug Cordiner Chief Deputy December 11, 2014 2013‑125 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 (state auditor) presents this audit report concerning how the Medi‑Cal Dental Program (program), administered by the California Department of Health Care Services (Health Care Services), is fulfilling its mandate to ensure that children enrolled in Medi‑Cal (child beneficiaries) receive the dental care for which they are eligible. This report concludes that Health Care Services’ information shortcomings and ineffective actions are putting child beneficiaries at higher risk of dental disease. Federal data showed that nearly 56 percent of the 5.1 million children enrolled in Medi‑Cal in federal fiscal year 2013 did not receive dental care through the program. Our review of Health Care Services’ data for 2011 through 2013 found similar results. Studies we reviewed concerning utilization cite low provider participation among the factors contributing to low utilization rates. A primary reason for low dental provider participation rates is low reimbursement rates. California’s dental reimbursement rates are relatively low compared to national and regional averages and to the reimbursement rates of other states we examined. For example, California’s rates for the 10 dental procedures most frequently authorized for payment within the Medi‑Cal program’s fee‑for‑service delivery system in 2012 averaged $21.60, which is only 35 percent of the national average of $61.96 for the same 10 procedures in 2011. Although California as a whole appeared to have an adequate number of active providers to meet child beneficiaries’ dental needs as of January 2014, five counties may lack active providers. In addition, 11 counties had no providers willing to accept new Medi‑Cal patients while 16 other counties appear to have an insufficient number of providers. Furthermore, recent changes in federal and state laws that increase the number of children and adults who can receive additional covered dental services make us question whether there will be enough dental providers to meet the needs of Medi‑Cal beneficiaries. We estimate that these changes could increase the number of individuals using Medi‑Cal dental services from 2.7 million to as many as 6.4 million people. Health Care Services has also failed to adequately monitor the program. For instance, it has not complied with state law requiring it to annually review reimbursement rates to ensure reasonable access of Medi‑Cal beneficiaries to dental services. In addition, Health Care Services has not enforced certain terms of its contract with Delta Dental of California (Delta Dental) related to improving beneficiary utilization rates and provider participation. For instance, under this contract, in effect since 2004, Health Care Services has not required Delta Dental to contract with fixed facilities or mobile clinics to provide dental services in underserved areas. Health Care Services also fails to track each county’s ratio of providers to beneficiaries, and thus cannot effectively measure children’s access to and availability of dental services in each county, nor can it accurately predict whether sufficient numbers of providers are available to meet the increasing needs of the program. Respectfully submitted, ELAINE M. HOWLE, CPA State Auditor 621 Capitol Mall, Suite 1200 Sacramento, CA 95814 916.445.0255 916.327.0019 fax www.auditor.ca.gov Blank page inserted for reproduction purposes only. California State Auditor Report 2013-125 v December 2014 Contents Summary 1 Introduction 7 Chapter 1 Some Children Enrolled in Medi‑Cal May Face Difficulties Accessing Dental Services 17 Recommendations 36 Chapter 2 The California Department of Health Care Services Has Failed to Monitor the Medi‑Cal Dental Program Adequately 39 Recommendations 57 Appendix A Data Results for the Medi‑Cal Dental Program 61 Appendix B Data Results for the Healthy Families Dental Program 69 Response to the Audit California Department of Health Care Services 71 California State Auditor’s Comments on the Response From the California Department of Health Care Services 85 vi California State Auditor Report 2013-125 December 2014 Blank page inserted for reproduction purposes only. California State Auditor Report 2013-125 1 December 2014 Summary Results in Brief Audit Highlights . . . Through the California Medical Assistance Program (Medi‑Cal), Our audit of the California Medical the State of California participates in the federal Medicaid program, Assistance Program (Medi‑Cal) Dental which provides health care services to the aged, disabled, and Program, administered by the California indigent. The California Department of Health Care Services Department of Health Care Services (Health (Health Care Services) is the single state agency responsible for Care Services), highlighted the following: administering Medi‑Cal. Unfortunately, Health Care Services’ » Although the proportion of children information shortcomings and ineffective actions are putting who had at least one dental procedure children enrolled in Medi‑Cal—child beneficiaries—at higher risk performed during the year —utilization of dental disease.1 Health Care Services is responsible for meeting rate—increased each year from 2011 the health care needs, including the dental needs, of enrolled to 2013, Health Care Services has not individuals and families who rely on public assistance under established criteria for assessing utilization Medi‑Cal. According to the U.S. Department of Health and Human rates under the fee‑for‑service model. Services (HHS), tooth decay is almost entirely preventable through a combination of good oral health habits at home, a healthy diet, » While overall California appears to have and early and regular use of preventive dental services. Tooth decay an adequate number of active providers in children can cause significant pain and loss of school days, and it to meet the dental needs of child can lead to infections and even death. beneficiaries, some counties lacked active providers for children in the program. Child beneficiaries in the Medi‑Cal Dental Program (program) » California’s reimbursement rates for the can receive services under two delivery models: fee‑for‑service 10 dental procedures most frequently and managed care. Although California’s utilization rate for authorized for payment within the child beneficiaries—the proportion of children who had at least program in 2012 averaged $21.60—only one dental procedure performed during the year—increased by as 35 percent of the national average for much as 1.2 percentage points each year from 2011 to 2013, its annual these same procedures in 2011. utilization rates are still lower than those of many other states. Despite this fact, Health Care Services has not established criteria » We estimate that recent changes in for assessing utilization rates under the fee‑for‑service model. Data federal and state laws could increase from HHS’s Centers for Medicare and Medicaid Services (CMS) the number of individuals using indicate that nearly 56 percent of the 5.1 million children enrolled dental services through Medi‑Cal from in Medi‑Cal in federal fiscal year 2013—October 1, 2012, through 2.7 million to as many as 6.4 million. September 30, 2013—did not receive dental care through the program. The CMS data indicate that the national average utilization » Health Care Services has not reviewed rate was 47.6 percent and ranged from a low of 23.7 percent in reimbursement rates annually as required Ohio to a high of 63.4 percent in Texas for that same federal fiscal and thus, may remain unaware of their year. CMS’s data also indicate that California’s utilization rate of impact on access to dental services. 43.9 percent was the 12th worst among the states that submitted » Health Care Services has not enforced data. Our review of Health Care Services’ data for 2011 through 2013 certain contract provisions related to found similar results. Studies we reviewed concerning utilization increasing utilization. rates for Medicaid child beneficiaries suggested several reasons for low utilization rates, including an uneven distribution of dentists » Health Care Services’ current data nationwide and a relatively small number of dentists who participate collection efforts lack the specificity in Medicaid. required to fully meet federal and state reporting requirements. 1 We refer to people enrolled in Medi‑Cal as beneficiaries. Individuals under age 21 enrolled in Medi‑Cal are child beneficiaries. 2 California State Auditor Report 2013-125 December 2014 Health Care Services also has not formally established criteria for assessing provider participation under the fee‑for‑service model. Therefore, we used a ratio of one provider to every 2,000 child beneficiaries—or 1:2,000—for this audit as an indicator of geographic areas in which an insufficient number of dental service providers may exist. We chose this ratio primarily because state regulations require that all managed care enrollees have a residence or workplace within 30 minutes or 15 miles of a contracting or plan‑operated primary care provider and that providers exist in such numbers and distribution so that all enrollees experience a ratio of at least one primary care provider (on a full‑time equivalent basis) to every 2,000 enrollees. As of January 2014, California as a whole appeared to have an adequate number of active providers to meet the dental needs of child beneficiaries because its provider‑to‑beneficiary ratio for child beneficiaries did not exceed 1:2,000.2 However, some counties lacked active providers for children in the program. For example, Health Care Services data showed that five counties with roughly 2,000 child beneficiaries who received at least one dental procedure in 2013 may not have any active Medi‑Cal dental providers. Because of data limitations, we were unable to identify the providers rendering dental services to these 2,000 child beneficiaries. Furthermore, Health Care Services’ data show that in 2013 11 counties had no dental providers willing to accept new Medi‑Cal patients and that 16 counties had provider‑to‑beneficiary ratios above 1:2,000, indicating there may be an insufficient number of dental providers willing to accept new Medi‑Cal patients. Health Care Services has taken some actions to increase the fee‑for‑service delivery system’s provider participation, such as simplifying the administrative process by implementing an automated provider enrollment system, but much remains to be done. Studies indicate that one of the primary reasons for low dental provider participation is low reimbursement rates. California’s dental reimbursement rates are relatively low compared to national and regional averages and to the reimbursement rates of other states. For example, California’s reimbursement rates for the 10 dental procedures most frequently authorized for payment within the program in 2012 averaged $21.60, which was only 35 percent of the national average of $61.96 for those same 10 procedures in 2011. California has not raised its dental reimbursement rates since fiscal year 2000–01, and it implemented in September 2013 a 10 percent state‑mandated payment reduction for most dental service providers. 2 To be counted as an active provider for the purposes of this audit, a provider must have rendered at least one program dental procedure to at least one child beneficiary in the past year. California State Auditor Report 2013-125 3 December 2014 Although the statewide active provider‑to‑beneficiary ratio of 1:807 in 2013 appears sufficient to provide reasonable access to dental services for child beneficiaries, recent changes in federal and state laws that increase the number of children and adults who can receive additional covered dental services make us question whether California will have enough available dental providers to meet the needs of Medi‑Cal beneficiaries. For example, federal and state law expanded Medi‑Cal’s eligibility income limits and restored limited dental services for adult beneficiaries. We estimate that these changes in federal and state laws could increase the number of individuals using dental services through Medi‑Cal from 2.7 million to as many as 6.4 million. Health Care Services also has not complied with state law requiring it to review reimbursement rates annually. The purpose of this review is to ensure the reasonable access to dental services by Medi‑Cal beneficiaries. Health Care Services stated that it did not perform these reviews because of its workload and the State’s fiscal climate. However, Health Care Services did not notify the Legislature that it would not be conducting these reviews. Although Health Care Services is working toward a plan to incorporate annual rate reviews into its workload, it did not provide us with an estimated date of completion. If Health Care Services does not perform annual reimbursement rate reviews, it remains unaware of the impact of its reimbursement rates, and it cannot reasonably justify requesting from the Legislature changes to the reimbursement rates to ensure reasonable access to dental services by Medi‑Cal beneficiaries. In addition, Health Care Services has not complied with its plan for monitoring access to services. In its monitoring plan, Health Care Services stated that it would report yearly on its comparison of the results from a specific dental utilization metric with results from three national and statewide surveys. However, we evaluated a draft copy of the dental portion of Health Care Services’ access monitoring report, and the draft does not compare the results from Health Care Services’ utilization metric with the three surveys in its plan. According to the chief of the provider and beneficiary services section, Health Care Services’ Medi‑Cal Dental Services Division (division) did not include the comparisons because it thought another division was responsible for completing the dental metrics in the monitoring plan. He further stated that the division would be revising the dental section of the report to include the comparisons proposed in the monitoring plan. Because Health Care Services has not compared its child beneficiaries’ utilization data for Medi‑Cal dental services to the results of the three surveys, it lacks information necessary to determine whether California’s utilization rates are low. 4 California State Auditor Report 2013-125 December 2014 Health Care Services’ actions related to improving beneficiary utilization and provider participation have been ineffective. Our analysis of beneficiary utilization rates and provider‑to‑beneficiary ratios indicates that these activities have not resulted in meaningful improvements. For example, beneficiary utilization rates statewide increased by only 1.2 percentage points from 2011 to 2012 and by 1 percentage point from 2012 to 2013. Health Care Services is also not enforcing its key contract provisions related to improving beneficiary utilization rates and provider participation. Health Care Services has contracted with Delta Dental of California (Delta Dental) since 2004, at a maximum amount payable of up to $8.6 billion, to help administer the program. According to that contract, Delta Dental is responsible for performing several beneficiary and provider outreach activities. Even though Health Care Services believes that Delta Dental has fully complied with these provisions, we remain convinced that Delta Dental has not performed contract‑required outreach for improving dental access in underserved areas. For instance, Delta Dental has not contracted with entities to provide additional dental services through fixed facilities or mobile clinics. By not ensuring the performance of contract provisions aimed at increasing beneficiary utilization and provider participation in underserved areas, Health Care Services increases the risk that dental disease and tooth decay will affect children in those areas. Further, Health Care Services’ current data collection efforts lack the specificity required to fully meet federal and state reporting requirements. For example, federal law requires Health Care Services to report annually the number of children receiving specific types of dental services, but Health Care Services does not collect all of the data in sufficient detail to report accurately the number of children who have received these dental services. In addition, recently enacted state law requires Health Care Services to report on dental health access, dental care availability, and the effectiveness of preventive care and treatment. We believe that one critical measure of access and availability is each county’s provider‑to‑beneficiary ratio. Health Care Services does not currently track this type of information; thus it cannot effectively measure either children’s access to or the availability of dental services in each county, nor can it accurately predict whether sufficient numbers of providers are available to meet the increasing needs of the program. In addition, because of limitations in the data related to dental providers that Health Care Services collects, it cannot accurately calculate this ratio by county. Finally, Health Care Services and its fiscal intermediaries authorized reimbursements of more than $70,000 for dental services purportedly provided to deceased beneficiaries because it had not updated its beneficiary eligibility system with death information. California State Auditor Report 2013-125 5 December 2014 Recommendations To ensure that child beneficiaries throughout California can reasonably access dental services under Medi‑Cal and to increase beneficiary utilization and provider participation, Health Care Services should take the following steps for the fee‑for‑service delivery system by May 2015: • Establish criteria for assessing beneficiary utilization of dental services. • Establish criteria for assessing provider participation in the program. • Develop procedures to identify periodically any counties or other geographic areas where beneficiary utilization and provider participation fail to meet applicable criteria. • Immediately take actions to resolve any declining trends identified during its monitoring efforts. To ensure that the influx of beneficiaries resulting from recent changes to federal and state law is able to access Medi‑Cal’s dental services, Health Care Services should do the following: • Continuously monitor beneficiary utilization, the number of beneficiaries having difficulty accessing appointments with providers, and the number of providers enrolling in and leaving the program. • Immediately take actions to resolve any declining trends identified during its monitoring efforts. To make certain that Medi‑Cal beneficiaries have reasonable access to dental services, Health Care Services should immediately resume performing its annual reimbursement rate reviews, as state law requires. To ensure that child beneficiaries’ access to Medi‑Cal dental services is comparable to the general population’s access to service in the same geographic areas, Health Care Services should immediately adhere to its monitoring plan and compare its results measuring the percentage of child beneficiaries who had at least one dental visit in the past 12 months with the results from the three surveys conducted by other entities, as its state plan requires. 6 California State Auditor Report 2013-125 December 2014 To improve utilization rates and provider participation under the fee‑for‑service delivery system, Health Care Services should immediately take these actions to make certain that Delta Dental performs the following contract‑required outreach activities: • Direct Delta Dental to submit annually a plan that describes how it will remedy the dental access problems in underserved areas within California. • Direct Delta Dental to contract with one or more entities to provide additional dental services in either fixed facilities or mobile entities in underserved areas, as its contract requires. To meet the requirements of the new state law, Health Care Services should establish the provider‑to‑beneficiary ratio in each county as one of the performance measures designed to evaluate access and availability of dental services and require that the provider field in its data systems is populated in all circumstances. To ensure that it reports an accurate number of children who received specific types of dental services, Health Care Services should continue working on a solution to capture the details necessary to identify specific dental services rendered. To make certain that Health Care Services and its fiscal intermediaries reimburse providers for services rendered to eligible beneficiaries only, Health Care Services should do the following: • Obtain the U.S. Social Security Administration’s Death Master File and update its beneficiary eligibility system with death information monthly. • Coordinate with the appropriate fiscal intermediaries to recover any inappropriate payments made for services purportedly rendered to deceased beneficiaries. Agency Comments Health Care Services agrees with all but one of our recommendations. Regarding the recommendation that it establish the provider‑to‑beneficiary ratio statewide and by county as performance measures, Health Care Services states that it does not agree because these measures are not part of the reporting required by state law. California State Auditor Report 2013-125 7 December 2014 Introduction Background The federal Medicaid program provides funds to states to pay for the medical treatment of the needy. The State of California participates in the federal Medicaid program through its California Medical Assistance Program, known as Medi‑Cal, which provides health care services to the aged, disabled, and indigent. The California Department of Health Care Services (Health Care Services) is the single state agency responsible for administering Medi‑Cal. Federal regulations mandate that California’s state plan—essentially, a contract between the State and the federal government describing how it will administer its Medicaid program—meets the requirements for providing early and periodic screening, diagnostic, and treatment (EPSDT) services for beneficiaries under the age of 21 years. EPSDT services include dental screening services furnished by direct referral to a dentist for children beginning at 3 years of age and dental care, at as early an age as necessary, to relieve pain and infections, restore teeth, and maintain dental health. Health Care Services covers dental services through its Medi‑Cal Dental Program (program). In addition to the EPSDT dental services, the program covers emergency and essential diagnostic and restorative dental services for all Medi‑Cal beneficiaries, except for orthodontic care, fixed bridgework, and partial dentures that are not necessary for the balance of a complete artificial denture.3 However, the program generally does not cover certain services, such as periodontal treatment, for beneficiaries who are 21 years or older. The Joint Legislative Audit Committee (audit committee) specifically directed the California State Auditor (state auditor) to audit the program’s mandate to provide dental services to beneficiaries under the age of 21, whom we refer to as child beneficiaries. Child beneficiaries can receive services under the program through two delivery models: fee‑for‑service and managed care. Providers that wish to render dental services to Medi‑Cal beneficiaries must submit an application to Health Care Services to enroll in the program. Health Care Services’ Medi‑Cal Dental Program Provider Handbook (handbook) defines providers as individual dentists, certain registered dental hygienists, dental groups, dental schools, or dental clinics. Under the fee‑for‑service model, state regulations require that each provider receive the maximum reimbursement rate for dental services established by Health Care Services. However, if the provider’s billed amount is less than the maximum, the provider receives the lesser amount. 3 Effective May 1, 2014, state law restored certain dental benefits—such as dentures and crowns— to Medi‑Cal beneficiaries who are 21 years old or older. 8 California State Auditor Report 2013-125 December 2014 Health Care Services contracts with Delta Dental of California (Delta Dental) to perform fiscal intermediary services, such as adjudicating provider claims, and to underwrite the program’s fee‑for‑service delivery system.4 Figure 1 presents an overview of how child beneficiaries receive dental services via Medi‑Cal. Figure 1 Process Used by Child Beneficiaries Who Access Dental Services Under Medi‑Cal Parents or guardians (caregivers) enroll child beneficiaries in Medi-Cal at their designated county offices. Managed Care Delivery System Fee-for-Service Delivery System Caregivers select a managed care health plan and dental provider for each child beneficiary or the California Department of Health Care Services (Health Care Services) assigns each child Caregivers identify approved Medi-Cal dental providers beneficiary to a health plan and dental provider. Caregivers and make appointments for child beneficiaries. make appointments for child beneficiaries with the children’s established dental providers. Providers render dental services to child beneficiaries. Dental Managed Care Fee for Service Providers submit claims for the dental services they rendered. In accordance with the Manual of Criteria for Medi-Cal Authorization of Dental The providers’ managed care Services, Delta Dental of California, Health organizations process claims and Care Services' fiscal intermediary for reimburse providers.* dental services, processes claims and reimburses providers based on the services they rendered. Sources: Federal law, state law and regulations, and Health Care Services’ contracts with fiscal intermediaries and managed care organizations; the Medi‑Cal Dental Program Provider Handbook; and documentation from Health Care Services’ Web site. Note: Child beneficiaries can receive dental services from centers and clinics that include federally qualified health centers, rural health clinics, and Indian Health Service clinics. Xerox State Healthcare LLC, Health Care Services’ fiscal intermediary for medical services, or the beneficiaries’ managed care plans (if applicable), processes claims and reimburses the centers and clinics generally on a per‑visit basis. * Health Care Services pays each managed care organization a capitated rate based on the number of beneficiaries enrolled in the plan. 4 Delta Dental underwrites the program’s fee‑for‑service delivery system by paying providers’ claims and by billing Health Care Services weekly for cost reimbursements. California State Auditor Report 2013-125 9 December 2014 Since 1994, as part of the geographic managed care program, state regulations have required Health Care Services to provide dental services in geographic areas designated by Health Care Services; care is provided through dental‑only prepaid health plans licensed in accordance with the Knox‑Keene Health Care Service Plan Act of 1975 (Knox‑Keene Act) by the California Department of Managed Health Care. One of the Legislature’s purposes for implementing the Knox‑Keene Act was to ensure that patients receive available and accessible medical services that provide for continuity of care. For example, Health Care Services contracts with three prepaid health plans to provide Medi‑Cal dental services in the counties of Los Angeles and Sacramento. Health Care Services pays the prepaid health plans a fixed amount per month for each Medi‑Cal beneficiary regardless of the number or type of services they deliver. Medi‑Cal beneficiaries residing in Los Angeles County can access dental care through either the prepaid health plans or the fee‑for‑service delivery system, while Medi‑Cal beneficiaries residing in Sacramento County are—with the exception of specific populations—mandatorily enrolled in prepaid health plans for dental care. If Sacramento County beneficiaries are unable to secure services through their prepaid health plan in accordance with the applicable contractual time frames and the Knox‑Keene Act, they can qualify for the beneficiary dental exception, which allows them to move into the fee‑for‑service delivery system. In 2013, about 143,000 child beneficiaries received services under the dental managed care plans operating in the counties of Los Angeles and Sacramento. Finally, under Medi‑Cal, child beneficiaries may also obtain dental services from federally qualified health centers, rural health clinics, and Indian Health Service clinics (centers and clinics).5 These centers and clinics generally provide dental services to medically underserved locations or populations. Medi‑Cal allows these centers and clinics to bill for dental services. Federal law requires states to reimburse the centers and clinics for performing Medicaid services based on an annually adjusted rate. Specifically, the State calculates the centers’ and clinics’ payment for services on a per‑visit basis in an amount equal to 100 percent of their average costs for furnishing the dental services in the previous year, after adjusting for factors such as changes in the scope of services they are furnishing in the current year. However, Medi‑Cal reimburses Indian Health Service programs at 100 percent of the amounts expended for the services they render to Medi‑Cal beneficiaries. 5 Federal law defines federally qualified health centers as entities that provide primary health services, such as dental care, to a population that is medically underserved. In addition, federal law defines a rural health clinic as a clinic located in a rural area that has been designated as having a shortage of personal health services or primary medical care. Finally, federal law designates Indian Health Service programs as the health service program for Indians administered by the Indian Health Service within the U.S. Department of Health and Human Services. The program also serves non‑Indians. 10 California State Auditor Report 2013-125 December 2014 Health Care Services’ data indicate that about 550 centers and clinics provided Medi‑Cal dental services in 2013. These centers and clinics were located in 50 of California’s 58 counties and range from one in the counties of Lake, Nevada, Plumas, San Benito, Siskiyou, and Sutter to 90 in Los Angeles County. There were none in the counties of Alpine, Amador, Imperial, Inyo, Modoc, San Luis Obispo, Sierra, and Trinity. Medi‑Cal authorized payments to the centers and clinics for more than $127 million in 2012. This represented payments for more than 772,000 dental visits, an average of $164 per visit, which is much higher when compared to payments to Medi‑Cal dental providers. For example, Health Care Services’ 2012 data indicate that the average reimbursement per procedure for the Medi‑Cal dental providers was $20. Each visit can include either one or multiple procedures. Healthy Families Program The federal government’s State Children’s Health Insurance Program (CHIP) provides health insurance for medical, vision, and dental services to children in families with incomes too high to qualify for Medicaid but too low to afford private coverage. Like Medicaid, CHIP is administered by each state but is jointly funded by the federal government and states. Every state administers its own CHIP program with broad guidance from the U.S. Department of Health and Human Services (HHS). States have the option to run a separate CHIP program or a combined Medicaid and CHIP program. Until November 1, 2013, California operated separate Medicaid and CHIP programs. The Managed Risk Medical Insurance Board (board) was responsible for the administration of the Healthy Families Program, California’s CHIP program. Through managed care plans, the Healthy Families Program offered dental services to enrolled children. Families enrolled in this program paid a monthly premium determined by family size, family income, and the plan chosen. Enrolled families also paid copayments for certain dental procedures, such as a root canal. In 2012, about 7,200 providers rendered dental services to nearly 1.1 million children from birth to age 18 years in the Healthy Families Program. The State now runs a combined Medicaid and CHIP program. State law required that children enrolled in the Healthy Families Program transition to Medi‑Cal beginning January 1, 2013.6 Medi‑Cal covers these children under a new coverage group known as the Optional Targeted Low‑Income Children’s Program. According to the Health Care Services’ transition report submitted to the Legislature in July 2014, more than 750,000 former Healthy Families Program 6 State law exempted from this transition any infants linked to the Access for Infants and Mothers program whose families had incomes above 250 percent of the federal poverty level. California State Auditor Report 2013-125 11 December 2014 enrollees were receiving comprehensive health, dental, mental health, and substance use disorder services under Medi‑Cal’s new coverage group. Further, more than 470,000 additional children enrolled in Medi‑Cal under its new coverage group. Thus, roughly 1.2 million children were enrolled in Medi‑Cal as a result of the transition and changes to its income eligibility requirements. The 2014–15 Governor’s Budget did not provide funding for the board effective July 1, 2014, and thus, in effect, eliminated it. Scope and Methodology The audit committee directed the state auditor to audit the Medi‑Cal Dental Program to understand how it is fulfilling its mandate to ensure that children enrolled in the program receive the dental care for which they are eligible. Table 1 lists the audit committee’s objectives and the methods we used to address those objectives. Table 1 Audit Objectives and the Methods Used to Address Them AUDIT OBJECTIVE METHOD 1 Review and evaluate the laws, • Reviewed relevant state and federal laws and regulations, as well as other relevant information applicable rules, and regulations significant to the administration by the California Department of Health Care Services (Health Care Services) of to the audit objectives. the Medi‑Cal Dental Program (program), and the administration of the Healthy Families Program by the Managed Risk Medical Insurance Board (board). • Interviewed key Health Care Services and board staff. • Examined studies, reports, reviews, journal articles, issue briefs, compendiums, presentations, and papers (collectively, studies) regarding the provision of dental services under the federal Medicaid program. • Because our audit focused on state‑level activities, we did not examine local governments’ role in either program. Also, although our audit work included examining Health Care Services’ activities and data for the program’s fee‑for‑service and managed care delivery systems, most of the results described in our report pertain to the fee‑for‑service delivery system. The California Department of Managed Health Care oversees managed health care plans and their provision of dental services. Further, Health Care Services uses the managed care delivery system in only two of California’s 58 counties. In 2013 only 6.1 percent of the Medi‑Cal child beneficiaries received dental services from a managed care dental provider. 2 Compare the utilization rates • Analyzed beneficiary utilization data for the past three years for both programs to identify trends, and of specialty, preventative, and interviewed Health Care Services and board staff for their perspective. treatment services for children • Although Health Care Services’ periodicity schedule recommends seeing a dentist every six months (or enrolled in the Healthy Families twice per year), we assessed whether child beneficiaries in both programs received dental care at least Program and the program over once per year. Our approach is consistent with the approaches described in studies issued by the federal the past three years, to the Centers for Medicare and Medicaid Services (CMS) and others. extent the data are available. • To calculate a utilization rate, we included in the numerator any child beneficiary who received a paid dental service through either program during a calendar year and included in the denominator any child beneficiary who was enrolled in either program at any point during a calendar year. Although some studies we examined included only those beneficiaries who were continuously enrolled in a program for a certain length of time (for example, 90 consecutive days of continuous enrollment during the year), we did not use a similar approach because we did not want to exclude children from our analysis unnecessarily. • Health Care Services’ Medi‑Cal Dental Program Provider Handbook separates dental procedures into different categories, including diagnostic, preventive, and other categories such as restoration, endodontics, and periodontics. For purposes of our analysis, we considered dental procedures not categorized as either diagnostic or preventive to be treatment. Our approach is consistent with the approach used by CMS. continued on next page . . . 12 California State Auditor Report 2013-125 December 2014 AUDIT OBJECTIVE METHOD a. Assess reasons for any significant • Analyzed the beneficiary utilization rates of both programs, stratified by service type (for example, differences in utilization rates diagnostic, preventive, and treatment procedures). between the two programs. • Interviewed Health Care Services and board staff to determine the reasons for any significant differences between the two programs’ utilization rates. • We did not compare utilization rates between the two programs at the county level because the data we received for the Healthy Families Program did not consistently contain the beneficiaries’ residential addresses for the years 2009 to 2013. b. Determine the reasons for any • Reviewed and analyzed beneficiary utilization data from Health Care Services and the board. changes in the dental service • Because of the likelihood of incomplete data, we did not calculate changes in utilization rates for children access or utilization rates for formerly enrolled in the Healthy Families Program who were subsequently enrolled in the program. The children formerly enrolled in scope of our audit ends at December 31, 2013, and the State was still transitioning children from the Healthy Families Program the Healthy Families Program to the program until November 2013. Also, dental providers may submit a that are now enrolled in claim within six calendar months after the end of the month in which the service was performed for full the program. payment, and as late as 12 months after the end of the month in which the service was performed for 50 percent payment. 3 Review and determine the • Examined documents to identify Health Care Services’ efforts to improve beneficiary utilization rates and effectiveness of Health Care to evaluate its progress in implementing these efforts. Services’ efforts over the past • Compared California’s utilization rates to national and other states’ utilization rates. three years to improve the • Interviewed Health Care Services’ key staff. beneficiaries’ utilization of child dental care in the program. 4 Assess Health Care Services’ • Examined documents to identify Health Care Services’ efforts to increase provider participation and to efforts over the past five years evaluate its progress in implementing these efforts. to increase the participation of • Interviewed Health Care Services’ key staff. dental providers in the program. • Despite concerns we discuss in Chapter 1—and in the absence of any formal criteria established by Health Care Services—we used a ratio of one dental provider per 2,000 beneficiaries, or 1:2,000, as an indicator of geographic areas in which an insufficient number of dental service providers may exist. a. Review trends in the number • Reviewed and analyzed Health Care Service’s provider participation data for the past five years. of participating dental • Calculated a statewide provider participation ratio for each of the past five years and determined whether providers, to the extent data the result exceeded 1:2,000. are available. • Estimated the increase in the number of program beneficiaries using dental services based on recent changes in law. b. Assess the effectiveness of • Examined documents to identify Health Care Services’ outreach efforts to dental providers and to Health Care Services’ outreach determine whether those efforts were successful. efforts to dental providers. • Reviewed studies to identify methods other states used to successfully increase provider participation. • Interviewed Health Care Services’ key staff. 5 Determine the effect of • Reviewed the Medi‑Cal Dental Program Provider Handbook, which identifies in its Schedule of Maximum reimbursement rates over the Allowances the covered dental services and the fee‑for‑service maximum reimbursement rates. past three years on participation • Reviewed studies for how reimbursement rates could affect provider participation. of dental providers in the • Because prepaid health plans determine how they pay their dental providers (Health Care Services and Healthy Families Program and in the board pay the prepaid health plans a fixed amount per month for each Medi‑Cal beneficiary), we did the program. not obtain reimbursement rates that the program’s prepaid health plans in Los Angeles and Sacramento counties used to pay their providers, nor did we obtain reimbursement rates that the Healthy Families Program’s prepaid health plans used to pay their providers. Therefore, we did not include these rates as part of our analysis. a. Review trends in dental • Identified reimbursement rates for the program’s fee‑for‑service delivery model since 1994 and compared provider reimbursement rates trends in the reimbursement rates to the number of providers from 2011 through 2013. under both programs, to the • Identified and reviewed court cases relevant to the program’s fee‑for‑service reimbursement rates. extent data are available. • Compared the fee‑for‑service reimbursement rates for the 10 dental procedures most frequently authorized for payment under the program to national and regional average rates charged by private dentists for the same 10 procedures and to the Medicaid program’s fee‑for‑service rates for three other states. California State Auditor Report 2013-125 13 December 2014 AUDIT OBJECTIVE METHOD b. Compare and assess reasons Compared the program’s provider participation ratio to the ratio for the Healthy Families Program. Because for any significant differences the statewide ratios for both programs fell below 1:2,000, we performed no additional analysis. in dental provider participation in both programs. 6 Determine, for the most recent Analyzed Health Care Services’ 2013 provider participation data. We present a summary of these data in year that information is available, Appendix A. the availability of dental providers participating in the program for both general and specialist dental services throughout the State. a. Determine areas where the Analyzed Health Care Services’ 2013 provider participation data for each county. We present a summary of greatest gaps exist between these data in Appendix A. patient need and dental provider availability. b. Assess Health Care Services’ • Examined documents to identify Health Care Services’ efforts to improve provider availability and efforts to improve dental evaluated its progress in implementing these efforts. provider availability in areas • Interviewed Health Care Services’ and its fiscal intermediary’s key staff. where such gaps exist. • Assessed efforts by Health Care Services’ fiscal intermediary to implement contract provisions related to provider outreach. 7 Determine whether Health Care Reviewed relevant federal and state laws and regulations to assess the types of data Health Care Services is Services has appropriate data required to collect and report. collection methods to track beneficiary utilization and dental provider participation rates. a. Evaluate the effectiveness of • Interviewed staff at Health Care Services to gain an understanding of its current data collection methods. Health Care Services’ current • Reviewed Health Care Services’ draft report for the program in response to requirements set forth by data collection methods. Chapter 3, Statutes of 2011 (Assembly Bill 97). b. Assess Health Care Services’ Interviewed staff at Health Care Services to gain an understanding of its methods for tracking and responding plans to modify data collection to changes in state and federal laws. According to Health Care Services, it tracks changes through its regular methods in response correspondence and conference calls with CMS and by reviewing and tracking informational bulletins and to changes in state and clarifications on laws related to the provision of dental service. federal laws. 8 To the extent possible, identify • Compared California’s utilization and reimbursement rates to those of the states of Connecticut, Texas, factors that may contribute to the and Washington. We selected these three states primarily because they had high utilization rates program’s provider rates being compared to those of other states. lower than comparable programs • Interviewed key staff from the three states to identify factors contributing to their relatively high administered in other states. reimbursement rates and the factors they believed contributed to those higher rates. 9 Review and assess any other We did not identify any other significant issues. issues that are significant to the program. Sources: California State Auditor’s analysis of the Joint Legislative Audit Committee’s audit request number 2013‑125, planning documents, and analysis of information and documentation identified in the column titled Method. 14 California State Auditor Report 2013-125 December 2014 Assessment of Data Reliability In performing this audit, we obtained electronic data files extracted from the information systems listed in Table 2. The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of computer‑processed information that we use to support findings, conclusions, or recommendations. Table 2 describes the analyses we conducted using data from these information systems, our methodology for testing them, and the limitations we identified in the data. Although we recognize that these limitations may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations. Table 2 Methods Used to Assess Data Reliability INFORMATION SYSTEM PURPOSE METHOD AND RESULT CONCLUSION California Department To identify the number, We performed data‑set verification procedures and found no Undetermined of Health Care Services age, and county of errors. We also performed electronic testing of key data elements reliability for the (Health Care Services) residence for children and found no issues in the fields used for this analysis. purposes of this enrolled in the Medi‑Cal audit. Although this We did not perform accuracy or completeness testing because Fiscal Intermediary Access Dental Program. determination may testing the number and variety of data systems used in this audit to Medi‑Cal Eligibility affect the precision would be cost‑prohibitive. system (FAME) of the numbers we present, there is Eligibility data for sufficient evidence calendar years 2009 in total to support through 2013 our audit findings, conclusions, and recommendations. Health Care Services To identify the number We performed data‑set verification procedures and found no Undetermined of dentists accepting errors. We also performed electronic testing of key data elements reliability for the California Dental Medicaid new patients as of and found no errors in the fields used for this analysis. purposes of this Management Information December 28, 2013. audit. Although this We did not perform accuracy or completeness testing because System (CD‑MMIS) determination may testing the number and variety of data systems used in this audit affect the precision would be cost‑prohibitive. Data for dental of the numbers we service providers present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations. California State Auditor Report 2013-125 15 December 2014 INFORMATION SYSTEM PURPOSE METHOD AND RESULT CONCLUSION Health Care Services To identify the number We performed data‑set verification procedures and found no Undetermined and type of dental errors. We also performed electronic testing of key data elements reliability for the California Medicaid services performed, and found no issues in the fields used for this analysis. purposes of this Management Information and the amounts audit. Although this We did not perform accuracy or completeness testing because System (CA‑MMIS) and authorized for payment determination may testing the number and variety of data systems used in this audit CD‑MMIS for these services from affect the precision would be cost‑prohibitive. January 2009 through of the numbers we Data for paid or denied December 2013. present, there is dental claims sufficient evidence To identify the counties in total to support in which providers our audit findings, performed dental conclusions, and services in 2013. recommendations. To identify the number We performed data‑set verification procedures and found no Not sufficiently reliable of dentists rendering errors. We also performed electronic testing of key data elements for the purposes of this Medi‑Cal dental services and found no issues in the fields used for this analysis. However, audit. Although we from January 2009 we were not able to determine the unique number of providers identified limitations through December 2013. because Health Care Services does not require that providers in the data that may who rendered certain types of dental services be identified in the affect the precision system. In fact, when we performed our analysis, we excluded of the numbers we nearly 18 percent of the more than 111 million dental services present, there is because we were unable to uniquely identify the providers of sufficient evidence these services in the data. Thus, we may be undercounting the in total to support number of providers who rendered dental services. our audit findings, conclusions, and We did not perform accuracy or completeness testing because recommendations testing the number and variety of data systems used in this audit would be cost‑prohibitive. U.S. Social Security To determine the We performed data‑set verification procedures and electronic Undetermined Administration death dates recorded testing of key data elements and did not identify any reliability for the (Social Security) for Social Security significant issues. purposes of this numbers associated audit. Although this Social Security does not guarantee the accuracy of the Death Death Master File with Medi‑Cal Dental determination may Master File; however, we did not perform accuracy and Program beneficiaries. affect the precision completeness testing of its data because the source documents Death records reported of the numbers we that support these data are maintained by the U.S. government, to Social Security as of present, there is and our access statute does not compel the U.S. government to March 2014 sufficient evidence provide us with records. in total to support our audit findings, conclusions, and recommendations. MAXIMUS, Inc. To identify the number We performed data‑set verification procedures and found no Undetermined and ages of children errors. We also performed electronic testing of key data elements reliability for the Healthy Families enrolled in the Healthy and found no issues in the fields used for this analysis. purposes of this Enrollment Database Families Program for audit. Although this We did not perform accuracy or completeness testing because (MAXe2) each year from 2009 determination may testing the number and variety of data systems used in this audit through 2013 affect the precision would be cost‑prohibitive. Enrollment records for the of the numbers we Healthy Families Program present, there is from 2009 through 2013 sufficient evidence in total to support our audit findings, conclusions, and recommendations. continued on next page . . . 16 California State Auditor Report 2013-125 December 2014 INFORMATION SYSTEM PURPOSE METHOD AND RESULT CONCLUSION Premier Access Insurance To identify the number For each of these databases, we performed data‑set verification Undetermined Company and Access of children receiving procedures and found no errors. We also performed electronic reliability for the Dental Plan Healthy Families Program testing of key data elements and found no issues in the fields purposes of this MCARE database services and the types of used for this analysis. However, the data did not include the audit. Although this services performed from rendering providers’ National Provider Identifier number for all determination may Delta Dental of California January 2009 through dental services, so we excluded these services from our analysis. affect the precision (Delta Dental) December 2013. Specifically, we excluded from the listed systems between zero of the numbers we MetaVance database percent to 2 percent of the total services. present, there is To uniquely identify sufficient evidence the dentists providing We did not perform accuracy or completeness testing because Health Net, Inc. in total to support dental services to testing the number and variety of data systems used in this audit HSP database our audit findings, Healthy Families Program would be cost‑prohibitive. conclusions, and beneficiaries. Western Dental recommendations. Services, Inc. Dansoft ERP database Data for dental services rendered from 2009 through 2013 Delta Dental To identify the number For both of these databases, we performed data‑set verification Undetermined DB2 database of children receiving procedures and found no errors. We also performed electronic reliability for the Healthy Families Program testing of key data elements and found no issues in the fields purposes of this SafeGuard Health Plans, services and the types used for this analysis. audit. Although this Inc. (SafeGuard) of services performed determination may We did not perform accuracy or completeness testing because NOVA database from January 2009 affect the precision testing the number and variety of data systems used in this audit through December 2013. of the numbers we would be cost‑prohibitive. Data for dental services present, there is rendered from 2009 sufficient evidence through 2013 in total to support our audit findings, conclusions, and recommendations. To uniquely identify For both of these databases, we performed data‑set verification Not sufficiently reliable the dentists providing procedures and found no errors. We also performed electronic for the purposes of this dental services to testing of key data elements and found that the data did not audit. Although we Healthy Families Program include the rendering providers’ National Provider Identifier identified limitations beneficiaries. number for all dental services, so we excluded these services from in the data that may our analysis. Specifically, we excluded nearly 25 percent of the affect the precision more than 2.3 million services rendered through SafeGuard and of the numbers we all of the nearly 37,000 services recorded in Delta Dental’s DB2 present, there is database. As a result, we may be undercounting the number of sufficient evidence providers who rendered dental services because we were unable in total to support to uniquely identify in the data the provider of these services. our audit findings, conclusions, and We did not perform accuracy or completeness testing because recommendations. testing the number and variety of data systems used in this audit would be cost‑prohibitive. Sources: California State Auditor’s analysis of various documents, interviews, and data obtained from the entities listed in this table. California State Auditor Report 2013-125 17 December 2014 Chapter 1 SOME CHILDREN ENROLLED IN MEDI‑CAL MAY FACE DIFFICULTIES ACCESSING DENTAL SERVICES Chapter Summary Children’s use of free dental services available through the California Medical Assistance Program (Medi‑Cal) is low. California’s utilization rates for children’s dental services, or the proportion of children enrolled in Medi‑Cal who had at least one dental procedure performed during a year, increased statewide by 1.2 percentage points from 2011 to 2012 and by 1 percentage point from 2012 to 2013; however, these utilization rates were still low compared to those of other states. According to the Centers for Medicare and Medicaid Services (CMS), part of the U.S. Department of Health and Human Services (HHS), dental disease and tooth decay are almost entirely preventable through a combination of an early and regular use of preventive dental services, a healthy diet, and good oral health practices. A CMS report indicates that California’s utilization rate of 43.9 percent was the 12th worst among states that submitted data to CMS in federal fiscal year 2013. The studies we reviewed concerning utilization rates for children who are beneficiaries of Medicaid programs cite low provider participation among the factors contributing to low utilization rates. In California, the number of active providers statewide appears sufficient to provide services to child beneficiaries.7 An active provider is one who rendered at least one dental procedure to at least one Medi‑Cal child beneficiary during the year. However, data from the California Department of Health Care Services (Health Care Services), which administers Medi‑Cal, show that some counties may not have enough active providers to meet the dental needs of child beneficiaries. For example, according to Health Care Services data, five counties, containing roughly 2,000 child beneficiaries who received at least one dental procedure in 2013 did not have any active providers in 2013. Because of data limitations, we were unable to identify the providers rendering dental services to these 2,000 child beneficiaries. Moreover, Health Care Services’ data show that in 2013 11 counties had no dental providers willing to accept new Medi‑Cal patients and that 16 counties had provider‑to‑beneficiary ratios above 1:2,000, indicating there may be an insufficient number of dental providers willing to accept new Medi‑Cal patients. 7 Individuals under age 21 enrolled in the Medi‑Cal program are child beneficiaries. 18 California State Auditor Report 2013-125 December 2014 According to several studies, including those published by CMS, The Children’s Partnership, the National Academy for State Health Policy, and the Urban Institute, dentists cite three main reasons for not participating in the Medicaid program: cumbersome administrative paperwork related to enrolling as a provider, seeking prior authorization for certain procedures, and obtaining reimbursement for rendering services; poor beneficiary behavior, such as frequently missing appointments; and low reimbursement rates. Health Care Services has taken some action to address these concerns, such as issuing guidance to providers on how to minimize missed appointments. However, its reimbursement rates for dental services are low. The fee‑for‑service reimbursement rates in 2012 for the 10 dental procedures most frequently authorized for payment under the Medi‑Cal Dental Program (program) averaged $21.60, which was only 35 percent of the national average of $61.96. Health Care Services has not increased reimbursement rates since fiscal year 2000–01. Finally, while the statewide active provider‑to‑beneficiary ratio of 1:807 in 2013 appears sufficient to provide reasonable access to Recent changes to Medi‑Cal make dental services for child beneficiaries, recent changes to Medi‑Cal us question whether there will be make us question whether there will be enough dental providers enough dental providers available available to meet the needs of children not previously receiving to meet the needs of children not services and of adults who can now receive additional covered previously receiving services and services. For example, federal and state law expanded Medi‑Cal’s of adults who can now receive eligibility income limits and restored some dental services for additional covered services. adults. We estimate that these changes in federal and state law could increase the number of individuals using Medi‑Cal’s dental services from 2.7 million to up to 6.4 million. Children’s Use of Medi‑Cal’s Dental Services Is Low The utilization rate for Medi‑Cal dental services by child beneficiaries is low relative to national averages and to the rates of other states. According to state law, the Legislature intends, whenever feasible, that the health care needs, including dental services, of enrolled families and individuals who rely on public assistance be met under Medi‑Cal. Federal law requires those states that provide the early and periodic screening, diagnostic, and treatment (EPSDT) benefit to children in their Medicaid programs to report data to CMS annually. CMS uses its Form 416: Annual Early and Periodic Screening, Diagnostic, and Treatment Participation Report (CMS‑416) to collect basic information from the states such as the number of children receiving dental services. California State Auditor Report 2013-125 19 December 2014 Our analysis of data from CMS‑416 for federal fiscal year 2013 (October 1, 2012 through September 30, 2013) shows that California had the 12th worst utilization rate for Medicaid children receiving dental services among 49 states and the District of Columbia (data from Missouri was unavailable). According to the CMS‑416 data, only 43.9 percent of California’s child beneficiaries received dental services in federal fiscal year 2013 while the national average for the 49 states and the District of Columbia was 47.6 percent. Utilization rates for the individual states ranged from a low of 23.7 percent in Ohio to a high of 63.4 percent in Texas. The HHS 2013 Annual Report on the Quality of Care for Children in Medicaid and CHIP states that tooth decay is almost entirely preventable through a combination of good oral health habits at home, a healthy diet, and early and regular use of preventive dental services. Tooth decay can cause significant pain and loss of school days and lead to infections and even death. Our analysis of Health Care Services’ data yielded results similar to those we derived from the CMS‑416 data for 2013. The program’s statewide utilization rates for child beneficiaries for 2011, 2012, and 2013 were 39.2 percent, 40.4 percent, and 41.4 percent, respectively.8 The California statewide utilization rate for child beneficiaries increased each year by 1.2 percentage points and 1 percentage point, respectively. However, the utilization rates for 26 of California’s 58 counties decreased from 2011 to 2013. In 2013, the utilization rates ranged from a low of 6.4 percent in Alpine County to a high of 53.4 percent in Monterey County. As Figure 2 on the following page indicates, California’s lowest utilization rates for child beneficiaries tended to be in rural counties.9 8 The 2.5 percentage point difference between the 2013 utilization rates can be attributed to CMS’s use of figures for child beneficiaries who had been continuously enrolled in Medicaid or a CHIP Medicaid expansion program for at least 90 days in the federal fiscal year and our use of figures for child beneficiaries who were enrolled in the program at any point during a calendar year. In addition, the difference can be attributed to CMS’s use of figures from federal fiscal year 2013 and our use of figures from calendar year 2013. 9 Health Care Services’ Primary, Rural, and Indian Health Division considers the following 14 counties to be urban: Alameda, Contra Costa, Los Angeles, Marin, Orange, Riverside, Sacramento, San Diego, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, and Ventura. This division considers the remaining 44 counties to be rural. 20 California State Auditor Report 2013-125 December 2014 Figure 2 The Medi‑Cal Dental Program’s 2013 Utilization Rates by County for Child Beneficiaries Counties’ percentages of child beneficiaries who received services under the Medi-Cal Dental Program: Up to 35 percent received dental services 35 percent to 40 percent received dental services More than 40 percent received dental services * Sacramento Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. The service utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. * The Dental Board of California’s Web site shows no licensed dentists located in Alpine County. California State Auditor Report 2013-125 21 December 2014 As Table 3 shows, utilization rates for child beneficiaries under the Medi‑Cal fee‑for‑service delivery system were highest in the State’s 14 urban counties, which contained 67 percent of California’s child beneficiary population in 2013, including nearly 30 percent in Los Angeles County alone. Utilization rates for managed care in Los Angeles County were low compared to the fee‑for‑service delivery system. The low rates may be because in Los Angeles County, Medi‑Cal beneficiaries also have the option to obtain dental services through the fee‑for‑service delivery system. Further, utilization rates for federally qualified health centers, rural health clinics, and Indian Health Service clinics (centers and clinics) were highest in California’s 44 rural counties. In both urban and rural counties, the fee‑for‑service delivery system utilization rates were significantly higher than utilization rates at centers and clinics. Tables A.1 through A.4 in Appendix A display additional information and analyses related to child beneficiaries’ utilization rates for dental services. Table 3 Differences Between the Medi‑Cal Dental Program’s Utilization Rates for Child Beneficiaries in Urban and Rural Counties From 2011 Through 2013 UTILIZATION RATES 2011 2012 2013 Utilization Rates in the Fee‑for‑Service Delivery System* Rural counties† 31.5% 31.8% 33.4% Urban counties† 33.6 33.8 34.2 Utilization Rates in the Managed Care Delivery System‡ Los Angeles County 3.3 3.9 5.6 Sacramento County 20.6 27.2 22.8 Utilization Rates in Centers and Clinics* Rural counties† 7.7 8.3 8.0 Urban counties† 4.0 4.7 4.9 Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services (Health Care Services), including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. * The service utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. The centers and clinics include federally qualified health centers, rural health clinics, and Indian Health Service clinics. † Health Care Services’ Primary, Rural, and Indian Health Division (division) considers the following 14 counties to be urban: Alameda, Contra Costa, Los Angeles, Marin, Orange, Riverside, Sacramento, San Diego, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, and Ventura. The division considers the remaining 44 counties to be rural. ‡ Because Health Care Services uses a managed care delivery system in Los Angeles and Sacramento counties, we used the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year in these counties as the denominator to calculate utilization rates. 22 California State Auditor Report 2013-125 December 2014 The studies, reports, reviews, articles, issue briefs, and papers (collectively, studies) we reviewed concerning utilization rates for Medicaid child beneficiaries cite several reasons for low rates. For example, an issue brief titled In Search of Dental Care: Two Types of Dentist Shortages Limit Children’s Access to Care published by The PEW Charitable Trusts in June 2013 cites an uneven distribution of dentists nationwide and a relatively small number of dentists who participate in Medicaid among the reasons why tens of millions of children lack access to dental care each year. We discuss the number of providers participating in the program (provider participation) in more depth in the next section. Many Counties Lack Active Providers or Providers Who Are Willing to Accept New Patients As noted earlier, studies indicate that the lack of providers rendering dental services can contribute to low utilization rates for Medicaid child beneficiaries. For example, according to the issue brief and action plan titled Fix Medi‑Cal Dental Coverage: Half of California Kids Depend on It (issue brief), which was published by The Children’s Partnership in January 2013, the primary reason that children enrolled in Medi‑Cal are not getting needed dental care is that too few dentists practice where they live. Health Care Services has not Health Care Services has not formally established criteria to measure formally established criteria to the adequacy of the beneficiaries’ access to dental services under the measure the adequacy of the program’s fee‑for‑service model. According to the acting division beneficiaries’ access to dental chief of its Medi‑Cal Dental Services Division (acting division services under the program’s chief), Health Care Services used a ratio of one provider for every fee‑for‑service model. 2,000 beneficiaries to monitor the adequacy of the fee‑for‑service delivery system during the Healthy Families Program transition. State regulations require health care service plans or specialized health care service plans to use this same ratio to demonstrate that they can render a comprehensive range of services that are readily available and accessible to all enrollees throughout the geographic regions in their service area. Specifically, the state regulations require that all enrollees have a residence or workplace within 30 minutes or 15 miles of a contracting or plan‑operated primary care provider and that providers exist in such numbers and distribution so that all enrollees experience a ratio of at least one primary care provider (on a full time equivalent basis) to each 2,000 enrollees. However, in its issue brief, The Children’s Partnership questioned the appropriateness of Health Care Services’ use of the 1:2,000 provider to‑beneficiary ratio to measure provider adequacy. Specifically, The Children’s Partnership stated that the ratio should factor in all of the providers’ patients, including those who have private insurance or are private payers. The Children’s Partnership California State Auditor Report 2013-125 23 December 2014 also stated that the ratio should account for the number of patients a provider treats and the number of available providers who treat certain subpopulations of children who have especially limited access to care, such as young children and children with special health care needs. Also according to the American Dental Association (ADA), a simple dentist‑to‑patient ratio cannot take into account the differing economic environments from region to region, state to state, and urban to rural. Therefore, the ADA does not recommend a dentist‑to‑patient ratio. In response to The Children’s Partnership’s concerns, the acting division chief acknowledged that the ratio is not meant to work for a fee‑for‑service delivery system because beneficiaries are free to choose any provider and thus, assessing the individual capacity of that provider is difficult because the provider does not know in advance how many beneficiaries he or she will treat. However, he stated that Health Care Services used the ratio because it is a recognized Knox‑Keene standard.10 Further, Health Care Services continually assesses provider participation within the program and is currently exploring a more appropriate method of network evaluation in light of the characteristics of a fee‑for‑service delivery system. Specifically, the acting division chief stated that Health Care Services needs to formally establish quality and access criteria to assess the adequacy of the child beneficiaries’ access to dental services under the program’s fee‑for‑service model. Although Health Care Services planed to establish such criteria by November 30, 2014, it did not meet this deadline. In addition, Health Care Services did not indicate that it would establish criteria for assessing provider participation under the fee‑for‑service model. We acknowledge the concern that the 1:2,000 provider‑to‑beneficiary ratio does not consider several factors and consequently does not necessarily tell the whole story of network adequacy in a given area. Nonetheless, in the absence of any formal criteria established by Health Care Services, we used the 1:2,000 provider‑to‑beneficiary Our analysis found that the number ratio to identify geographic areas in which an insufficient number of active providers in the program of dental service providers may exist. Our analysis found that statewide appears sufficient to the number of active providers in the program statewide appears provide reasonable access for sufficient to provide reasonable access for child beneficiaries.11 child beneficiaries. 10 State regulations require that Health Care Services’ dental‑only prepaid health plans be licensed in accordance with the Knox‑Keene Health Care Service Plan Act of 1975 (Knox‑Keene Act). State regulations implementing the Knox‑Keene Act provide that each enrollee must have a residence or workplace within 30 minutes or 15 miles of a contracting or plan‑operated primary care provider and that providers exist in such numbers and distribution so that all enrollees experience a ratio of at least one primary care provider to each 2,000 enrollees. 11 As discussed in this report’s Scope and Methodology section, Health Care Services does not require that the provider who rendered certain types of dental services be identified in two of Health Care Services’ data systems. Thus, because of this data limitation, we were not always able to identify the provider who rendered each service. As a result, our analysis of the numbers of dental providers and child beneficiaries may understate the number of providers who rendered dental services. 24 California State Auditor Report 2013-125 December 2014 Table 4 presents the number of active dental providers in the program statewide that rendered services to child beneficiaries and indicates that the provider‑to‑beneficiary ratio did not exceed the ratio of 1:2,000 for the five years from 2009 through 2013. For purposes of our analysis, we define active providers as those rendering at least one dental procedure to at least one Medi‑Cal child beneficiary during the year. Table 4 Ratios of Active Providers to Child Beneficiaries in the Medi‑Cal Dental Program From 2009 Through 2013 2009 2010 2011 2012 2013 Medi‑Cal dental child beneficiaries* 4,531,566 4,695,281 4,833,214 4,825,161 5,549,929† A D ct e i n ve ta p l r P o r v o i g d r e a r m s i ‡ n the Medi‑Cal 6,473 6,950 7,016 7,048 6,874§ Provider‑to‑beneficiary ratio 1:700 1:676 1:689 1:685 1:807 Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services (Health Care Services), including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: As discussed in the Scope and Methodology, because of a data limitation, we may be undercounting the number of providers who rendered dental services. * Child beneficiaries are Medi‑Cal enrollees under age 21. † According to the acting division chief of the Medi‑Cal Dental Services Division, the 15 percent increase in child beneficiaries from 2012 to 2013 was likely due to the Healthy Families Program transition. ‡ An active provider is an individual dentist, registered dental hygienist in an alternative practice, dental group, dental school, or dental clinic enrolled in the Medi‑Cal program to provide health care, dental services, or both to Medi‑Cal beneficiaries. To be counted as an active dental provider, the provider must have rendered at least one dental procedure to a child beneficiary in the Medi‑Cal Dental Program. The count includes fee‑for‑service providers, managed care providers, and providers associated with centers and clinics. We counted each provider only once per year for any dental procedure they rendered. § The data indicate that there was a 2.5 percent decrease in providers from 2012 to 2013. Health Care Services expressed concerns with our calculation of active providers and stated that enrolled providers rendering services actually increased during that period. However, Health Care Services did not provide documentation to support its statement. However, Health Care Services’ data showed that some counties may not have enough active providers to meet the dental needs of child beneficiaries in that geographic area. Because of our concerns with Health Care Services’ data, we were unable to formulate definitive conclusions on the sufficiency of dental access in these counties. Nonetheless, we calculated the number of dental providers in each county based on whether they were active providers or whether, according to Health Care Services, they were willing to accept new Medi‑Cal child beneficiaries. When we calculated the number of active providers for 2013 for each of the State’s 58 counties, Health Care Services’ data showed that five counties, containing roughly 2,000 child beneficiaries who received at least one dental procedure, may not have any active providers. Figure 3 identifies these counties. Because of data limitations, we were unable to identify the providers rendering dental services to these 2,000 child beneficiaries. California State Auditor Report 2013-125 25 December 2014 Figure 3 California Counties That Lacked Dental Providers for Child Beneficiaries in the Medi‑Cal Dental Program in 2013 Counties with no active Medi-Cal dental providers in 2013 Counties with active Medi-Cal dental providers in 2013 * Sacramento Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. To be counted as an active dental provider, the provider must have rendered at least one dental procedure to a child beneficiary in the Medi‑Cal Dental Program in 2013. As discussed in the Scope and Methodology, because of a data limitation, we may be undercounting the number of providers who rendered dental services. * The Dental Board of California’s Web site shows no licensed dentists located in Alpine County. 26 California State Auditor Report 2013-125 December 2014 Finally, Health Care Services’ data indicated that 27 counties identified in Figure 4 did not have any or may not have enough dental offices or providers willing to accept new Medi‑Cal Nearly 468,000 child beneficiaries child beneficiaries as of December 28, 2013. Nearly 468,000 child enrolled in Medi‑Cal and residing beneficiaries enrolled in Medi‑Cal and residing in these 27 counties in 27 counties did not receive any did not receive any dental services in 2013. The data show that dental services in 2013. 11 counties did not have any dental offices or providers willing to accept new Medi‑Cal child beneficiaries, while the other 16 counties had provider‑to‑beneficiary ratios above 1:2,000. Our calculation of the provider‑to‑beneficiary ratios for the 16 counties includes applying a 65 percent utilization rate to the number of child beneficiaries who did not receive a dental procedure in 2013 because all of these child beneficiaries are not likely to seek services in the future. Tables A.5 and A.6 in Appendix A provide additional information about the number of child beneficiaries and providers in each county. As mentioned previously, several studies cite dentists as reporting three main reasons for not participating in the Medicaid program: cumbersome administrative paperwork related to enrolling as a provider, to seeking prior authorization for certain procedures, and to obtaining reimbursement for rendering services; poor beneficiary behavior, such as frequent missed appointments; and low reimbursement rates. Those studies indicate that dentists generally believe the Medicaid enrollment procedures are lengthy, complex, and burdensome. According to the March 2008 study The Effects of Medicaid Reimbursement Rates on Access to Dental Care from the National Academy for State Health Policy, California dentists noted that the Medi‑Cal provider enrollment forms are paper‑based, lengthy, and not specific to dentists and that the forms require supplemental information that may be confusing to dentists. State law requires each prospective provider for any type of Medi‑Cal service to enroll in Medi‑Cal by submitting to Health Care Services for its review and approval a complete application form that is signed under penalty of perjury or that is notarized, a disclosure statement, a provider agreement, and all applicable attachments. These forms and attachments are about 22 pages. Health Care Services also requires each prospective rendering provider of dental services to complete the Medi‑Cal Rendering Provider Application/Disclosure Statement/ Agreement for Physician/Allied/Dental Providers form. The form is five pages, of which two pages are instructions. Although the prospective rendering providers must submit supplemental information with the form, the type of information Health Care Services requests of them appears to be unambiguous. For example, the requested supplemental information includes copies of the prospective provider’s driver’s license, professional license certificate, and proof of professional liability insurance. California State Auditor Report 2013-125 27 December 2014 Figure 4 California Counties That Lacked Providers or Lacked Sufficient Providers Willing to Accept New Medi‑Cal Dental Child Beneficiaries in 2013 Counties with no dental providers willing to accept new Medi-Cal child beneficiaries Counties with willing providers but with a provider-to-beneficiary ratio above 1:2,000* † Sacramento Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. * Because all child beneficiaries not having dental procedures in 2013 are not likely to seek services in the future, we applied a 65 percent utilization rate to estimate the number of child beneficiaries who could seek services from providers willing to accept new patients. The 65 percent utilization rate is based on data reported to the U.S. Department of Health and Human Services by 49 states and the District of Columbia for federal fiscal year 2013. † The Dental Board of California’s Web site shows no licensed dentists located in Alpine County. 28 California State Auditor Report 2013-125 December 2014 However, Health Care Services has not established an electronic process for submitting the applicable forms and any attachments. In August 2014, the California State Auditor issued California Department of Health Care Services: Its Failure to Properly Administer the Drug Medi‑Cal Treatment Program Created Opportunities for Fraud, report 2013‑119. In that report, the chief of Health Care Services’ Provider Enrollment Division (enrollment division) stated that the enrollment division was implementing a system that would automate its provider enrollment process and that it would be fully implemented by spring 2015. Further, the system would include efficiencies that should significantly reduce the time it takes to process applications. In that report, we recommended that Health Care Services continue its implementation of an automated provider enrollment system. Thus, Health Care Services has taken some actions and is working toward other actions that should address the concerns the California dentists noted in the 2008 study. Also according to those studies, dentists generally believe that the Medicaid prior authorization requirements are cumbersome and that they create barriers to participation in the program’s fee‑for‑service delivery system. State law establishes utilization controls for services rendered under Medi‑Cal. One utilization control is the prior authorization of a specified procedure based upon a determination of medical necessity by a Health Care Services’ consultant. State regulations require prior authorization through the submission and approval of a treatment authorization request (TAR). Health Care Services’ Medi‑Cal Dental Program Provider Handbook (handbook) generally excludes from prior authorization the diagnostic and preventive treatment codes as well as more than half of the billable codes for dental treatment procedures. For example, preventive dental prophylaxis and fluoride treatment procedures do not require prior authorization unless the frequency exceeds the stated limitations of Health Care Services’ 2012 data once in a six‑month period for beneficiaries under age 21 and once indicate that it paid roughly annually for beneficiaries ages 21 and older. Health Care Services’ $458 million to Medi‑Cal dental 2012 data indicate that it paid roughly $458 million to Medi‑Cal providers for services rendered dental providers for services rendered to child beneficiaries and to child beneficiaries and only only $40.9 million, or roughly 9 percent, of the services required $40.9 million, or roughly 9 percent, those providers to submit TARs. Thus, although the prior of the services required those authorization process may be cumbersome, it does not appear providers to submit treatment to be creating a barrier for providers to render dental services to authorization requests. child beneficiaries. Further, the studies stated that dentists generally believe the Medicaid billing and payment requirements create additional barriers to participating in the program. For example, state law requires Medi‑Cal dental providers to submit pretreatment radiographs or photographs with posttreatment claims to establish California State Auditor Report 2013-125 29 December 2014 the medical necessity for dental restorations when four or more dental fillings have been completed on a beneficiary in any 12‑month period. The purpose of this requirement is to reduce fraudulent claims for unnecessary fillings. According to Health Care Services’ handbook, 96, or 26 percent, of Medi‑Cal’s 369 codes for covered dental procedures require providers to submit radiographs or photographs for reimbursement. Health Care Services’ 2012 data indicated that Medi‑Cal dental providers were reimbursed for 312 procedure codes under the fee‑for‑service delivery system, of which 24.4 percent required radiographs or photographs as a condition of reimbursement. According to the acting division chief, Health Care Services has taken steps to reduce administrative barriers. Health Care Services The five “dental operating gave us five “dental operating instruction letters” that it identified instruction letters” that Health as reducing administrative barriers. Health Care Services issues Care Services identified as these instruction letters to its fiscal intermediary—Delta Dental of reducing administrative barriers California (Delta Dental)—to modify processes. However, these do not appear to reduce materially five instruction letters do not appear to reduce materially the the administrative barriers administrative barriers for providers. For instance, Health Care for providers. Services issued two instruction letters in September 2014. One instruction letter directed Delta Dental to make changes to the dental database to eliminate its review of photographs when none of the associated procedures on the provider’s claim require Delta Dental’s review to establish the medical necessity of the procedures. The acting division chief explained that this change benefits providers because it results in a reduction of the delays in Health Care Services’ review, claims adjudication, and payment processes. In fact, he stated that this change eliminates at least seven days in payment delays. The acting division chief did not provide us with documentation to support his assertion that this change shortens the payment process by seven days. Further, this change does not improve the process for providers because they must still submit the photographs with their claims. Another instruction letter directed Delta Dental to discontinue contacting the original provider when it receives multiple TARs from different providers for the same beneficiary within 60 days. Instead, Delta Dental is to deny the duplicate TARs. The acting division chief also stated that this change benefits providers because it reduces delays in Health Care Services’ review, claims adjudication, and payment processes. However, even though this modification benefits Delta Dental, it does not appear to benefit the providers. The remaining three instruction letters primarily focused on allowing providers to submit their referral forms to Health Care Services without signatures and by e‑mail and fax instead of by mail only; on eliminating the requirement for providers to include their names and permit numbers on the anesthesia records for certain dental procedures codes; and on establishing procedures 30 California State Auditor Report 2013-125 December 2014 for providers to request enrollment in the program as a preferred provisional provider if they meet the requirements set forth in state law. State law requires Health Care Services to notify applicants or providers who request consideration as preferred providers within 60 days of submitting their application whether they have met the applicable requirements. The preferred provisional provider enrollment procedures have been in effect since December 27, 2012. As of October 31, 2014, Delta Dental However, according to the quality management director of Delta had not enrolled any providers Dental’s State Government Programs, as of October 31, 2014, using the preferred provisional Delta Dental had not enrolled any providers using this provider enrollment process. enrollment process. Finally, the studies generally state that dental providers believe that poor behavior by beneficiaries, such as frequently missing appointments, creates barriers to providers’ participation in the program. In its 2013 strategy guide Keep Kids Smiling: Promoting Oral Health Through the Medicaid Benefit for Children & Adolescents, CMS cited poor patient compliance as a barrier to participation as reported by providers. Specifically, missed patient appointments are a reason providers often cite for not wanting to accept Medicaid patients because providers cannot charge for those missed appointments. In its February 2014 bulletin for program providers, Health Care Services presented best practices for providers to address no‑show rates, such as using e‑mail and automated system reminders and delivering appointment reminders in English and Spanish. According to Influence of Caregivers and Children’s Entry Into the Dental Care System, an April 2014 study published by the American Academy of Pediatrics, improving access to dental services for young children is a goal best achieved by engaging caregivers and families in a culturally, linguistically, and literacy‑appropriate manner. However, as we discuss more fully in Chapter 2, Health Care Services can do more to educate and assist the caregivers and families of Medi‑Cal’s child beneficiaries in accessing dental services. California’s Reimbursement Rates for the Medi‑Cal Dental Program Are Low California’s dental reimbursement rates are lower than national and regional averages and lower than the reimbursement rates of other states. Studies published by CMS, the National Academy for State Health Policy, and the National Bureau of Economic Research identify low reimbursement rates as a barrier to securing provider participation and thus children’s access to dental care and children’s subsequent utilization rates. California State Auditor Report 2013-125 31 December 2014 Based on the ADA’s 2011 Survey of Dental Fees, California’s reimbursement rates for the 10 fee‑for‑service procedures most frequently authorized for payment under the program in 2012 averaged $21.60, or 35 percent of the national average of $61.96. These reimbursement rates were just 31 percent of the average reimbursement of $70.32 for the same 10 procedures for the five states that fall into the Pacific Division of the U.S. Census Bureau— Alaska, California, Hawaii, Oregon, and Washington. Similarly, our comparison of California’s fee‑for‑service reimbursement rates for these 10 procedures with the fee‑for‑service rates of Connecticut, Texas, and Washington showed that California’s average reimbursement rates were lower. We selected these three states primarily because they were among the top five states with high percentages of Medicaid‑enrolled children in their programs receiving dental care according to The PEW Charitable Trusts’ June 2013 issue brief titled In Search of Dental Care: Two Types of Dentist Shortages Limit Children’s Access to Care. In other words, these states had high utilization rates. Table 5 on the following page presents our comparison of the 10 fee‑for‑service dental procedures most frequently authorized for payment in 2012 for child beneficiaries under the program with the national and regional averages and with the averages for the three other states. Medicaid officials from those three states believed their Medicaid officials from three states reimbursement rates were one of the factors leading to the states’ believed their reimbursement rates higher utilization rates. The dental program manager from were one of the factors leading to Connecticut stated that its high rates were driven by competitive the states’ higher utilization rates. reimbursement rates and the lessening of the administrative burden on providers related to claims processing and prior authorization. The dental program manager also stated that the reimbursement rates had last been updated in 2008 in accordance with a 2008 class action settlement. Specifically, in the settlement agreement, Connecticut agreed to reimburse participating providers directly for rendering covered dental services to children enrolled in Medicaid at levels that are at least equal to the fee schedule specified in the agreement for patients under the age of 21. These fees represented an increase in dental reimbursement rates. In addition, the strategic decision support director (director) of Texas’ Health and Human Services Commission stated that Texas increased its reimbursement rates for selected commonly used dental procedures in 2008 as a result of a lawsuit. A corrective action order from a federal court directed the state to increase its reimbursement rates for dental providers in the 2008–09 biennium to 50 percent above the state fiscal year 2006–07 reimbursement rate levels. The director also stated that the data suggest the increase in the reimbursement rates was a primary driver in increasing Texas’ dental utilization rates. 32 California State Auditor Report 2013-125 December 2014 5 elbaT smargorP diacideM ’setatS rehtO dna margorP latneD laC‑ideM eht fo smetsyS yrevileD ecivreS‑rof‑eeF eht ni setaR tnemesrubmieR fo nosirapmoC ’SRENOITITCARP LARENEG STNEMESRUBMIER ’SMARGORP DIACIDEM ETATS )1102( STNEMESRUBMIER MUMIXAM S’AINROFILAC GNIDULCNI ,ECNAWOLLA S’AINROFILAC ‑NOTGNIHSAW TNEMYAP REDIVORP MUMIXAM NOTGNIHSAW 5 EGA HGUORHT TUCITCENNOC SAXET SNOITCUDER ECNAWOLLA NOISIVID CIFICAP LATNED TCEFFE NI( TCEFFE NI( EVITCEFFE( LITNU TCEFFE NI( EVITCEFFE( LITNU TCEFFE NI( SUSNEC .S.U EHT FO LANOITAN ERUDECORP )7002 ECNIS II)7002 ECNIS )8002 ,1 LIRPA §)2102 ,92 YRAURBEF )3102 ,5 REBMETPES ‡)3102 ,5 REBMETPES †EGAREVA UAERUB †EGAREVA *ERUDECORP LATNED FO EMAN *EDOC 37.12$ 64.92$ 00.53$ 58.82$ 05.31$ 00.51$ 30.25$ 01.44$ tneitap dehsilbatse–noitaulave laro cidoireP 0210D 46.33 83.04 00.56 23.53 05.22 00.52 61.97 93.07 tneitap dehsilbatse ro wen–noitaulave laro cidoireP 0510D 73.2 AN 00.71 15.11 07.2 00.3 24.02 48.91 mlfi lanoitidda hcae lacipairep–laroartnI 0320D 92.01 AN 00.23 83.32 00.9 00.01 32.74 33.93 smlfi owt–sgniwetiB 2720D 00.54 AN enon 83.81 04.5 00.6 08.24 02.24 segami cihpargotohp laicaf/larO 0530D 89.22 AN 00.64 57.63 00.72 00.03 35.57 41.16 dlihc–sixalyhporP 0211D 52.31 14.32 00.92 07.41 ** ** 70.63 07.13 **ediroufl fo noitacilppa lacipoT #8021D/3021D 89.12 AN 00.04 42.82 08.91 00.22 08.55 76.64 htoot rep tnalaeS 1531D 79.94 16.36 00.59 14.46 01.53 00.93 03.231 56.711 tnenamrep ro yramirp ,ecafrus eno–maglamA 0412D 79.16 79.96 00.411 17.58 02.34 00.84 28.161 16.641 tnenamrep ro yramirp ,secafrus owt–maglamA 0512D 23.82$ AN 65.25$ 37.43$ AN AN 23.07$ 69.16$ deredner secivres rof etar tnemesrubmier egarevA †02 ega hguorht seiraicfieneb dlihc lla ot AN 73.54$ AN AN 44.91$ 06.12$ AN AN deredner secivres rof etar tnemesrubmier egarevA 5 ega ot htrib morf seiraicfieneb dlihc ot AN AN AN AN 45.81$ 06.02$ AN AN secivres rof etar tnemesrubmier egarevA 02 hguorht 6 ega seiraicfieneb dlihc ot deredner noitamrofnI tnemeganaM diacideM latneD ainrofilaC eht gnidulcni ,)secivreS eraC htlaeH( secivreS eraC htlaeH fo tnemtrapeD ainrofilaC eht yb deretsinimda smetsys morf atad fo sesylana s’rotiduA etatS ainrofilaC :secruoS eht ;4102 hcraM detad ,koobdnaH redivorP margorP latneD laC‑ideM ’secivreS eraC htlaeH ;metsys ytilibigilE laC‑ideM ot sseccA yraidemretnI lacsiF eht dna ,metsyS noitamrofnI tnemeganaM diacideM ainrofilaC eht ,metsyS detad ,eludehcS eeF margorP latneD ytirohtuA eraC htlaeH notgnihsaW fo etatS eht ;4102 ,1 yraunaJ detad ,eludehcS eeF latneD tucitcennoC fo etatS eht ;1102 ,4 rebmetpeS detad ,eludehcS eeF latneD diacideM saxeT fo etatS .seeF latneD fo yevruS 1102 )ADA( s’noitaicossA latneD naciremA eht dna ;4102 ,1 yraunaJ .elbacilppa toN = AN eht rednu deredner secivres lla fo tnecrep 77 detutitsnoc serudecorp 01 esehT .)margorp( margorP latneD laC‑ideM eht rednu 2102 ni tnemyap rof dezirohtua yltneuqerf tsom serudecorp latned 01 eht swohs elbat sihT * .ADA eht yb dehsilbup era sedoc erudecorp latned ehT .margorp eht tneserper dna srenoititcarp lareneg yb detroper erew ereh desu atad ehT .seeF latneD fo yevruS 1102 s’ADA eht morf era uaeruB susneC .S.U eht fo noisiviD cfiicaP dna lanoitaN eht rof seef erudecorp latned egareva ehT † .notgnihsaW dna ,nogerO ,iiawaH ,ainrofilaC ,aksalA sedulcni noisiviD cfiicaP ehT .stneitap ot degrahc netfo tsom tnuoma eef lautca ot deilppa snoitcuder esehT .)79 lliB ylbmessA( 1102 fo setutatS ,3 retpahC htiw ecnadrocca ni secivres latned rof noitcuder tnemyap redivorp tnecrep 01 eht detnemelpmi secivreS eraC htlaeH ,3102 ,5 rebmetpeS evitceffE ‡ .sredivorp ecivres latned tsom .ledom erac deganam a ot ledom ecivres‑rof‑eef a morf 12 fo ega eht rednu nerdlihc elbigile‑diacideM rof ledom yreviled ecivres latned sti degnahc saxeT fo etatS eht ,2102 ,1 hcraM evitceffE § ta margorp noitacude gniunitnoc eht hguorht defiitrec era ohw stsitned ,elpmaxe roF .regnuoy dna 5 sega stneilc elbigile‑diacideM rof secivres latned ot ssecca sesaercni margorp )DCBA( yrtsitneD dlihC dna ybaB ot sseccA ehT II .setar tnemesrubmier decnahne‑margorp DCBA rof elbigile era yrtsitneD fo loohcS notgnihsaW fo ytisrevinU eht morf 6002 retfa etaudarg ohw ro yrtsitneD cirtaideP fo loohcS notgnihsaW fo ytisrevinU eht .emas eht yllaitnesse era serudecorp eht esuaceb 8021D edoc htiw ,ylevitcepser ,stluda dna nerdlihc rof ediroufl fo noitacilppa lacipot ,4021D dna 3021D sedoc decalper ADA eht ,3102 ,1 yraunaJ evitceffE # serudecorp 01 eht rof setar egareva etarapes tneserp eW .02 hguorht 6 sega nerdlihc rof 8$ dna 5 ega ot htrib morf nerdlihc rof 81$ si etar ehT .ediroufl fo noitacilppa lacipot eht rof setar tnemesrubmier owt sah ainrofilaC ** .seirogetac ega eseht no desab California State Auditor Report 2013-125 33 December 2014 Finally, the dental program administrator from Washington stated that its Access to Baby and Child Dentistry program (ABCD program) is a primary driver in its high utilization rates. Washington established the ABCD program to increase access to dental services for Medicaid‑eligible child beneficiaries through age 5. The ABCD program provides enhanced reimbursement rates to dentists who possess a certificate in pediatric dentistry or who graduated after 2006 from the University of Washington’s School of Dentistry. The ABCD program also provides enhanced reimbursement rates to primary care medical providers who receive training and a certificate from the Washington Dental Service Foundation. These providers also render such services as periodic oral evaluations and the topical application of fluoride to the children in the program. California has not increased its reimbursement rates for Medi‑Cal California has not increased its fee‑for‑service dental services since fiscal year 2000–01. We reimbursement rates for Medi‑Cal asked Health Care Services to provide us with documentation to fee‑for‑service dental services since demonstrate its consideration of increasing the reimbursement rates fiscal year 2000–01. since fiscal year 2000–01. However, Health Care Services has elected to keep confidential any analyses it may have performed related to this issue, as permitted by state law. Nevertheless, because of difficult economic times, in 2011 California’s governor and Legislature passed Chapter 3, Statutes of 2011 (Assembly Bill 97), to require Health Care Services to reduce by 10 percent its payments for many Medi‑Cal fee‑for‑service benefits, including dental services. This statute in effect reduces reimbursement rates. In October 2011, HHS approved California’s state plan amendment to reduce certain reimbursements, including dental services, by 10 percent. According to the associate regional administrator of HHS’s Division of Medicaid and Children’s Health Operations, the state plan amendment complied with all applicable federal requirements. The reduction in payments was to become effective on or after June 1, 2011. However, several parties, including the California Dental Association, challenged the reductions in court, claiming that Health Care Services’ reductions did not comply with federal law because the rates did not ensure that payments to providers were consistent with the providers’ efficiency, economy, and quality of care; in addition, they claimed that the rates were not sufficient to enlist enough providers so that care and services were available to the Medi‑Cal population to the same extent that such care and services were available to the general population in the same geographic areas. Although the plaintiffs won in a district court, the U.S. Court of Appeals for the Ninth Circuit (court) overturned the decision in May 2013. The court did not decide whether California’s specific reimbursement rates were reasonable; rather, it concluded that HHS’s review and approval of Health Care Services’ state plan amendment implementing the reimbursement 34 California State Auditor Report 2013-125 December 2014 reduction was reasonable. Health Care Services implemented the 10 percent reduction effective September 5, 2013. However, several plaintiffs, including the California Dental Association, appealed the court’s decision to the U.S. Supreme Court. The U.S Supreme Court refused to hear the appeal of the court’s decision in January 2014, and the reductions remained in effect.12 Recent Changes in Law May Affect Children’s Access to Dental Services Although the 2013 provider‑to‑beneficiary ratio of 1:807 statewide appears sufficient to provide reasonable access to dental services We question whether enough from active providers for child beneficiaries, recent changes to Medi‑Cal dental providers will be Medi‑Cal make us question whether enough Medi‑Cal dental available to meet the needs of providers will be available to meet the needs of children not children not previously receiving previously receiving services and the needs of adults who are services and the needs of adults now eligible to receive additional covered services. Specifically, who are now eligible to receive state law required that children enrolled in the Healthy Families additional covered services. Program transition to Medi‑Cal beginning in January 2013.13 (We describe the Healthy Families Program in the Introduction to this report.) In addition, beginning January 1, 2014, federal and state law expanded Medi‑Cal by allowing certain individuals under the age of 65 and whose income does not exceed 133 percent of the federal poverty level that is applicable to their family size to receive medical assistance such as dental services. For example, the 2014 annual federal poverty level for a family of four residing in all states except Alaska and Hawaii is $23,850 and 133 percent of this amount is $31,721. Until April 2014, state law generally excluded adult dental services from coverage under Medi‑Cal unless they were medical or surgical services performed by a doctor of dental medicine or dental surgery who could be either a physician or a dentist or unless the services were performed as an emergency procedure. Effective May 1, 2014, state law allows specified medically necessary dental services for individuals 21 years of age or older, including examinations, prophylaxis, fluoride treatments, crowns, root canal therapy, and full dentures. These services are subject to utilization controls. 12 According to a 2013 dental operating instruction letter that it issued, Health Care Services exempted from the 10 percent payment reduction certain pediatric surgery centers with at least 95 percent of their Medicaid patient bases consisting of beneficiaries under the age of 21. Health Care Services indicated that it did not want to adversely affect access to care because the nature of the treatments these centers offer—such as restorative, endodontic, and adjunctive procedures as well as oral and maxillofacial surgery—are limited by office participation on the referral list. 13 State law exempted from this transition infants linked to the Access for Infants and Mothers program whose families had incomes above 250 percent of the federal poverty level. California State Auditor Report 2013-125 35 December 2014 Figure 5 presents our estimate of the effect these recent changes to federal and state laws could have on the program. Our analysis included both Health Care Services’ estimate that between one and two million individuals will benefit from the Medi‑Cal expansion and Health Care Services’ reported number of adults who were able to obtain certain covered dental benefits as of January 2013. We estimate that the number of individuals using covered dental services could increase from 2.7 million adult and child beneficiaries to between 5.1 million and 6.4 million adult and child beneficiaries. Figure 5 Recent Changes in Federal and State Laws Could Significantly Increase the Number of Medi‑Cal Dental Program Beneficiaries Using Dental Services Restoration of Certain Adult Dental Benefits Medi-Cal Expansion Adults Using Federally Required Adult Dental Services* Child Beneficiaries†‡ 2012 2013 Ma Lo y w 1, e 2 r 0 R 1 a 4 nge § Ma U y p 1 p , e 2 r 0 R 1 a 4 ngeII gnisU seiraicfieneB fo rebmuN detamitsE secivreS latneD laC-ideM )sdnasuohT nI( 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Sources: California State Auditor’s analyses of data from the California Department of Health Care Services (Health Care Service), including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system; as well as information presented on Health Care Services’ Web site titled Medi‑Cal Expansion: Covering More Californians and Population Distribution by Age/Gender, January 2013, Report Date: January 2014. * This portion of the column represents the number of adult beneficiaries who received medical or surgical services under the Medi‑Cal Dental Program (program) that were performed by doctors of dental medicine or dental surgery, who were either physicians or dentists, or that were performed as an emergency procedure. † The number of child beneficiaries who received services under the program. ‡ Health Care Services’ July 2014 report Healthy Families Program Transition to Medi‑Cal Monitoring Report and Summary states that between January 2013 and November 2013, 751,293 children transitioned from the Healthy Families Program to the Medi‑Cal program. Thus, Health Care Services’ data for 2013 should include these children. § The lower range includes Health Care Services’ estimate of 1 million beneficiaries for the Medi‑Cal Expansion and nearly 2.7 million beneficiaries for adults who are now able to obtain certain dental benefits. The nearly 2.7 million beneficiaries exclude beneficiaries ages 65 and older because they could include individuals living in skilled nursing facilities, who were allowed dental benefits before 2009 and who would not be affected by the restoration. After applying a 65 percent utilization rate to the nearly 3.7 million beneficiaries, we estimate that 2.4 million adult beneficiaries could use services. We selected the 65 percent rate because, as indicated earlier in the chapter, it is at a high end of the range of utilization rates based on data reported to the U.S. Department of Health and Human Services by 49 states and the District of Columbia for federal fiscal year 2013. II The upper range includes Health Care Services’ estimate of 2 million beneficiaries for the Medi‑Cal Expansion and roughly 3.6 million beneficiaries for adults who are now able to obtain certain dental benefits. The 3.6 million beneficiaries include beneficiaries ages 65 and older. After applying a 65 percent utilization rate to the more than 5.6 million beneficiaries, we estimate that as many as 3.7 million adult beneficiaries could use services. (See previous note for the reason we chose the 65 percent rate.) 36 California State Auditor Report 2013-125 December 2014 Figure 5 includes an additional 2.4 million beneficiaries in the lower range and 3.7 million in the upper range who we estimate may use dental services. According to the chief of the Medi‑Cal Dental Services Division’s provider and beneficiary services section, Health Care Services is monitoring the additional beneficiaries’ access to care via the fee‑for‑service delivery system. However, Health Care Services has elected to keep confidential the details related to its monitoring activities, as permitted by state law. Health Care Services’ data, as of December 28, 2013, indicate that 2,886 service offices and providers were willing to accept new patients. Because a limited number of providers are willing to accept Medi‑Cal beneficiaries, Health Care Services should continue its monitoring efforts to ensure that any child beneficiaries and any additional adult beneficiaries who now can receive covered dental services because of the recent changes to federal and state laws can access dental care. Recommendations To ensure that child beneficiaries throughout California can reasonably access dental services under Medi‑Cal and to increase child beneficiary utilization and provider participation, Health Care Services should take the following steps for the fee‑for‑service delivery system by May 2015: • Establish criteria for assessing beneficiary utilization of dental services. • Establish criteria for assessing provider participation in the program. • Develop procedures for identifying periodically counties or other geographic areas in which the utilization rate for child beneficiaries and the participation rate for providers fail to meet applicable criteria. • Immediately take action to resolve any declining trends identified during its monitoring efforts. To help increase the number of providers participating in the program’s fee‑for‑service delivery system, Health Care Services should improve its identification and implementation of changes that minimize or simplify administrative processes for providers. These changes should include revising its processes pertaining to dental procedures that require radiographs or photographs. California State Auditor Report 2013-125 37 December 2014 To ensure that the influx of beneficiaries resulting from recent changes to federal and state law is able to access Medi‑Cal’s dental services, Health Care Services should take these steps: • Continuously monitor beneficiary utilization, the number of beneficiaries having difficulty accessing appointments with providers, and the number of providers enrolling in and leaving the program. • Immediately take action to resolve any declining trends identified during its monitoring efforts. 38 California State Auditor Report 2013-125 December 2014 Blank page inserted for reproduction purposes only. California State Auditor Report 2013-125 39 December 2014 Chapter 2 THE CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES HAS FAILED TO MONITOR THE MEDI‑CAL DENTAL PROGRAM ADEQUATELY Chapter Summary The California Department of Health Care Services (Health Care Services) has not always conducted activities, such as performing rate reviews and enforcing key contract provisions, to ensure that child beneficiaries have access to dental services under the California Medical Assistance Program (Medi‑Cal).14 For instance, Health Care Services has not complied with state law to assess the adequacy of reimbursement rates for these services, which the Medi‑Cal Dental Program (program) provides. State law requires Health Care Services’ director to review reimbursement rates annually but Health Care Services has performed only two annual reviews since fiscal year 2000–01. If Health Care Services does not perform annual reimbursement rate reviews, it remains unaware of the impact that reimbursement rates may have on its ability to ensure that California has sufficient providers for Medi‑Cal child beneficiaries to have reasonable access to dental services. Health Care Services also did not comply with its plan for monitoring child beneficiary access to services. In its monitoring plan approved by the Centers for Medicare and Medicaid Services (CMS), part of the U.S. Department of Health and Human Services (HHS), Health Care Services stated that it would compare the results from one of its dental utilization metrics with dental results from three surveys conducted by other entities. However, a draft copy of Health Care Services’ monitoring report did not disclose the results of these comparisons. According to the chief of the provider and beneficiary services section within the Medi‑Cal Dental Services Division (division), the division did not include the comparisons because it thought another division was responsible for full compliance with the monitoring plan. However, he stated that the division would revise the report to include the comparisons listed in the monitoring plan. Because Health Care Services did not compare the Medi‑Cal child beneficiaries’ utilization data to the results of the three surveys, it lacks information critical for determining whether California’s utilization rates for child beneficiaries (utilization rates) are low. 14 Individuals from birth through age 20 enrolled in Medi‑Cal are child beneficiaries. 40 California State Auditor Report 2013-125 December 2014 In addition, Health Care Services’ actions for improving beneficiary utilization and provider participation have been ineffective. Our analysis of beneficiary utilization rates and provider‑to‑beneficiary ratios indicates that Health Care Services’ actions have not resulted in meaningful improvements. For example, as presented in Chapter 1, beneficiary utilization rates statewide increased by only 1.2 percentage points from 2011 to 2012 and by 1 percentage point from 2012 to 2013. Health Care Services also is not enforcing key contract provisions related to improving beneficiary utilization rates and provider participation. Health Care Services contracts with Delta Dental of California (Delta Dental) to help administer the program. According to the contract, Delta Dental is responsible for performing several beneficiary and provider outreach activities among other things. However, Delta Dental did not perform some of these outreach activities, including contracting with entities to provide additional dental services through fixed facilities or mobile clinics in underserved areas. By not performing activities aimed at increasing beneficiary utilization and provider participation in underserved areas, Health Care Services increases the risk of dental disease and tooth decay for children in those geographic areas. Health Care Services also does not collect sufficient data to fully comply with federal and state reporting requirements, and it has not updated its system for monitoring beneficiary eligibility. Federal law requires Health Care Services to report annually the number of children receiving specific types of dental services. Further, recently enacted state law requires Health Care Services to report a performance measure on access to dental care. However, because of data limitations, Health Care Services cannot provide Health Care Services and its the information required. Finally, Health Care Services and its fiscal intermediaries authorized fiscal intermediaries authorized payments of more than $70,000 payments of more than $70,000 for dental services purportedly provided to deceased beneficiaries for dental services purportedly because it had not updated with death information its beneficiary provided to deceased beneficiaries. eligibility system. Health Care Services Has Not Complied With State Law Directing It to Assess the Adequacy of Dental Reimbursement Rates Health Care Services has not complied with state law that requires it to conduct annual reimbursement rate reviews. According to state law, the director must perform annual reviews of the reimbursement levels for dental services under Medi‑Cal, and the director must revise periodically the rates of reimbursement to dentists. The purpose of that review is to ensure Medi‑Cal beneficiaries have reasonable access to dental services. As Chapter 1 mentions, California has not increased its reimbursement rates California State Auditor Report 2013-125 41 December 2014 for dental services since fiscal year 2000–01. In fact, Health Care Services implemented a 10 percent state‑mandated payment reduction in 2013 for most dental providers. Health Care Services has only performed two annual reviews Health Care Services has only of the reimbursement levels for dental services in conformance performed two annual reviews with state law since fiscal year 2000–01. Health Care Services in conformance with state law performed the first annual review during the period we examined since fiscal year 2000–01 and did in December 2011. Health Care Services stated that Medi‑Cal pays not perform any between 2001 an average of 31.5 percent of the statewide average for commercial and 2011. usual, customary, and reasonable rates (UCR rates), which the report defined as provider fees established for noninsured clients. The American Dental Association does not define UCR rates, but it does define the usual fee as the fee an individual dentist most frequently charges for a specific dental procedure independent of any contractual agreement. Health Care Services concluded that the utilization rate among child beneficiaries was increasing but that there was a slight decrease in the number of active providers rendering dental services to child beneficiaries who were continuously enrolled in Medi‑Cal. However, Health Care Services did not comment on the adequacy of the reimbursement levels for dental services or connect those facts to its reimbursement rates. Health Care Services completed another annual review of the reimbursement levels for dental services in February 2013, which reported that Medi‑Cal pays an average of 31.3 percent of the statewide average for commercial UCR rates. Health Care Services concluded that the Medi‑Cal dental reimbursement rates were adequate to provide access to care for Medi‑Cal beneficiaries based on the fact that utilization rates for child beneficiaries increased and the number of children receiving services increased as did the number of services provided. Health Care Services did not perform similar annual reviews between 2001 and 2011, and it has not finalized a plan to conduct annual reviews in the future. According to the acting division chief, Health Care Services did not perform annual reimbursement rate reviews before 2011 because of the State’s fiscal climate and its own workload, and it prepared the reviews in 2011 and 2013 only at the request of its legal counsel. The acting division chief also stated that Health Care Services did not notify the Legislature that it would not comply with state law that requires the annual reviews of the reimbursement levels for dental services. In fact, he said that until 2011 he was not aware of the requirement to perform the annual reviews. Further, the acting division chief stated that Health Care Services has had some internal discussions about the rate review and will be working toward developing a plan to incorporate this task into its workload. Health Care Services did not provide us with an estimate as to when it will resume performing the annual 42 California State Auditor Report 2013-125 December 2014 reviews of the reimbursement levels for dental services; thus, we are concerned that it may not implement its plan in a timely fashion. If Health Care Services does not perform annual reimbursement rate reviews, it remains unaware of the impact that reimbursement rates may have on its ability to ensure that Medi‑Cal’s child beneficiaries have reasonable access to dental services. Therefore, it cannot reasonably justify requesting changes to the reimbursement rates for dental services from the Legislature. Health Care Services Has Not Complied With Its Plan for Monitoring Medi‑Cal Child Beneficiaries’ Access to Dental Services As part of the state plan amendment to reduce certain reimbursements by 10 percent, Health Care Services also submitted its monitoring plan titled Monitoring Access to Medi‑Cal Covered Healthcare Services. Health Care Services told HHS that it would monitor predetermined metrics quarterly or annually to ensure that beneficiary access is comparable to services available to the general population in the same geographic areas. The monitoring plan states that Health Care Services intended to use three metrics to monitor the program: • The difference in the number of child beneficiaries from the previous quarter to the current quarter as a percentage of total beneficiaries from the previous quarter. • The number of child beneficiaries divided by the number of active dental providers, with the results stratified by factors such as the county in which the child beneficiaries reside. • The number of child beneficiaries who each had at least one dental visit in the past 12 months divided by the total number of child beneficiaries. For the first two metrics, Health Care Services would report on its comparison of program trends quarterly and yearly, respectively. In addition, Health Care Services would report yearly on its comparison of the results from its third metric with the results related to dental services from the California Health Interview Survey conducted by the University of California, Los Angeles, in collaboration with Health Care Services and the California Department of Public Health and with the results related to dental services of HHS’s National Health Interview Survey and Medical Expenditure Panel Survey. Figure 6 presents the purpose and relevant questions from these surveys about dental services. California State Auditor Report 2013-125 43 December 2014 Figure 6 The California Department of Health Care Services Uses Results from Certain Surveys to Monitor the Results of the Medi‑Cal Dental Program California Health Interview Survey (CHIS) Conducted by the University of California, Los Angeles Center for Health Policy Research in collaboration with the California Departments of Health Care Services and Public Health, the CHIS Purpose aims to provide a detailed picture of the health and health care needs of California’s large and diverse population. The 2011–2012 CHIS included the following two questions about dental care for adults, children Questions (ages 11 and under), and teens (ages 12 to 17): (1) When was your last dental visit? and, (2) If applicable, what was the main reason you have not visited a dentist? National Health Interview Survey (NHIS) Conducted by the federal Centers for Disease Control and Prevention, the main objective of the NHIS is to monitor the health of the U.S. civilian noninstitutionalized population through collecting Purpose and analyzing data on a broad range of health topics. Examples of persons excluded from the sample include those who live in long-term facilities, who are on active duty with the Armed Forces, who are incarcerated in the prison system, and who are U.S. nationals living in foreign countires. The 2013 NHIS included the following two questions about dental care for children (ages 17 and under): (1) During the past 12 months was there any time that you needed dental care but did Questions not get it because you could not afford it? and (2) About how long has it been since you last saw a dentist? Medical Expenditure Panel Survey (MEPS) The MEPS, which began in 1996, is a set of large-scale surveys of families and individuals, their medical providers, and employers across the U.S. that are conducted by the federal Agency for Purpose Healthcare Research and Quality. The MEPS collects data on specific health services and how they are paid for as well as data on the cost, scope, and breadth of health insurance held by and available to U.S. workers. The 2012 MEPS included the following two questions about dental care for children ages 2 through Questions 17: (1) What type of dental care provider did you see during this visit? and (2) What did you have done during this visit? Sources: Monitoring Access to Medi‑Cal Covered Healthcare Services, Attachment 4.19 F to California’s Medicaid State Plan, as well as information from the Web sites of the University of California, Los Angeles; the federal Centers for Disease Control and Prevention; and the federal Agency for Healthcare Research and Quality. CMS approved Health Care Services’ monitoring plan in October 2011. However, Health Care Services still had not issued its first monitoring report as of October 2014. According to the chief of the Research and Analytic Studies Division (research division), Health Care Services does not have a specific release date for its monitoring report. We evaluated a draft copy of the dental portion of the report, which does not compare the results from its third 44 California State Auditor Report 2013-125 December 2014 metric, measuring the percentage of Medi‑Cal’s child beneficiaries who had at least one dental visit in the past 12 months, with the results from the three surveys (listed in Figure 6), as the monitoring plan requires. According to the division’s chief of the provider and beneficiary services section, the division did not include the comparison because it thought the research division was responsible for full compliance with the monitoring plan, including any comparisons with surveys. However, he stated that the division would revise the current draft of the report to include the comparisons explained in the monitoring plan. Health Care Services acknowledges in its plan that the benefit of seeing a dentist annually includes an increased likelihood of children’s receiving preventive dental services and early diagnoses and treatment of Because Health Care Services dental problems. The purpose of the third metric was to allow has not compared the child Health Care Services to monitor the child beneficiaries’ annual beneficiaries’ utilization data to the contact with their dentists. Because Health Care Services has not results of the three surveys, it lacks compared the child beneficiaries’ utilization data to the results information critical for determining of the three surveys, it lacks information critical for determining whether utilization rates are low. whether utilization rates are low. Health Care Services’ Actions Related to Improving Beneficiary Utilization and Provider Participation Have Been Ineffective, and Health Care Services Has Not Enforced Some Key Contract Provisions Health Care Services has identified activities that it and Delta Dental are required to take to increase beneficiary utilization and provider participation in the program. Health Care Services contracts with Delta Dental to perform fiscal intermediary services, such as adjudicating provider claims and underwriting the program’s fee‑for‑service delivery system. Our analysis of beneficiaries’ utilization rates and provider‑to‑beneficiary ratios indicates that these activities have not resulted in meaningful improvements. For example, as Chapter 1 explains, beneficiary utilization rates increased statewide by only 1.2 percentage points from 2011 to 2012 and by 1 percentage point from 2012 to 2013. In addition, Health Care Services’ data indicate that participation of active providers decreased from 2012 to 2013. CMS established national oral health goals and announced them in April 2010 at the National Oral Health Conference. One of CMS’s goals is to increase by 10 percentage points over a five‑year period the rate of children ages 1 through 20 who are enrolled in Medicaid and who receive any preventive dental service. CMS asked each state to develop a specific oral health action plan to support this goal. Health Care Services developed an action plan in October 2013 describing the activities that it already had underway or that it was planning to implement to achieve this goal in federal fiscal year 2015. Health Care Services contracted with Delta Dental California State Auditor Report 2013-125 45 December 2014 to fulfill its responsibility for many of its beneficiary outreach and provider recruitment activities. However, in some instances these two entities were unable to produce measureable outcomes for the According to Health Care activities, or they did not demonstrate to us that these activities Services’ acting division chief, it is occurred. According to Health Care Services’ acting division chief, unrealistic to expect an increase given the current status of its strategies and utilization rates, it is of 10 percentage points in child unrealistic to expect an increase of 10 percentage points in child beneficiaries’ utilization rates by beneficiaries’ utilization rates by September 2015. September 2015. Health Care Services identified its Oral Health Action Plan (action plan) as a step that it and Delta Dental would take to increase beneficiary utilization and provider participation. According to the plan, Delta Dental’s outreach unit is to conduct many of the activities described in the action plan—activities that are largely requirements of Health Care Services’ contract with Delta Dental. The two entities entered into a contract for nearly $7.8 billion on December 9, 2004, with a term of November 1, 2004, through September 30, 2010. The contract term also included four optional one‑year extensions. For no additional cost, Health Care Services extended the contract term through September 30, 2013, by exercising those extensions on March 26, 2010; April 30, 2010; and August 2, 2010. The acting division chief stated that these three extensions were signed in close proximity because Health Care Services did not realize it had to process a contract amendment to ratify the extensions. In addition, on November 29, 2012, Health Care Services extended this contract for an additional year ending on September 30, 2014, at no additional cost. Our legal counsel advises us that Health Care Services’ contract amendments were appropriate. Finally, on June 11, 2013, the Department of General Services, which state law generally requires to approve contract amendments, authorized Health Care Services to extend this contract an additional two years ending on September 30, 2016. Health Care Services increased the maximum amount payable under the contract to $8.6 billion. According to the acting division chief, Health Care Services is currently working on a new fiscal intermediary contract for the program’s fee‑for‑service delivery system. Health Care Services’ contract requires Delta Dental to develop a provider services manual (manual). According to the manual, Delta Dental’s outreach unit is to focus on giving beneficiaries access to quality dental care within their geographical location and emphasizing underserved counties. In addition, the outreach unit’s efforts are to focus on increasing the number of dentists in the program, increasing the number of beneficiaries treated, and maintaining the level of provider participation. The manual outlines a number of activities that the outreach unit should undertake. For instance, to increase beneficiary utilization rates, the outreach unit 46 California State Auditor Report 2013-125 December 2014 is to contact federal, state, and county organizations or agencies— such as Rural Health Services, Child Health and Disability Prevention, and Women, Infants and Children—to notify them of the program’s beneficiary services. The outreach unit also is to notify organizations of the program’s toll‑free telephone line to help beneficiaries find dentists. When beneficiaries call the toll‑free telephone line to request assistance in accessing dental providers, service representatives are to provide beneficiaries with names, addresses, phone numbers, and specialties of providers in their areas who accept new dental patients enrolled in Medi‑Cal. In January 2013, Health Care Services and Delta Dental implemented a new referral process aimed at increasing the number of successfully scheduled dental appointments for beneficiaries. Upon receiving a request to find a dentist, service representatives are to call providers listed in the referral database, verify that the provider is still accepting new patients and can perform the necessary services that the beneficiary requires, and then use three‑way calling to include the beneficiary on the call with the provider to schedule an appointment. The manual also identifies the steps that the outreach unit should take to increase provider participation in underserved counties. These steps include increasing provider awareness about the program and communicating with providers, provider organizations, and clinics. For example, the outreach unit might periodically contact providers to ascertain their feelings or concerns about the program and to offer assistance. Further, the manual states that the outreach unit should contact newly licensed dentists and encourage them to enroll in the program. In its action plan, Health Care Services acknowledges that the impact of these activities has not been well documented or at least that they have not been well known or felt in the dental community. Health Care Services stated that it planned to review Delta Dental’s outreach activities and develop measureable objectives for the outreach unit that better reflect the activities that it believes are most likely to improve access to dental services. Health Care Services also stated that it would develop an interactive performance measurement dashboard by November 2013; this dashboard would allow staff to access dental data on beneficiary eligibility, utilization rates, Although Health Care Services has and expenditures so that staff could identify issues that require created the interactive performance improvement and outreach activities to specific populations. measurement dashboard, it is still Although Health Care Services has created the interactive working on developing measurable performance measurement dashboard, as of December 2014 Health objectives and plans to implement Care Services is still working on developing measureable objectives, the objectives in early 2015. and it plans to implement the objectives in early 2015. California State Auditor Report 2013-125 47 December 2014 In addition, the contract directs Delta Dental to undertake the tasks that we present in Figure 7 on the following page to remedy the dental access problem in underserved areas within the State and in California’s border communities near the Oregon, Nevada, and Arizona state lines. Our review of five of the eight provisions Our review of five of the in Health Care Services’ contract found that Delta Dental did not eight provisions in Health Care implement three of them. In May 2014, the director of customer Services’ contract found that Delta service of Delta Dental’s State Government Programs stated that Dental did not implement three the following contract provisions were waived for Delta Dental by of them. Health Care Services: (1) submitting a plan to Health Care Services for its review and approval to remedy the dental access problem in underserved areas within California and the border communities, (2) contracting with one or more entities to provide additional dental services in fixed facilities or through the use of portable dental equipment in the underserved areas, and (3) initiating a process in which beneficiaries in underserved areas receive direct contact to ensure that they are aware of their Medi‑Cal dental benefits and that each beneficiary has access to a dental provider within a reasonable distance. Nevertheless, Health Care Services stated that it did not waive these provisions. Health Care Services’ contract with Delta Dental states that should either party desire a change or amendment to the terms of the contract, the changes and amendments must be proposed in writing to the other party, and the other party must respond in writing as to its acceptance or rejection of the proposed changes and amendments. In addition, the contract requires the agreed‑upon changes to be made through the State’s official contract amendment process and formally approved by the State. Further, the contract states that “no covenant, condition, duty, obligation, or undertaking contained in or made a part of the contract shall be waived except by written agreement of the parties or by explicit language found in the contract.” However, the director of customer service was unable to provide us with a written agreement for the waiver of these contract provisions. Moreover, the contract amendments we referred to previously do not mention the waiver of these contract provisions. In October 2014, Health Care Services gave us documents to support its belief that Delta Dental has complied with these three contract provisions. Nevertheless, we remain convinced that Delta Dental did not implement them. For instance, to demonstrate Delta Dental’s compliance with the contract provision that it submit a plan to Health Care Services for review and approval to remedy dental access problems in underserved areas within the State and in the border communities near California’s state lines, Health Care Services gave us a document labeled Provider Services Plan. Health Care Services stated that Delta Dental submitted this plan as part of its technical proposal for the contract in 2004. This plan describes provider 48 California State Auditor Report 2013-125 December 2014 Figure 7 Delta Dental of California’s Contract Provisions for Provider Outreach The contract between the Department of Health Care Services (Health Care Services) and Delta Dental of California (Delta Dental) requires Delta Dental–the contractor—to do the following: Submit a plan to Health Care Services for review and approval to remedy the dental access 1 problems in underserved areas within California and in the border communities. Areas to be targeted for outreach activities will include any area with a low utilization rate—defined by the federal courts as 41.17 percent or less—or areas that appear to be in danger of low or decreased utilization. Contract with one or more entities to provide additional dental services in either fixed 2 facilities (such as existing dental offices or clinics) or through the use of portable dental equipment (such as mobile clinics) in the underserved areas. Initiate a process whereby beneficiaries in the underserved areas are contacted directly to 3 ensure they are aware of their Medi-Cal dental benefits and that they have access to a Medi-Cal dental provider within a reasonable distance. 4 Ensure that new Medi-Cal dental providers are established in the underserved areas. Include with the plan (described above) an evaluation of the accessibility to Medi-Cal dental care providers throughout the State, including which Medi-Cal dental providers (by provider number) serve which cities, counties, and geographic areas of the State; whether dentists 5 provide general dentistry or specialties, by type of specialty; whether they are currently accepting new Medi-Cal patients; and current addresses/telephone numbers of their locations of practice. This information shall be continuously updated on an on-line system as changes occur to previously gathered and recorded information received by the contractor. The on-line system shall be made available to approved contractor staff as well as Health Care Services. Conduct a semi annual survey of Medi-Cal dental providers in a form and manner 6 previously approved by Health Care Services. This survey should query providers regarding the points addressed in the paragraph above. Survey results and recommendations shall be submitted to the contracting officer within 45 state workdays. Based on the survey results, the contractor shall develop and maintain a referral system for beneficiaries. This referral system shall provide beneficiaries with three provider names, addresses, phone numbers and specialties of dental providers who are in their geographical location, and who are currently accepting new Medi-Cal patients. In areas where more than 7 one provider fits these specifications, the system shall refer beneficiaries to all such providers, or to at least three (3) such providers, on a rotational basis to ensure each enrolled provider receives an equal share of the referrals. Referrals shall be in a manner that ensures that neither the contractor nor Health Care Services is perceived as recommending a particular provider or assuming responsibility for the quality of care rendered by any provider. 8 Develop and recommend methods to assist beneficiaries’ ability to access Medi-Cal dental providers in identified underserved areas. Source: Contract number 04‑35745 between Health Care Services and Delta Dental. California State Auditor Report 2013-125 49 December 2014 outreach activities Delta Dental anticipated taking such as promoting the program at dental forums, conventions, and other appropriate venues; strengthening its liaisons with counties, social service agencies, and school districts; and regularly surveying program providers to update its dental database. However, other than stating that it would work with dental schools to place graduates in underserved areas, this plan does not specifically describe how Delta Dental planned to remedy the dental access problems in underserved areas within California and the border communities. For example, the plan does not state how Delta Dental intended to identify the underserved areas and measure the effectiveness of its actions. In addition, we fail to understand how We fail to understand how Health Health Care Services believes this 10‑year old plan is sufficient to Care Services believes that a address the conditions outlined in its more recent action plan. In 10‑year old Provider Services Plan is fact, Health Care Services stated in its action plan that the impacts sufficient to address the conditions of Delta Dental’s outreach has not been well documented or at outlined in its more recent least not well known or felt in the dental community and that it action plan. planned to review Delta Dental’s outreach activities and develop measureable objectives for the outreach unit that better reflect the activities that it believes are most likely to improve access to dental services. The director of customer service at Delta Dental stated that it has taken steps to ensure that Medi‑Cal dental providers are established in underserved areas. For example, its outreach unit has conducted biannual campaigns for new dental provider outreach in an effort to acquire applications from newly licensed dentists, and it has reached out to dental schools to speak with graduating dental students about working in rural communities. However, Delta Dental was unable to provide us with any statistical reports that summarize the results of its outreach activities and how its efforts have increased the number of dental providers established in underserved areas. The acting division chief stated that Health Care Services has evaluated program data to identify geographic areas with few or no dental providers and has given this information to Delta Dental to request targeted provider outreach. He also stated that Health Care Services has absorbed the responsibility for identifying underserved areas as part of its Healthy Families Program transition to Medi‑Cal and its implementation of the 10 percent provider payment reduction. However, Health Care Services has elected to keep confidential the details related to its monitoring activities, as permitted by state law. We also fail to understand Health Care Services’ assertion that Delta Dental complied with the contract provision that requires Delta Dental to contract with one or more entities to provide additional dental services in either fixed facilities or mobile clinics in underserved areas. In October 2014, Health Care Services acknowledged that Delta Dental did not contract directly with fixed 50 California State Auditor Report 2013-125 December 2014 facilities or mobile clinics to provide dental services in underserved areas. In fact, according to its director of dental policy, as of September 24, 2014, Delta Dental was reviewing a draft contract for it to begin contracting directly with these entities. Although Health Care Services stated that Delta Dental had instead participated in many outreach activities to facilitate and promote these entities’ provision of services in underserved areas, these activities do not fulfill the contract provision. We disagree with Health Care Finally, we disagree with Health Care Services’ assertion that Delta Services’ assertion that Delta Dental met the contract provision requiring Delta Dental to initiate Dental met the contract provision a process to contact beneficiaries directly in underserved areas requiring Delta Dental to initiate to ensure they are aware of Medi‑Cal’s dental benefits and that a process to contact beneficiaries each has access to a Medi‑Cal dental provider within a reasonable directly in underserved areas. distance. Health Care Services stated that Delta Dental employees attend health fairs and other functions to meet face to face with beneficiaries; that Delta Dental distributes benefits information at teen mother programs, food banks’ parenting programs, and other community events at which beneficiaries are likely to congregate; and that Delta Dental distributes information to organizations such as Head Start so the organizations can share it with beneficiaries. Under this process, Delta Dental has abrogated its responsibility to initiate a process and instead generally relies on the counties and other organizations that sponsor the health fairs and other functions. In addition, Delta Dental in essence places the burden on the beneficiaries to attend these events to get the information they need. Our view of this provision is that Delta Dental bears the burden of identifying beneficiaries in underserved counties who do not use Medi‑Cal’s dental services and of informing them directly about the benefits that Medi‑Cal affords them. Health Care Services’ acting division chief acknowledged that the beneficiary outreach and education activities were not developed robustly and that Health Care Services planned to reengineer this area in the near future. He also stated that although Health Care Services is looking into contacting beneficiaries directly to inform them of their benefits, it has not yet done so because Delta Dental has limited access to beneficiary address information. Health Care Services stated that Delta Dental fully complied with these three contract provisions. Specifically, Health Care Services stated that it interprets the applicable deliverables and performance standards as well as the contractual requirements to refer to the criteria identified in its financial management manual (financial manual) and the monthly invoices it requires Delta Dental to submit. The contract required Delta Dental to submit the financial manual three months after the effective date of the contract, which was in December 2004. Health Care Services initially reviewed and approved the financial manual in 2005 and has reviewed and approved subsequent changes made to it in 2006. The financial California State Auditor Report 2013-125 51 December 2014 manual requires Delta Dental to demonstrate that it has met the contract deliverables for the categories shown in Figure 8 on the following page before receiving payment. However, the financial manual does not require Delta Dental to demonstrate that it has met other applicable contract deliverables found in the scope of work section of the contract for the provider services subsystem, such as the provider outreach we present in Figure 7. Health Care Services acknowledges that the financial manual’s criteria do not address each category of the contract’s scope of work section for the provider services subsystem. Health Care Services’ interpretation is inconsistent with the general terms and conditions of the contract. These terms and conditions state that the contract will be governed by and shall be interpreted in accordance with the laws of the State of California. Our legal counsel advises that Health Care Services’ interpretation results in the financial manual’s overriding the terms of the contract, and this situation, in effect, creates a contract amendment. Although Health Care Services should have sought General Services’ approval of the contract amendment in accordance with California’s Public Contract Code, Section 10335, it did not do so. This same section of the law states that contract amendments have no effect unless and until General Services approves them. The contract specifically states that Health Care Services will pay for provider services when all applicable deliverables have been met as defined in the contract. Further, the contract states that the contractor’s failure to meet the requirements for a given month will constitute failure to provide the deliverable, and the contractor will not be entitled to payment for that month. The contract states that such a denial of payment will occur unless Health Care Services determines that Delta Dental was in substantial compliance with specific contract requirements. Health Care Services does not Health Care Services does not believe the State should attempt to recover any funds from Delta believe the State should attempt to Dental for its failure to demonstrate that it met the requirements recover any funds from Delta Dental for delivering all applicable provider services defined in the for its failure to demonstrate that it contract. Health Care Services stated that in the future it will ensure met the requirements for delivering that the financial manual and invoices are consistent with the all applicable provider services contract language, commit to developing tangible measurements defined in the contract. to better evaluate Delta Dental’s performance of all functions, and implement contract amendments via the appropriate channels, including state contracting procedures. By not ensuring the performance of contract provisions aimed at increasing beneficiary utilization and provider participation in underserved areas, Health Care Services increases the risk that children in these areas will suffer needlessly from dental disease and tooth decay. 52 California State Auditor Report 2013-125 December 2014 Figure 8 The Financial Management Manual’s Requirements for Delta Dental of California’s Contract Deliverables Provider enrollment responsibilities for Delta Dental of California (Delta Dental) include the following: • Ensuring that prospective Medi-Cal dental providers receive sufficient information to understand program requirements to enable accurate processing of enrollment applicants and agreements, billing intermediary registration requirements, and certification. This responsibility shall include the review and processing of prospective dental providers’ application agreement packages. • When processing enrollment application agreement packages, ensuring that prospective providers meet certain requirements in accordance with state regulations and as directed by the California Department of Health Care Services (Health Care Services), such as the provider’s having an active, unrestricted license to practice dentistry. Delta Dental’s provider master file responsibilities include the following: • Making certain that the California Dental Medicaid Management Information System (CD-MMIS) meets the federal requirements for systems performance review. The purpose of this review is to ensure that it is operating effectively and efficiently and to ensure that the claims processing and information retrieval system meets the minimum operational performance standards on an ongoing basis. Performance standards establish levels of achievement that the CD-MMIS must sustain in terms of accuracy, timeliness, and cost. Delta Dental’s billing intermediaries and Electronic Data Interchange responsibilities include the following: • Approving, processing, developing, and maintaining a tracking system of registration forms from billing intermediaries and of notification forms for providers who wish to register or have notified Delta Dental of billing intermediary participation. State law requires companies who bill the Medi-Cal program on behalf of providers, to register with Health Care Services and include their registration number on all claims they submit. • Ensuring that all billing intermediaries register with it and that the registration number is on the claims the intermediaries submit for payment. • Processing provider requests to discontinue or modify existing Electronic Data Interchange and billing intermediary arrangements. Delta Dental’s provider publications and forms responsibilities include the following: • Producing and providing publications on paper, electronic media, or both to providers, billing agents, government, and private entities using Health Care Services’ approved criteria. After Health Care Services’ review and approval, Delta Dental is to print and disseminate the Delta Provider Manual, including replacement pages, priority bulletins, and general bulletins to providers regarding Medi-Cal related policies, procedures, statutes, and regulations. Delta Dental’s provider support services are to inlude the following: • Receiving and responding to provider inquiries via telephone, correspondence, or on-site visits; contacting newly-enrolled dental providers after they have been enrolled for three months to ensure they understand Medi-Cal dental program requirements, the Medi-Cal dental billing process, and the availability of specialized training for their office staff; answering all correspondence and appeals regarding Medi-Cal dental policy, procedures, regulations, and statutes; and coordinating and conducting training seminars for providers regarding program policies, law, regulations, and claim issues. Sources: Delta Dental’s Financial Management Manual for the Medi‑Cal Dental Program and contract number 04‑35745 between Delta Dental and Health Care Services. California State Auditor Report 2013-125 53 December 2014 Because Delta Dental did not submit a plan to Health Care Services that specifically describes how it plans to remedy the dental access problems in underserved areas within California and the border communities, it cannot demonstrate that it performed an evaluation of the accessibility to Medi‑Cal dental providers throughout the State. Delta Dental stated that it fulfilled the latter half of contract provision number 5 in Figure 7 on page 48 that requires it to update continuously an online system as changes occur to information that Health Care Services has previously gathered and recorded from Medi‑Cal dental providers. Specifically, the director of customer service stated that this requirement pertains to the referral database it maintains for the State, which includes all of the listed requirements in the contract provision. He also stated that Health Care Services has access to a report generated from the database that contains this information. Our review found that the reports contained the listed requirements in the contract provision. Finally, although not shown among the eight contract provisions listed in Figure 7, the contract requires Delta Dental to develop a dental outreach and education program for Medi‑Cal beneficiaries in accordance with state law. This program is to cover recommended frequencies for regular and preventive dental care, how to obtain Med‑Cal dental care, how to avoid inappropriate care or fraudulent providers, and how to obtain assistance in getting care or resolving problems with care. The contract also requires Delta Dental to deliver the plan for the outreach and education program to Health Care Services for its review and approval by the end of each calendar year. State law requires that the dental outreach and education program particularly target underserved populations and parents of young and adolescent children. Neither the director Neither the director of customer of customer service nor Heath Care Services’ acting division chief service nor Health Care Services’ was able to provide us with copies of the annual plans for the dental acting division chief was able to outreach and education program. Instead, the director of customer provide us with copies of the annual service and Heath Care Services’ acting division chief described plans for the dental outreach and materials—such as brochures, charts, and flyers that contain dental education program. information—that were distributed to Medi‑Cal beneficiaries. Without reviewing and approving Delta Dental’s outreach and education plans annually, Health Care Services may not know whether Delta Dental is using effective methods for communicating with and educating beneficiaries or whether it has a well‑developed strategy to do so. Health Care Services Has Not Fully Complied With Federal and New State Reporting Requirements Health Care Services’ current data collection efforts lack the specificity required to fully meet federal and state reporting requirements. Federal law requires states to report on the 54 California State Auditor Report 2013-125 December 2014 Because of data limitations, number of children receiving specific types of dental services. Health Care Services cannot Further, recently enacted state law also requires Health Care report on dental health access and Services to report on dental health access and availability and the availability and the effectiveness of effectiveness of preventive care and treatment. However, because preventive care and treatment. of data limitations, Health Care Services cannot provide the information required. Health Care Services does not collect all of the data in sufficient detail to report accurately, as a federal report requires, the number of children who received specific types of dental services. More specifically, federal law requires that states receiving funds for the early and periodic screening, diagnostic, and treatment (EPSDT) benefit to children in their Medicaid programs report performance data annually to CMS about the dental care provided to these beneficiaries as indicated on its Form 416: Annual Early Periodic Screening, Diagnostic, and Treatment Participation Report (CMS‑416). The CMS‑416 requires Health Care Services to identify the number of children receiving specified types of dental services, including preventive and diagnostic services. Health Care Services tracks these data by classifying the dental procedures using standardized codes, and it then uses these codes when compiling the data to populate the CMS‑416. However, according to a section chief in the division, because of a system limitation, the division has not used these codes to classify the dental services that federally qualified health centers, rural health clinics, and Indian Health Service clinics (centers and clinics) provided. Instead, the dental services provided by centers and clinics are assigned a single generic code—03—that does not provide the detail necessary to identify the specific dental services rendered by providers. Consequently, Health Care Services currently does not report in the CMS‑416 the number of children who receive specific types of dental services from the centers and clinics. The dental services rendered by these centers and clinics represented just over 3 percent of the total amount paid under EPSDT between 2009 through 2013. Although the section chief indicated that Health Care Services is working on a solution to capture these codes for the centers and clinics, he was unable to provide a date by which Health Care Services expects to correct this issue. In addition, because of limitations in the data related to dental providers that Health Care Services collects, we had to qualify the ratios we developed when we analyzed the number of providers rendering dental services to children in the program. Specifically, as indicated in this report’s Scope and Methodology section, we were asked to determine the availability of dental providers participating in the program throughout the State and to determine areas where the greatest gaps exist between patient need and the availability of dental providers. Using data included in Health Care Services’ systems, we developed and analyzed the provider‑to‑beneficiary California State Auditor Report 2013-125 55 December 2014 ratios and compared these ratios to a ratio that Health Care Services indicated it often uses as a measure of the adequacy of beneficiaries’ access to dental services under the program. However, as we acknowledge in the Scope and Methodology section and in Chapter 1, we were unable to calculate these ratios with precision because the data we obtained from Health Care Services’ systems did not allow us to do so. We found that although Health Care Services’ systems contain fields that indicate the provider who actively rendered services to child beneficiaries, the field was not always populated. As a result, in Chapter 1’s discussion of these ratios, we qualify our analysis by indicating that our count of dental providers rendering dental services to children may be understated because of data limitations in certain circumstances that prevented us from identifying the providers who rendered the services. According to Health Care Services, its electronic business rules do not require the provider field to be populated in all circumstances. For example, the rules do not require that this field be populated for certain dental services, such as an X‑ray or fluoride treatment. However, a recent amendment to state law, effective June 2014, requires Health Care Services to establish a list of performance measures to ensure that the program meets quality and access criteria. State law also requires that these performance measures be designed to evaluate utilization, access, availability, and effectiveness of preventive care and treatment. Finally, Health Care Services is required to post these performance measures on its Web site annually beginning October 1, 2014. We believe We believe that one critical measure that one critical measure of access and availability is each of access and availability is each county’s provider‑to‑beneficiary ratio for this program and that county’s provider‑to‑beneficiary Health Care Services should include these ratios as one of the ratio for this program. performance measures it establishes and reports. However, for Health Care Services to calculate these ratios accurately, it will need to ensure that in the future the provider fields in its data systems are populated. Although Health Care Services did include on its Web site by October 3, 2014, the performance measures related to service utilization and the effectiveness of preventive care and treatment, it did not include measures related to access and availability. According to the acting division chief, Health Care Services believes that most of these performance measures relate to access in varying degrees. However, our review of these measures indicates that they are more directly related to utilization and that they do not fully address access and availability. As a result, we believe that until Health Care Services begins tracking for all of its dental services the providers that render services to child beneficiaries, it cannot effectively measure children’s access to and the availability of dental services, nor can it accurately predict whether sufficient numbers of providers are available to meet the increasing needs of the program in each county. 56 California State Auditor Report 2013-125 December 2014 Finally, when we initially attempted to calculate each county’s provider‑to‑beneficiary ratio using Health Care Services’ available data, we identified multiple data anomalies. Health Care Services investigated these anomalies and determined that it had incorrectly transferred provider information from its mainframe computer to its data warehouse—the system, according to Health Care Services, that it uses to produce performance measures included in various reports. Ultimately, because of the errors in its data warehouse, Health Care Services had to provide us with data from a different source to enable us to calculate the data presented in Chapter 1’s We believe Health Care Services Figure 3 and in Appendix A’s Table A.5. Although Health Care should begin using the information Services’ October 2014 report, discussed earlier, did not rely on to calculate the ratio of providers to this provider information, we believe it should begin using the beneficiaries by county. information to calculate the ratio of providers to beneficiaries by county. For that process to occur before its next annual report, Health Care Services needs to correct the errors in its data warehouse to ensure that its performance measures are accurate. Health Care Services Authorized Reimbursements for Services Providers Purportedly Rendered to Deceased Beneficiaries Health Care Services and its fiscal intermediaries inappropriately authorized reimbursements to providers for services rendered to child beneficiaries using Social Security numbers belonging to deceased individuals. Specifically, using the Death Master File of the U.S. Social Security Administration (Social Security), we determined that Health Care Services and its fiscal intermediaries authorized reimbursements to providers for services rendered to 153 beneficiaries who, according to Social Security records, were deceased at the time the services purportedly occurred. Our analysis of Health Care Services’ dental procedures data indicates that these reimbursements totaled more than $70,000 for dental procedures that were purportedly provided to deceased beneficiaries between 2009 and 2013. We identified a similar concern in our earlier report titled California Department of Health Care Services: Its Failure to Properly Administer the Drug Medi‑Cal Treatment Program Created Opportunities for Fraud, Report 2013‑119, issued in August 2014. Specifically, we reported that Health Care Services and the California Department of Alcohol and Drug Programs authorized payments totaling more than $10,300 for 323 services purportedly provided to 19 deceased beneficiaries under the Drug Medi‑Cal Treatment Program. The fact that we found this problem in a second Medi‑Cal program supports a conclusion we made in the August 2014 report that this issue “could have even greater implications related to Health Care Services’ other Medi‑Cal programs that also rely on this system’s data.” California State Auditor Report 2013-125 57 December 2014 Federal law requires that Health Care Services authorize reimbursements to providers only for services rendered to eligible beneficiaries; thus, reimbursements for services purportedly rendered to deceased beneficiaries are not allowable. Health Care Services indicated that it relies on information it receives from California Vital Statistics and Social Security to update its beneficiary eligibility system with available death records. According to Health Care Services, it uses this system to verify the eligibility of beneficiaries before reimbursing providers for services they rendered to those beneficiaries. However, we found instances indicating that Health Care Services had not updated the beneficiary eligibility system with death information. For example, our analysis found that Health Care Services and its fiscal intermediaries authorized reimbursements for a total of $3,569 for services purportedly rendered to a beneficiary between February 2009 and April 2011. However, Health Care Services’ data were not updated to reflect that this beneficiary had died in March 2004. After researching 15 of these 153 beneficiaries’ Social Security numbers, Health Care Services indicated that these Social Security numbers had been entered incorrectly into its beneficiary eligibility system. However, the fact remains that although Health Care Services believes it is obtaining sufficient death information from sources other than Social Security’s Death Master File, these other sources are not sufficient. In fact, until we brought this issue to its attention, Health Care Services was not aware that it had authorized payments for services purportedly rendered to deceased beneficiaries. Until it develops robust procedures for using available death information to update promptly all records in its beneficiary eligibility system, Health Care Services and others that use the system risk reimbursing providers for services they did not render. Again, as we indicated in our earlier report, this issue has implications that extend beyond the dental program because Health Care Services as well as others use the beneficiary eligibility system to verify beneficiary eligibility for all Medi‑Cal programs. Recommendations To ensure that Medi‑Cal’s child beneficiaries have reasonable access to dental services, Health Care Services should immediately resume performing its annual reimbursement rate reviews, as state law requires. To make certain that access to dental services for child beneficiaries is comparable to the access available to the general population in the same geographic areas, Health Care Services should immediately adhere to its monitoring plan. Health Care Services should also compare its results for measuring the percentage of 58 California State Auditor Report 2013-125 December 2014 child beneficiaries who had at least one dental visit in the past 12 months with the results from the three surveys conducted by other entities, as its state plan requires. To improve beneficiary utilization rates and provider participation under the program’s fee‑for‑service delivery system, Health Care Services should immediately take the following actions: • Direct Delta Dental to submit annually a plan that describes how it will remedy the dental access problems in the State’s underserved areas and in California’s border communities. • Direct Delta Dental to contract with one or more entities to provide additional dental services in either fixed facilities or mobile clinics in underserved areas, as its contract requires. • Increase Delta Dental’s access to beneficiary address information and require it to contact beneficiaries residing in underserved areas directly to make them aware of the program’s benefits. • Review Delta Dental’s outreach activities and implement measurable objectives for its outreach unit. • Require Delta Dental to develop a dental outreach and education program and to submit an annual plan by the end of each calendar year. To ensure that the State pays only for deliverables performed by Delta Dental under the terms of its contract, Health Care Services should immediately take these steps: • Ensure that the financial manual and invoices are consistent with contract language. • Develop and implement tangible measurements to evaluate Delta Dental’s performance of all functions under the contract. To comply with state contracting laws that protect the State’s interests, Health Care services should implement future contract amendments via appropriate channels, including state contracting procedures. To ensure that it reports in the CMS‑416 an accurate number of child beneficiaries who received specific types of dental services from the centers and clinics, Health Care Services should continue working on a solution to capture the details necessary to identify the specific dental services rendered. California State Auditor Report 2013-125 59 December 2014 To make certain that it meets the requirements of the new state law and that its performance measures are accurate, Health Care Services should do the following: • Establish the provider‑to‑beneficiary ratio statewide and by county as performance measures designed to evaluate access and availability of dental services and include this measure in its October 2015 report to the Legislature. • Require that the provider field in its data systems be populated in all circumstances. • Correct the erroneous data currently in its data warehouse and fix its process for transferring data from its mainframe to its data warehouse. To ensure that Health Care Services and its fiscal intermediaries reimburse providers only for services rendered to eligible beneficiaries, Health Care Services should do the following: • Obtain Social Security’s Death Master File and update monthly its beneficiary eligibility system with death information. • Coordinate with the appropriate fiscal intermediaries to recover inappropriate payments made for services purportedly rendered to deceased beneficiaries, if necessary. 60 California State Auditor Report 2013-125 December 2014 We conducted this audit under the authority vested in the California State Auditor by Section 8543 et seq. of the California Government Code and according to generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives specified in the scope section of the report. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Respectfully submitted, ELAINE M. HOWLE, CPA State Auditor Date: December 11, 2014 Staff: Joanne Quarles, CPA, Audit Principal Dale A. Carlson, MPA, CGFM Sam Harrison Michelle J. Sanders Legal Counsel: Scott A. Baxter, Sr. Staff Counsel Joseph L. Porche, Staff Counsel IT Audit Support: Denise L. Vose, CPA, Deputy State Auditor Ben Ward, CISA, ACDA Ryan P. Coe, MBA, CISA Richard W. Fry, MPA, ACDA For questions regarding the contents of this report, please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255. California State Auditor Report 2013-125 61 December 2014 Appendix A DATA RESULTS FOR THE MEDI‑CAL DENTAL PROGRAM The following tables summarize additional or more detailed results of our review of data related to the beneficiary utilization rates and provider‑to‑beneficiary ratios for the Medi‑Cal Dental Program (program), which we discuss in Chapter 1. Table A.1 summarizes beneficiary utilization rates across California for program services of the California Department of Health Care Services (Health Care Services) for 2011 through 2013. In 2013 Alpine County had the lowest utilization rate at 6.4 percent, and Monterey County had the highest utilization rate at 53.4 percent. Table A.1 Service Utilization Rates by County for Child Beneficiaries in the Medi‑Cal Dental Program Dental Services for Child Beneficiaries From Fee‑for‑Service and Managed Care Delivery Models, and From Centers and Clinics UTILIZATION RATES UTILIZATION RATES COUNTY 2011 2012 2013 COUNTY 2011 2012 2013 Alameda 38.7% 39.2% 41.5% Orange 45.8% 46.9% 48.1% Alpine 14.1 6.0 6.4 Placer 31.9 31.1 28.1 Amador 28.8 28.7 28.6 Plumas 41.3 40.4 35.2 Butte 37.2 36.4 35.8 Riverside 37.6 38.1 40.6 Calaveras 30.9 31.4 26.9 Sacramento 23.9 30.2 25.8 Colusa 34.7 38.4 34.8 San Benito 37.2 39.1 39.6 Contra Costa 34.5 35.3 37.9 San Bernardino 37.9 38.0 40.3 Del Norte 39.3 39.3 35.1 San Diego 40.3 40.7 42.7 El Dorado 31.5 33.1 29.2 San Francisco 43.5 43.8 45.0 Fresno 39.0 39.8 41.3 San Joaquin 34.5 35.1 36.3 Glenn 43.1 44.6 40.9 San Luis Obispo 40.0 44.6 43.4 Humboldt 29.6 29.7 27.0 San Mateo 37.3 39.1 40.6 Imperial 35.8 35.7 33.6 Santa Barbara 39.9 42.4 44.9 Inyo 35.3 31.4 27.8 Santa Clara 42.2 44.4 47.3 Kern 42.1 42.6 44.0 Santa Cruz 47.3 49.1 47.1 Kings 35.6 37.5 41.5 Shasta 32.6 33.1 30.2 Lake 37.0 37.2 37.6 Sierra 29.4 27.0 27.4 Lassen 39.5 36.9 33.1 Siskiyou 30.1 27.2 25.2 Los Angeles 40.8 42.3 42.8 Solano 30.2 31.5 33.8 Madera 39.3 41.4 43.6 Sonoma 37.6 39.8 41.4 Marin 49.7 53.7 52.3 Stanislaus 33.2 33.7 35.2 Mariposa 34.0 32.8 32.0 Sutter 37.2 39.8 38.5 Mendocino 39.8 39.9 39.3 Tehama 41.3 44.1 41.9 continued on next page . . . 62 California State Auditor Report 2013-125 December 2014 Dental Services for Child Beneficiaries From Fee‑for‑Service and Managed Care Delivery Models, and From Centers and Clinics UTILIZATION RATES UTILIZATION RATES COUNTY 2011 2012 2013 COUNTY 2011 2012 2013 Merced 36.4 37.4 38.9 Trinity 27.3 29.8 25.5 Modoc 39.6 34.8 32.4 Tulare 38.1 39.5 42.3 Mono 35.5 40.3 34.8 Tuolumne 37.9 40.1 36.5 Monterey 46.6 48.6 53.4 Ventura 37.4 37.6 36.6 Napa 39.5 41.9 40.8 Yolo 35.1 34.5 33.9 Nevada 36.1 34.1 27.6 Yuba 35.8 36.0 36.1 Statewide utilization rates 39.2% 40.4% 41.4% Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. The utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. Table A.2 summarizes fee‑for‑service utilization rates by county for 2011 through 2013. In 2013 fee‑for‑service utilization rates ranged from 1.2 percent in Mono County to 45.9 percent in Orange County. Table A.2 Service Utilization Rates by County for Child Beneficiaries in the Medi‑Cal Dental Program Fee‑for‑Service Dental Services for Child Beneficiaries UTILIZATION RATES UTILIZATION RATES COUNTY 2011 2012 2013 COUNTY 2011 2012 2013 Alameda 28.1% 27.1% 29.0% Orange 44.8% 45.4% 45.9% Alpine 8.9 0.8 4.8 Placer 26.8 26.6 24.4 Amador 16.1 18.0 17.5 Plumas 7.8 6.9 6.1 Butte 19.5 17.8 18.1 Riverside 35.7 35.8 38.3 Calaveras 19.4 20.3 17.4 Sacramento 3.4 3.2 3.1 Colusa 14.2 16.6 18.7 San Benito 25.2 26.3 25.0 Contra Costa 25.1 25.5 28.9 San Bernardino 37.4 37.3 39.7 Del Norte 3.7 4.1 3.1 San Diego 31.3 31.1 33.3 El Dorado 25.9 26.4 22.2 San Francisco 31.3 31.0 33.2 Fresno 35.6 36.1 37.2 San Joaquin 33.7 34.2 35.5 Glenn 8.8 9.8 9.6 San Luis Obispo 29.3 30.9 30.2 Humboldt 4.3 3.7 3.4 San Mateo 31.7 32.1 34.0 Imperial 28.1 27.3 25.5 Santa Barbara 28.9 29.8 32.0 Inyo 3.2 3.4 2.7 Santa Clara 37.6 37.8 40.0 Kern 38.6 39.1 40.8 Santa Cruz 27.7 28.3 28.0 California State Auditor Report 2013-125 63 December 2014 Fee‑for‑Service Dental Services for Child Beneficiaries UTILIZATION RATES UTILIZATION RATES COUNTY 2011 2012 2013 COUNTY 2011 2012 2013 Kings 25.5 25.5 27.9 Shasta 16.5 16.1 13.7 Lake 8.1 7.7 9.3 Sierra 12.7 8.1 3.9 Lassen 16.8 15.0 14.0 Siskiyou 12.7 11.2 10.3 Los Angeles 36.9 37.4 36.1 Solano 23.5 23.2 23.4 Madera 28.6 30.0 32.7 Sonoma 26.1 25.6 26.0 Marin 9.3 8.0 7.8 Stanislaus 29.7 30.0 31.9 Mariposa 16.8 17.2 18.1 Sutter 30.2 32.2 32.9 Mendocino 6.7 6.8 6.7 Tehama 9.3 7.2 6.4 Merced 28.7 29.7 31.5 Trinity 7.6 8.4 11.4 Modoc 6.4 5.7 6.9 Tulare 30.7 31.3 33.6 Mono 1.4 2.0 1.2 Tuolumne 12.3 15.5 16.0 Monterey 38.5 39.4 45.3 Ventura 33.0 33.2 32.1 Napa 19.2 22.4 23.1 Yolo 22.8 24.3 23.7 Nevada 9.3 7.5 5.3 Yuba 19.0 20.0 21.7 Statewide utilization rates 33.1% 33.4% 34.0% Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. The utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. Table A.3 summarizes by county the utilization rates of federally qualified health centers, rural health clinics, and Indian Health Service clinics (centers and clinics) for 2011 through 2013. Services rendered by centers and clinics are more common in rural areas than urban areas. Health Care Services was unable to tell us why the utilization rate in Marin County was so much higher than in other urban counties. Table A.3 Service Utilization Rates by County for Child Beneficiaries in the Medi‑Cal Dental Program Centers and Clinics Dental Services From Centers and Clinics for Child Beneficiaries UTILIZATION RATES UTILIZATION RATES COUNTY* 2011 2012 2013 COUNTY* 2011 2012 2013 Alameda 12.1% 13.8% 14.2% Orange 2.1% 3.2% 3.6% Alpine 7.4 5.3 2.4 Placer 5.5 4.8 3.8 Amador 14.8 12.4 12.9 Plumas 37.3 37.6 33.1 continued on next page . . . 64 California State Auditor Report 2013-125 December 2014 Dental Services From Centers and Clinics for Child Beneficiaries UTILIZATION RATES UTILIZATION RATES COUNTY* 2011 2012 2013 COUNTY* 2011 2012 2013 Butte 20.6 20.8 20.2 Riverside 2.5 3.0 3.0 Calaveras 13.9 13.1 10.9 Sacramento 0.5 0.6 0.6 Colusa 24.7 26.5 18.9 San Benito 15.7 15.1 17.7 Contra Costa 10.6 11.0 10.4 San Bernardino 0.7 0.8 0.8 Del Norte 37.6 37.6 33.7 San Diego 11.1 12.0 11.4 El Dorado 6.9 8.3 8.6 San Francisco 13.6 14.1 12.8 Fresno 4.2 4.8 5.1 San Joaquin 1.1 1.2 1.0 Glenn 36.5 38.4 34.3 San Luis Obispo 13.9 19.7 17.1 Humboldt 27.3 27.8 25.1 San Mateo 6.4 7.9 7.4 Imperial 9.4 9.9 9.5 Santa Barbara 13.4 16.1 15.3 Inyo 32.9 28.8 25.8 Santa Clara 5.6 8.2 9.6 Kern 4.4 4.5 4.2 Santa Cruz 23.6 23.9 21.3 Kings 12.8 15.5 16.7 Shasta 18.6 19.2 18.3 Lake 32.1 32.6 32.0 Sierra 19.6 21.6 24.2 Lassen 28.5 27.8 23.9 Siskiyou 19.7 17.8 16.7 Los Angeles 1.2 1.5 1.7 Solano 7.9 9.5 12.2 Madera 13.4 14.3 13.8 Sonoma 13.8 17.2 17.9 Marin 43.5 48.1 46.8 Stanislaus 4.4 4.3 4.0 Mariposa 21.3 19.8 17.3 Sutter 8.4 9.1 7.1 Mendocino 36.9 36.9 36.4 Tehama 35.0 39.3 37.9 Merced 9.6 9.5 9.4 Trinity 22.0 24.6 15.9 Modoc 35.1 30.8 28.0 Tulare 9.4 10.8 11.2 Mono 34.4 38.9 33.9 Tuolumne 29.7 28.5 23.5 Monterey 10.2 10.9 9.6 Ventura 5.4 5.3 5.4 Napa 23.7 22.6 19.8 Yolo 15.8 12.0 12.1 Nevada 28.4 28.4 23.7 Yuba 18.9 18.7 16.7 Statewide utilization rates 5.3% 5.9% 5.9% Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services (Health Care Services), including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. The utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. * Health Care Services’ Primary, Rural, and Indian Health Division (division) considers the following 14 counties to be urban: Alameda, Contra Costa, Los Angeles, Marin, Orange, Riverside, Sacramento, San Diego, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, and Ventura. The division considers the remaining 44 counties to be rural. California State Auditor Report 2013-125 65 December 2014 Table A.4 summarizes fee‑for‑service utilization rates by service type for 2011 through 2013. For all years, utilization rates for diagnostic and preventive services were higher than utilization rates for treatment services. Further, the closeness of the utilization rates for diagnostic and preventive services to the overall utilization rates indicates that most child beneficiaries receiving services are obtaining diagnostic and preventive services. Table A.4 Service Utilization Rates for Child Beneficiaries in the Medi‑Cal Dental Program Who Received Diagnostic, Preventive, and Treatment Services FEE‑FOR‑SERVICE DELIVERY SYSTEM UTILIZATION RATES SERVICE TYPE 2011 2012 2013 Diagnostic 32.3% 32.5% 33.2% Preventive 30.4 30.6 31.5 Treatment 18.6 18.2 17.6 Totals* 33.1% 33.4% 34.0% Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: Child beneficiaries are Medi‑Cal enrollees under age 21. The utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for Medi‑Cal dental services for at least one month during the year. * Totals represents the statewide utilization rate for all types of dental services. Because some child beneficiaries received more than one type of dental service, the statewide utilization rate is less than the sum of the individual service utilization rates. Table A.5 summarizes data related to provider‑to‑beneficiary ratios for active providers. In 2013 Health Care Services’ data show that five counties had no active providers. Table A.5 Provider‑to‑Beneficiary Ratios for 2013 by County for Active Providers in the Medi‑Cal Dental Program NUMBER NUMBER OF RATIO OF NUMBER NUMBER OF RATIO OF OF CHILD ACTIVE DENTAL PROVIDERS TO OF CHILD ACTIVE DENTAL PROVIDERS TO COUNTY BENEFICIARIES* PROVIDERS† BENEFICIARIES‡ COUNTY BENEFICIARIES * PROVIDERS† BENEFICIARIES‡ Alameda 65,203 264 1:247 Orange 179,871 968 1:186 Alpine§ 8 0 no providers Placer 6,738 45 1:150 Amador 852 0 no providers Plumas 687 1 1:687 Butte 10,958 46 1: 238 Riverside 150,698 608 1:248 Calaveras 1,199 4 1: 300 Sacramento 58,164 263 1:221 continued on next page . . . 66 California State Auditor Report 2013-125 December 2014 NUMBER NUMBER OF RATIO OF NUMBER NUMBER OF RATIO OF OF CHILD ACTIVE DENTAL PROVIDERS TO OF CHILD ACTIVE DENTAL PROVIDERS TO COUNTY BENEFICIARIES* PROVIDERS† BENEFICIARIES‡ COUNTY BENEFICIARIES * PROVIDERS† BENEFICIARIES‡ Colusa 1,648 4 1: 412 San Benito 3,445 6 1:574 Contra Costa 36,754 134 1: 274 San Bernardino 162,344 665 1:244 Del Norte 1,688 6 1: 281 San Diego 157,209 480 1:328 El Dorado 3,989 20 1: 199 San Francisco 26,678 145 1:184 Fresno 91,969 225 1: 409 San Joaquin 48,609 164 1:296 Glenn 2,399 11 1: 218 San Luis Obispo 11,024 18 1:612 Humboldt 4,838 19 1: 255 San Mateo 22,090 82 1:269 Imperial 13,535 29 1: 467 Santa Barbara 28,838 74 1:390 Inyo 671 0 no providers Santa Clara 81,601 405 1:201 Kern 82,314 191 1: 431 Santa Cruz 15,268 44 1:347 Kings 11,585 37 1: 313 Shasta 7,743 33 1:235 Lake 4,087 5 1: 817 Sierra 78 0 no providers Lassen 1,047 4 1: 262 Siskiyou 1,632 5 1:326 Los Angeles 696,872 3,064 1: 227 Solano 16,239 85 1:191 Madera 14,828 39 1: 380 Sonoma 21,071 60 1:351 Marin 7,463 33 1: 226 Stanislaus 35,240 105 1:336 Mariposa 568 2 1: 284 Sutter 6,684 43 1:155 Mendocino 6,144 9 1: 683 Tehama 5,004 10 1:500 Merced 24,653 81 1: 304 Trinity 415 0 no providers Modoc 383 1 1: 383 Tulare 52,184 142 1:367 Mono 487 2 1: 244 Tuolumne 1,968 9 1:219 Monterey 44,762 57 1: 785 Ventura 37,551 162 1:232 Napa 5,610 22 1: 255 Yolo 7,835 32 1:245 Nevada 2,439 5 1: 488 Yuba 4,978 6 1:830 Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. Note: As discussed in the Scope and Methodology, because of a data limitation, we may be undercounting the number of active providers who rendered dental services. * Child beneficiaries are Medi‑Cal enrollees under age 21 who received at least one dental procedure in 2013. † To be counted as an active dental provider, the provider must have rendered at least one dental procedure to a Medi‑Cal Dental child beneficiary through one of the Medi‑Cal Dental Program’s delivery models—fee‑for‑service or managed care—and the provider must have been registered as a general practitioner. This number also includes active dental providers affiliated with federally qualified health centers, rural health centers, and Indian Health Service clinics. We counted those providers rendering dental services to child beneficiaries in multiple counties once for each county in which they provided services. ‡ On Table A.6 we present the ratio of providers to beneficiaries for those child beneficiaries who did not have a dental procedure. § The Dental Board of California’s Web site shows no licensed dentists located in Alpine County. Table A.6 summarizes data related to the provider‑to‑beneficiary ratio for generalist dental providers willing to accept new patients. Health Care Services’ data show that in 2013 11 counties had no dental providers willing to accept new Medi‑Cal patients and that 16 counties had provider‑to‑beneficiary ratios above 1:2,000, indicating there may be an insufficient number of dental providers willing to accept new Medi‑Cal patients. California State Auditor Report 2013-125 67 December 2014 Table A.6 Provider‑to‑Beneficiary Ratios by County for Dental Service Offices and Providers Willing to Accept New Medi‑Cal Patients as of December 28, 2013, for the Medi‑Cal Dental Program NUMBER OF NUMBER OF GENERALIST DENTAL GENERALIST DENTAL SERVICE OFFICES AND SERVICE OFFICES AND NUMBER PROVIDERS WILLING RATIO OF NUMBER PROVIDERS WILLING RATIO OF OF CHILD TO ACCEPT NEW PROVIDERS TO OF CHILD TO ACCEPT NEW PROVIDERS TO COUNTY BENEFICIARIES*† MEDI‑CAL PATIENTS BENEFICIARIES‡ COUNTY BENEFICIARIES*† MEDI‑CAL PATIENTS BENEFICIARIES‡ Alameda 59,840 59 1:1,014 Orange 126,138 385 1:328 Alpine§ 76 0 no providers Placer 11,204 7 1:1,601 Amador 1,380 0 no providers Plumas 824 1 1:824 Butte 12,776 6 1:2,129 Riverside 143,387 193 1:743 Calaveras 2,123 0 no providers Sacramento 108,558 42 1:2,585 Colusa 2,005 1 1:2,005 San Benito 3,414 3 1:1,138 Contra Costa 39,210 21 1:1,867 San Bernardino 156,363 217 1:721 Del Norte 2,033 0 no providers San Diego 137,014 166 1:825 El Dorado 6,282 3 1:2,094 San Francisco 21,197 35 1:606 Fresno 85,112 80 1:1,064 San Joaquin 55,531 29 1:1,915 Glenn 2,249 1 1:2,249 San Luis Obispo 9,359 4 1:2,340 Humboldt 8,503 1 1:8,503 San Mateo 21,003 20 1:1,050 Imperial 17,400 12 1:1,450 Santa Barbara 23,035 15 1:1,536 Inyo 1,130 0 no providers Santa Clara 59,044 105 1:562 Kern 68,010 53 1:1,283 Santa Cruz 11,171 11 1:1,016 Kings 10,624 4 1:2,656 Shasta 11,629 3 1:3,876 Lake 4,410 1 1:4,410 Sierra 135 0 no providers Lassen 1,377 1 1:1,377 Siskiyou 3,152 2 1:1,576 Los Angeles 605,728 1,222 1:496 Solano 20,641 13 1:1,588 Madera 12,483 9 1:1,387 Sonoma 19,396 9 1:2,155 Marin 4,420 5 1:884 Stanislaus 42,177 15 1:2,812 Mariposa 786 0 no providers Sutter 6,945 6 1:1,158 Mendocino 6,159 1 1:6,159 Tehama 4,514 0 no providers Merced 25,188 8 1:3,148 Trinity 787 1 1:787 Modoc 519 2 1:259 Tulare 46,369 29 1:1,599 Mono 593 0 no providers Tuolumne 2,225 1 1:2,225 Monterey 25,370 19 1:1,335 Ventura 42,271 58 1:729 Napa 5,301 3 1:1,767 Yolo 9,946 4 1:2,487 Nevada 4,163 0 no providers Yuba 5,725 0 no providers Sources: California State Auditor’s analyses of data from systems administered by the California Department of Health Care Services, including the California Dental Medicaid Management Information System, the California Medicaid Management Information System, and the Fiscal Intermediary Access to Medi‑Cal Eligibility system. * These child beneficiaries—who are Medi‑Cal enrollees under age 21—did not have dental procedures in 2013. † Because all child beneficiaries not having a dental procedure in 2013 are not likely to seek services in the future, we applied a 65 percent utilization rate to estimate the number of child beneficiaries who could seek services from providers willing to accept new patients. The 65 percent utilization rate is based on data reported to the U.S. Department of Health and Human Services by 49 states and the District of Columbia for federal fiscal year 2013. ‡ On Table A.5 we present the ratio of providers to beneficiaries for those child beneficiaries who received at least one dental procedure. § The Dental Board of California’s Web site shows no licensed dentists located in Alpine County. The ratio of providers to beneficiaries for this county is higher than 1:2,000. 68 California State Auditor Report 2013-125 December 2014 Blank page inserted for reproduction purposes only. California State Auditor Report 2013-125 69 December 2014 Appendix B DATA RESULTS FOR THE HEALTHY FAMILIES DENTAL PROGRAM The following tables summarize our review of data related to the beneficiary utilization rates and provider‑to‑beneficiary ratios of California’s Healthy Families Program. Table B.1 shows that utilization rates for the Healthy Families Program dropped in 2013. According to the former deputy director for eligibility (former deputy director) at the Managed Risk Medical Insurance Board (board), the 45 percent decrease in the utilization rates between 2012 and 2013 was because the Healthy Families Program ceased the enrollment of new beneficiaries and transitioned existing beneficiaries to the California Medical Assistance Program, or Medi‑Cal. Further, the similarity of the utilization rates for diagnostic and preventive services to the overall total utilization rates indicates that most child beneficiaries receiving services are obtaining diagnostic and preventive services. Table B.1 Service Utilization Rates for Child Beneficiaries in the Healthy Families Program Who Received Diagnostic, Preventive, and Treatment Services UTILIZATION RATES SERVICE TYPE 2011 2012 2013 Diagnostic 37.9% 40.9% 20.8% Preventive 35.2 38.2 19.4 Treatment 21.9 23.4 11.1 Totals* 40.7% 43.1% 23.8% Sources: California State Auditor’s analysis of data obtained from Delta Dental of California’s MetaVance and DB2 databases; Health Net, Inc.’s HSP database; MAXIMUS, Inc.’s Healthy Families Enrollment Database (MAXe2); Premier Access Insurance Company and Access Dental Plan’s MCARE database; SafeGuard Health Plans, Inc.’s NOVA database; and Western Dental Services, Inc.’s Dansoft ERP database. Note: Child beneficiaries were Healthy Families Program enrollees under age 19. The service utilization rates are calculated by dividing the number of child beneficiaries who received at least one dental service during the year by the number of child beneficiaries eligible for this program’s dental services for at least one month during the year. * Totals represents the statewide utilization rate for all types of dental services. Because some child beneficiaries received more than one type of dental service, the statewide utilization rate is less than the sum of the individual service utilization rates. Table B.2 on the following page indicates that from 2009 to 2013, the number of Healthy Families Program dental providers decreased overall by 189. However, the number of dental providers in this program increased in 2011 and 2012 before dropping 70 California State Auditor Report 2013-125 December 2014 below the 2009 and 2010 levels. According to the former deputy director, the 21 percent increase in providers between 2010 and 2011 occurred because of new performance requirements the board added to its contracts with the health plans in an effort to increase utilization of dental services. To meet these requirements, the plans added more providers to increase access to services. Further, according to the former deputy director, the 22 percent decrease in providers between 2012 and 2013 occurred because the Healthy Families Program ceased the enrollment of new beneficiaries and transitioned existing beneficiaries to the Medi‑Cal program. Table B.2 Ratios of Active Providers to Child Beneficiaries in the Healthy Families Program From 2009 Through 2013 2009 2010 2011 2012 2013 Child beneficiaries receiving dental services under the 1,124,777 1,102,669 1,099,858 1,081,857 663,418 Healthy Families Program* Active dental providers in the Healthy Families Program† 5,809 5,904 7,175 7,222 5,620 Provider‑to‑beneficiary ratio 1:194 1:187 1:153 1:150 1:118 Sources: California State Auditor’s analysis of data obtained from Delta Dental of California’s MetaVance and DB2 databases; Health Net, Inc.’s HSP database; MAXIMUS, Inc.’s Healthy Families Enrollment Database (MAXe2); Premier Access Insurance Company and Access Dental Plan’s MCARE database; SafeGuard Health Plans, Inc.’s NOVA database; and Western Dental Services, Inc.’s Dansoft ERP database. Note: As discussed in the Scope and Methodology, because of a data limitation, we may be undercounting the number of providers who rendered dental services. * Child beneficiaries were Healthy Families Program enrollees under age 19. † To be counted as an active dental provider, the provider must have rendered at least one dental procedure to a Healthy Families Program child beneficiary. California State Auditor Report 2013-125 71 December 2014 * 1 * California State Auditor’s comments begin on page 85. 72 California State Auditor Report 2013-125 December 2014 California State Auditor Report 2013-125 73 December 2014 Department of Health Care Services Response to the The California State Auditor’s Report entitled, “California Department of Health Care Services: Weakness in its Medi-Cal Dental Program Limit Children’s Access to Dental Care Chapter 1 (pg. 19): Some Medi-Cal Children May Face Difficulties Accessing Dental 2 Services A. To ensure that child beneficiaries throughout California can reasonably access dental services under the Medi-Cal program and to increase child beneficiary utilization and provider participation, Health Care Services should take the following steps for the fee-for-service delivery system by May 2015: 1. Establish criteria for assessing beneficiary utilization. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS will develop criteria for assessing beneficiary utilization and will consult with the stakeholder community. DHCS will develop benchmarks for this measurement on an annual basis and will publicly report this measurement in accordance with Departmental reporting policies along with the other legislatively required performance measures. Further, DHCS will develop processes to help trackutlization by county and will identify mitigation strategies when benchmarks are not met. Implementation Date: May 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2. Establish criteria for assessing provider participation. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS will develop criteria for assessing provider participationand will consult with the stakeholder community. DHCS will develop benchmarks for this measurement in accordance with Departmental reporting policies on an annual basis and will publicly report this measurement. DHCS will develop processes to track provider participation to assess capacity by region and will identify mitigation strategies when geographic problem areas are identified. Page 1 74 California State Auditor Report 2013-125 December 2014 Implementation Date: May 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 3. Establish procedures for periodically identifying counties or other geographic areas where child beneficiary utilization and provider participation fail to meet applicable criteria. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS will use the criteria developed in recommendations 1 and 2 to establish procedures to perform annual assessments of beneficiary utilization and provider participation capacity by geographic region. This will allowDHCS to identify underperforming areas and to develop mitigation strategies. Implementation Date: May 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 4. Immediately implement actions to resolve any declining trends identified during its monitoring efforts. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS agrees to take the necessary stepsto resolve any declining trends that are within its purview to implement. DHCS recognizes that some solutions may require additional resources and funding and will take the necessary steps to seek approval within the Administration in order to implement identified mitigation strategies. Implementation Date: N/A Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division B. To help increase the number of providers participating in the Medi-Cal Dental Program fee-for-service delivery system, Health Care Services should improve its identification and implementation of changes that minimize or simplify administrative processes for providers. These changes should include revising its processes pertaining to dental procedures that require radiographs or photographs. Page 2 California State Auditor Report 2013-125 75 December 2014 Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS agrees with the recommendation to evaluate and simplify administrative processes to encourage providerparticipation while consulting with the stakeholder community. DHCS is committed to re-evaluating all program criteria and utilization management tools. DHCS has a responsibility to develop, implement, and monitor program policies and procedures and to ensure medical necessity criteria is met for covered benefits which, in totality, are designedto protectand ensure the healthand well-being of Medi-Cal beneficiaries. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division C. To ensure that the influx of beneficiaries resulting from recent changes to federal and state law are able to access Medi-Cal dental services, Health Care Services should: 1. Continuously monitor beneficiary utilization, the number of beneficiaries having difficulty accessing appointments with providers, and the number of providers enrolling in and leaving the Medi-Cal program. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. Anestimated date of completion is required. DHCS will use the criteria developed in recommendations 1 and 2 of Section A to establish procedures to perform periodic assessments of beneficiary utilization, the number of beneficiairies reporting difficulty accessing dental appointments, and provider enrollment trends by geographic region. This will allow DHCS the ability to identify underperformingareas andto develop mitigation strategies to address identified issues. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2. Immediately implement actions to resolve any declining trends identified during its monitoring efforts. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. Page 3 76 California State Auditor Report 2013-125 December 2014 If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or plannedbelow. An estimated date of completion is required. DHCS agrees to take the necessary steps to resolve any declining trends that are within its purview to implement. DHCS recognizes that some solutions may require additional resources and funding and will take the necessary steps to seek approval within the Administration in order to implement identified mitigation strategies. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2 Chapter 2 (pg. 40): The California Department of Health Care Services Has Failed to Adequately Monitor the Medi-Cal Dental Program D. To ensure that Medi-Cal child beneficiaries have reasonable access to dental services, Health Care Services should immediately resume performing its annual reimbursement rate reviews as state law requires. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and is currently working on a timeline to perform its annual rate review. DHCS also recognizes that the findings of the rate review and implementation of any such changes will be subject to approval within the Administration, the Legislature, and with the federal Centers for Medicare and Medicaid Services for purposes of receiving federal reimbursement while ensuring the proper and efficient administration of the program. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division E. To ensure that child beneficiary access is comparable to services available to the general population in the same geographic areas, Health Care Services should immediately adhere to its monitoring plan and compare its results for measuring the percentage of child beneficiaries who had at least one dental visit in the past 12 months with theresults from the three surveys conducted by other entities, as its state plan requires. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is Page 4 California State Auditor Report 2013-125 77 December 2014 required. DHCS is in agreement and is already working towards implementation of this recommendation. Implementation Date: February 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division F. To improve beneficiary utilization rates and provider participation under the fee-for- service delivery system, Health Care Services should immediately take the following actions: 1. Direct Delta Dental to annually submit a plan that describes how it will remedy the dental access problems in underserved areas within California and the border communities. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and is already working with Delta Dental who will develop and submit to DHCS an annual plan that shall address access problems in underserved areas within California and the border communities. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2. Direct Delta Dental to contract with one or more entities to provide additional dental services in either fixed facilities or mobile entities in underserved areas, as its contract requires. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and is already working with Delta Dental on the needed steps they will take to contract with mobile entities to provide access in underserved areaspursuant to contract requirements. Implementation Date: July1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division Page 5 78 California State Auditor Report 2013-125 December 2014 3. Increase Delta Dental's access to beneficiary address information and require it to directly contact beneficiaries residing in underserved areas to make them aware of the program's benefits. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and is already working with Delta Dental to provide them with beneficiary address information so that they can contact beneficiaries directlywho reside in underserved areas to inform them about program services. Implementation Date: July1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 4. Review Delta Dental's outreach activities and implement measurable objectives for its outreach unit. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and will be working with Delta Dental on this recommendation and will review their outreach plan to ensure it contains measurable objectives for its outreach unit. Implementation Date: July 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental ServicesDivision 5. Require Delta Dental to develop a dental outreach and education program and submit an annual plan by the end of each calendar year. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and will require Delta Dental to develop and submit to DHCS annually a dental outreach and education program that includes measurable objectives. Implementation Date: June 1, 2015 Page 6 California State Auditor Report 2013-125 79 December 2014 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division G. To ensure that the State only pays for deliverables performed by Delta Dental under the terms of its contract, Health Care Services should immediately: 1. Ensure that its financial manual and invoices are consistent with contract language. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS will take the necessary steps as required by the Delta Dental contract to align the financial manual and invoices with contract language. Implementation Date: May1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2. Develop and implement tangible measurements to evaluate Delta Dental's performance of all functions under the contract. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS will take the necessary steps required to work with Delta Dental to identify tangible measurements to evaluate Delta's performance with respect to all functionsunder the contract. Implementation Date: May 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division H. To comply with state contracting laws that protect the State's interest, Health Care services should implement future contract amendments via appropriate channels, including state contracting procedures. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describethe corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. Page 7 80 California State Auditor Report 2013-125 December 2014 DHCS concurs and will take appropriate steps to ensure that all future contract amendments follow the appropriatecontracting procedures. Implementation Date: January 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division I. To ensure that it reports an accurate number of children that received specific types of dental services from the centers and clinics in the CMS-416, Health Care Services should continue working on a solution to capture the detail necessary to identify the specific dental service rendered. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and is already working toward this goal. DHCS is working across all applicable divisions within the department to ensure that all required information for the CMS-416 is being reported byDHCS. Implementation Date: July1, 2016 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division J. To ensure that it meets the requirements of the new state law and that its performance measures are accurate, Health Care Services should do the following: 1. Establish the provider-to-beneficiary ratio statewide and by county as performance measures designed to evaluate access and availability of dental services and include this measure in its October 2015 report to the Legislature. 1 Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. 1 DHCS does not agree with the recommendation to include provider-to-beneficiary ratio in the October 2015 report to the Legislature as this requirement is not part of the required reporting in Welfare and Institution Code 14132.915. However, DHCS is committed to establishing and monitoring provider to beneficiary ratios as part of its ongoing monitoring efforts to ensure that beneficiaries are able to access care. Implementation Date: N/A Page 8 California State Auditor Report 2013-125 81 December 2014 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 2. Require that the provider field in its data systems be populated in all circumstances. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees with this recommendation; however, DHCS must evaluate the necessary system changes required to implement this requirement and the implications of such a requirement in light of the current procurement effort that is underway. There will be a need to freeze all future system changes at some point in time. Based on otherprogrammatic priorities DHCS must weigh this effort against, it may be decided that this requirement is better accomplished through the procurement process. Implementation Date: N/A Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division 3. Correct the erroneous data currently in its data warehouse and its process for transferring data from its mainframe to its data warehouse. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees with this recommendation and is already in the process of remedying this anomaly. When this issue has been resolved, it will also fix existing data back to the inception of this problem. Implementation Date: March 1, 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division K. To ensure that Health Care Services and its fiscal intermediaries only reimburse providers for services rendered to eligible beneficiaries, Health Care Services should do the following: 1. Obtain the U. S. Social Security Administration's Death Master File and update its beneficiary eligibility system with death information monthly. Response: DHCS Agrees DHCS Disagrees with the recommendation. Page 9 82 California State Auditor Report 2013-125 December 2014 If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS intends to increase the frequency of updates to the Medi-Cal Eligibility Data System (MEDS) with the SSA Death Master File from quarterly to monthly. The request to increase the frequency to monthly was already in progress and will most likely require an amendment to the existing DHCS/SSA information sharing agreement. The implementation date takes into account the development and testing needed to complete this request. Implementation Date:No later than April 30,2016 Contact Name: Manuel Urbina Title: Chief,Program Integrity Unit, Medi-Cal Eligibility Division 2. Coordinate with the appropriate fiscal intermediaries to recover inappropriate payments made for services purportedly rendered to deceased beneficiaries, if appropriate. Response: DHCS Agrees DHCS Disagrees with the recommendation. If you agree, describe the corrective action taken or plannedbelow. If you disagree, indicate the specific reason(s) for the non-concurrence and a statement of any alternative corrective action taken or planned below. An estimated date of completion is required. DHCS agrees and will implement procedures to collect for inappropriatepayment to providers. Implementation Date: May 2015 Contact Name: Jon Chin Title: Acting Division Chief, Medi-Cal Dental Services Division Page 10 California State Auditor Report 2013-125 83 December 2014 DHCSConcerns Regarding CSAAudit Report In the Department of Health Care Services’ (DHCS) review of the California State Auditor’s (CSA) Audit Report, there are several areas of concern that have arisen regarding the content and methodologies utilized. DHCS feels due to the nature of the concerning areas, it is important that these factual and content-based concerns be presented. The following are the some of the areas that the Department feels inappropriately represent information: • In several areas of the report, CSA compares California’s Medi-Cal Dental Program to that of Texas. This comparison is not appropriate as Texas’ Medicaid program has been 3 widely suspected to have suffered from rampant fraud due to program integrity issues. Therefore, Texas’ high utilization is to be expected and is not an accurate representation of what a Medicaid program with strong program integrity should be modeling. Thus, the utilization ofTexas’ data inappropriately skews the data. • Additionally, more appropriate state Medicaid programs based on comparable state 4 eligible sizes and program integrity should have been selected as comparisons to California’s Medicaid program. If this more suitable methodology would have been employed, the data clearly shows that California is on par with states of a similar eligible population size. Below are the data to support DHCS’ above statements. Based on the CMS-416 Report for federal fiscal year (FFY) 2013, the following o are the utilization numbers for states in the top ten percentile based on eligible population size, with the exception of Texas for the aforementioned reasons: Table 1: Utilization for States in the Top Ten Eligibles Percentile State Users Eligibles Utilization* California 2,242,896 5,113,405 43.9% New York 930,563 2,263,808 41.1% Florida 666,077 2,110,488 31.6% Illinois 885,468 1,624,037 54.5% *Utilization was calculated by dividing the number of users receiving any dental or oral health services (section 12g in the CMS- 416 Report) by the number of eligible beneficiaries eligiblefor EPSDT for 90 continuous days of enrollment (section 1b in the CMS-416 Report) for the applicable state.Data is drawn from the CMS-416 for FFY 2013, which was updated by CMS on October 22, 2014. Although DHCS largely agrees with the overall recommendations made by CSA in the Audit Report, DHCS believes these aforementioned concerns should be noted as the report does not 5 appropriately representthe facts and programmatic health ofthe California Medi-Cal Dental Program. 84 California State Auditor Report 2013-125 December 2014 Blank page inserted for reproduction purposes only. California State Auditor Report 2013-125 85 December 2014 Comments CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES To provide clarity and perspective, we are commenting on the response to our audit by the California Department of Health Care Services (Health Care Services). The numbers below correspond to the numbers we have placed in the margin of Health Care Services’ response. 1 We believe Health Care Services should reconsider its decision to not implement our recommendation. Although Section 14132.915 of the Welfare and Institutions Code does not specifically mention provider‑to‑beneficiary ratio as a performance measure to report annually, it does require Health Care Services to establish a list of performance measures to ensure that the program meets quality and access criteria and that this list include, but not be limited to [emphasis added], certain specific performance measures. In addition, state law requires that these performance measures be designed to evaluate utilization, access, availability, and effectiveness of preventive care and treatment and that Health Care Services post these performance measures on its Web site annually. As we point out on page 55 of our report, we believe one critical measure of access and availability is each county’s provider‑to‑beneficiary ratio for this program. Although Health Care Services included on its Web site performance measures related to service utilization and effectiveness of preventive care and treatment, it did not include measures related to access and availability. As a result, until Health Care Services establishes the provider‑to‑beneficiary ratio as a performance measure, it cannot accurately predict whether sufficient numbers of providers are available to meet the increasing needs of the program in each county. 2 During the publication process for the audit report, page numbers shifted. Therefore, the page numbers cited by Health Care Services in its response do not correspond to the page numbers in our final report. 3 Contrary to Health Care Services’ statement that comparing California’s Medi‑Cal Dental Program to the equivalent Texas program is not appropriate because of suspected fraud, we believe it would be inappropriate to exclude Texas from our analysis based simply on allegations. Although the fraud allegations have been mentioned in the media and the Office of the Inspector General within the U.S. Department of Health and Human Services 86 California State Auditor Report 2013-125 December 2014 issued a report in August 2014 related to the allegations, Health Care Services provided no evidence that the allegations had been adjudicated or that the effect of any proven fraud on Texas’ utilization rate had been calculated. Furthermore, data from the Centers for Medicare and Medicaid Services do not indicate that Texas was an outlier. Although Texas had the highest utilization rate among the reporting states, the second highest utilization rate— 62.7 percent from Connecticut—was less than one percentage point lower than Texas’ utilization rate and 8 other states had utilization rates that exceeded 55 percent. Therefore, Health Care Services’ assertion that the inclusion of Texas’ data inappropriately skews the data is without merit. 4 We strongly disagree that the methodology we used was not suitable. To the contrary, Health Care Services’ efforts to have the State Auditor present a narrower perspective by comparing California’s utilization rates to only certain other states can be interpreted as self‑serving. In particular, if readers were to rely only on data for the four states Health Care Services mentions in its response, California’s utilization rates would appear to be the second highest. However, as we mention on page 19 of our report, California had the 12th worst utilization rate for Medicaid children receiving dental services among 49 states and the District of Columbia. In the absence of criteria established by Health Care Services for assessing the usage of Medi‑Cal dental services by child beneficiaries, we compared California’s utilization rates to others’ rates to provide readers an unbiased perspective of where California stands relative to the 49 states that provided data. Based in part on this comparison, we point out on page 18, “The utilization rate for Medi‑Cal dental services by child beneficiaries is low relative to national averages and to the rates of other states.” 5 Health Care Services is wrong when it states that our “report does not appropriately represent the facts and programmatic health of the California Medi‑Cal Dental Program.” We stand by our recommendations, and by the facts and conclusions presented in our report to support those recommendations. The California State Auditor’s Office is established in state law as the State’s independent auditor. Furthermore, state law requires the California State Auditor to conduct its audits in conformity with Government Auditing Standards issued by the Comptroller General of the United States. These standards provide a framework for performing high‑quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. They also provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. As we state on page 60 of our report, “We conducted this audit… according to generally accepted government auditing standards.”