Summary

REPORT BY THE STATE AUDITOR OF CALIFORNIA THE DEPARTMENT OF HEALTH SERVICES’ INFORMATION ON DRUG TREATMENT AUTHORIZATION REQUESTS 95012 FEBRUARY 1995 February 1, 1995 95012 The Governor of California President pro Tempore of the Senate Speaker of the Assembly State Capitol Sacramento, California 95814 Dear Governor and Legislative Leaders: Summary The Bureau of State Audits (BSA) presents the eighth in a series of semiannual reports concerning the way the Department of Health Services (department) processes reimbursement requests for certain prescribed drugs under the California Medical Assistance Program (Medi-Cal). These requests are known as drug treatment authorization requests (TARs). In response to Chapter 716, Statutes of 1992, we obtained from the department statistical information, compiled each month, concerning the number of drug TARs received and processed from June 1990 through November 1994. This report focuses on the drug TARs processed during the six months from June 1994 through November 1994. The first four reports on this subject were prepared by the Office of the Auditor General (OAG). The remaining reports were prepared by the BSA, which assumed responsibility for this audit under the Government Code, Section 8546.8, in May 1993. The department received 210,677 drug TARs from June through November 1994. This represents an increase of 132,179 (168 percent) drug TARs since June through November 1990, the first six months of the OAG’s review. According to the chief of the department’s Medi-Cal Operations Division Northern Field Operations Branch, the increase in the number of drug TARs received was primarily due to recently adopted policy changes including the reduction of the number of drugs on the Medi-Cal list of contract drugs and changes in the governing code which reduced the number of prescriptions allowed per Letter Report 95012 February 1, 1995 Page 2 month for most contract drugs. Whenever the monthly prescription limit is exceeded, a drug TAR is required to obtain reimbursement. Also, drugs that do not appear on the list require drug TARs for reimbursement. The increase in the number of drug TARs received may also have occurred because of the addition of approximately 1,433,254 Medi-Cal beneficiaries (a 39 percent increase since June 1990) eligible to obtain drugs through Medi-Cal. From June through November 1994, the department processed 214,303 drug TARs. This represents an increase of 137,021 (177 percent) drug TARs since the first six months that we reviewed. It also represents the highest level of activity since that time. The department’s backlog of unprocessed drug TARs was 2,311 drug TARs in November 1990. In comparison, its backlog of unprocessed drug TARs in November 1994 was 2,344 drug TARs. Further, we found that the department was not able to process its drug TARs in a timely manner from June 1994 through November 1994. According to the department’s own calculations, in five of the six months at the Stockton drug unit and in all six months at the Los Angeles drug unit, the department was not able to process mailed-in drug TARs within five working days as required by law (see Figure 7 on page 15 of this report for more details). Our review of samples of drug TARs randomly selected at each drug unit for the months of August and November 1994 confirmed that mailed-in drug TARs were not always processed within five working days. In August 1994, for example, neither of the drug units met the five-day state requirement for processing drug TARs. However, in November 1994, according to our samples, the Los Angeles drug unit took an average of five working days, and the Stockton drug unit took an average of one to two working days to process mailed-in drug TARs. We also found that the drug units generally did not process drug TARs received by FAX within 24 hours of receipt, as federal law requires. Based on samples of drug TARs randomly selected at each drug unit, an average of 107 hours was required to process a FAX TAR in the Los Angeles drug unit and an average of 29 hours was required to process a FAX TAR in the Stockton drug unit in August 1994. During that month, the department processed only 5 percent of the FAX TARs in our sample within 24 hours. In November 1994, 26 percent of the Letter Report 95012 February 1, 1995 Page 3 FAX TARs in our sample were processed within 24 hours. Finally, during August and November 1994, the Los Angeles drug unit did not meet the 24-hour turnaround requirement for drug TARs received via the department’s audio response telephone system–the Voice Drug TAR System (VDTS). For our sample of 53 VDTS TARs, only 65 percent of the VDTS TARs were processed within 24 hours. In response to Section 14105.42 of the Welfare and Institutions Code, the department provided us with information regarding the number of fair hearing requests beneficiaries made to appeal a denied drug TAR. The department also provided the number of complaints received from providers. Sixty-four fair hearing requests were submitted to the Department of Social Services from June through November 1994, which represents a 94 percent increase over the six months ending May 1994. Of those, 4 were dismissed, 28 were withdrawn before the cases were heard, 6 were denied, 3 were approved, and the decisions on the remaining 23 were still pending at the time of our review In addition to fair hearing requests, the department received numerous complaints from providers about its processing of drug TARs from June through November 1994. Because this represented an increase in the number of complaints, we contacted a sample of ten pharmacists to ascertain the impact of processing delays on patient care. All ten pharmacists stated they had experienced processing delays. Each pharmacist, however, stated such delays had not affected patient care because when the department took a long time to process a drug TAR, the pharmacist went ahead and filled the patient’s prescription in advance of receiving the drug TAR approval. As mentioned previously, the increase in the number of drug TARs received during June through November 1994 was largely due to changes in the governing code. To keep pace with the increasing workload, 79 new positions were added in the drug units in October 1994. For that reason, we selected samples from the months of August and November 1994, during which time we noted differences in the department’s processing capabilities. Letter Report 95012 February 1, 1995 Page 4 Background Authorized in 1965 under Title XIX of the Social Security Act, Medi-Cal provides a wide array of health care services including payment for prescription drugs to public assistance recipients and low-income families. Under the provisions of Title 22 of the California Code of Regulations, the department administers Medi-Cal; the state and federal governments jointly fund it. Under Medi-Cal, beneficiaries may receive prescription drugs from a list the department has established. This list is known as the Medi-Cal list of contract drugs and, according to the chief of the department’s northern field operations branch, includes drugs from most therapeutic categories. Therapeutic categories are classifications of drugs addressing specific medical problems. For example, the contract drugs are classified into such therapeutic categories as antibiotics, cardiac drugs, and gastrointestinal drugs. According to the chief of the northern field operations branch, when a doctor prescribes a drug that is not on the list of contract drugs or when a prescription exceeds the monthly limit of six, the provider, generally a pharmacist, must receive authorization to seek reimbursement for the cost of the drug. The provider’s request for authorization is known as a treatment authorization request (TAR). Currently, the department has two Medi-Cal drug units that process drug TARs. These drug units are located in Los Angeles (with a satellite office in San Bernardino) and Stockton. The role of the pharmacist consultants, who are licensed pharmacists, is to process drug TARs by either approving, denying, modifying, or returning the TARs to the providers (to request additional information). Drug TARs can be submitted via FAX, the department’s Voice Drug TAR System (VDTS), or mail. Drug TARs submitted by FAX and VDTS are restricted to initial supplies of prescribed drugs and drugs that are urgently needed. Drug TARs submitted by mail generally cover renewals or retroactive approvals of prescribed drugs. In both renewals and retroactive approvals, the beneficiary, or patient, may have already received the drug. Although the Stockton drug unit once processed VDTS drug TARs statewide, most of the VDTS drug TARs were reassigned to the Los Angeles drug unit as of April 1992. The Los Angeles drug unit employs more medical transcribers than the Stockton drug unit and, therefore, is better able to handle drug TARs received by VDTS. The Letter Report 95012 February 1, 1995 Page 5 processing of TARs submitted by FAX and mail is divided between the Los Angeles and Stockton drug units on a geographic basis. According to our interview with the chief pharmacist consultant in the Los Angeles drug unit, the San Bernardino office processes the majority of the mailed-in TARs received in Los Angeles. Drug TARS received by FAX or mail are first reviewed by medical transcribers for completeness. Mailed-in TARs are date stamped on the day they are received in the drug unit and are sent to the department’s contractor, Electronic Data Systems (EDS), for key data entry. EDS shares office space with the drug units. The drug TARs are then forwarded to the pharmaceutical consultants. The consultants process a drug TAR by either approving it, denying it, approving it with modifications, or returning it to request further information from the provider. After a decision is made on a drug TAR, the TAR is sent back to EDS for final key data entry. Then a copy of the drug TAR is returned to the provider. Drug TAR information received by VDTS is retrieved by medical transcribers. The medical transcribers type the information onto a TAR form and forward the form to a pharmaceutical consultant. The pharmaceutical consultant processes the drug TAR by either approving it, denying it, approving it with modifications, or returning it to request further information from the provider. After a decision is made on a drug TAR, the TAR is sent back to EDS for final key data entry. Then a copy of the TAR is mailed to the provider. The decision is also recorded on the VDTS, which the provider can access to determine the status of the request. Scope and Chapter 716, Statutes of 1992, required the OAG to prepare an analysis Methodology and summary of the department’s data on drug TARs. Further, Section 14105.42 of the Welfare and Institutions Code mandated that the OAG submit a report on this data to the Legislature beginning February 1, 1991, and every six months thereafter until January 1, 1999. Chapter 12, Statutes of 1993 (Government Code Section 8546.8) directs the Bureau of State Audits to assume these responsibilities. To fulfill these requirements, we obtained statistical data from the department regarding drug TARs received by VDTS, FAX, and mail. We also obtained data on the number of drug TARs approved, modified, denied, and returned. The data for this audit cover the six Letter Report 95012 February 1, 1995 Page 6 months from June through November 1994. We did not attempt to validate the drug units’ processes for compiling monthly drug TAR data since we have done this in previous audits. In addition to obtaining statistical data, we reviewed the methods the drug units used for measuring the time it takes them to respond to a drug TAR from the time it is received at the drug unit to the time the drug unit returns the completed drug TAR to the provider. Further, we conducted tests to determine if the Los Angeles and Stockton drug units are processing initial and urgent drug TARs submitted via FAX and VDTS within 24 hours, as required by federal law. We also conducted tests in the Stockton and Los Angeles drug units to determine if mailed-in TARs are processed within five days as state law requires. To obtain data on the number of denied drug TARs that have been appealed to the Department of Social Services and to obtain data on the number of complaints the Department of Health Services has received about its processing of drug TARs, we collected data from the drug units for June through November 1994. We also contacted a random sample of providers (pharmacists) by telephone to determine if the delays in obtaining responses to their drug TARs had caused lapses in medication or problems for patients, or both. Drug TARs As shown in Figure 1, the number of drug TARs received has increased Received from June 1990 through November 1994. The volume of drug TARs has increased most significantly, however, during the most recent six-month reporting period, from June through November 1994. During the first six months of the OAG’s review, from June through November 1990, the drug units received 78,498 drug TARs, whereas, from June through November 1994, the drug units received 210,677 drug TARs, an increase of more than 132,179 (an increase of 168 percent) drug TARs since the first six months of this review. Also, the number of drug TARs received from June through November 1994 Letter Report 95012 February 1, 1995 Page 7 exceeded drug TARs received during the previous reporting period, December 1993 through May 1994, by more than 54,000 drug TARs (an increase of 35 percent). Figure 1 Number of Drug TARs Received June 1990 Through November 1994 250000 200000 150000 100000 50000 0 6/90 - 11/90 6/91 - 11/91 6/92 - 11/92 6/93 - 11/93 6/94 - 11/94 Six-Month Reporting Periods According to the chief of the department’s Medi-Cal Operations Division Northern Field Operations Branch, the increase in the number of drug TARs received was due to changes in the governing code, which reduced the number of prescriptions allowed per month for most contract drugs and reduced the number of drugs on the Medi-Cal list of contract drugs. Whenever the monthly prescription limit is exceeded, a drug TAR is required to obtain reimbursement. Also, drugs that do not appear on the list require drug TARs for reimbursement. To display the impact of these changes on the volume of drug TARs received, Figure 2 highlights the timing of these changes against the monthly volumes of drug TARs received. sRAT gurD Letter Report 95012 February 1, 1995 Page 8 Figure 2 Number of Drug TARs Received June Through November 1994 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Jun-94 Jul-94 Aug-94 Sep-94 Oct-94 Nov-94 Month In July 1994, Section 14133.22 of the Welfare and Institutions Code reduced the number of prescriptions allowed per month to ten. Whenever this monthly limit is exceeded, a drug TAR is required for reimbursement. In addition, a new anti-psychotic drug, Risperdal, was no longer exempt through the department’s list of contract drugs and beginning in July 1994, the department required a drug TAR. These events contributed to an increase in the number of drug TARs the department received. For example, the department received 6,122 more drug TARs in August 1994 than in July 1994, an increase of 19 percent. In August 1994, Zantac, a commonly prescribed drug for ulcers, was removed from the department’s list of contract drugs. Drugs that do not appear on the department’s list of contract drugs require a drug TAR for reimbursement. In November, Chapter 147, Statutes of 1994, amended Section 14133.22 of the Welfare and Institutions Code by reducing the 10-prescription limit to 6 prescriptions per month. This change further increased the drug TAR volume in the drug units. Similarly, Chapter 147, Statutes of 1994, added Section 14105.335 to the Welfare and Institutions Code. This statute authorized the department to remove from the list of contract drugs, those drugs manufactured by drug sRAT gurD Risperdal removed from drug list Requirement of supplemental 10% rebate Zantac removed Implementation of Implementation of 10-prescription limit from drug list 6-prescription limit Letter Report 95012 February 1, 1995 Page 9 companies that refused to offer the Medi-Cal program a 10 percent rebate. The department experienced its greatest month-to-month increase from October to November 1994, at the time of the implementation of the six-prescription limit. In November 1994, the department received 6,923 more drug TARs than it received in October 1994, representing an increase of 19 percent. Finally, as mentioned in the BSA’s previous reports, the increase in the number of drug TARs received may have occurred because of the increase in the number of Medi-Cal beneficiaries. In June 1990, the department reported 3,675,000 Medi-Cal beneficiaries. According to the department, by November 1994, the number of Medi-Cal beneficiaries had increased to 5,108,254, resulting in 1,433,254 (39 percent) more Medi-Cal beneficiaries eligible to obtain drugs through Medi-Cal than in June 1990. Drug TARs As Figure 3 shows, from June through November 1994, the most Received common method of submitting drug TARs was by FAX, followed by According to mail and VDTS. During that period, the number of drug TARs submitted by FAX increased substantially from the previous six-month Methods of reporting period. From December 1993 to May 1994, providers Delivery submitted 68,866 drug TARs by FAX. In comparison, from June through November 1994, providers submitted 113,906 drug TARs by FAX, representing a 65 percent increase over the number of drug TARs received by FAX during the previous six months. Letter Report 95012 February 1, 1995 Page 10 Figure 3 Methods of Receiving Drug TARs June 1990 Through November 1994 120000 100000 80000 60000 40000 20000 0 6/90 - 11/90 6/91 - 11/91 6/92 - 11/92 6/93 - 11/93 6/94 - 11/94 Six-Month Reporting Periods The department also experienced an increase in the number of drug TARs submitted through the mail and by VDTS. From June to November 1990, the department received 52,257 drug TARs through the mail. From June to November 1994, the department received 80,985 drug TARs (a 55 percent increase) through the mail. From June through November 1991, the first period when VDTS was operational for a full six months, the department received 5,074 VDTS TARs. From June through November 1994, providers submitted 15,786 drug TARs (a 211 percent increase) by VDTS. Figure 4 shows the number of drug TARs processed at the drug units from June 1990 through November 1994. During the first six months of the OAG’s review, from June through November 1990, the drug units processed 77,282 drug TARs. In comparison, from June through November 1994, the drug units processed 214,303 drug TARs, an increase of more than 137,021 (177 percent) drug TARs since the first six months that we reviewed. Similar to the increase in the number of drug TARs received, the number of drug TARs processed increased significantly during the six months of June through November 1994. As mentioned previously, 79 new workers were hired in October 1994 to enable the drug units to sRAT gurD Phone FAX Mail VDTS Drug TARs Processed Letter Report 95012 February 1, 1995 Page 11 process drug TARs more effectively. Attachment B presents a comparison of the number of drug TARs the department processed from June through November 1990 and from June through November 1994. Figure 4 Number of Processed Drug TARs June 1990 Through November 1994 250000 200000 150000 100000 50000 0 6/90 - 11/90 6/91 - 11/91 6/92 - 11/92 6/93 - 11/93 6/94 - 11/94 Six-Month Reporting Periods As mentioned earlier, from June through November 1994, the drug units processed a total of 214,303 drug TARs. Of those, 65 percent were approved, 16 percent were modified, 13 percent were denied, and 6 percent were returned. Attachment C provides a comparison of the number of drug TARs approved, modified, denied, and returned from June through November 1990 and from June through November 1994. Figure 5 shows the department’s backlog of drug TARs as of the end of the last month of each of the six-month reporting periods from June 1990 through November 1994. For the last month of this most recent reporting period, November 1994, the department had 2,344 drug TARs waiting to be processed. sRAT gurD Backlog of Unprocessed Drug TARs Letter Report 95012 February 1, 1995 Page 12 Figure 5 Unprocessed Drug TARs November 1990 Through November 1994 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Nov-90 May-91 Nov-91 May-92 Nov-92 May-93 Nov-93 May-94 Nov-94 Month Figure 5 also shows that the department’s backlog of unprocessed drug TARs for November 1994 was among the lowest over the four-year period from November 1990 through November 1994. The reduction in the number of unprocessed drug TARs in November 1994 is probably the result of the department hiring 79 staff workers in the drug units. Figure 6 shows the backlog of drug TARs at the end of each of the months from June through November 1994 in relation to various factors affecting the drug TAR process. As shown in the figure, the department’s backlog of unprocessed drug TARs increased dramatically following the implementation of the 10-prescription limit in July 1994. On the other hand, in October 1994, when the 79 workers were hired in the drug units, the department’s backlog decreased to 804 unprocessed drug TARs. Attachment B provides detailed information on the number of drug TARs processed and unprocessed from June through November 1990 and from June through November 1994. sRAT gurD Letter Report 95012 February 1, 1995 Page 13 Figure 6 Number of Drug TARs Unprocessed June Through November 1994 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Jun-94 Jul-94 Aug-94 Sep-94 Oct-94 Nov-94 Month Section 14103.6 of the Welfare and Institutions Code requires that pharmaceutical consultants process drug TARs in an average of five working days. Additionally, this section states that, if the pharmaceutical consultant does not make a decision on a drug TAR within 30 days of receiving it, the request shall be considered approved. Additionally, Section 1927(d)(5) of the federal Social Security Act of 1990 requires states to respond to all drug TARs within 24 hours of receipt. The federal Department of Health and Human Services’ Health Care Financing Administration (HCFA) upholds this position, regardless of whether the TAR is for an initial or urgent prescription or for reauthorization of an existing prescription. It also upholds this position regardless of how the drug TARs are delivered to the department. In interpreting those regulations, the department expects the drug units to process initial or urgent drug TARs (that is, drug TARs typically submitted via FAX or VDTS) within 24 hours and to process reauthorization drug TARs (that is, drug TARs typically submitted through the mail) within five working days. sRAT gurD Implementation of Removal of Zantac from drug list 10-prescription limit Implementation of 6-prescription limit Addition of 79 staff positions Disagreements Over Processing Time for Drug TARs Letter Report 95012 February 1, 1995 Page 14 Although the Welfare and Institutions Code and the Social Security Act seem to conflict in their requirements, past BSA reports have stated that the federal government was expected to issue regulations to resolve this difference. However, according to our discussions with the department’s Medi-Cal Operations Division Northern Field Operations Branch, these regulations have not yet been issued. Processing Time During this audit, we reviewed a sample of 143 drug TARs submitted for Drug TARs by FAX to the Stockton and Los Angeles drug units in August 1994. Submitted Via Of those, only 7 drug TARs (5 percent) were processed within 24 hours as required. Our review also found that processing times for drug FAX and VDTS TARs received by FAX were as high as six days during August 1994. Lengthy processing times in August 1994 were accompanied by a heavy backlog of 16,446 unprocessed drug TARs at the end of the month. To determine if the department improved its timeliness in processing drug TARs, we also reviewed a sample of 189 drug TARs submitted by FAX during November 1994. In that month, the department processed 49 drug TARs submitted by FAX (or 26 percent) within 24 hours as required by state law. In November, the Stockton drug unit began to batch those drug TARs that resulted from the new 6-prescription per month limit separately from other drug TARs. Our sample of drug TARs received by FAX in the Stockton drug unit included 45 drug TARs that were not subject to the 6-prescription limit and 55 drug TARs that were. The Stockton drug unit processed all of the 45 drug TARs (100 percent) received by FAX within 24 hours as required by law. However, only 4 (7 percent) of the drug TARs subject to the 6-prescription limit were processed within 24 hours. The Los Angeles drug unit was unable to process any of the 89 drug TARs received by FAX in our sample within 24 hours in November 1994. From June through November 1994, the Los Angeles drug unit was primarily responsible for processing drug TARs received by VDTS. We reviewed a sample of 53 drug TARs submitted by VDTS to the Los Angeles drug unit in August and November 1994. Twenty-eight drug TARs were submitted in August 1994, and 25 were submitted in November 1994. In August 1994, the Los Angeles drug unit processed 18 (or 64 percent) of the drug TARs submitted by VDTS within 24 hours as required by state law. In November 1994, it Letter Report 95012 February 1, 1995 Page 15 processed 17 (or 68 percent) of the drug TARs submitted by VDTS within 24 hours. In both months, the processing time for drug TARs submitted by VDTS to the Los Angeles drug unit ranged from 24 to 48 hours. Processing Time According to the BSA’s last report on drug TARs which was issued in for Mailed-In July 1994, the drug units generally did not meet the state requirement to Drug TARs process mailed-in drug TARs within five working days. Similarly, for the period covered by this audit, June through November 1994, the drug units generally did not meet this requirement. According to the department’s records as shown in Figure 7, the requirement to process mailed-in drug TARs within five working days was only met in November 1994 at the Stockton Drug unit. Figure 7 Number of Days To Process Mailed-In Drug TARs by Drug Unit June Through November 1994 Unit June July August September October November Average Los Angeles 18 25 38 25 6 13 20.8 Stockton 9 14 20 21 6 3 12.2 Source: Department of Health Services Figure 7 presents the number of days to process mailed-in drug TARs as computed by the drug units. To validate the drug units’ calculation of the turnaround time for drug TARs, we reviewed samples of drug TARs received through the mail in August and November 1994. According to our calculations, in November 1994, the Los Angeles drug unit’s turnaround time for mailed-in drug TARs was 5 days, although Los Angeles’ turnaround time for mailed-in drug TARs was 25 days in August 1994. In August 1994, we calculated the turnaround time for mailed-in drug TARs received in the Stockton drug unit as 19 days, which by November 1994 had decreased to 2 days. Although we found that the Stockton drug unit’s method of calculating turnaround time was generally appropriate, the methodology used in the Los Angeles drug unit was not. The Los Angeles drug unit used only one day’s activity to calculate the turnaround time for mailed-in drug TARs for the entire month. In addition, the Los Angeles drug Letter Report 95012 February 1, 1995 Page 16 unit did not exclude nonworking days (weekends and holidays) in its calculation of turnaround times, which overstated the turnaround times by several days. For example, there were 13 days difference between the turnaround time we calculated and the turnaround time the drug unit calculated for the Los Angeles drug unit in August 1994. We identified this practice as a problem in our previous audit, but the unit had not corrected it from June through November 1994. Information on For all denied drug TARs, Section 14105.42 of the Welfare and Drug TAR Fair Institutions Code requires the department to report to the Legislature Hearings and the number of fair hearings requested, approved, denied, and pending. This code section also requires the department to report to the Complaints Legislature the number of complaints from beneficiaries and providers regarding the difficulty or inability of obtaining a response to a drug TAR. Beneficiaries request fair hearings through the Department of Social Services to appeal denials of drug TARs. From June through November 1994, the department received 64 requests for fair hearings. This number represents a substantial increase from the previous reporting period of December 1993 through May 1994. During that period, the department received 33 requests for fair hearings. Of the 64 requests for fair hearings, 4 were dismissed, 28 were withdrawn before the cases were heard, 6 were denied, 3 were approved, and the decisions on the remaining 23 were still pending at the time of our review. In our review, we found that several of the fair hearing requests were withdrawn because the denial of the drug TAR was rescinded after the drug TAR had been reviewed a second time. In addition, the denial of drug TARs was often upheld at the fair hearing because the recipient failed to appear. In addition to fair hearing requests, the department received about 8 to 10 complaints each month from providers (pharmacists) about its processing of drug TARs from June through November 1994. The majority of those complaints addressed the delay in processing times for drug TARs, which ranged from 6 to 38 days for mailed-in drug TARs. According to the chief of the Los Angeles drug unit, the delayed processing times were due to an unanticipated increase in drug TARs received in May 1994, which continued thereafter. During August and September 1994, the Los Angeles drug unit also received numerous complaints about its processing of drug TARs received by Letter Report 95012 February 1, 1995 Page 17 VDTS. During those months, the VDTS suffered a major system failure, and the system was either completely shut down or operated sporadically. We discussed with a sample of 10 pharmacists who had submitted drug TARs that were not processed within 5 days or 24 hours as required, how the department’s delay impacted each of the Medi-Cal beneficiaries. Each of the 10 pharmacists that we talked to stated that when TARs are not processed in a timely manner, the pharmacy either dispenses all, or a portion of, the prescribed medication in anticipation of receiving approval from the department. This was particularly true if the pharmacist knew from past experience that the drug TAR would be approved. As a result, the pharmacists stated that patient care was not affected, as lapses in medication did not result from delays in receiving approval for drug TARs for reimbursement purposes. Letter Report 95012 February 1, 1995 Page 18 The Bureau of State Audits, whose authority is vested by Section 8543 of the California Government Code, conducted this review according to generally accepted governmental auditing standards. The review was limited to areas specified in the audit scope Section of this report. Sincerely, KURT R. SJOBERG State Auditor Attachments A Comparison of Drug Treatment Authorization Requests Received by Means of Delivery June Through November 1990, June Through November 1991, and June Through November 1994 B Comparison of Drug Treatment Authorization Requests June Through November 1990, and June Through November 1994 C Comparison of Drug Treatment Authorization Requests Approved, Modified, Denied, and Returned June Through November 1990, and June Through November 1994 Attachment A Comparison of Drug Treatment Authorization Requests Received by Means of Delivery June Through November 1990, June Through November 1991, and June Through November 1994 Monthly Telephone FAX Mail VDTS Total 1990 June 3,989 0 10,125 0 14,114 July 3,225 985 9,990 0 14,200 August 3,126 1,561 8,679 0 13,366 September 2,358 1,646 7,517 0 11,521 October 2,955 2,064 8,340 0 13,359 November 2,483 1,849 7,606 0 11,938 1991 June 2,083 1,661 7,922 399 12,065 July 2,277 3,283 7,879 602 14,041 August 2,396 3,214 7,718 678 14,006 September 2,129 3,234 7,490 688 13,541 October 1,741 4,077 8,417 1,129 15,364 November 86 4,233 7,519 1,578 13,416 Total 28,848 27,807 99,202 5,074 160,931 1994 June 0 12,412 13,155 2,466 28,033 July 0 16,814 12,230 3,062 32,106 August 0 20,862 14,380 2,986 38,228 September 0 18,462 12,975 2,244 33,681 October 0 19,131 14,391 2,331 35,853 November 0 26,225 13,854 2,697 42,776 Total 0 113,906 80,985 15,786 210,677 Source: California Department of Health Services Attachment B Comparison of Drug Treatment Authorization Requests June Through November 1990 and June Through November 1994 Unprocessed TARS Total Total TARs at Received Available Processed Percent Beginning During To Be During Unprocessed of TARs of Month Month Processed Month TARs Processed 1990 June 2,160 14,114 16,274 13,015 3,259 79.97 July 3,259 14,200 17,459 14,164 3,295 81.13 August 3,295 13,366 16,661 14,502 2,159 87.04 September 2,159 11,521 13,680 11,394 2,286 83.29 October 2,286 13,359 15,645 13,103 2,542 83.75 Novembera 1,477 11,938 13,415 11,104 2,311 82.77 Totals 14,636 78,498 93,134 77,282 15,852 82.98 1994 June 5,970 28,033 34,003 27,085 6,918 79.65 July 6,918 32,106 39,024 27,435 11,589 70.30 August 11,589 38,228 49,817 33,371 16,446 66.99 September 16,446 33,681 50,127 42,440 7,687 84.66 October 7,687 35,853 43,540 42,736 804 98.15 November 804 42,776 43,580 41,236 2,344 94.62 Totals 49,414 210,677 260,091 214,303 45,788 82.40 Source: California Department of Health Services a The number of unprocessed drug TARs at the end of October 1990 does not agree with the number of unprocessed drug TARs at the beginning of November 1990. The manager of the San Francisco drug unit stated that unit staff did a hand count of the actual unprocessed drug TARs at the end of October 1990 and found the unit’s accounting records overstated by 1,065, the number of unprocessed drug TARs for the end of the month. Because of this finding, unit staff adjusted the number of unprocessed drug TARs reported at the beginning of November. Attachment C Comparison of Drug Treatment Authorization Requests Approved, Modified, Denied, and Returned June Through November 1990 and June Through November 1994 Total Approveda Modifie Denied Returned Processed d 1990 June 9,350 2,001 1,226 438 13,015 July 9,169 2,008 1,361 1,626 14,164 August 8,980 2,650 2,045 827 14,502 September 7,222 1,847 1,565 760 11,394 October 8,377 2,215 1,698 813 13,103 November 7,033 1,811 1,455 805 11,104 Totals 50,131 12,532 9,350 5,269 77,282 1994 June 15,526 4,271 5,205 2,083 27,085 July 17,007 4,425 4,152 1,851 27,435 August 20,918 5,831 4,624 1,998 33,371 September 30,361 6,209 4,006 1,864 42,440 October 29,740 5,580 4,811 2,605 42,736 November 24,661 8,996 4,758 2,821 41,236 Totals 138,213 35,312 27,556 13,222 214,303 Source: California Department of Health Services a An approved drug TAR has been authorized by the drug unit as submitted. A denied drug TAR has been rejected as submitted. A modified drug TAR has been changed by the drug unit in some way and then approved. Changes could include a change in the quantity of the drug requested, a change in the time for which the drug is approved, or the denial of or change to one drug request on a drug TAR with several requests. A returned drug TAR lacks sufficient information for the drug unit to make a decision. The drug unit returns the drug TAR to the provider for clarification.