OIG: Medi-Cal Made $15.7M in Unallowable Capitation Payments

The California Department of Health Care Services agrees with the audit findings.

Federal watchdogs are asking Medi-Cal to refund $15.7 million in unallowable capitation payments made to managed care organizations on behalf of beneficiaries with multiple Client Index Numbers.

The U.S. Department of Health and Human Services Office of the Inspector General audited $112.1 million ($56.1 million federal share) in Medi-Cal capitation payments made to MCOs from July 1, 2015, through June 30, 2019, for 12,686 beneficiary matches.

Based on a random sample of 100 beneficiaries, OIG found that Medi-Cal made improper capitation payments in 76 cases totaling $657,057 ($328,529 federal share).

"On the basis of our sample results, we estimated that California made unallowable capitation payments totaling approximately $31.4 million ($15.7 million Federal share) on behalf of beneficiaries with multiple CINs during our audit period," OIG says.

The California Department of Health Care Services agrees with the audit findings, attributes the improper payments to "human error" at the county level, and says it is implementing a correction plan.

"Specifically, during the file clearance process, California county staff made data entry errors that included misspelling beneficiaries' names," OIG says. "Also, staff transposed Social Security numbers, failed to identify and link multiple records, and did not always identify and resolve variations in beneficiaries' names."

OIG says that the algorithm that CDHS used to create the Beneficiary Name and Date of Birth Match Report was too broad and ineffective, and that CDHS did not require county staff to review training materials.

OIG recommends that CDHS: refund the $15.7 million federal share in unallowable payments, review capitation payments that fell outside the OIG audit period and refund any unallowable payments; ensure that the algorithm used to in its revised Beneficiary Name and DOB Match Reports is effective at detecting individuals with multiple records; require training for county staff to prevent issuing multiple CINs; and enhance internal controls to ensure that no beneficiary is issued multiple CINs.