California Paid $4 Billion to Ineligible Medi-Cal Recipients

The California Department of Health Care Services paid at least $4 billion to managed care plans and fee-for-service medical providers over a four-year period for individuals who may have been ineligible for the state’s Medi-Cal program, according to a new report from State Auditor Elaine Howle.

The auditor analyzed 10.7 million beneficiaries in December 2017 and found that more than 453,000 beneficiaries were marked as eligible for Medi-Cal benefits, but were not listed as eligible in the county systems. This led to $4 billion in what the audited described as “questionable payments” by the state. More than half of the discrepancies persisted for more than two years.

The state notifies counties of discrepancies, but does not have a system for timely resolution – even though it paid counties $2.3 billion for local administration of Medi-Cal eligibility in fiscal year 2017-18 alone.

In one case, the Department of Health Care Services paid more than $6 million in claims for a beneficiary transferring from another entitlement program whose county did not determine eligibility for two and a half years.

Another discrepancy found by the auditor: 54,000 individuals are eligible in the county system, but not in the state system. This leads to eligible individuals encountering hardships when trying to obtain Medi-Cal services.

The auditor’s report concluded that the Department of Health Care Services should develop and implement a system by December 31 to ensure timely resolution of any discrepancies between the state and counties.

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