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California Agencies Failing to Regulate Mental Health Care Funding and Promptly Investigate Abuse in Nursing Homes, Auditor Finds

By Claudia Boyd-Barrett
California Health Report
February 10th, 2020

The California State Auditor condemned three government agencies in a recent report for failing to fix problems with health care programs that serve some of the state’s most vulnerable residents.

In a 61-page report, State Auditor Elaine Howle singled out California’s Department of Health Care Services, the Department of Public Health, and the California Department of Corrections and Rehabilitation as having significant problems with health care provision and oversight. These departments are responsible for the health and wellbeing of low-income residents, seniors in nursing homes and incarcerated people, respectively.

Released in January, the report informs the governor and legislators about potential fraud, mismanagement and ineffectiveness in government agencies that, if left unresolved, pose a substantial risk to the state or its residents.

Health Care Services has been slow to improve oversight of how counties manage and spend money for mental health care, the auditor said. In 2018, the auditor found that counties were sitting on $2.5 billion in unspent mental health funds collected from a voter-approved state tax on millionaires. Health Care Services has yet to provide counties with proper guidance on how to spend those funds, and still hasn’t implemented recommended auditing and data collection requirements, the latest report concluded.

The agency also hasn’t done enough to correct problems with how it determines eligibility for Medi-Cal, California’s health insurance program for people with limited incomes, the auditor found. This may have resulted in as much as $1 billion in improper Medi-Cal payments and claims, including some for people who are deceased, the report said. This could put the state on the hook to repay millions of dollars to the federal government, the auditor warned.

“Health Care Services’ failure to provide sufficient Medi-Cal oversight may result in state liability for improperly disbursed funds,” Howle wrote.

In a letter to the auditor, Health Care Services’ acting director, Richard Figueroa, disagreed with the report’s findings. Problems with the Medi-Cal eligibility system stem largely from the chaotic months following implementation of the Affordable Care Act, and have since been remedied, he said, including the enrollment of deceased beneficiaries. The auditor’s interpretation of how much the state may be liable for is also incorrect, the letter said, and the department may in fact owe nothing to the federal government.

Additionally, Figueroa said his department plans to complete improvements to its oversight of mental health spending this year, and already has an auditing system in place.

Meanwhile, the auditor criticized the Department of Public Health for not doing enough to rectify problems with how it handles complaints of abuse in nursing homes. This endangers the lives of patients in these facilities, the auditor stated.

Public Health must set a time limit for investigating complaints, and ensure it has enough staffing to handle the volume of complaints received, the auditor wrote.

The department did not respond to a request for comment before the publication deadline. According to the auditor, the department has said it is taking steps to address the problems identified in the report.

However, Michael Connors, an advocate with California Advocates for Nursing Home Reform, a nonprofit that has sued the department over its handling of nursing home complaints, said he sees little evidence of improvement. If anything, Public Health’s failure to address complaints in a timely manner is worse than ever, Connors said.

Abuse and neglect in the state’s nursing homes has reached “epidemic proportions,” the advocate contended. Many residents die before their complaints are investigated, and even after investigations are completed the department often fails to take action to ensure abuse doesn’t reoccur, he said.

“The Department of Public Health needs to start acting like a consumer protection agency,” Connors said. “It needs to speak out about the terrible conditions in California nursing homes, prevent unscrupulous operators from acquiring nursing homes, hold operators accountable when they mistreat residents, and begin treating nursing home residents as if their lives matter.”

Lastly, the auditor condemned the California Department of Corrections and Rehabilitation for failing to adequately improve its ability to provide medical care to inmates in the state’s 35 prisons, according to the report. The federal government currently oversees inmate medical care at almost half of the state’s prisons, because the department has failed to show it can handle this responsibility itself. Quality of care has also declined at six prisons since 2017, according to a report by the Office of the Inspector General.

“CDCR has not made the significant improvements in the provision of inmate medical care necessary to remove it as a high‑risk agency,” the auditor concluded. “Inadequate health care heightens the likelihood of serious injury to patients and liability to the State.”


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