Federal Reports

The California Department of Health Care Services (California) pays managed care organizations (MCOs) to provide covered health care services in return for a monthly fixed payment for each enrolled beneficiary (capitation payments). The California Medicaid Program (Medi-Cal) is the largest Medicaid program in the Nation. Medi-Cal provides health coverage to almost one-third of California’s more than 39 million residents. Approximately 80 percent of Medi-Cal’s population is enrolled in managed care. Previous Office of Inspector General reviews found that State Medicaid agencies had improperly made capitation payments on behalf of deceased beneficiaries. We conducted this review of California, which administers Medi-Cal, to determine whether the issue we identified in other States also exists in California.

The VA Office of Inspector General (OIG) conducted a healthcare inspection at the facility to assess allegations regarding an orthopedic surgeon’s failure to adequately assess two patients (Patient Red and Patient Blue), improper orthopedic surgeon fee-for-service (fee) use, and facility leaders’ unresponsiveness to concerns regarding Orthopedic Surgery Department. The OIG also evaluated orthopedic surgeons’ responsiveness to physician assistants (PAs), aspects of infrastructure, support services, clinical privileging, and PA scopes of practice. The OIG substantiated that the orthopedic surgeon did not physically evaluate or take responsibility for Patient Red’s orthopedic care, and a PA had to seek help from multiple attending surgeons over several hours before a surgeon came to assess the patient. Patient Red’s clinical course met Veterans Health Administration’s (VHA’s) definition of an adverse event but as of August 8, 2018, a disclosure had not been completed. Further, the OIG substantiated that the orthopedic surgeon’s decision not to admit Patient Blue placed the patient at risk for medical decompensation. The OIG did not substantiate that orthopedic surgeons ignored critical patients or that facility leaders were unresponsive to concerns about the Orthopedic Surgery Department. The Orthopedic Surgery Department tolerated on-call surgeons who did not consistently manage complex patient care needs and relied on PAs to find other surgeons, resulting in potential care delays. The OIG found that due to staffing and Orthopedic Surgery limitations, the facility appropriately used fee providers. However, operating room and anesthesia operations were inefficient. Additionally, the facility was not in compliance with VHA requirements regarding surgeons’ core privileges, surgeon and PA ongoing professional practice evaluations, or PA policy and scopes of practices. The OIG made 12 recommendations related to provision of care for Patients Red and Blue; inter-departmental communications, surgical process efficiencies, orthopedic surgeon privileging; and PA practice.