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.

The VA Office of Inspector General (OIG) conducted a healthcare inspection in response to allegations related to the facility’s inpatient mental health unit, specific to the subpopulation of patients with a diagnosis of dementia. The OIG team made two visits to the facility in 2017 and 2018. The OIG team found that patients with dementia admitted to the mental health unit had a longer length of stay when one-to-one observation was required. The OIG substantiated that unit staff did not consistently follow the facility’s patient safety observer policy that outlined one-to-one care. The OIG was unable to determine whether a patient was improperly restrained because a seclusion room was not available. At the time of the second visit, both seclusion rooms were available. The OIG was unable to determine whether nurse staffing was adequate to meet patient care needs. Staffing methodology documentation initially provided was not complete; at the time of the second visit, staffing methodology supporting data used to determine nursing hours per patient day after the inpatient mental health unit was separated into two distinct units was also not complete. In 2017, the OIG team substantiated that the inpatient mental health unit was not a therapeutic environment due to the absence of cleanliness and interior updates, patients not wearing personal clothes, and a noncompliant patient advocacy program. In 2018, the OIG team noted a satisfactory improvement in cleanliness after contracting with an external cleaning services company. The OIG substantiated that some staff who worked on the inpatient mental health unit did not have required annual training in accordance with the facility’s policy. The OIG made seven recommendations related to documentation issues, the patient safety observer policy, staffing methodology, training of mental health staff, environment of care, and the patient advocacy program.

FEMA awarded two contracts to Bronze Star, and Bronze Star could not meet the requirements of either contract. This delayed delivery of crucial supplies, and impeded Puerto Rican residents’ efforts to protect their homes and prevent further damage. FEMA’s errors within both solicitations may have prevented other potential qualified contractors from submitting bid proposals. FEMA also wasted personnel resources by issuing, canceling, and reissuing contracts for protective tarps. Through such actions, FEMA may have compromised its credibility with congressional oversight personnel and American taxpayers.

We audited the Public Housing Capital Fund program at the Housing Authority of the City of Woonsocket, RI, based on a request by the U.S. Department of Housing and Urban Development (HUD) and because we have not audited the Authority in more than 10 years. We also received a complaint regarding a property purchase and later demolition next to one of the Authority’s developments. The audit objective was to determine whether the Authority administered its Capital Fund program in accordance with HUD’s requirements; specifically, whether costs were eligible and supported and the Authority procured and awarded contracts in accordance with HUD requirements and its procurement policies. In addition, we wanted to determine whether the complaint regarding the Authority’s purchase of a property and later demolition of the property next to one of its developments had merit.Authority officials did not administer the Capital Fund program in accordance with HUD requirements. Specifically, they did not always ensure that Capital Fund activity costs were eligible and supported. They did not always follow environmental review requirements and support that awarded contracts were procured in accordance with HUD requirements. Although the complaint reviewed had merit, non-Federal funds were used for the property purchase and demolition. These deficiencies occurred because Authority officials did not have adequate policies and procedures or always follow them to ensure that they met environmental review, procurement, and contract administration requirements. As a result, the Authority spent more than $1.9 million for ineligible costs and more than $1.4 million for unsupported costs and may spend $125,491 for ineligible costs.We recommend that the Director of HUD’s Boston Office of Public and Indian Housing require Authority officials to (1) repay from non-Federal sources more than $1.9 million in ineligible costs related to environmental deficiencies and for payments made beyond the contract terms, (2) support that more than $1.4 million spent was fair and reasonable and in accordance with Federal procurement and environmental review requirements or repay from non-Federal funds any amounts that cannot be supported, and (3) deobligate $125,491 in funds not yet spent on ineligible activities and costs.

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