| Date: | January 10, 2020 |
| To: | Health Plan of San Joaquin (HPSJ) Physicians, Providers, Pharmacies, and Capitated Service Providers |
| From: | Health Plan of San Joaquin |
| Subject: | Notice of Recoupment – Capitation (CAP) Overpayment – Unallowed payments – CAP paid providers after Health Plan of San Joaquin members’ death |
| Business: | Medi-Cal |
Dear Provider,
We have been informed by California Department of Health Care Services (DHCS) that there may have been unallowable capitation payments, to various Medicaid Managed Care Organizations (MCO) throughout the state, due to unreported member deaths. The unallowable payments include Health Plan of San Joaquin (HPSJ) and our network providers. We are informing you that there will be a recoupment process to recover capitated payments paid out on behalf of deceased HPSJ members. If you are a provider deemed to have received an unallowable capitation payment, then HPSJ will notify you directly in a follow-up communication about repayment options. Below we have included general information provided by the DHCS regarding this specific occurrence of unallowable payments.
Issue of Unallowable Payments:
California Department of Health Care Services (DHCS) made payments to Medicaid Managed Care Organizations (MCO) to pay MCO contracted providers capitation payments after beneficiary death, thereby resulting in what is classified as “unallowable payments”.
Note:
- Medi-Cal eligibility is determined at the county-level and communicated to the state DHCS, for payments to be made to MCOs, for generation of MCO payments to MCO contracted providers.
- When timely updates do not occur to Medi-Cal eligibility systems, which communicate between the county and state, the potential for unallowable payments exist.
- Factors impacting eligibility include, but not limited to death and income.
Time Frame / State Specified Period – Unallowable Payments:
- 2011 through 2017
Issue Facts:
- S. Department of Health & Human Services Office of Inspector General (HHS OIG) estimates California DHCS incurred $70.9 million in unallowable payments to MCOs continuing to pay capitation to MCO contracted providers for Medi-Cal deceased beneficiaries (https://oig.hhs.gov/oas/reports/region4/41806220.pdf).
- California State Auditor report publicly-released and presented to DHCS underscored the magnitude of unallowable payments made on behalf of ineligible beneficiaries—including, but not limited to deceased beneficiaries to MCOs and MCO contracted providers (https://www.auditor.ca.gov/reports/2018-603/index.html).
- Health Plan of San Joaquin is one of several Medi-Cal Managed Care Organization (MCO) licensed by the State of California Department of Health Care Services.
Resolution from DHCS:
- DHCS accepted California State Auditor recommendations to recover unallowable payments made for period specified to return federal funds per HHS OIG.
- DHCS will be recovering unallowable payments from all relevant MCOs—including Health Plan of San Joaquin—in 2020.
- DCHS implemented a pilot program beginning in August 2018 to proactively prevent unallowable payment related issues from occurring in the future.
Resolution from HPSJ:
- HPSJ will be working with providers to engage in recovery of state classified unallowable payments for the specified period.
- HPSJ would like to educate providers on what to do in the event of a member becoming deceased to proactively assist in preventing future occurrences of this issue.
What’s next:
- Over the next few weeks HPSJ will be communicating specific details of the unallowable payments made to individual providers and medical groups.
- Your HPSJ designated representative will be in touch with you after the provider/medical group specific communications have been sent to providers to inquire regarding (a) explanation of details in the provider/medical group specific letter, as well as (b) advising the provider who to contact at HPSJ to get any questions answered after details have been released.
We value you as a provider and apologize for the inconvenience associated with this state identified issue. Health Plan of San Joaquin is dedicated to providing all members the best health care available in the most effective and efficient manner. Thank you for being one of our valued partners and your continued support of Health Plan of San Joaquin.