Los Angeles County Grand Jury • 2013-2014 • Agency Response

Final Report 2013 - 2014

Published: June 25, 2014 459 pages Consolidated Report

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Findings 17 findings

Only two (2) City Departments or Bureaus fully complied with the requirements to designate a LRM by January 31, 2007, and designate a new LRM within 30 days of the current manager leaving. As shown in Exhibit 3, as of February, 2014, only Airports and Recreation and Parks, are in full compliance with this requirement of Exec9. The Department of Transportation has not designated a LRM at all. Five departments or bureaus designated litigation risk managers, but submitted the name of the designated LRM to the Mayor’s Office after the deadline of January 31, 2007. The Bureau of Engineering 101 EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS had some lapses over 30 days in reporting the senior staff member designated as LRM. Exhibit 3 Designation of Litigation Risk Manager Requirement Under Mayor’s Executive Directive No. 9 102 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT tropriA gnireenignE eriF robraH eciloP skraP & noitaerceR noitatinaS steertS noitatropsnarT rewoP dna retaW 1. Designated senior- level staff to serve Yes Yes Yes Yes NR Yes Yes Yes No NA as LRM. 2. Submit designated LRM to the Mayor’s Yes No No No NR Yes No No No NA Office by January 31, 2007. 3. Designate a new LRM within 30 days of the current Yes No Yes Yes NR Yes Yes Yes No NA manager leaving the department. Notes: NR = No Response to our request for information was received from the department in this area. NA = Not Applicable for the Department of Water and Power, which chose not to implement Exec9. Source: Review of responses and documentation provided by each city department or bureau, as of February, 2014. Protocol with the City Attorney’s Office It was required by Exec9 that each department, through its LRM, develop a protocol with the City Attorney’s Office. This included timely notice and ongoing evaluation of all claims or litigation served on the city that relate to department employees and/or programs. Exec9 defines specific requirements that must be included in this protocol. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS

Only one of the city departments or bureaus fully complied with the requirements to develop a protocol with the City Attorney’s Office for timely notice and ongoing evaluation of all claims or litigation. As shown in Exhibit 4, as of February, 2014, only the Police Department is in full compliance with this requirement of Exec9. Three departments, Airports, Recreation and Parks, and Transportation, did not develop the protocol with the City Attorney. Other departments or bureaus developed protocols, but not to the specific requirements outlined in Exec9. In discussions with department and bureau LRMs, the CGJ was informed that some requirements of Exec9 are not realistic, and are therefore not incorporated into protocols. These requirements are mainly focused on time periods that are not realistic compared with actual claim and case management experience. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Exhibit 4 Development of Protocol with the City Attorney Department Protocol Requirement Under Mayor’s Executive Directive No. 9 104 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT tropriA gnireenignE eriF robraH eciloP skraP & noitaerceR noitatinaS steertS noitatropsnarT rewoP dna retaW 1. Receives timely notice and a copy of any claim, No Yes Partial Partial Yes No Yes Yes No NA generally within 10 days 2. Cooperates with defense counsel in reviewing No Yes Yes Yes Yes No Yes Yes No NA allegations and investigation 3. Discusses and determines with counsel whether early mediation or other settlement No Yes Yes Yes Yes No Yes Yes No NA discussions would be appropriate, generally within 90 days 4. Discusses and determines with counsel whether a statutory No Partial Yes Yes Yes No Partial Partial No NA offer of settlement should be recommended 5. Engages in ongoing discussions with assigned defense No Yes Yes Yes Yes No Yes Yes No NA counsel about mediation or other settlement negotiations 6. Reviews all deposition transcripts and all significant opposition No No Yes Yes Yes No No No No NA produced discovery documents 7. Discusses with counsel whether an appeal No Partial Yes Yes Yes No Partial Partial No NA should be filed 8. Presents and discusses with assigned defense counsel any proposed change in policy or No Partial Yes Yes Yes No Partial Partial No NA practice and any proposed employee discipline or retraining Notes: NA = Not Applicable for the Department of Water and Power, which chose not to implement Exec9. Source: Review of responses and documentation provided by each city department or bureau, as of February, 2014. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Internal Protocol for Litigation Risk Management Each city department was also required by Exec9 to develop an internal protocol for claims or litigation served on the city that relate to department employees and/or programs. The intent of this internal protocol was to ensure that departments and bureaus implemented a successful LRM system, and to ensure completion of the five key practices identified earlier in this report.

Only one department developed an internal protocol for LRM that met all the requirements of Executive Directive No. 9. As shown in Exhibit 5, as of February, 2014, only the Fire Department is in full compliance with this requirement of Exec9. Airports, Recreation and Parks, and Transportation did not develop any internal protocol at all. Each of the other departments or bureaus developed protocols, but the specific requirements outlined in Exec9 are not completely included. The CGJ was informed by department and bureau LRMs that some requirements of Exec9 are not realistic, and are not incorporated into protocols. These requirements are mainly focused on time periods that are not realistic compared with actual claim and case management experience. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Exhibit 5 Development of Internal Protocol Department Protocol Requirements Under Mayor’s Executive Directive No. 9 106 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT tropriA gnireenignE eriF robraH eciloP skraP & noitaerceR noitatinaS steertS noitatropsnarT rewoP dna retaW 1. That an early and thorough investigation is No Partial Yes Yes NR No Partial Partial No NA completed 2. Evaluates carefully and thoroughly whether the allegations suggest the advisability of a change in No No Yes No NR No No No No NA policy or practice, or the need for new or renewed training 3. Timely develops and implements any warranted changes in No No Yes No NR No No No No NA policy, practice, and/or training 4. Warranted changes in policy, practice, and/or training are evaluated for budgetary impact and No No Yes No NR No No No No NA included in the department's budgetary planning 5. Evaluates carefully and thoroughly the advisability of discipline, reassignment, or No No Yes No NR No No No No NA retraining of individual employees whose actions contributed to potential liability 6. Timely pursues any warranted discipline, reassignment, or retraining of individual No No Yes No NR No No No No NA employees whose actions contributed to potential liability 7. Evaluates carefully and thoroughly the advisability of the city seeking a change in No No Yes Yes NR No No No No NA federal, state, or municipal law or regulation EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Exhibit 5 Development of Internal Protocol Department Protocol Requirements Under Mayor’s Executive Directive No. 9 107 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT tropriA gnireenignE eriF robraH eciloP skraP & noitaerceR noitatinaS steertS noitatropsnarT rewoP dna retaW Notes: NR = No Response to our request for information in this area was received from the department. NA = Not Applicable for the Department of Water and Power, which chose not to implement Exec9. Source: Review of responses and documentation provided by each city department or bureau, as of February, 2014. Quarterly Reporting on Litigation Risk Management Each city department was also required to submit a confidential quarterly report to the Mayor’s Office. This report indicated each filed claim or litigation that related to department employees and/or programs. These quarterly reports were required to include very specific information about each claim or litigation case.

City Departments or Bureaus have not fully complied with the requirements to submit quarterly Litigation Risk Management reports to the Mayor’s Office. As exhibit 6 shows, as of February 2014, none of the city departments or bureaus are in full compliance with the quarterly reporting requirements of Exec9. Fire, Harbor, Recreation and Parks, and Transportation did not submit any quarterly reports. Reports were submitted by other departments, but none of them included all of the elements required by Exec9. In the CGJ discussions with LRMs, some of these elements are identified as being unrealistic (example, timelines that are not possible to meet), or beyond the purview of the LRMs, due to personnel or other rules and regulations (example, employee discipline issues). EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Exhibit 6 Quarterly Reporting Quarterly Reporting Requirements Under Mayor’s Executive Directive No. 9 108 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT tropriA gnireenignE eriF robraH eciloP skraP & noitaerceR noitatinaS steertS noitatropsnarT rewoP dna retaW 1. The date the claim or litigation was filed, the date it was served, the date the department was No Yes No No Partial No Yes No No NA notified of the claim or litigation, and any scheduled trial date. 2. The specific claims alleged in the claim or Yes Yes No No Partial No Yes Yes No NA litigation. 3. Whether the early investigation and consideration of early settlement process was No No No No Partial No No No No NA completed, including whether any early settlement process was pursued. 4. Whether evaluations of the claim or litigation for warranted changes in policy, practice or training, or individual employee discipline or No No No No Partial No No No No NA training have been completed, including when completed, whether any such steps were pursued and the status of any such steps. 5. Whether evaluations of the claim or litigation for the advisability of seeking a change in federal, No No No No Partial No No No No NA state, or municipal law or regulation, including any

In review of the claim and litigation files, as of February, 2014, none of the city departments or bureaus have fully complied with the specific requirements of Executive Directive No. 9. The CGJ asked each of the departments or bureaus if any files that demonstrated compliance with the requirements of Exec9 were maintained. Harbor, Recreation and Parks, and Streets responded that they did not maintain any LRM files. For the departments or bureaus that stated they did maintain LRM files, the CGJ randomly selected a total of 20 claims or cases to review. Exhibit 7 shows that none of the city departments or Bureaus are in full compliance with the requirements of Exec9. Engineering and Transportation are not in compliance with most of the requirements of Exec9. Airports, Fire, and Sanitation are partially in compliance with the requirements of Exec9. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Exhibit 7 Review of Litigation Risk Management Files Sample of Department / Maintain Files Summary of Review Results Bureau Files Reviewed Airports maintained files for all cases selected. The files were well Airports Yes Yes documented and organized. In practice, Airports is partially in compliance with the protocols. Engineering maintained files for some cases but not all. Files were not maintained for 10 out of 20 cases selected because the information was Engineering Partial Partial not forwarded from the City Attorney’s office. In practice, Engineering is not in compliance with most of the protocols. Fire maintained files for some cases but not all. Files were not available for review for 15 out of 20 cases selected because the information was Fire Partial Partial either not forwarded from the City Attorney’s office or in archive. In practice, Fire is partially in compliance with the protocols. All files are maintained by the City Harbor No No Attorney. No Police No N/A Response Recreation and No No N/A Parks Sanitation maintained in the database files for all cases selected. In Sanitation Yes Yes practice, Sanitation is partially in compliance with the protocols. Streets No No N/A Transportation maintained files for some cases but not all. Files were not maintained for 10 out of 20 cases selected because the information was either not forwarded from the City Transportation Partial Partial Attorney’s office, not LADOT cases, or not determined if they were LADOT cases. In practice, Transportation is not in compliance with most of the protocols. Water and Not Applicable, Chose not to N/A N/A Power implement Exec9. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS Mayor’s Office Follow-Up, Review and Revision of Executive Directive No. As discussed above, Exec9 establishes specific requirements and specific due dates for their completion and submission to the Mayor’s Office. Exec9 created the expectation that there would be follow-up with departments if the required elements were not completed and submitted to the Mayor’s Office.

The Mayor’s Office, since issuing Exec9, has not adequately followed-up nor has it enforced implementation and compliance with Executive Directive No. 9 by City Departments. The CGJ found the overall level of compliance with Exec9 by city departments and bureaus reviewed to be abysmal. Transportation and Water and Power did not implement any of the required elements of Exec9. The Department of Water and Power chose not to implement Exec9 because the Mayor merely requested City proprietary departments, which DWP is, to implement the Directive. The general city departments were directed to implement it. Airports, Recreation and Parks, and Transportation have not developed or sent either of the required protocols to the Mayor’s Office. Fire, Harbor, Recreation and Parks, and Transportation have not submitted any quarterly reports to the Mayor’s Office as required by Exec9. The Police Department submitted quarterly reports from 2007 to 2009. They then discontinued quarterly reporting. For the city departments and bureaus that did develop and submit the required protocols and quarterly reports, only a few met all of the requirements outlined in Exec9. City departments and bureaus tend to be very responsive to directives and requests from the Mayor’s Office. However, they are also adept at determining what is truly important to the Mayor’s Office, based on the follow-up and attention given to an issue or directives. Implementation and compliance with Exec9 did not appear to be a priority for the Mayor’s Office. The city departments and bureaus responded accordingly. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS

The Mayor’s Office has not yet revised Exec9 to be more effective. As part of this investigation, the CGJ met with staff of the Mayor’s Office to discuss Exec9 and compliance with it. The CGJ was informed that the new mayoral administration was in the process of reviewing and potentially revising all Executive Directives inherited from previous administrations, including Exec9. It was suggested that the Mayor’s Office draw on the LRM talent within the city and substantially revise Exec9 to provide a more meaningful set of requirements. This would also likely improve the level of department and bureau compliance with Exec9. As discussed earlier in this report, the intent of Exec9 (see attached), was to ensure “further progress in preserving City resources by reducing and preventing claims against City operations and employees.” Exec9 also outlined key mechanisms or practices that a successful LRM system should include. Exec9 then outlines a very specific list of requirements to purportedly establish these mechanisms or practices within city management. However, it is uncertain that these very specific requirements are the most effective way to develop a successful LRM system. The list of requirements in Exec9 is very specific. These requirements are also very focused at the individual claim or case level. Finally, Exec9 provides no focus on the outcome or end result of LRM. There is no tracking or reporting on whether claim and litigation payouts are actually being reduced, or the degree to which changes in department or bureau operations are being implemented to avoid future claims or litigation. Performance indicators, focused on these outcomes or results, would be more effective measures. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS

Litigation related payouts or expenditures from the City’s General Fund have increased rather than decreased since 2007, when Executive Directive No. 9 was issued. Exhibit 8 shows the trend in general fund expenditures for litigation, by fiscal year. Clearly, Exec9 has not been effective in achieving its stated intent of ensuring “further progress in preserving City resources by reducing and preventing claims against City operations and employees”. Exhibit 8 Litigation General Fund Expenditures by Fiscal Year $100.0 $91.0 $90.0 In Millions $80.0 $70.0 $57.9 $56.9 $60.0 $49.1 $50.0 $45.0 $41.2 $36.6 $36.8 $40.0 $34.3 $33.5 $30.0 $20.0 $10.0 $0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: The spike in payouts for FY 2010 was the result of several lawsuits with substantial payouts. This included two lawsuits related to landslides, several cases involving civil rights or discrimination, and several related to personal injuries. Source: Analysis of amounts paid in judgments, verdicts, and/or settlements over the past 10 years provided by the Los Angeles City Attorney’s office as of October, 2013. EXECUTIVE DIRECTIVE No. CITY OF LOS ANGELES LAWSUITS

The audit sample of Incomplete or No Medical Records write-offs demonstrated key trends that aligned with problems reported by DHS staff involved in managing and executing the patient billing processes.

F10

Approximately $24.5 million in gross charge write-offs between FY 2009-10 and 2012-13 was attributed to physicians without National Provider Identifier numbers and required authorization with DHS for billing of services to Medicare.

F11

Barriers or complications in coding accounts by Health Information Management divisions.

F12

Coding backlogs in Health Information Divisions.

F13

Physicians reportedly scheduling follow-up outpatient services, after basic needs are met through emergency room/urgent care or after a patient has been discharged from the hospital, when the patient does not have prior authorization.

F14

The Department of Health Services is not obtaining timely authorization for high dollar value inpatient services due to the inability of Patient Financial Services staff to obtain prior authorization or redirect patient’s to facilities in the patient’s health plan’s network prior to all schedule outpatient appointments.

F15

Insufficient or inadequate allocation of resources and tools for Utilization Review nurses to obtain timely authorization from other health care plans for inpatient.

F16

Write-offs for Medi-Cal Managed Care patient accounts due to no authorization for services have increased over time. As Medi- Cal Managed Care enrollment is expected to increase over time, it is imperative that DHS improve its business processes to ensure timely authorization and billing for Medi-Cal Managed Care patients.

F17

Because the Board of Supervisors is able to decrease subsequent fiscal year General Fund contributions to offset increased DHS revenues from prior fiscal years, such Board actions could potentially serve as a disincentive for DHS staff to increase revenue collections.

Recommendations 18

R1

Utilize DHS’s electronic billing system, Affinity Adjustment Codes on all accounts for classifying and better explaining the reasons for all write-offs.
R2

Update the DHS write-off procedure to include all Reason Codes, including new Codes, as they are developed.
R3

Expand the scheduled availability of Patient Financial Service Worker staff at all hospitals.
R4

1 The Probation Department must continue to obtain funds and fill staff positions based on the mandated program needs. Post-Release Community Supervision Procedures The LACPD in coordination with the County’s Public Safety Realignment Team developed case intake to case termination procedures. As previously stated, AB 109 legislation modified parole statutes and created a Post-release Community Supervision Program under the auspices of the County. LACPD responsibilities and procedures include the following: 1. The pre-release packet for each inmate scheduled to be released to the County is sent from the CDCR to the Probation Pre Release Center. The Post Released Supervised Person (PSP) packet provides pertinent information, such as release date, criminal history, social history, medical and mental health issues, and legal status. The staff then evaluates the data and develops an individualized case plan. The information is used to determine risk levels, supervision conditions, monitoring requirements, and the verification of address to determine local office designation. Conditions of release, supervision, instruction, and reporting responsibilities are returned to the respective PSP for signature. 2. An individualized treatment case plan is finalized during the Screening, Intake and Assessment process. The PSP’s past criminal record is reviewed. The entire record is reviewed to determine the assignment of a risk level. (Tier O – very high; Tier I – high; Tier II – medium; Tier III – Low). The following Risk Level Chart shows the monthly standards for supervision. CHALLENGES OF REALIGNMENT 87 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT MINIMUM MONTHLY STANDARDS TIER SUPERVISION OFFICE FIELD DRUG ASSESSMENT LEVEL VISITS VISITS TESTS PRE & POST Orientation and Cognitive 0 Very High 1 1 1-2 Behavioral Therapy (CBT) completion I High 1 1 1-2 Orientation and CBT completion II Medium 1 Quarterly 1-2 Orientation and CBT as needed III Low 1 None 2 per Orientation quarter Records of the PSP are scanned into the Adult Probation System (APS). All records regarding PSPs are maintained in the APS. This system enables the DPO to access a number of screens to input accurate and comprehensive data from each contact, in order to maintain current information. 3. The PSP is mandated to report to one of the four Probation HUBs within two business days of release. The HUB is a collaborative group of agencies, consisting of the Department of Mental Health (DMH), Department of Public Health Services (DPH), and Department of Public Social Services (DPSS). An orientation is conducted with the PSP. During this orientation, referrals are made to Community Based Organizations for mental and physical health services, substance abuse, and the assignment of a Deputy Probation Officer (DPO) is completed. In addition, any other emergent needs (housing and transportation) are identified and addressed. If the PSP requires mental health treatment as a condition of their release, a referral to DMH is completed. The PSP must be registered within five working days to participate in mental health treatment. CHALLENGES OF REALIGNMENT 88 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT Refusal of the PSP to enroll or participate in a mental health program could result in intermediate sanctions, Flash Incarceration, and Revocation. Intermediate sanctions are imposed as a result of the PSP violating conditions of their post release plan. Flash Incarceration is a period of detention in county jail, for up to ten days, for violating conditions of post-release supervision. Flash Incarceration applies to PSPs only, and requires approval by the Supervising Deputy Probation Officer. Revocation returns the PSP to jail. This process requires court approval. If a PSP fails to comply with the conditions of their case plan, the DPO can impose intermediate sanctions up to and including, Flash Incarceration and Revocation. If the PSP requires substance abuse treatment, the DPO ensures that this condition is added to the APS, and provides a referral to the local Community Assessment Service Center. The PSP has five working days to report for assessment. During this process, thorough instructions are given to the PSP. All referrals, instructions, and documents are signed by the PSP, and the PSP is given a copy. The PSP has the opportunity to request additional services. A referral is submitted for housing and employment through the various departments who offer contracted services. The PSP may be eligible for, but not limited to, the following: 1. Bus tokens or transportation provided by the Mobile Unit 2. Housing assistance 3. Employment and job placement 4. Clothing, uniforms, and tools for employment 5. Medication and medical supplies 6. Enrollment fees (e.g. Community College/GED Classes/Vocational Schools) 7. Identification fees (e.g. CA driver’s license/ID card, birth records/certificates, social security cards) CHALLENGES OF REALIGNMENT 89 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT If the PSP fails to report, the DPO conducts due diligence and submits a petition for a warrant. The petition is submitted to the courts within five working days. The LACPD assists the PSP in becoming accountable, working towards rehabilitation by case management, supervision, and monitoring. The DPO is responsible for making routine home calls and compliance checks at the reported residence of the PSP. The number of home calls depends on the risk, need level cooperation and adjustment of the PSP in the community. The routine home calls are generally made by two DPOs. The Compliance Checks include additional DPOs and law enforcement that have search, seizure, and arrest authority. The purpose of the home calls are to ensure that the PSP is residing at the reported address. The PSP must be in compliance with conditions of their case plan, participating and receiving their collaborative services. The LACPD has developed a list of violations which is a guideline to ensure that consistent application of sanctions is followed. There must be a balance between rehabilitative casework and the appropriate level of sanction and rewards for compliance and noncompliance. DPOs must address all violations appropriately and comply with supervision conditions. If warranted, the DPOs make referrals to the Court for Revocation proceedings. Sanctions and Revocation can be imposed for failure to comply with any of the following: 1. Employment/education conditions 2. Gang affiliation/membership/activity conditions 3. Victim related conditions 4. Sex offenders conditions 5. Substance abuse conditions 6. Mental Health conditions 7. Weapons violation: PSP in possession of weapon CHALLENGES OF REALIGNMENT 90 2013-2014 LOS ANGELES COUNTY CIVIL GRAND JURY FINAL REPORT 8. Weapons violation: PSP in presence of weapon 9. General Conditions of supervision a. reporting b. residence c. identification d. misdemeanor arrests e. felony arrests f. registration conditions The application of sanctions including verbal, intermediate sanctions and revocation are progressive. All verbal and/or written admonishments are documented. The PSP must be discharged from Probation at 12 months if no custodial violations, sanctions or infractions have occurred. If the PSPs violate the condition of their release, the LACPD may initiate the revocation processes through the court.
R5

Formalize the point at which Medi-Cal fee-for-service accounts are retrospectively reviewed for patients still in the Department hospitals.
R6

Conduct a Utilization Review staffing analysis at county hospitals as an increase in staff may substantially increase Department cash flow by decreasing backlogs and increasing the timeliness of billings. SECTION TWO Incomplete or No Medical Records DHS write-offs due to Incomplete or No Medical Records totaled $101,568,377 in gross charges between FY 2008-09 and FY 2012-13. During the fiscal years reviewed, write-offs of Medicare accounts totaled $57,673,677, or over 56 percent of the write-offs, because of Incomplete or No Medical Records. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT iv A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION The CGJ found three primary causes of Incomplete or No Medical Records write-offs:
R7

Utilize available systems and tools, and require DHS physicians to report their National Provider Identifier (NPI) number and complete the 855R form linking the NPI number to DHS, as required for Medicare billing purposes, prior to commencing work at a DHS facility.
R8

1 The Los Angeles County Assessor and Board of Supervisors should request the California State Legislature to revise the law to require reassessment, when real property is purchased/transferred to different structural ownership at the conclusion of a transaction. Reassessment should be based on the purchase/transfer of real property—not the structure of ownership involved. (i.e. the greater than 50+% ownership formula currently in place.) Certification of Professionals Responsible for Determining Change in Ownership
R9

Track the backlog for coding at all facilities through regular reports, similar to those produced by Los Angeles County/USC Medical Center. Aggregate and analyze coding backlog data at all facilities for resulting trends and to identify any problem areas.
R10

Perform a staffing analysis in DHS Health Information Management (HIM) divisions at all DHS facilities to assess whether additional staff might ameliorate the current HIM backlogs and delays in coding. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT v A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION SECTION THREE “No Authorization for Services” No Authorization for Services is the most common reason for write-offs in the “Failed to Bill for Third Party Requirements” write-off classification. Between FYs 2008-09 and 2012-13, the Department wrote off $68,247,162 in gross charges because it had not obtained authorization from the patient’s third party payer prior to providing non-emergency inpatient and outpatient services. A total of $58,567,426, or 85.8 percent of write-offs due to “No Authorization for Services” was Medi-Cal Managed Care accounts. Factors contributing to the “No Authorization for Services” write-offs include:
R11

Implement an electronic notification method for alerting physicians of the patients’ required authorization from third party payers when follow-up services are required.
R12

All physicians must be trained on the new electronic notification system and accountability measures should be implemented to ensure that physicians schedule follow-up services appropriately. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT vi A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION
R13

Require all DHS facilities to regularly pre-screen scheduled outpatient appointments to ensure that authorization is obtained or the patient is referred to a more appropriate provider.
R14

Evaluate effective and efficient staffing models to support the need for obtaining authorization from third party payers for inpatient services; such as a designated unit, a centralized staff, or an independent utilization review unit.
R15

6 Expand the catering services to outside groups, including courts and other municipal and government agencies. SOUTH DISTRICT GOVENOR GEORGE DEUKEMEJIAN COURTHOUSE 275 MAGNOLIA AVE. LONG BEACH, CA 90802
R16

Collaborate with Cerner, the Department’s vendor for its new electronic medical record system, ORCHID, to determine if enhancements in the new system could facilitate online processing of health care plan authorizations for DHS services. SECTION FOUR County Financial Incentive Policies Historically, DHS has ended a fiscal year with surplus revenue. It was able to retain these surplus funds for DHS operating expenditures in subsequent years and the county General Fund contribution to the DHS budget was not reduced in subsequent years to offset the retained surplus funds. The Board of Supervisors could vote to reduce the county General Fund contribution to the DHS budget, subsequent to fiscal years with surplus revenue, as long as the total County contribution still meets the required minimum contribution amount per its agreement with the State of California. RECOMMENDATIONS To provide financial incentives for DHS to improve revenue collections, the County Board of Supervisors should:
R17

Consider the advantages and disadvantages of adopting a formal policy to allow for a minimum level of annual General Fund contributions to the DHS budget.
R18

Allocate a portion of the funds to DHS, if additional revenue is obtained through improved collection efforts, that are beyond the required contributions by the state and irrespective of any additional revenue DHS is able to obtain through improved collection efforts. LOS ANGELES COUNTY 2013-2014 CIVIL GRAND JURY FINAL REPORT vii A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION A TIMELY AND CLEAN “BILL” OF HEALTH MAY SAVE $285 MILLION TOPIC OF INVESTIGATION The Los Angeles County Board of Supervisors approved write-offs totaling $285,421,607 in gross charges billed to third party payers by the Department of Health Services for the five fiscal years from FY 2008-09 through FY 2012-13. An average of $57,058,431 in gross charges was written off per year for the past five fiscal years. After a preliminary investigation, the 2013-2014 Los Angeles County Civil Grand Jury (CGJ) initiated an audit to investigate and analyze the Department of Health Services (DHS or Department) annual write-offs, processes, and systems used for electronic health records and billing for third party payers. These third party payers include Medi-Cal, Medi- Cal Managed Care, Medicare, and private insurance.