AHCCCS	Janice K. Brewer, Governor

Arizona Healtn Care Cost Containment System

November 10, 2014

Trista Loops, Interim CEO Health Net Access
1230 W. Washington St. Tempe, AZ 85281

Thomas J. Betlach, Director

SUBJECT:  Notice  of Compliance Action- Sanction -Dispute and Appeals Manager

Dear Ms. Loops:

The Arizona Health Care Cost Containment System (AHCCCS), Division of Health Care Management (DHCM) has determined that Health Net Access (HNA) is in violation of the Acute Care contract YH14-0001 for contract year ending 2015. As outlined in Section D, Paragraph 72 (Sanctions) of the Acute Care contract and  the AHCCCS Contractor Operations Manual (ACOM) Policy 408, Health Net Access is hereby subject to compliance action for failure to comply with Key Staffing requirements specific to the position of Grievance and Appeal Manager as follows:

Failure to Comply with Key Staffing
Section D, Paragraph 16 of the Acute Care contract requires that the Contractor shall:
Have in place the organizational,  operational,  managerial  and  administrative  systems capable of fulfilling all contract requirements.
Employ sufficient staff  and  utilize  appropriate  resources  to  achieve  contractual compliance.
Have adequate resource allocation to achieve outcomes in all functional areas within the organization. Adequacy will be evaluated based on outcomes and compliance with contractual and AHCCCS policy requirements.
Have at a minimum the outlined Key Staff Positions including
o	g. Dispute and Appeal Manager who is located in Arizona and who will manage and adjudicate member and provider disputes arising under the Grievance System
including  member  grievances,  appeals  and  requests  for  hearing  and  provider claims disputes.

Health Net Access provided a Key Staff listing for CYE 2014 and CYE  2015  identifying  a person with the title of Dispute and Appeal Manager. However, the Position Description provided for the identified Grievance and Appeal Manager states 1) Under the General Summary Section that the position, "Supervises the activities and staff involved in providing resolution of member inquiries and appeal & grievances. " and 2) Is titled "Health  Net"  description,  not Health Net  Access.  Health Net  Access  has  also  confirmed  that  the  person  listed  for this key

801 East Jefferson, Phoenix, AZ 85034 • PO Box 25520, Phoenix, AZ 85002 • 602-417-4000 • www.azahcccs.gov

position is only responsible for managing member grievances and appeals and is not responsible for managing and adjudicating provider disputes and that provider disputes are in fact handled by another person who is located in California. Further, based on the information provided, the identified person listed as the Grievance and Appeal Manager  has been listed in this key staff position since the effective date of the initial contract with AHCCCS on 10/01/2013 but has not held the responsibility for managing and adjudicating claims disputes as the contract requires. Health Net Access has been noncompliant with this contract requirement since 10/01/2013.

In addition, documentation of correspondence with California staff refers to the person listed as the Provider Claims Educator (Az) as the person that will represent Health Net Access on the actual hearings, not the Grievance and Appeal Manager. It is also evident from recent significant issues related to managing and adjudicating claim disputes as outlined in the November 10, 2014 AHCCCS Notice To Cure letter that Health Net Access does not have a dedicated person with not only claims knowledge, but appropriate Arizona Medicaid knowledge and skills necessary to manage and adjudicate provider disputes as required in the AHCCCS contract.

Compliance Action

Sanction

Health Net Access has not demonstrated compliance in meeting the requirement of the contract. Therefore, AHCCCS will impose a $25,000 monetary sanction for Health Net Access' failure, since 10/01/2013 to date, to have a Grievance and Appeals Manager who is located in Arizona and who manages and adjudicates provider claim disputes arising under the Grievance System.

The total sanction amount above will be withheld from a future capitation payment. If Health Net Access disagrees with this decision, the Contractor may file a dispute with  the  AHCCCS  Administration  using  the process  outlined  in
A.A.C. R9-34-401 et seq. The dispute must be filed in writing and must  be received by the AHCCCS Administration, Office of Administrative Legal Service
at 701 E. Jefferson, Phoenix, AZ 85034, no later than 60 days from the date of this letter. The dispute shall specify the legal and factual bases for the dispute as
well as the relief requested.

Corrective Action

Health Net Access must submit a Corrective Action Plan to AHCCCS detailing the following:

Specific steps to fill the position of Grievance and Appeal Manager that meets the requirements of the AHCCCS contract including projected timeframe.
Notification to AHCCCS upon hire, including a copy of the person's
resume and job description.

o	A plan for ensuring training and technical assistance regarding AHCCCS contract requirements is provided to the new person.

Please submit your Corrective Action Plan to Karen Edgley, Operations and Compliance Officer at Karen.edgley@azahcccs.gov   by November 24, 2014.

If you have any questions regarding this letter, you may contact Virginia Rountree, Operations Administrator,  at 602-417-4122 or Virginia.rountree@azahcccs.gov

Sincerely,

Michael Veit
Contracts and Purchasing Administrator

Cc:	Susan Gilkey, Director, Regulatory Compliance & Reporting Health Net Access
Gay Ann Williams, Vice President Medicaid/Medicare Compliance Officer Health Net Inc. Kari Price, Assistant Director, DHCM
Shelli Silver, Assistant Director, DHCM
Matt Devlin, Assistant Director, OALS
Virginia Rountree, Operations Administrator, DHCM Diana Alvarez, Operations Manager, DHCM
Karen Edgley, Operations Compliance Officer, DHCM