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GAO Releases Recommendations for CMS about Managed Care Encounter Data Reporting

November 20, 2018

The Government Accountability Office (GAO) released a report recommending that the Centers for Medicare & Medicaid Services (CMS) give states more information to ensure regulatory compliance regarding encounter data reliability in managed care organizations (MCO). The GAO found that CMS has provided states with limited information on how to fulfill new regulatory requirements related to encounter data reliability.

States collect data on Medicaid services to help CMS oversee the managed care program. This data can help set managed care payment rates, identify inappropriate billing patterns, and ensure access to services. CMS now requires states to have independent audits of their data to help ensure reliability. However, CMS has not provided complete guidance to states about how to conduct these audits—which could lead to inconsistent results.

The GAO conducted this study in response to questions raised by the United States House Committee on Energy and Commerce.

The GAO selected a sample of eight states to review MCO encounter data; California, Nebraska, New Hampshire, New York, Ohio, Texas, Utah, and West Virginia. It found that all eight states checked MCO-submitted encounter data for reasonableness, meaning the data contained valid values, were submitted in a timely manner, and reflected historical trends.

States are required to report this encounter data to CMS' Transformed Medicaid Statistical Information System (T-MSIS). In addition, states must submit certain other information to CMS, including periodic independent audits of state encounter information and annual assessments of encounter data.

The GAO did find that CMS had provided states with limited information on these newer regulatory requirements, and recommended that CMS provide more information to states about:

  • The scope and methodology requirements for encounter data audits
  • The required content of the annual assessments
  • The circumstances for deferring or disallowing matching funds in response to noncompliant T-MSIS  data submissions

In addition, the GAO report highlights some remaining problems within CMS’ accountability and data collection procedures, and reinforces the continued need for congressional oversight of these programs.

For additional information, contact Jeff Bechtel, HAP’s senior vice president, health economics and policy.

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