Dive Brief:
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To improve data collection for Medicaid managed care organizations, CMS should provide states information on scope and methodology requirements for encounter data audits, required content of the annual assessments and circumstances for deferring or disallowing matching funds in response to noncompliant Transformed Medicaid Statistical Information System (T-MSIS) data submissions, according to a new U.S. Government Accountability Office report.
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GAO examined Medicaid MCO encounter data reliability by reviewing states' oversight practices and CMS actions to help ensure encounter data reliability. The watchdog focused on eight states — California, Nebraska, New Hampshire, New York, Ohio, Texas, Utah and West Virginia.
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All eight states review MCO-submitted encounter data for reasonableness. Of those eight, three of them use an additional oversight practice to compare encounter data with an external data source. CMS recommends states use those practices to ensure data reliability. Also, five of the states reported they use other mechanisms to enforce encounter data reporting requirements, including penalties, according to the report.
Dive Insight:
GAO found that CMS hasn't provided states with the proper guidance on how to fulfill new regulatory requirements focused on encounter data reliability. It added that the agency doesn't offer enough information to states about the T-MSIS data submission process.
"In 2016, CMS indicated that it would provide this information before taking such actions. Until CMS provides this information to states, the effectiveness of deferring or disallowing funds as a potential enforcement tool to ensure state compliance is diminished, thus potentially hampering its efforts to ensure the reliability of encounter data," according to the report.
Medicaid covers nearly 23% of the U.S. population. Medicaid managed care plans added 21 million people over the past five years. A managed care plan covers almost three-quarters of the Medicaid population. That includes all Medicaid recipients in Hawaii and Tennessee and nearly all in Louisiana and New Hampshire. More states expanding Medicaid next year will likely increase those numbers.
States see Medicaid MCO as a cost-containment strategy and have increasingly transferred their Medicaid population to private payers. However, Medicaid costs remain a problem.
A recent HHS Office of the Actuary report projected the federal/state program's expenditures will increase at an average annual rate of 5.7% over the next decade. The report warned that growth could strain federal and state budgets.
With the growth of Medicaid MCOs, government watchdogs have raised concerns about how they collect encounter data. The accuracy of this data is critical to these programs, especially with almost half of total federal Medicaid dollars going to MCOs in 2017.