Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
 
N A S R
OT  LL  TATES  EPORTED 
 
 
M M C
EDICAID  ANAGED  ARE 
 
E D
NCOUNTER  ATA AS 
R  
EQUIRED 
 
Suzanne Murrin  
Deputy Inspector General  
for Evaluation and Inspections  
 
July 2015 
OEI-07-13-00120   
   
EXECUTIVE SUMMARY:  NOT ALL STATES REPORTED MEDICAID 
MANAGED CARE ENCOUNTER DATA AS REQUIRED  
OEI-07-13-00120 
 
WHY WE DID THIS STUDY 
Approximately 70 percent of all Medicaid beneficiaries receive services through 
managed care.  The high proportion of beneficiaries enrolled in managed care makes 
accurate encounter datai.e., information about the services provided to Medicaid 
beneficiaries enrolled in managed careessential for the oversight of Medicaid as well as 
prevention of fraud, waste, and abuse. State Medicaid programs are required to report 
encounter data to a national database, the Medicaid Statistical Information System  
(MSIS). However, previous Office of Inspector General (OIG) reviews have raised 
concerns about the completeness, timeliness, and accuracy of national Medicaid data.   
For example, in 2009 OIG found that the encounter data reported to MSIS were 
incomplete, and recommended that the Centers for Medicare & Medicaid Services (CMS) 
enforce Federal requirements for reporting encounter data.  Another 2009 OIG report 
found that over one and a half years elapsed between when States submitted MSIS files 
and when CMS accepted them. 
 
HOW WE DID THIS STUDY  
We examined the third-quarter fiscal year 2011 MSIS claims files for the 38 States that 
had the types of managed care programs for which encounter data must be reported to 
MSIS. For each State we reviewed, we determined whether encounter data was present 
in MSIS for all of the managed care entities with which the State had contracts.  For each 
State with missing encounter data, we contacted State Medicaid officials to determine 
why these data were missing.  Finally, we conducted interviews with CMS and contractor 
staff regarding oversight of States reporting to MSIS.  
 
WHAT WE FOUND 
States reporting of encounter data to MSIS improved since our 2009 report, but some  
States are still not reporting data for all contracted managed care entities.  In the 
2009 report, OIG found that 15 States did not report encounter data to MSIS.  In the 
current report, 8 of the 38 States we reviewed did not report encounter data from any 
managed care entities by the required deadline. An additional 11 States did not report 
encounter data for all managed care entities. Finally, because of issues with the data that 
seven States submitted, we could not assess whether those States reported encounter data 
for all of their managed care entities.  
 
WHAT WE RECOMMEND 
To ensure that all States comply with the requirement to submit encounter data, we 
recommend that CMS use its authority to withhold appropriate Federal funds from States 
that fail to submit encounter data to MSIS until those States report encounter data as 
required.  We also recommend that CMS monitor encounter data to ensure they are 
reported for all managed care entities.  CMS concurred with both recommendations. 
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................5 

Findings .......................................................................................................7 

Eight States did not report any encounter data by the required  

deadline............................................................................................7 

Eleven States did not report encounter data from all managed  

care entities......................................................................................8 

We could not determine whether seven States reported  

encounter data for all managed care entities .................................10 

Conclusion and Recommendations ...........................................................13 

Agency Comments and Office of Inspector General Response ................15 

Appendixes ................................................................................................16 

A: Detailed Methodology .............................................................16 

B: Status of Encounter Data Reported to MSIS by States for  

Third Quarter FY 2011 ..................................................................19 

C: Agency Comments  ...................................................................20 

Acknowledgments .....................................................................................22 

 
 
 
   
   
OBJECTIVES 
1. 	  To determine the extent to which States reported encounter data for all 
managed care entities to the Medicaid Statistical Information System  
(MSIS). 
2. 	  To identify factors that prevented States reporting of MSIS encounter data. 
BACKGROUND 
Medicaid Managed Care 
Medicaid managed care programs deliver health services through contracted 
arrangements between State Medicaid agencies and managed care entities. In 
2013, approximately 70 percent of the 55 million Medicaid beneficiaries 
nationwide were enrolled in managed care programs.1  The reimbursement 
methods and delivery systems of managed care programs vary depending on 
the type of program implemented.  One reimbursement method is capitation.  
In capitated managed care programs, managed care entities receive a fixed 
monthly rate per enrolled Medicaid beneficiary in exchange for the provision 
of covered services.2, 3    
Encounter Data 
Encounter data are detailed information regarding the services provided to the 
individual beneficiaries enrolled in capitated managed care programs.  
Encounter data are the managed care counterpart of claims data from  
fee-for-service programs.   
Accurate encounter data are essential for oversight of Medicaid.  Encounter 
data are used for rate-setting, quality assurance, utilization review, and 
evaluation of how managed care entities performed.  A 2009 OIG report found 
that despite the importance of encounter data to oversight of Medicaid, 
15 of the 40 States reviewed were not reporting encounter data to MSIS.  The 
report recommended that the Centers for Medicare & Medicaid Services 
(CMS) begin enforcing Federal requirements regarding the reporting of 
encounter data.4  CMS concurred with this recommendation.  In its comments 
on the 2009 report, CMS stated that it intended to increase its efforts to 
____________________________________________________________ 
1 Mathematica Policy Research, Encounter Data Toolkit, November 30, 2013. 
2 Managed care entities include managed care organizations (MCOs), prepaid inpatient  health  
plans  (PIHPs), prepaid  ambulatory health plans (PAHPs), primary care case managers 
(PCCMs), and health insurance organizations (HIOs). 42 CFR 455.101. 
 
3 Managed care entities receive a capitation payment for each beneficiary regardless of 

whether the beneficiary actually received services during the period covered by the payment. 
 
42  CFR  438.2. 
 
4 OIG,  Medicaid Managed Care Encounter  Data: Collection and  Use (OEI-07-06-00540), 
May 2009. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   1 
   
   
consistently enforce all Federal requirements for the reporting of encounter 
data from Medicaid managed care programs. 
The Medicaid Statistical Information System 
MSIS is a national database of Medicaid fee-for-service claims, encounter 
data, and beneficiary eligibility information.  CMS uses MSIS to produce, 
manage, and analyze information on Medicaid beneficiaries, services, and 
payments.  MSIS data are also widely used for research and policy analysis by 
both public and private organizations, and may be used for detecting fraud, 
waste, and abuse.5, 6    
Federal Authority to Require Encounter Data Reporting. Federal authority 
regarding submission of State Medicaid programs encounter data stems from  
two laws. First, the Social Security  Act requires States to submit data, 
including encounter data, to MSIS.7, 8  Second, the passage of the Affordable 
Care Act (ACA) in 2010 gave CMS authority to withhold Federal Medicaid 
matching funds from States that do not include encounter data in their MSIS 
submissions.9  However, rules for implementing the ACA provision have not 
been published, and as a result CMS has not yet exercised its authority to 
withhold funds for failure to submit encounter data. 
MSIS Claims Files. States are required to submit files to MSIS quarterly.  The 
MSIS Data Dictionary defines the data elements required for each type of 
MSIS file and establishes  the dates by which the quarterly submissions must be 
received (6 weeks after the end of the reporting period).10       
MSIS includes one eligibility data file and four claims data files for each State.  
The eligibility file contains one record for each person who was eligible for 
Medicaid for at least one day during the quarter, or for whom retroactive 
eligibility was established during the quarter.  The four claims files are: 
____________________________________________________________ 
5  53  Fed.  Reg. 26674 (July 14, 1988).  
6 CMS, MSIS Medicaid Statistical Information System.  Accessed at 
http://www.medicaid.gov/medicaid-chip-program-information/by-topics/data-and-
systems/msis/medicaid-statistical-information-system.html on October  20, 2014. 
7 Social Security Act  1903(r)(1)(F). 
8 Encounter data must be reported to MSIS for only two types of managed care entities: MCOs 
and PIHPs.  42 CFR  438.242.  An MCO is a managed  care entity that provides a 
comprehensive benefit  package in exchange for capitated risk-based payments.  (Under a 
risk-based contract, if the cost of the services exceeds the payments made to the managed care 
entity, the managed care entity incurs a loss.)  A PIHP is a managed care entity that provides a 
limited benefit package including inpatient hospital or institutional services; payments to  
PIHPs may be risk-based or non-risk-based.  CMS, Managed Care.  Accessed at 
http://medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-
care/managed-care-site.html on March 23, 2015.   Definitions of these types of managed  care 

entities can  also be found in 42  CFR  438.2. 

9  P.L.  No. 111-148  6504. 
 
10 CMS, MSIS Data Dictionary, pp. 3, 1863, 67136.   

Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   2 
   
   
1. 	  The inpatient claims file, which contains records of inpatient hospital 
services.  
2. 	  The long-term-care claims file, which contains records of 
long-term-care services received in an institution, including nursing 
facilities, intermediate care facilities for the intellectually disabled, 
psychiatric hospitals, and independent psychiatric wings of acute-care 
hospitals.  
3. 	  The prescription claims file, which contains records of prescription 
drugs, including durable medical equipment and supplies provided by a 
pharmacist under a prescription. 
4. 	  The other claims file, which contains records of services that are not 
included in the inpatient, long-term-care, or prescription filesi.e., all 
noninstitutional services, institutional services that are not billed for as 
part of a long-term-care or inpatient claim, and services received under 
waiversand records of capitated payments. 
Each of the four claims files must contain one record for every claim that was 
paid and for every encounter that was  processed during the reporting quarter.11   
Each State reports the services covered by its managed care programs via the 
appropriate MSIS claims files, as described above.  For example, if a State 
does not cover prescription drugs through managed care, it would report 
encounter data via only its inpatient, long-term-care, and other claims files.  
The State would not report any encounter data via its prescription claims file.12    
MSIS File Review Process. We interviewed CMS officials regarding the 
process for reviewing MSIS files. Each file that a State submits to MSIS is 
reviewed twice before it is accepted.  The first review is an automated review 
of the contents of each file that occurs at the time of submission.  The second 
review is an indepth review conducted by staff of Mathematica Policy 
Research (hereinafter Mathematica).  Mathematica staff review all of a States 
files for a particular quarter. They review the files individually and 
collectively, to ensure consistency both within individual files and across files.  
For example, Mathematica staff determine whether every beneficiary for 
whom encounter data are reported in a claims file is also identified in the  
eligibility file as being enrolled in managed care.   As Mathematica staff  
conduct these reviews, they contact the States to make followup inquiries and 
request corrections. State staff then respond to those inquiries and make the 
needed corrections before resubmitting their files.   
After the files have passed all the levels of review and editing, Mathematica 
staff make a recommendation to CMS staff as to whether they should be 
____________________________________________________________ 
11 CMS, MSIS Data Dictionary, p. 64. 
12 This example assumes that the State in question uses managed care to cover services of the 
types reported  to the inpatient, long-term-care, and other claims files. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   3 
   
   
accepted. If CMS staff accept the files, they load the files into the MSIS 
database and make them available to MSIS users.     
Transformed Medicaid Statistical Information System  
Recognizing the need for a more comprehensive information management  
strategy for Medicaid, CMS began implementation of a new national Medicaid 
dataset called the Transformed Medicaid Statistical Information System  
(T-MSIS) in 2011.13  With T-MSIS, CMS hopes to improve the completeness 
and timeliness of national Medicaid data.14 The target date for States to start 
reporting to T-MSIS was July 1, 2014;15 however, CMS officials told us that 
the agency actually expects most States to start reporting to T-MSIS in 2015.   
T-MSIS will replace MSIS and other data reports that States are currently 
required to submit to CMS.  The requirement for States to report encounter 
dataand CMSs authority to withhold funds from States that do not report 
these datawill apply to T-MSIS as they did to MSIS.    
Related Reports  
In addition to conducting this reviewwhich focuses on data related to 
Medicaid managed care servicesOIG has conducted other reviews that raised 
concerns about the completeness, timeliness, and accuracy of national 
Medicaid data. In 2009, OIG published two separate reports on MSIS.  One 
review foundas mentioned earlierthat 15 States did not report encounter 
data to MSIS. The other review found that over one and a half years elapsed 
between States submission and CMSs acceptance of MSIS files.16 In addition 
to conducting these studies, OIG performed an early implementation review of 
T-MSIS in 2013 that also raised concerns about the completeness and accuracy 
of future T-MSIS data.17 
 ____________________________________________________________ 
13 Testimony of Peter J. Budetti, Deputy Administrator and Director  of the Center for Program  
Integrity, CMS, on  Assessing  Medicare and  Medicaid Program Integrity  before the United  
States House Committee on Oversight and Government Reform, Subcommittee on  
Government Organization, Efficiency, and Financial Management, June 7, 2012.  Accessed at 
http://oversight.house.gov/wp-content/uploads/2013/02/2012-06-07-Ser.-No.-112-176-SC-
Govt-Orgs-on-Medicaid-Medicare.pdf on May 18, 2015. 

14 CMS, T-MSIS Implementation Toolkit, June 21, 2013. 

15 CMS staff will work with States to end their MSIS submissions when States are ready to 

submit files to  T-MSIS  on a monthly basis.  CMS, SMD#  [State Medicaid Director  Letter] 

13-004, RE:  Transformed Medicaid Statistical Information  System (T-MSIS) Data, 
 
August 23, 2013. 
16 OIG,  MSIS Data Usefulness for Detecting Fraud,  Waste, and Abuse (OEI-04-07-00240), 

August 2009. 

17 OIG,  Early Outcomes Show Limited Progress for the Transformed Medicaid  Statistical  

Information System (OIG-05-12-00610), September 2013. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   4 
   
   
METHODOLOGY 
This study assessed the extent to which States reported encounter data for all 
managed care entities to MSIS for the third quarter of fiscal year (FY) 2011  
and identified factors that prevented States from reporting encounter data to 
MSIS. When we began this study, the most recent edition of the National 
Summary of Managed Care Programs available was for 2011.  Therefore, we 
reviewed the 2011 MSIS files that were present in MSIS as of 
September 2013.18   
To identify which States had programs for which encounter data should have 
been reported to MSIS, we reviewed the Medicaid managed care programs that 
were in operation during the review period in all 50 States and the District of 
Columbia.  Thirteen States did not use MCOs or PIHPs to deliver Medicaid 
managed care services and were therefore excluded from the evaluation.  
These exclusions brought the total States reviewed to 38.19  
In each of the 38 States that had the types of managed care programs for which 
encounter data must be reported to MSIS, we identified the services covered by 
each managed care program, the managed care entities participating in each 
managed care program, and plan IDs for those managed care entities.  We used 
the unique plan ID for each managed care entity to determine if the entity had 
at least one encounter in the MSIS claims file(s) containing data on services of 
the types the entity provided. We assigned each State to a category indicating 
the status of its reporting of encounter data for contracted managed care 
entities: all data reported, some data reported, no data reported, or unknown.  
Table 1 shows the criteria for each category. 
 ____________________________________________________________ 
18  We  used information from the National Summary to identify which managed care programs 
each managed care entity was participating in, and to identify the MSIS claims files to which 
States should have reported encounter data for each managed care entity.    
19 The 2009 OIG evaluation reviewed 40 States.  The 2009 evaluation excluded Mississippi, 
which was included in this evaluation.  The 2009 evaluation also included three States 
Alabama, North Dakota, and Vermontthat were excluded from the current evaluation 
because in 2011 they did not operate managed care programs of the types for which encounter 
data must be reported to MSIS.  
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   5 
   
   
Table 1: Criteria for Categories Indicating Status of States Reporting of Encounter Data for 
Contracted Managed Care Entities  
Status of States  
Description of Status  
Encounter Data  
At least one encounter showing the plan ID of every contracted managed care entity was 
All data reported   reported in each of the four MSIS claim files containing services of the type(s) the managed 
care entity covered. 
At least one encounter showing the plan ID of some, but not all, contracted managed care 
Some data reported  entities was reported in each of the four MSIS claims files containing services of the type(s)  
the managed care entity covered.  
No encounters showing any plan ID were reported to any of the four MSIS claim files by the 
No data reported  
required deadline 
Unknown  The status of the encounter data reported could not be determined.  
Source:  OIG analysis of MSIS claims files from the third quarter FY 2011, 2015. 
We corresponded with Medicaid officials in each reviewed State to ensure that 
our understanding of their managed care programs and contracted managed 
care entities was correct. In States with missing encounter data, we also asked 
Medicaid officials to identify factors that affected their reporting of encounter 
data. We interviewed CMS and Mathematica staff regarding their roles in  
MSIS  submissions.  Finally, we reviewed correspondence among CMS, 
Mathematica, and State Medicaid staff regarding the submission of MSIS files.  
See Appendix A for further details on our methodology.   
Scope 
While States are only required to report encounter data to MSIS for MCOs and 
PIHPs participating in capitated managed care programs, many States also 
report encounter data for other types of managed care entities.  We reviewed 
the MSIS encounter data only for MCOs and PIHPs. 
We reviewed only the MSIS claims files; we did not review the eligibility files 
because they do not contain encounter data.  
Limitations 
We did not review MSIS claims files to ensure that encounter data representing 
all services provided through MCOs and PIHPs were present.  Our analysis 
determined whether at least one row of encounter data was present for each 
MCO and PIHP in each relevant MSIS file in each State.  
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General on 
Integrity and Efficiency.  
   
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   6 
   
   
FINDINGS 
Complete and accurate national data, including MSIS data, are essential for the 
oversight of Medicaid. However, previous OIG reviews have raised concerns 
about the completeness, timeliness and accuracy of national Medicaid data.  
For example, in 2009 OIG found that 15 States were not reporting any 
encounter data to MSIS, and recommended that CMS begin enforcing the 
requirement for such reporting.  Our current review looked at 2011 MSIS data, 
finding that reporting of encounter data to MSIS has improved, but some States 
are still not reporting data for all managed care entities with which they have 
contracts. Eight of the thirty-eight States reviewed did not report any 
encounter data by the required deadline, and an additional 11 States did not 
report encounter data for all contracted managed care entities.   Twelve States 
reported at least one encounter for every contracted managed care entity.  We  
could not make determinations about the status of an additional seven States  
encounter data reported to MSIS. 
Eight States did not report any encounter data by the 
required deadline  
The MSIS Data Dictionary establishes a deadline of 6 weeks after the end of 
the reporting period for receipt of quarterly MSIS files.  However, eight States 
had not reported any encounter data from the third quarter of FY 2011 to MSIS 
by this deadline. CMS accepted MSIS claims files from six of these States  
knowing that the files did not contain any encounter data. The two remaining 
States submitted their MSIS claims files for the third quarter of FY 2011, 
including their encounter data, nearly 2 years after they were due.  See 
Appendix B for a table showing the results of our assessment of each States 
encounter data reported to MSIS. 
CMS accepted MSIS claims files from six States knowing that 
required encounter data were not present  
Email correspondence between CMS and Mathematica staff regarding the files 
submitted by the six States shows that CMS staff knew that the files did not 
contain encounter data.20   Yet CMS still accepted those files.  Because these six 
States enrolled between 50 and 100 percent of their Medicaid beneficiaries in 
managed care, services for at least half the Medicaid beneficiaries in each State 
were not reported to MSIS.21      
Medicaid officials in all six States attributed the lack of encounter data in their 
MSIS claims files to limitations in their respective State data systems.  These 
systems either did not collect encounter data from contracted managed care 
____________________________________________________________ 
20 The six States were Massachusetts, Nevada, North Carolina, Pennsylvania, South Carolina, 
and West Virginia. 
21 CMS, Medicaid Managed Care Enrollment  Report: Summary Statistics as of July  1, 2011, 
p. 4.  
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   7 
   
   
entities, or did not report these data to MSIS.  When we contacted officials 
from the six States in 2013, those from four of the six stated that they had 
already corrected the data system limitation(s) that prevented them from  
reporting encounter data to MSIS. Officials from the remaining two States 
stated that they were working to correct the limitations.  CMS and 
Mathematica staff encouraged all six of these States to improve their reporting 
of encounter data and offered them technical assistance.   
Two States MSIS claims files were nearly 2 years overdue 
MSIS claims files for the third quarter of FY 2011 were due on 
November 15, 2011.  Two States first submitted their MSIS claims files for 
that quarter in September and October 2013, respectively, nearly 2 years after 
the deadline.22  These States did not submit their files for the third quarter of  
FY 2011 until after the due date because they were correcting files submitted 
for previous quarters. 
Data quality issues prevented the files submitted in 2013 from being accepted 
into MSIS at the time they were submitted.  Only some of the rows of data in 
these files presented the problematic data issues.  However, MSIS can only 
accept or reject all the data in a submitted filethere is no option for MSIS to 
accept only the rows of data that do not  have quality issues and to reject the 
rows that do. Therefore, no data could be accepted into MSIS for these two 
States until the data issues were resolved and the entire files could be accepted.  
Despite frequent followup by CMS and Mathematica staff, the States did not 
resubmit acceptable files for the third quarter of FY 2011 until May and 
August 2014, respectively.23  Officials from both States reported that the files 
accepted in 2014 did contain encounter data.   
Eleven States did not report encounter data from all 
managed care entities 
Eleven States did not report encounter data for all of their contracted managed 
care entities.  Four of these eleven States were unable to collect required 
encounter data from all contracted managed care entities, despite the fact that 
State contracts with managed care entities require the reporting of these data.  
Another 2 of the 11 States were unable to report all required encounter data 
because of limitations in their State data systems.  Another State cited both  
reasonsit was unable to collect encounter data from some managed care 
entities, and it also had limitations in its own data system.  This State had five 
contracted managed care entities operating in the third quarter of FY 2011, but 
____________________________________________________________ 
22 The two States were Kansas and Utah.   
23 The data quality issues that prevented these MSIS claims  files from being accepted when  
they were first submitted were unrelated to the States encounter data.  We did not assess the 
encounter data in  the files submitted  in 2014. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   8 
   
   
two of the five did not start reporting encounter data until July 2012. In 
addition, in the third quarter of FY 2011, this States data system did not yet 
have the ability to process encounter data representing long-term-care 
services.24  The remaining four States did not identify the cause of their 
missing encounter data. 
These 11 States varied as to their respective percentages of managed care 
entities for which encounter data were reported.  Some Statessuch as 
Washington and Texaswere missing only a small percentage of managed 
care entities from one MSIS claims file.  Other Statessuch as Colorado and 
Illinoiswere missing a higher percentage of managed care entities from  
multiple files.  Table 2 shows the percentage of managed care entities for 
which plan IDs were present among the encounter data in each MSIS claims  
file for each of these 11 States. 
   
 ____________________________________________________________ 
24 This  State was working on  developing such  capacity at the time of our review. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   9 
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these five States reported to MSIS.  The remaining two States used 
multiple identifiers in the plan-ID field, rather than a single unique 
identifier corresponding to each managed care entity.  We determined that 
for these two States, it would be prohibitively difficult to determine which 
of the multiple identifiers we should look for to confirm that the required  
encounter data were being reported for each managed care entity.  Thus, 
we were unable to make determinations about the status of these two 
States encounter data.  
Invalid plan IDs. Two States included invalid values in the plan ID field 
in their encounter data. Both States reported health care provider IDs 
rather than the plan IDs of the managed care entities that paid for the 
services. Officials from one of these States explained that the data system  
it had in operation in 2011 did not have the ability to report plan IDs to 
MSIS. Officials from this State said that CMS staff directed them to 
report provider identification numbers in the plan ID field as a stopgap 
measure, and to develop the capacity to report plan IDs for when the State 
begins submitting files to T-MSIS.  Medicaid officials from the other State 
explained that provider identification numbers were reported instead of 
plan IDs for services that beneficiaries received outside the provider 
networks of their respective managed care entities.    
Blank plan IDs. Another two States reported encounter data with blank 
plan IDs in their prescription claims  files.  Officials from these States 
explained that problems in the process of creating the files for submission 
to MSIS resulted in the blank plan IDs.  Officials from both of these States 
also stated that the problems had been corrected in subsequent MSIS 
claims file submissions.   
Dummy plan IDs. Review of the fifth States inpatient claims file 
showed that only the dummy plan ID888888888888was present.  
When we contacted officials in this State, they stated that the inpatient file 
they submitted had a valid plan ID on every row of encounter data.  
However, the file that was loaded into MSIS, after review and acceptance 
by CMS, contained only the dummy value in the plan ID field.  We were  
unable to identify the source or cause  of the discrepancy between what the 
State reported and the accepted MSIS inpatient claims file. 
Multiple plan IDs. The remaining two States assigned multiple plan IDs 
to managed care entities.   The first State assigned plan IDs to managed 
care entities based on the region(s) they served, the program(s) they 
participated in, and the type(s) of beneficiaries they covered.  The second 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   11 
   
   
State assigned each of its managed care entities a different plan ID for 
each county that the entity operated in. 
States have flexibility in how they assign plan IDs to managed care 
entities; it is not incorrect for States to assign regional or county-specific 
plan IDs to each contracted managed care entity.  However, we determined 
that it was prohibitively difficult to define which of the multiple identifiers 
for each managed care entity should be present in each MSIS claims file.26   
Just as it was for us, it would be difficult for CMS to obtain the 
information needed to ensure encounter data for every contracted managed 
care entity are present in the MSIS claims files of States that assign 
regional or county-specific plan IDs to their managed care entities.   
 
 
   
____________________________________________________________ 
26 Defining which of the multiple plan IDs for each managed care entity should be present  
in a given MSIS file is difficult because there are legitimate reasons why no encounter  
data should be  reported  for a particular  plan ID.  For example, in a county  with low 
Medicaid enrollment, it could be that  no  beneficiaries enrolled in a particular managed  
care entity in that county needed long-term care during the quarter. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   12 
   
   
CONCLUSION AND RECOMMENDATIONS 
Previous OIG reviews have raised concerns about the completeness, 
timeliness, and accuracy of national Medicaid data.  OIGs early 
implementation review of T-MSIS, published in 2013, raised concerns 
about the completeness and accuracy of future T-MSIS data.  Other OIG 
work found that over one and a half years elapsed between States 
submission of MSIS files and CMSs acceptance of them.  A 2009 OIG 
report found that CMS did not enforce the required reporting of encounter 
data to MSIS, and recommended that CMS begin enforcing Federal 
requirements regarding such reporting.  CMS concurred with that 
recommendation and said it would increase its efforts to consistently 
enforce all Federal requirements for Medicaid encounter data  
reporting. However, we found thatfor data from the third quarter of 
FY 2011CMS was still not enforcing the requirement for States to 
report encounter data to MSIS. Of the 38 States we reviewed, 8 States had 
not reported any encounter data by the required deadline.  An additional 
11 States did not report encounter data for all contracted managed care 
entities. Finally, we could not determine whether seven States reported 
encounter data for all managed care entities. 
The passage of the Affordable Care  Act in 2010 gave CMS new authority 
to withhold Federal funds from States that do not comply with 
requirements to report encounter data.  In the past, CMS has accepted 
MSIS files that do not contain the required encounter data.  CMS should 
change its practices for overseeing States submissions to ensure full 
compliance with the requirement for States to report encounter data. 
To ensure that all States comply with this requirement, we recommend that 
CMS: 
Use its authority to withhold appropriate Federal funds from 
States 
If States fail to submit encounter data within a reasonable timeframe after 
being notified of issues with their MSIS submissions, CMS should use its 
authority to withhold appropriate Federal funds, to an extent 
commensurate with the States level of noncompliance, from those States 
until encounter data are reported as required.   
Monitor encounter data to ensure States report data for all 
managed care entities 
To accomplish this, CMS should monitor the submission of encounter data 
to ensure that: 
 	  all States with capitated managed care programs using MCOs and 
PIHPs submit encounter data;  
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   13 
   
   
 	  submitted encounter data include all contracted managed care 
entities; and  
 	  submitted encounter data include valid plan IDs. 
   
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   14 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with both of our recommendations. 
In responding to our first recommendation, CMS noted that it has issued a 
notice of proposed rulemaking that would authorize the withholding of 
Federal funds from States until encounter data are reported as required and  
information systems meet established standards.   
In responding to our second recommendation, CMS stated that it will 
continue to work with States to ensure that managed care programs submit 
encounter data to States, that encounter data submitted to MSIS by States 
include all managed care entities, and that the submitted encounter data 
include valid plan IDs. CMS stated that it takes a number of steps to 
ensure that States submit encounter dataspecifically, it approves each 
new managed care program that a State implements, and as part of that 
approval process, the State attests that it will be able to report quality data  
for that managed care program.  Once the new managed care program is 
operating, CMS monitors the quality and completeness of encounter data 
that the State submits to MSIS regarding the program.  Finally, CMS said 
that it provides feedback to States to improve the quality of their encounter 
data. 
We support CMSs efforts to ensure that encounter data are reported to 
MSIS as required, and to monitor and improve the encounter data that 
States submit to MSIS.  However, the issues we identified in this report 
occurred despite CMSs current monitoring practices.  We suggest that 
CMS either increase its monitoring of encounter data that States submit to 
MSIS, or expand its efforts to assist States to correct deficiencies 
identified through that monitoring. For the full text of CMSs comments, 
see Appendix C. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   15 
   
   
APPENDIX A 
Detailed Methodology 
Collection of MSIS Files   
We obtained copies of the MSIS claims files for the third quarter of 
FY 2011 for each of the 38 States included in this evaluation.  Within each  
MSIS claims file, we limited the data used in our analysis to those rows 
with value 3 in the type of claim  field; this value indicates that the 
row of data represents an encounter provided through a capitated managed 
care program. 
Identification of Managed Care Programs, Contracted Managed 
Care Entities, and Plan IDs 
Each managed care entity has an identification number known as a 
plan ID, which is reported in the plan ID field in MSIS.  CMS staff 
provided us with a list of managed care entities that were participating in 
managed care programs in each State in 2011, and the plan IDs for those 
managed care entities.  CMS staff explained that the information in this 
list was reported by States and had not been validated.  When the list 
provided by CMS proved inaccurate for a particular State, we collected 
correct information on contracted managed care entities and their plan IDs 
from State Medicaid staff.27  
Using the plan ID list(s) and information in the 2011  National Summary of 
Managed Care Programs, we created a database showing the managed 
care programs through which each managed care entity was providing 
services, and the MSIS claims files to which the services provided should 
have been reported. Thus, we developed a table showing to which of the 
four MSIS claims files each State should have reported encounters for 
each managed care entity.  Chart A.1 illustrates the flow of encounter data 
from managed care entities participating in managed care programs to 
States to MSIS claims files. 
____________________________________________________________ 
27  We considered the plan  ID information provided  by CMS inaccurate if (1) the plan IDs  
in the MSIS claims files were of a different format or type than the plan IDs in the CMS 
information (i.e., 204776597032 vs 026); (2) the number  of  plan IDs in a States 
MSIS claims files greatly exceeded the number of plan IDs for that State in CMSs 
information; or (3) when CMSs information contained internal  discrepancies, such as  
listing multiple plan IDs for one managed care entity, assigning the same plan  ID to 
multiple managed care entities, or having missing plan  IDs. 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   16 
   
   
Chart A-1:  Flow  of Encounter Data to MSIS Claims Files 
 
 
Assessment of Encounter Data in MSIS Claims Files 
For each State we reviewed, we compared the plan IDs for contracted 
managed care entities to the plan IDs that were present among the 
encounter data in the MSIS claims files.  We identified which, if any,  
managed care entities did not have any encounters present in a given file.   
Prior to publication of the report, we shared with officials in each 
reviewed State the categorization of the States encounter data, and gave 
them an opportunity to provide further information regarding the reasons 
for any missing encounter data.   
CMS and Contractor Data Collection 
We conducted three interviews spaced throughout the data collection 
period with CMS staff responsible for oversight of MSIS, regarding the 
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   17 
   
   
MSIS reporting requirements and file submission process.  We also 
conducted a similar interview with staff from Mathematica.      
Finally, we requested and reviewed correspondence among CMS, 
Mathematica, and State Medicaid staff regarding the submission of files 
for the third quarter of FY 2011, followup questions about those files, and 
resubmission of those files.  We limited this correspondence review to the 
States that were placed in the no data reported category.  
   
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   18 
   
   
APPENDIX B 
Status of Encounter Data Reported to MSIS by States for Third Quarter 
FY 2011 
Status of Encounter Data   Description of Status   Number of States 
At least one encounter showing the plan ID of every  
12 (Arizona, Connecticut, Georgia,  
contracted managed care entity was reported in 
Hawaii, Kentucky, Maryland,  
All data reported   each of the four  MSIS claims files containing 
Michigan, Minnesota, Mississippi,  
services of the type(s) the managed care entity  
Nebraska, New Jersey, Tennessee)  
covered. 
At least one encounter showing the plan ID of some, 
11 (California, Colorado, Delaware, 
but not all, contracted managed care entities was 
the District of Columbia, Illinois, 
Some data reported  reported in each of the four MSIS claims files 
Indiana, Iowa, New York, 
containing services of the type(s) the managed care  
Rhode Island, Texas, Washington) 
entity covered.  
No encounters showing any plan ID were reported to  8 (Kansas, Massachusetts, Nevada, 
No data reported   any of the four MSIS claim files by the required  North Carolina, Pennsylvania, 
deadline.  South Carolina, Utah, West Virginia) 
The status of the encounter data reported cannot be  
5 (Missouri, New Mexico, Oregon,  
determined because of blank, invalid, or dummy 
Virginia, Wisconsin)  
plan IDs. 
Unknown 
These States assigned multiple plan IDs to their 
managed care entities; it was not possible to define 
2 (Florida, Ohio)  
which plan IDs should be present in each MSIS 
claims file.  
13 (Alabama, Alaska, Arkansas, 
These States did not use managed care of the types  Idaho, Louisiana, Maine, Montana,  
Excluded  for which encounter data is required to be reported   New Hampshire, North Dakota, 
to MSIS during the review period.   Oklahoma, South Dakota, Vermont, 
Wyoming) 
 Total         51 
Source:  OIG analysis of MSIS claims files for  the third quarter of FY 2011, 2014. 
 
   
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   19 
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Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)  21 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Brian T.  Whitley, Regional 
Inspector General for Evaluation and Inspections in the Kansas City 
regional office. 
Michala Walker served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the Kansas City regional office who 
conducted the study include Michael Barrett, Teresa Dailey, and 
Conswelia McCourt. Central office staff who provided support include 
Eddie Baker, Berivan Demir Neubert, Althea Hosein, Kevin Manley, and 
Christine Moritz.  
Not All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120)   22 
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.