DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
SHO # 18-008 
 
RE: Transformed-Medicaid 
Statistical Information System (T-
MSIS) 
 
August 10, 2018 
 
Dear State Health Official: 
 
The Centers for Medicare & Medicaid Services (CMS) is issuing this letter to provide guidance 
to states regarding expectations for Medicaid and Childrens Health Insurance Program (CHIP) 
data and ongoing Transformed-MSIS (T-MSIS) implementation. As discussed in the August 23, 
2013 State Medicaid Directors letter,1 all states are required by law to submit certain kinds of 
data.  
 
CMS appreciates states continued partnership on T-MSIS, now resulting in all states, the 
District of Columbia, and Puerto Rico successfully in production of T-MSIS data.2 CMS 
continues to monitor ongoing monthly T-MSIS data submissions and to work with the remaining 
U.S. territories and entities not yet submitting data.  CMS now is shifting our T-MSIS efforts to 
assessing and improving the quality of T-MSIS data. 
 
The purpose of this SHO letter is to inform states and other stakeholders about steps CMS plans 
to take to assess, improve, and maintain T-MSIS data quality, our priorities for data quality, and 
how we and other stakeholders will begin to make use of T-MSIS data.  Continuous T-MSIS 
data quality review and improvement will be an ongoing task, and CMS expects states to 
consider it a permanent and ongoing process of state operations. 
 
CMS is committed to working with states on improving their data submissions by addressing 
known issues and through ongoing data integrity reviews.  While CMS recognizes this initiative 
will require some flexibility in state approaches, CMS expects states to develop achievable goals 
and commit the necessary resources to make steady progress in improving the quality of their 
data submissions over reasonable timeframes. 
 
The lack of access to high quality, timely Medicaid and CHIP data is a concern of the 
Government Accountability Office (GAO) and other oversight entities, and is routinely 
highlighted in their reports.3  Ongoing availability of high-quality T-MSIS data is essential to 
                                                           
1 https://www.medicaid.gov/federal-policy-guidance/downloads/smd-13-004.pdf  
2 This excludes a few remaining entities (e.g., CHIP and Third Party Administrator (TPA), and other territories. 
3 Examples of relevant GAO and OIG reports include: Medicaid: Further Action Needed to Expedite Use of 
National Data for Program Oversight, GAO-18-70; Not All States Reported Medicaid Managed Care Encounter 
  Page 2  State Health Official 
ensure robust monitoring and oversight of Medicaid and CHIP programs, to enable evaluation of 
demonstrations under section 1115 of the Social Security Act (the Act) and to calculate quality 
measures and other metrics, including those reported through the new Medicaid and CHIP 
(MAC) Scorecard released on June 4, 2018.4  
 
States should be aware ongoing access to enhanced funding for additional systems enhancements 
and operational costs is contingent upon the states continued ability to meet T-MSIS 
requirements of complete, accurate, and timely data reporting.  These requirements may be found 
in statute and federal regulations.  Section 4753 of the Balanced Budget Act of 1997, P.L. 105-
33, amended section 1903(r) of the Act to include a statutory requirement for states to submit 
claims data, enrollee encounter data, and supporting information.  Section 6504 of the Patient 
Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education 
Reconciliation Act, P.L. 111-152 (collectively, the Affordable Care Act) strengthened this 
provision by requiring states to include data elements the Secretary of Health and Human 
Services determines necessary for program integrity, program oversight, and administration.  The 
Medicaid managed care regulation published in May 2016 further describes the requirements for 
the submission of encounter data (see 42 CFR 438.242, 438.604 and 438.818).  As part of 
encounter data reporting, CMS expects states to report all actual payment-related fields 
stipulated in the T-MSIS documentation and referenced in the Medicaid managed care 
regulations.  Proprietary or trade secret data will be protected appropriately.  States should refer 
to Medicaid.gov for detailed information on submitting T-MSIS data, including the data 
dictionary and coding information.5 
 
Ongoing State Commitments 
T-MSIS data are reviewed through two data quality methods.  The first is the T-MSIS system 
business rules review, performed for each monthly data submission by the state, which displays 
the results of the basic edits and identifies the obvious errors as the data are processed.6  These 
errors are accessible to states through the T-MSIS operational dashboard.  States are expected to 
proactively and continuously address errors identified by the system business rules review.  The 
second method reviews each states data through inferential validation.  Inferential validation 
looks at patterns in each states data and identifies warnings where data elements fall outside 
of a normal range.  CMS is sharing these data quality results with states during meetings as part 
of its ongoing data quality monitoring efforts and expects states to make corrections to address 
identified issues. 
 
States ability to make complete, accurate, and timely T-MSIS data submissions is integral to the 
success of the Medicaid and CHIP programs.  States should therefore consider how system 
changes and/or enhancements could impact T-MSIS data submission.  States should notify CMS 
early of potential system or operational changes potentially impacting the quality, completeness, 
and/or timeliness of the states T-MSIS data submissions, and then work with CMS to follow 
                                                           
Data as Required, OEI-07-13-00120. For other examples and more information, please see https://www.gao.gov/ 
and https://oig.hhs.gov/ 
4 https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-06-
04.html.   
5 https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/index.html 
6 Basic edits may include checking for valid data types (character, numeric, etc.) checking for valid data values, 
checking data related elements that are key to linking for meaningful results.  Page 3  State Health Official 
best practices in the planning, design, development, testing, and implementation of these 
changes.  Through its vendor contracts, states should ensure changes to the states systems or 
operations will not result in any degradation in the level of quality, completeness, and/or 
timeliness of its T-MSIS data submissions. 
 
Data Quality Priorities 
 
CMS has identified 12 Top Priority Items (TPI)7 for post-production data quality all states 
should address.  States should resolve any data quality item identified as a pre-production issue 
and implement an appropriate plan of action to address the issue.  States should use the CMS-
provided data quality tracking tool to document their plans of action and their planned 
compliance dates for fixing identified data quality issues.  CMS expects each state to resolve data 
quality issues for these items no later than six months after release of this letter.  If a state cannot 
resolve any issue identified with respect to these 12 TPI items within the six-month timeframe, 
CMS will request a corrective action plan from the state.  
 
CMS will expand the data quality review from the 12 TPI items to a more comprehensive data 
quality approach later this year.  CMS will work with states to determine the priority and the 
timeline for resolution of identified data quality items.  States should refer to Medicaid.gov for 
detailed information8 on submitting T-MSIS data, including the data dictionary, coding 
information, and new information posted regarding technical and data quality priorities.  
 
Use of T-MSIS Data 
 
States, oversight entities, Congress, policy researchers, entrepreneurs, and others are eager to 
access the T-MSIS data set.  CMS intends to make T-MSIS data available through a variety of 
data products, such as analytic files, data marts, routine reports, and systems accessibility 
through open application program interface.  CMS anticipates making T-MSIS research-ready 
files available in calendar year 2019.  
 
CMS would like to thank states for their continued partnership in developing this robust 
repository of T-MSIS data.  CMS looks forward to using and strengthening the T-MSIS data set 
for data-driven decision-making and improving health outcomes of Medicaid and CHIP 
beneficiaries.  
 
Sincerely, 
/S/ 
Tim Hill 
Acting Director 
  
   
                                                           
7 Examples of these 12 Top Priority Items include:  managed care encounter data, eligibility group coding, CHIP 
coding, duplicate claims, cross-file linkages.  For more detail, please see https://www.medicaid.gov/medicaid/data-
and-systems/macbis/tmsis/tmsis-blog/?entry=45422 
8 https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/index.html  Page 4  State Health Official 
cc:  
National Association of Medicaid Directors  
National Academy for State Health Policy  
National Governors Association  
American Public Human Services Association  
Association of State Territorial Health Officials  
Council of State Governments  
National Conference of State Legislatures  
Academy Health