DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
 
 ____________________________________________________________________________ 
           
 
SMD# 13-004 
       
            RE: Transformed Medicaid Statistical    
            Information System (T-MSIS) Data 
August 23, 2013 
 
 
Dear State Medicaid Director:  
 
The purpose of this letter is to update you on ongoing efforts to work with states to improve 
Medicaid and Childrens Health Insurance Program (CHIP) data and data analytic capacity 
through the Medicaid and CHIP Business Information Solutions (MACBIS) initiative.  This 
initiative includes upcoming changes to the Medicaid Statistical Information System (MSIS), 
which will be known as Transformed-MSIS or T-MSIS.  We are implementing T-MSIS with 
states on a rolling basis, with the goal of having all states submitting data monthly by July 1, 
2014.   
 
We are continuing to work with a group of states, and expect them to begin to submit T-MSIS 
data later this year.  Late last year, the Centers for Medicare & Medicaid Services (CMS) 
conducted readiness assessment calls with all states both to more fully explain the T-MSIS 
project and requirements, but also to better understand each states ability to implement T-MSIS, 
and level of technical assistance each would need.  We have formally engaged with all states, 
providing a liaison and collaborating on state-specific project schedules.  This letter further 
outlines the next steps for the T-MSIS project and explains the available technical assistance.  
CMS appreciates the effort states have already applied to this initiative, as well as the broadly 
shared commitment to ensuring timely and accurate data are available to meet the data and 
analytical needs of states as well as the federal government and the general public. 
Background 
Programs with the size and scope of Medicaid and CHIP require robust, timely, and accurate 
data in order to ensure the highest financial and program performance, support policy analysis 
and ongoing improvement, identify potential fraud or waste, and enable data-driven decision 
making.  Section 4735 of the Balanced Budget Act of 1997 included a statutory requirement for 
states to submit claims data, enrollee encounter data, and supporting information.  Section 6504 
of the Affordable Care Act strengthened this provision by requiring states to include data 
elements the Secretary determines necessary for program integrity, program oversight, and 
administration.   
  Page 2 State Medicaid Director 
Based on our conversations with states and other stakeholders, we believe there is widespread 
support for having robust, timely, and accurate data to support the Medicaid and CHIP programs, 
and agreement that nationally available data must be improved.  Through MACBIS and the Data 
Analytics Learning Collaborative, CMS has been working with states and with Medicaid and 
CHIP data stakeholders to envision and move towards a modernized Medicaid and CHIP data 
infrastructure.  T-MSIS modernizes and enhances the way states will submit operational data 
about beneficiaries, providers, claims, and encounters and will be the foundation of a robust state 
and national analytic data infrastructure. 
Initially, the enhanced data available from T-MSIS will support improved program and financial 
management and more robust evaluations of demonstration programs.  It will also enhance the 
ability to identify potential fraud and improve program efficiency.  Ultimately, the transformed 
infrastructure will offer states, CMS, and others the ability to do the following at the state and 
national levels:  
 
  Study encounters, claims, and enrollment data by claim and beneficiary attributes; 
  Analyze expenditures by medical assistance and administration categories; 
  Monitor expenditures within delivery systems and assess the impact of different types 
of delivery system models on beneficiary outcomes;  
  Examine the enrollment, service provision, and expenditure experience of  providers 
who participate in our programs (as well as in Medicare);  
  Observe trends or patterns indicating potential fraud, waste, and abuse in the 
programs so we can prevent or mitigate the impact of these activities. 
 
In addition, T-MSIS benefits states in the following ways: 
 
  It will reduce the number of reports and data requests CMS requires of states.  T-MSIS 
will be a main source of Medicaid and CHIP operational data, and CMS intends to use 
the T-MSIS data to calculate and derive other reports states are currently required to 
submit, such as Early Periodic Screening, Diagnosis and Treatment Program (EPSDT) 
and Childrens Health Insurance Program Annual Reporting Template System (CARTS).  
Availability of T-MSIS will also reduce the number of ad hoc data requests CMS makes 
of states in the absence of a more robust reporting system. 
  States will be able to analyze data in the national repository.  Over time, CMS plans to 
incorporate capabilities for states to conduct their own analyses of data available in the 
national repository and, eventually, to enable states to bring their own data to analyze 
alongside the national repository. 
  States will have enhanced anti-fraud, waste, and abuse capabilities.  They will be able to 
analyze their data along with other information in the CMS data repositories, including 
Medicare data, enhancing abilities to better identify potential anomalies for further 
investigation.  Page 3 State Medicaid Director 
Transformed MSIS (T-MSIS): Status and Next Steps 
Over the last two years, CMS has been working with pilot states1 and other stakeholders to refine 
and enhance the MSIS data set and to modernize the ongoing submission and quality review 
process for the dataset.  The result is T-MSIS, which encompasses the set of data produced in the 
daily operation of the Medicaid and CHIP programs. These are the data about enrollees, services, 
and costs, including: fee-for-service (FFS) claims, encounters performed under managed care 
arrangements, beneficiary eligibility and demographic information, and provider enrollment data.  
 
CMS is currently building hardware and software to receive, store, and analyze the data.  We 
will also be implementing automated tools to check, review, and provide near real-time feedback 
to states on their T-MSIS submissions, as well as developing a basic data analytic capability.   
 
Later this year, we will be able to accept and test T-MSIS data submissions to support evaluation 
of operational readiness of state T-MSIS files.   As soon as states demonstrate they are 
operationally ready, states will begin monthly T-MSIS submission.  Implementation will proceed 
on a rolling basis.  When states comply with the T-MSIS data submission requirements and are 
able to submit T-MSIS data on a monthly basis, CMS will work with state staff to halt MSIS 
data submissions to avoid redundant state reporting requirements. Final operational readiness 
criteria will be published to the state project team at a later date as part of project implementation 
activities.  
 
Through the T-MSIS pilot, the readiness assessments, and other collaborations, we have learned 
much about the work involved for states to extract and provide T-MSIS data to CMS.  To assist 
states, we have created a suite of tools to accelerate and guide states in preparing to submit T-
MSIS data.  These include: 
 
  Collaboration Site and Implementation Toolkit  We have implemented a dedicated 
information sharing resource for collaboration and interaction.  State technical staff has 
received log-on information to gain access.  Relevant T-MSIS project artifacts available on 
the collaboration site include an implementation toolkit, templates, project outlines, 
directions, and recommendations to assist the state project teams in implementing T-MSIS. 
  CMS State Liaison & State Technical Assistance  CMS state liaisons are assigned for 
each state to assist in T-MSIS communication, coordination, planning, and oversight.  
Technical assistance will include support in overall project management, subject matter 
expertise during all project phases, support of data mapping of T-MSIS data, and oversight of 
file submissions.  Webinars are scheduled throughout the implementation process of the T-
MSIS project to address key issues and share best practices. 
  Creation of T-MSIS State Collaboration Workgroup  We have formed a workgroup 
consisting of states and CMS whose purpose is to provide guidance, inform project decisions, 
                                                           
1 States included Texas, California, New Jersey, Michigan, Washington, Oregon, Arizona, North Carolina, New 
Mexico, Tennessee, Minnesota, and Arkansas  Page 4 State Medicaid Director 
evaluate change for project impact and resolve project issues throughout the T-MSIS project 
life cycle.    
 
Though states will transition to T-MSIS at different points in time, all states are expected to 
demonstrate operational readiness to submit T-MSIS files, transition to T-MSIS, and submit 
timely T-MSIS data by July 1, 2014. This improved data submission is an integral part of state 
and CMS efforts to modernize the Medicaid and CHIP programs, and we are working with states 
to integrate T-MSIS into MMIS Advance Planning Document (APD) reviews (including 
enhanced funding requests for operation and maintenance for Medicaid Eligibility systems 
(75/25), Center for Medicare & Medicaid Innovation (CMMI) grants, state demonstrations and 
section 1115 waiver demonstrations. We look forward to working with you and your staff in the 
coming months and years to make actionable business intelligence a reality for all of us who are 
responsible for administering the Medicaid and CHIP programs. 
 
Questions about T-MSIS may be directed to Elaine Olin, Director of the Data Systems Group 
(Elaine.Olin@cms.hhs.gov) and the T-MSIS resource mailbox at T-MSIS@cms.hhs.gov.   
 
Sincerely, 
 
 
            /s/ 
 
            Cindy Mann 
            Director 
 
cc:   
CMS Regional Administrators  
 
CMS Associate Regional Administrators  
Division of Medicaid and Childrens Health Operations 
 
Ron Smith  
Director 
Legislative Affairs  
American Public Human Services Association  
 
Matt Salo  
Executive Director 
National Association of Medicaid Directors  
 
Joy Wilson  
Director, Health Committee  
National Conference of State Legislatures  
 
  Page 5 State Medicaid Director 
 
Heather E. Hogsett 
Director, Committee on Health & Homeland Security 
National Governors Association 
 
Debra Miller  
Director for Health Policy  
Council of State Governments  
 
Christopher Gould 
Director, Government Relations  
Association of State and Territorial Health Officials  
 
Alan R. Weil, J.D., M.P.P.  
Executive Director  
National Academy for State Health Policy