Suzanne Murrin 

Deputy Inspector General 

for Evaluation and Inspections 

July 2015 

OEI-07-13-00120 

Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

NOT ALL STATES REPORTED 

MEDICAID MANAGED CARE 

ENCOUNTER DATA AS 

REQUIRED 
 

 

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 data”—i.e., information about the services provided to Medicaid 

beneficiaries enrolled in managed care—essential 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. 

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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-andsystems/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/managedcare/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, 18–63, 67–136. 

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 files—i.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 

waivers—and 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 State’s 

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 

data—and CMS’s authority to withhold funds from States that do not report 

these data—will apply to T-MSIS as they did to MSIS. 

Related Reports 

In addition to conducting this review—which focuses on data related to 

Medicaid managed care services—OIG 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 found—as mentioned earlier—that 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 CMS’s 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-SCGovt-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. 

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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 Vermont—that 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. 

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Table 1: Criteria for Categories Indicating Status of States’ Reporting of Encounter Data for 

Contracted Managed Care Entities 

Status of States’ 

Encounter Data Description of Status 

All data reported 

Some data reported 

No data reported 

Unknown 

At least one encounter showing the plan ID of every contracted managed care entity was 

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 

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 

required deadline 

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. 

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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 State’s 

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. 

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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 file—there 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 

reasons—it 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. 

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two of the five did not start reporting encounter data until July 2012. In 

addition, in the third quarter of FY 2011, this State’s 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 States—such as 

Washington and Texas—were missing only a small percentage of managed 

care entities from one MSIS claims file. Other States—such as Colorado and 

Illinois—were 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 
Table 2: Percent of Managed Care Entities for Which At Least One Encounter Was Reported to

MSIS Among States Reporting Some Encounter Data

MSIS Claims Files Types

State Inpatient Long-term- Pharmacy Other care

California

Colorado

• • •

t t t

•

Delaware t t NA

•

D.C. t t

•

Illinois

• •

• 0 0

Indiana t t NA

•

Iowa

•

• 0 NA t

New York

Rhode Island

• • •

t

•

Texas

• • •

• • NA

Washington

•

Source: OIG analysis of MSIS claims files for the third quarter of FY 2011, 2015.

• • • •

Legend

0 0% of managed

care entities

reported

t 1-50% of

managed care

entities reported

•

51-99% of

managed care

entities reported

•

100% of managed

care entities

reported

File type not

applicable; State

NA did not cover

prescription drugs

through managed

care

We could not determine whether seven States

reported encounter data for all managed care entities

Seven States reported encounter data to MSIS with plan IDs that we could

not use to determine the extent to which at least one encounter was

reported for all managed care entities." Five of these seven States had at

least one MSIS claims file with encounter data that contained invalid,

blank, or "dummy" values instead of plan IDs. Without accurate values

for plan IDs, it is not possible to determine whether encounter data are

present in a given MSIS claims file for all managed care entities; thus, we

cannot make determinations about the status of the encounter data that

25 The seven States were Florida, Missouri, New Mexico, Ohio, Oregon, Virginia, and

Wisconsin.

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Table 2: Percent of Managed Care Entities for Which At Least One Encounter Was Reported to 

MSIS Among States Reporting Some Encounter Data 

MSIS Claims Files Types 

State Inpatient Long-termcare Pharmacy Other 

California 

Colorado • • • t t t 

•

Delaware t t NA 

•

D.C. 

•

t t 

Illinois • • • 0 0 

Indiana 

•

t t NA 

Iowa 

•

• 0 NA t 

New York 

Rhode Island • • • t 

•

Texas • • • • • NA 

Washington 

•

• • • • 

Legend 

0 0% of managed 

care entities 

reported 

t 1-50% of 

managed care 

entities reported 

• 51-99% of 

managed care 

entities reported 

• 100% of managed 

care entities 

reported 

NA 

File type not 

applicable; State 

did not cover 

prescription drugs 

through managed 

care 

Source: OIG analysis of MSIS claims files for the third quarter of FY 2011, 2015. 

We could not determine whether seven States 

reported encounter data for all managed care entities 

Seven States reported encounter data to MSIS with plan IDs that we could 

not use to determine the extent to which at least one encounter was 

reported for all managed care entities. 25 Five of these seven States had at 

least one MSIS claims file with encounter data that contained invalid, 

blank, or "dummy" values instead of plan IDs. Without accurate values 

for plan IDs, it is not possible to determine whether encounter data are 

present in a given MSIS claims file for all managed care entities; thus, we 

cannot make determinations about the status of the encounter data that 

25 The seven States were Florida, Missouri, New Mexico, Ohio, Oregon, Virginia, and 

Wisconsin. 

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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 State’s inpatient claims file 

showed that only the “dummy” plan ID—888888888888—was 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 

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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. OIG’s 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 CMS’s 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 that—for data from the third quarter of 

FY 2011—CMS 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 State’s 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 data—specifically, 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 CMS’s 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 CMS’s 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 CMS’s 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 State’s 

MSIS claims files greatly exceeded the number of plan IDs for that State in CMS’s 

information; or (3) when CMS’s 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 State’s 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 

All data reported 

Some data reported 

No data reported 

Unknown 

Excluded 

At least one encounter showing the plan ID of every 

contracted managed care entity was reported in 

each of the four MSIS claims 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 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 required 

deadline. 

The status of the encounter data reported cannot be 

determined because of blank, invalid, or “dummy” 

plan IDs. 

12 (Arizona, Connecticut, Georgia, 

Hawaii, Kentucky, Maryland, 

Michigan, Minnesota, Mississippi, 

Nebraska, New Jersey, Tennessee) 

11 (California, Colorado, Delaware, 

the District of Columbia, Illinois, 

Indiana, Iowa, New York, 

Rhode Island, Texas, Washington) 

8 (Kansas, Massachusetts, Nevada, 

North Carolina, Pennsylvania, 

South Carolina, Utah, West Virginia) 

5 (Missouri, New Mexico, Oregon, 

Virginia, Wisconsin) 

These States assigned multiple plan IDs to their 

managed care entities; it was not possible to define 

which plan IDs should be present in each MSIS 

claims file. 

These States did not use managed care of the types 

for which encounter data is required to be reported 

to MSIS during the review period. 

2 (Florida, Ohio) 

13 (Alabama, Alaska, Arkansas, 

Idaho, Louisiana, Maine, Montana, 

New Hampshire, North Dakota, 

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 
APPENDIX C

Agency Comments

Cenlers for Medicare & Medicaid Services

/1f .•nc.(;J.~ (-::!f- DEPAKlMENr OF HEALTH & HUMAN SERVICES

200 Independence Avenue SW

Washington. DC 2020t

MAY 19 20t5

To: Daniel R. Levinson

Inspector General

Office of the Inspector General

From: Andrew M. Slavitt

Acting Administrator

Centers for Medicare & Medicaid Services

Subject: Not All States Reported Medicaid Managed Care Encounter Data as Required

(OEl-07-IJ-OOI20)

The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and

comment on the Office of the Inspector General's (OIG) draft report. CMS is committed to

ensuring States report accurate and timely Medicaid encounter data.

Medicaid managed care programs deliver health services through contracted arrangements

between State Medicaid agencies and managed care entities. For capitated managed care

programs, encounter data are detailed information regarding the services provided to individual

beneficiaries, the equivalent of claims data for fee-for-service arrangements. CMS works with

states in a variety of ways to help them collect and report Medicaid encounter data. For

example, CMS has issued an encounter data toolkit to States which contains best practices,

sample processes and contact information for technical assistance and additional printed

publications.

CMS has been also working with states to implement changes to the way in which data is

collected by moving from the Medicaid Statistical Information System (MSIS) to the

Transformed-MSIS or T-MSIS. T-MSIS will use data provided by states to embed front end

data quality edits which provide greater transparency to a state's data quality and will have a

robust business intelligence/data analytics front end interface which will allow states and other

key stakeholders to analyze nationwide data. including encounter. claims, and enrollment data.

T-MSIS will also help streamline the reporting process by reducing the number of reports and

data requests CMS requires of states. 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.

OIG Recommendation

The OIG recommends that CMS use its authority to withhold appropriate Federal funds from

States.

Not Not All All States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120) States Reported Medicaid Managed Care Encounter Data as Required (OEI-07-13-00120) 2020 

APPENDIX C 

Agency Comments 

~ 

Acting Administrator (J.tv~ 

Centers for Medicare & Medicaid Services 

/'"J& ~Q:J . , 

( ~ :5~ DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Med icare & Medicaid Services 

200 Independence Avenue SW 

HAY 19 Z015 

Washington, DC 20201 

To: Daniel R. Levinson 

Inspector General 

Office ofthe Inspector General 

From: 	 Andrew M. Slavitt 

Subject: 	 Not All States Reported Medicaid Managed Care Encounter Data as Required 

(OET-07-13-00120) 

The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 

comment on the Office of the Inspector General ' s (OIG) draft report. CMS is committed to 

ensuring States report accurate and timely Medicaid encounter data. 

Medicaid managed care programs deliver health services through contracted arrangements 

between State Medicaid agencies and managed care entities. For capitated managed care 

programs, encounter data are detailed information regarding the services provided to individual 

beneficiaries, the equivalent of claims data for fee-for-service arrangements. CMS works with 

states in a variety of ways to help them collect and report Medicaid encounter data . For 

example, CMS has issued an encounter data toolkit to States whlch contains best practices, 

sample processes and contact information for technical assistance and additional printed 

publications. 

CMS has been also working with states to implement changes to the way in which data is 

collected by moving from the Medicaid Statistical Information System (1vfSIS) to the 

Transformed-MSIS or T-MSIS . T-MSIS will use data provided by states to embed front end 

data quality edits which provide greater transparency to a state' s data quality and will have a 

robust business intelligence/data analytics front end interface which will allow states and other 

key stakeholders to analyze nationwide data, including encounter, claims, and enrollment data. 

T-MSIS will also help streamline the reporting process by reducing the number of reports and 

data requests CMS requires of states. The enhanced data available from T-MSIS will support 

improved program and financial management and more robust evaluations ofdemonstration 

programs. It will also enhance the ability to identify potential fraud and improve program 

efficiency. 

OIG Recommendation 

The OIG recommends that CMS use its authority to withhold appropriate Federal funds from 

States. 
 

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 OIG’s 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.