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DEPARTMENT OF HEALTH & HUMAN SERVICES Office of Inspector General

Washington, D.C. 20201

.

AUG 2 6 2009

Deputy Inspector General

for Evaluation and Inspections

TO: Cindy Mann

Director of the Center for Medicaid and

State Operations

FROM: StUà wright

.

SUBJECT: Memorandum Report: "MSIS Data Usefulness for Detecting Fraud, Waste, and

Abuse," OEI-04-07-00240

This report provides information about the Medicaid Statistical Information System (MSIS) data

from fiscal years (FY) 2004 to 2006. Specifically, it provides information on: (1) the length of

time that the States and the Centers for Medicare & Medicaid Services (CMS) took to submit and

release the MSIS data; (2) CMS disclosure and documentation of the accuracy ofMSIS data; and

(3) the extent to which the MSIS captued information for detecting fraud, waste, and abuse.

We found that, on average, FYs 2004-2006 MSIS data took an average of over 1 Y2 years after

the initial State data submission before CMS released them to the public. This timeframe

included an average of 6 months that States took to submit the MSIS fies in a CMS-acceptable

format and averages of 4 and 9 months for CMS to validate and release the files to the public,

respectively. In addition, CMS did not fully disclose or document information about the

accuracy of the MSIS data. Finally, as of June 2009, the MSIS had not captured many data

elements that can assist in fraud, waste, and abuse detection.l

Timely, accurate, and comprehensive MSIS data can be used to meet the Health Care Fraud

Prevention and Enforcement Action Team (HEAT) objectives.2 In May 2009, HHS and the

Department of Justice established HEAT as an interagency effort to combat health care fraud. 3

1 The Offce ofInspector General (OIG) conference call with CMS, June 2009.

2 Departent of Health and Human Services (HHS). "Breaking News: Medicare Fraud Strike Force Operations

Lead to Charges Against 32 Doctors and Health Care Executives for More Than $16 Milion in Alleged False

Biling in Houston." Available online at h ://www.hhs. 'ov/sto medicarefraud/. Accessed on June 19,2009.

3 HHS. "Attorney General Holder and HHS Secretary Sebelius Announce New Interagency Health Care Fraud

Prevention and Enforcement Action Team." Available online at

htt ://www.hhs. ov/news/ ress/2009 res/05/20090520a.htinI. Accessed on June 19,2009.

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o EI -04-07 -00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

HEAT includes a focus on expanding data usage to more effectively identify and prevent 

Medicaid fraud. 

BACKGROUND 

In 1965, Title XIX of the Social Security Act established Medicaid to provide certain basic 

services to categorically and medically needy populations.4 Medicaid programs are jointly 

funded by Federal and State governments but solely administered by States pursuant to Federal 

statutes, regulations, and policies. CMS oversees State Medicaid programs and ensures that 

State-submitted expenditures for Federal reimbursement are appropriate. In FY 2006, Medicaid 

covered over 57 million beneficiaries at a cost of over $308 billion.5 6 The Federal share of this 

cost was approximately $174 billion.7

Medicaid Statistical Information System 

CMS maintains the MSIS database, the only nationwide Medicaid eligibility and claims 

information source. In FY 1984, MSIS was approved as a voluntary State reporting option of 

beneficiary-level Medicaid fee-for-service claims data in an electronic format.8 This option 

permitted States to forego data submission via a paper (i.e., hardcopy) format. The Balanced 

Budget Act of 1997 mandated MSIS-program participation from the 50 States and the District of 

Columbia (hereinafter referred to as States) for Medicaid claims filed on or after January 1, 

1999.9 To improve the timeliness of the MSIS files’ release, CMS encourages States to submit 

their files electronically.10 As of July 2009, 34 States were sending their MSIS files 

electronically.11 

4 42 U.S.C. §§ 1396-1396v, Social Security Act, §§ 1901-1936. 

5 “MSIS State Summary Data Mart,” 2006 Unique Eligibilities Count. Available online at http://msis.cms.hhs.gov/. 

Accessed on December 1, 2008. 

6 CMS, Office of the Actuary, National Health Statistics Group, Health Expenditure Data, Table 11: Expenditures 

for Health Services and Supplies Under Public Programs, by Type of Expenditure and Program: Calendar Year 

2006. Available online at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf. Accessed on 

December 1, 2008. 

7 Ibid. 

8 The MSIS reporting option was part of the annual State submission of the Statistical Report on Medical Care: 

Eligibles, Recipients, Payments and Services (HCFA-2082), started in FY 1972. As of FY 1997, the MSIS data can 

be provided in one of two ways: (1) the annual submission of the hardcopy 1984 version, or (2) quarterly fixed 

electronic format of Medicaid eligibility and claims. States that successfully comply with all MSIS requirements 

and submit data for a full fiscal year can receive a waiver from submitting the hardcopy HCFA-2082. CMS 

technical comments on OIG’s draft memorandum report, August 2009. 

9 42 U.S.C. § 1396b(r). In addition to requiring fee-for-service data, the Balanced Budget Act of 1997 mandated 

the electronic transmission of individual enrollee encounter data. Encounter data provide details about services 

provided to Medicaid beneficiaries enrolled in managed care. 

10 States are encouraged to submit their files via Electronic File Transmission (EFT) instead of cartridges or tape. 

This results in faster transmission and retransmission of the MSIS data. The EFT is identified in the MSIS Tape 

Specification and Data Dictionary, Release 3. Available online at http://www.cms.hhs.gov/MSIS. Accessed on 

August 11, 2009. 

11 CMS technical comments on OIG’s draft memorandum report, August 2009. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

The MSIS system of records notice indicates that CMS collects MSIS data from States “to 

establish an accurate, current, and comprehensive database containing standardized enrollment, 

eligibility, and paid claims of Medicaid beneficiaries to be used for the administration of 

Medicaid at the Federal level.”12 The system of records also notes that CMS collects MSIS data 

to “produce statistical reports, support Medicaid-related research, and assist in the detection of 

fraud and abuse in the Medicare and Medicaid programs.”13 According to CMS, the MSIS is 

also used for health care research and evaluation activities, program utilization and expenditure 

forecasts, policy alternatives analysis, congressional inquiry responses, and other health-related 

database matches.14

The MSIS timeliness, reliability, and comprehensiveness are further important because the data 

is also used as an information source for other CMS databases, such as the MSIS State Summary 

Data Mart, the MSIS Drug Utilization Data Mart, the Medicaid Analytical Extract, the Enterprise 

Cross-Reference Database, and the Medicaid Integrity Group (MIG) Data Engine. See 

Appendix A for descriptions of these databases 

CMS Efforts To Use MSIS Data for Detecting Medicaid Fraud, Waste, and Abuse 

The Deficit Reduction Act of 2005 (DRA) included several provisions to reduce Medicaid fraud, 

waste, and abuse. For example, it created a new Medicaid Integrity Program and appropriated 

$100 million over 2 years for CMS to implement the program. The DRA appropriated an annual 

budget of $75 million for the program’s continued operations postimplementation.15 

To oversee the Medicaid Integrity Program planning and implementation, CMS created the 

Medicaid Integrity Program Advisory Committee.16 The committee identified Medicaid data 

collection, including MSIS data, as key to the Medicaid Integrity Program’s success.17 

The Medicaid Integrity Group. In 2006, CMS established MIG, as part of the Center for 

Medicaid and State Operations (CMSO), to implement DRA’s Medicaid Integrity Program and 

12 71 Fed. Reg. 65527 (Nov. 8, 2006). The Privacy Act of 1974 (Privacy Act); (5 U.S.C. § 552a) required agencies 

to publish in the Federal Register a notice of the existence and character of a “system of records,” such as MSIS. 

The Privacy Act defines a “system of records” as “a group of any records under the control of any agency from 

which information is retrieved by the name of the individual or by some identifying number, symbol, or other 

identifying particular assigned to the individual.” 

13 System of Records No. 09-70-0541. 71 Fed. Reg. 65527 (Nov. 8, 2006). This system of records states that MSIS 

will also be used to combat “waste.” Available online at 

http://www.cms.hhs.gov/PrivacyActSystemofRecords/downloads/0541.pdf. Accessed on December 1, 2008. 

14 CMS, MSIS Overview. Available online at http://www.cms.hhs.gov/MSIS/. Accessed on December 1, 2008. 

15 DRA, section 6034(a) (codified at 42 U.S.C. § 1396u-6). 

16 The Medicaid Integrity Program Advisory Committee is made up of State Medicaid Directors; State Program 

Integrity Directors; Medicaid Fraud Control Unit Directors representing 16 States; as well as representatives of the 

Federal Bureau of Investigation, HHS OIG, and CMS regional offices. Source: CMS, Comprehensive Medicaid 

Integrity Plan, June 2008. Available online at 

http://www.cms.hhs.gov/DeficitReductionAct/Downloads/FY08CMIP.pdf. Accessed on December 1, 2008. 

17 CMS, Comprehensive Medicaid Integrity Plan (CMIP), August 2007. Available online at 

http://www.cms.hhs.gov/DeficitReductionAct/Downloads/CMIP2007.pdf. Accessed on December 1, 2008. 
Page 4 – Cindy Mann 

OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

carry out CMS’s national strategy to combat Medicaid fraud, waste, and abuse.18 CMSO and its 

contractors seek to identify improper payments and coordinate integrity efforts with various State 

and local entities.19 

In 2007, MIG began soliciting input from other CMS components, Department of Justice, and 

OIG officials involved in Medicaid fraud detection to identify useful data elements for Medicaid 

fraud, waste, and abuse detection (hereinafter referred to as MIG-identified data elements) and 

identified 182 such data elements. Not all of these data elements are currently captured in the 

MSIS database. 

Additionally, a Medicaid Data Integration Workgroup has also been established. This 

workgroup consists of consultants from a number of entities including: CMSO, the CMS Office 

of Financial Management, the CMS Office of Information Services (OIS), OIG, and several 

States. To address multiple business functions across CMS, the workgroup recently 

recommended adding approximately 96 more variables to the 182 MIG-identified data elements 

(bringing the total to 278). 

In 2008, CMS established a new system of records titled, “Medicaid Integrity Program 

System.”20 The primary purpose of this system is to “establish an accurate, current, and 

comprehensive database containing standardized enrollment, eligibility, and paid claims of 

Medicaid beneficiaries to assist in the detection of fraud, waste, and abuse.”21 This system, 

commonly referred to as the MIG Data Engine, became operational in November 2008 and is 

using MSIS data to support MIG’s activities.22 According to CMS officials, this system has 

resulted in the identification, or probable identification, of substantial overpayments.23 

MSIS File Submission and Data Validation Processes 

CMS requires States to submit one Medicaid-eligibility and four claims data files to CMS 

quarterly.24 25 CMS then tests the files to ensure that the data pass quality review. The MSIS 

files that pass quality review are posted to the production database on CMS’s mainframe 

computer and are considered validated MSIS data. 

18 CMS, CMIP, July 2006. Available online at http://www.cms.hhs.gov/DeficitReductionAct/Downloads/CMIP 

Initial July 2006.pdf. Accessed on December 1, 2008. 

19 Ibid. 

20 System of Records No. 09-70-0599. 73 Fed. Reg. 11638 (Mar. 4, 2008). CMS’s Medicaid Integrity Program 

established the new system of records. 

21 Ibid. 

22 CMS technical comments on OIG’s draft memorandum report, August 2009. 

23 Ibid. 

24 “The State Participation Procedures Manual.” Available online at http://www.cms.hhs.gov/MSIS. Accessed on 

December 1, 2008. 

25 The four types of MSIS claims files are inpatient services, long term care, prescription drug, and “other” claims. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

The MSIS files that do not pass quality review are returned to States for correction and 

resubmission. CMS does not limit the number of times States may resubmit corrected MSIS data 

or specify the amount of time States have to make corrections and resubmit the revised data. 

After all five files successfully pass quality reviews, CMS releases the data to most public 

users.26 The processes of MSIS file submission and data validation occur in three phases: initial 

submission, quality review, and final release. 

Initial submission. The initial submission phase starts at the end of each quarter and ends when 

CMS receives and successfully copies a properly formatted MSIS file to its mainframe computer 

for quality review. 

File submission schedules and formatting requirements are defined in the MSIS Tape 

Specification and Data Dictionary (MSIS Data Dictionary).27 States must submit their four 

Medicaid claims files to CMS within 45 days after the end of each quarter.28 However, CMS 

allows States to submit their Medicaid eligibility file up to 31⁄2 months after the end of each 

quarter.29 If the files are formatted improperly, CMS rejects the submission. States must then 

resubmit properly formatted files before the next phase may begin. 

Quality review. The quality review phase starts when CMS copies a properly formatted State file 

to its mainframe computer. This phase ends when the file passes data validation edits and 

distributional checks defined in the MSIS Data Dictionary maintained on CMS’s public Web 

site. 

Data validation edits occur when the MSIS Data Validation computer program compares the 

Medicaid data within each file to formatting rules and permitted error rates (i.e., error tolerances) 

established in the MSIS Data Dictionary.30 If a file’s errors exceed the established error 

tolerances, CMS rejects the file and returns it to the State for correction and resubmission. 

CMS’s MSIS Data Validation program produces error reports that show the number and types of 

errors identified. CMS shares the error reports with States to facilitate underlying data-problem 

identification and correction. 

26 According to CMS officials, MIG receives and uses MSIS data prior to the quality review. CMS technical 

comments on OIG’s draft memorandum report, August 2009. 

27 CMS. The MSIS Tape Specification and Data Dictionary, Release 2, version 5. Available online at 

http://www.cms.hhs.gov/MSIS. Accessed on February 6, 2009. 

28 The “State Participation Procedures Manual.” Available online at http://www.cms.hhs.gov/MSIS. Accessed on 

December 1, 2008. 

29 Ibid. 

30 The MSIS Data Validation program is a system of mainframe computer applications that copy, edit, and track 

files throughout the MSIS file submission and data validation process. These applications include the initial 

submission formatting checks, quality review data validation edits, as well as the final release data-posting routines. 

The MSIS Data Validation program does not control or track distributional checks performed by CMS’s data quality 

contractor, Mathematica Policy Research, Inc. (Mathematica). 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Default error tolerances are defined in the MSIS Data Dictionary. However, not all State MSIS 

files are subject to the default error tolerances. CMS periodically adjusts individual State error 

tolerances to allow particular files or sets of files to pass data validation tests. For example, 

CMS may adjust MSIS error tolerances when a State’s data systems are unable to accommodate 

MSIS file formats or when unique State coding issues trigger false errors. 

When the data files pass data validation edits, CMS forwards the data to its data quality 

contractor, Mathematica, to conduct distributional checks.31 These checks reveal data 

irregularities by comparing mathematical averages, ranges, frequency distributions, and payment 

totals to expected outcomes. For example, Mathematica’s distributional checks may analyze 

MSIS claims files to calculate a State’s average Medicaid payment for a specific item or service 

and compare it to the average payment from a previous quarter to identify significant or 

unexpected changes. Mathematica also compares the MSIS data to other CMS sources such as 

State waiver programs.32

CMS allows Mathematica to work directly with States to research and correct data irregularities 

(i.e., anomalies). For example, Mathematica found that a State submitted an MSIS eligibility file 

with all records marked as “dual-eligible” (i.e., Medicaid beneficiaries who are also eligible for 

Medicare benefits). Mathematica worked with the State and determined that this was a 

programming error that required State correction and file resubmission. 

Anomalies that are not caused by errors in the underlying data are documented and disclosed to 

MSIS data users in the MSIS “State Anomalies/Issues Report” maintained on CMS’s public Web 

site.33 For example, Mathematica identified a dramatic increase in the total number of 

Medicaid-eligible beneficiaries reported in a State’s quarterly eligibility file. However, changes 

in the State’s eligibility rules justified the increase, which was then documented in the MSIS 

“State Anomalies/Issues Report.” 

Final release. The final release phase starts when Mathematica notifies CMS that a file has 

passed quality review and ends when CMS posts the validated MSIS data in the file to a 

production database on its mainframe computer. In general, most public MSIS data users do not 

have access to MSIS data until CMS posts the validated data to its production database.34 

31 CMS. Active Projects Report 2008 Edition, Project Number 500-00-0047/04, MSIS Expansion and Data Quality 

Support. Available online at http://www.cms.hhs.gov/ActiveProjectReports/05_APR_2008_Edition.asp. Accessed 

on December 1, 2008. 

32 CMS technical comments on OIG’s draft memorandum report, August 2009. 

33 CMS. MSIS “State Anomalies/Issues Report.” Available online at 

http://www.cms.hhs.gov/MedicaidDataSourcesGenInfo/Downloads/anomalies.pdf. 

Accessed on December 1, 2008. 

34 According to CMS officials, MIG uses these files for preliminary analysis before they are validated. Some 

internal users, e.g., OIG, have direct mainframe access to validated MSIS files. Some external users, e.g., the 

Congressional Budget Office, have established data use agreements with CMS in which they receive predefined 

extracts of validated MSIS files. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

CMS officials stated that most MSIS data users require complete sets (i.e., one Medicaid eligible 

file and four Medicaid claims files) of quarterly MSIS data for analysis. Therefore, CMS does 

not typically post MSIS files to its production database until all five files have cleared quality 

review. 

Related Work 

In May 2009, OIG released a report that assessed the extent to which CMS accepts MSIS 

submissions without encounter data.35 Encounter data are the primary record of Medicaid 

services provided to beneficiaries enrolled in capitated Medicaid managed care. In a February 

2002 report, the Government Accountability Office (GAO) recommended that CMS analyze 

MSIS data to detect potentially improper Medicaid payments.36 GAO’s June 2006 follow-up 

report reiterated this recommendation because it found that CMS had not included MSIS data in 

its Medicaid oversight activities.37

METHODOLOGY 

Scope 

To assess the usefulness of MSIS data for detecting fraud, waste, and abuse, we determined: 

• the average length of time MSIS FYs 2004–2006 files were in each phase of file submission 

and data validation processes, as of June 2007, before release to the public; 

• the extent to which CMS disclosed and documented information about the accuracy of MSIS 

data as of June 2007;38 and 

• the extent to which, as of September 2008, MSIS contained data elements useful for fraud, 

waste, and abuse detection. 

Data Sources 

We reviewed the following documents to understand the MSIS program’s Federal and State 

requirements: 

• DRA 

• “State Participation Procedures Manual” 

• MSIS Data Dictionary 

• MSIS “Data Anomalies/Issues Report” 

35 “Medicaid Managed Care Encounter Data: Collection and Use,” OEI-07-06-00540. 

36 “Medicaid Financial Management: Better Oversight of State Claims for Federal Reimbursement Needed,” 

GAO-02-300, February 2002. Available online at http://www.gao.gov/new.items/d02300.pdf. Accessed on 

December 1, 2008. 

37 “Medicaid Financial Management: Steps Taken to Improve Federal Oversight But Other Actions Needed to 

Sustain Efforts,” GAO-06-705, June 2006. Available online at http://www.gao.gov/new.items/d06705.pdf. 

Accessed on December 1, 2008. 

38 CMS extracted processing data from the MSIS Data Validation program for our review in June 2007. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

We used data from the following sources to assess MSIS data usefulness for fraud, waste, and 

abuse detection: 

• CMS’s MSIS Data Validation program; 

• Mathematica’s MSIS Data Quality Review Status Reporting Database; and 

• MIG’s compilation of data elements that can assist in Medicaid fraud, waste, and abuse 

detection. 

Data Collection and Analysis 

We interviewed officials from CMSO, OIS, and Mathematica to gather information about the 

MSIS file submission and data validation processes. We also interviewed MIG officials to 

gather information about the extent to which they compiled data elements that can be useful for 

Medicaid fraud, waste, and abuse detection. 

Determining MSIS file processing times. To determine the number of days during which MSIS 

files spent in each phase of the file submission and data validation processes (initial submission, 

quality review, and final release), we analyzed the processing dates of 3,060 State FYs 

2004–2006 quarterly MSIS files as of June 2007.39 As of that date, CMS had validated and 

released 54 percent (1,655 of 3,060) of the files. We obtained processing dates from CMS’s 

MSIS Data Validation program and Mathematica’s Data Quality Review Status Reporting 

Database. 

• For the initial submission phase, we counted the number of days from the end of the quarter 

to the first time CMS successfully copied a State’s MSIS file submission to its mainframe 

computer. 

• For the quality review phase, we counted the number of days from the end of the initial 

submission phase to the date when Mathematica reported that the MSIS data completed 

distributional checks. 

• For the final release phase, we counted the number of days from the end of the quality review 

phase to the date when CMS posted validated MSIS data to the production database on its 

mainframe computer. 

For the 1,655 MSIS files that completed all phases of the MSIS file submission and data 

validation processes as of June 2007, we calculated, by file type, the average, median, minimum, 

and maximum days during which they were in each phase. 

39 Each quarter, CMS requires States to submit one eligibility file and four claims files of MSIS data. For 

FYs 2004–2006, CMS required the 51 States to submit a total of 3,060 quarterly MSIS files (3 years x 51 States x 

4 quarters x 5 files = 3,060 required MSIS files). 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

We also counted, by file type, the number of initial submission files that States did not submit by 

the established due dates and 6 months (180 days) after CMS’s due dates. We then counted, by 

file type, the number of States that submitted at least one file after CMS’s due dates and 

6 months after CMS’s due dates. 

For claims files, we calculated CMS’s due date as 45 days from the end of the quarter and the 

6-month-late date as 225 (45 + 180) days from the end of the quarter. For eligibility files, we 

based our analysis on the more conservative delayed MSIS eligibility file submission 

requirement (up to 105 days).40 We calculated CMS’s eligibility file due dates as 105 days from 

the end of the quarter and the 6-month-late mark as 285 (105 + 180) days from the end of the 

quarter. 

We also determined the number of State file submissions, including the initial submission, 

required for MSIS data to clear the data validation process quality review phase. We counted the 

number of times that States resubmitted MSIS files before Mathematica reported to CMS that the 

data completed distributional checks and then added one for the initial submission. For example, 

MSIS files that completed the quality review phase without correction required one State file 

submission (zero resubmission plus one initial file submission). 

Assessing CMS’s disclosure and documentation of MSIS data accuracy. To assess the extent to 

which CMS disclosed and documented the accuracy of MSIS error tolerance adjustments, we 

determined the number of CMS data validation adjustments that increased error tolerances above 

default levels documented in the MSIS Data Dictionary. To do so, we reviewed 9,639 error 

tolerance adjustment records that CMS programmers extracted from the MSIS Data Validation 

program as of June 2007. We first eliminated 7,197 adjustments (75 percent) that had no effect 

on the MSIS Data Validation program’s error tolerance levels (inactive adjustments).41 The 

remaining 2,442 adjustments (25 percent) increased error tolerances to levels above or equal to 

those programmed into MSIS Data Validation software (active adjustments). Of the 2,442 active 

adjustments, we reviewed 1,528 adjustments (63 percent) that increased the error tolerance levels 

above defaults documented in the MSIS Data Dictionary. We did not review 914 active 

adjustments that set the error tolerances at levels equal to the defaults documented in the MSIS 

Data Dictionary. See Appendix B for a breakdown of inactive and active error tolerance 

adjustments as of June 22, 2007. 

To assess the extent of the 1,528 error tolerance adjustments that we reviewed, we determined 

the earliest and latest adjustment dates, counted the number of adjustments, and calculated the 

percentage of total adjustments per year. We also counted the number of States and MSIS data 

40 According to the “MSIS State Participation Procedures Manual,” States may submit MSIS quarterly eligibility 

files on a regular or delayed submission schedule 45 days or 31⁄2 months from the end of the quarter, respectively. 

For our review, we define 31⁄2 months as 105 days. Available online at http://www.cms.hhs.gov/MSIS/. Accessed 

on August 7, 2009. 

41 These inactive adjustments included adjustments to MSIS files of U.S. territories, data elements not subjected to 

data validation tests, unused MSIS data elements, and invalid MSIS file type/data element combinations. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

elements affected by the 1,528 active error tolerance adjustments. Finally, we counted the 

number of States and MSIS data elements for which CMS increased the data validation error 

tolerance levels to 100 percent. Error tolerance levels set to 100 percent allow an unknown 

number of errors to be present in the data when it passes quality review. 

To assess controls over error tolerance adjustments, we asked CMS for justification and approval 

documentation related to the 1,528 error tolerance adjustments reviewed. To determine whether 

MSIS data users had access to information about error tolerance adjustments, we searched the 

MSIS Data Dictionary and the MSIS “State Anomalies/Issues Report” for references of these 

1,528 error tolerance adjustments. 

Assessing data elements contained in MSIS. To determine the extent to which MSIS data 

contained information that can assist in Medicaid fraud, waste, and abuse detection, we 

compared existing MSIS data elements, as of September 2008, to those that MIG identified as 

assisting in fraud, waste, and abuse detection. 

First, we consolidated similar data elements from the 182 individual data elements that MIG 

identified into 100 data elements.42 Second, we sorted the 100 consolidated data elements into 

four categories: (1) Service Provider Identifiers; (2) Procedure, Product, and Service 

Descriptions; (3) Billing Information; and (4) Beneficiary and Eligibility Information. Third, we 

consolidated similar data elements from MSIS’s 255 individual data elements into 85 data 

elements.43 44 Finally, to identify equivalent data elements, we compared the 100 consolidated 

data elements that MIG identified, to the 85 consolidated MSIS data elements.45 MIG officials 

reviewed and concurred with our data consolidation and comparison approaches. See 

Appendix C for comparisons of data elements consolidated from their listing and the MSIS Data 

Dictionary. 

Limitations 

We did not verify the accuracy of the MSIS data files or evaluate controls over Mathematica’s 

distributional checks. 

We did not review the accuracy of existing differences in the actual and reported MSIS file error 

tolerances because CMS periodically adjusts individual State error tolerances to allow particular 

files or sets of files to pass data validation tests. For example, CMS may adjust MSIS error 

42 For example, MIG collects the “amount billed—per item” and “total billed or charged amount—total claim” for 

both institutional and medical Medicaid claims. We consolidated these four data elements into a single “amount 

billed” data element. 

43 For example, each of the four MSIS claim files (i.e., inpatient, long term care, prescription drug, and “other”) 

include an “amount charged” data element. We consolidated these four data elements into a single “amount 

charged” data element. 

44 For this analysis we used the MSIS File Specification and Data Dictionary, Release 3 effective February 15, 2009, 

because it provided the most current listing of MSIS data elements. 

45 For example, we considered the “amount billed” MIG data element to be equivalent to the “amount charged” 

MSIS data element. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

tolerances when a State’s data systems are unable to accommodate MSIS file formats or when 

unique State coding issues trigger false errors. We report only on the extent to which CMS was 

able to provide documentation to support the rationale for making changes to the error 

tolerances. 

We based our analysis on the extent to which, as of September 2008, MSIS captured 

data elements that MIG identified as those that can assist in Medicaid fraud, waste, and abuse 

detection. Although not comprehensive or specifically required by statute, MIG, other CMS 

components, Department of Justice, and OIG identified these data elements as useful to detect 

fraud, waste, and abuse. 

Standards 

We conducted this study in accordance with the “Quality Standards for Inspections” approved by 

the Council of the Inspectors General on Integrity and Efficiency. 

RESULTS 

MSIS Data From FYs 2004–2006 Took an Average of 11⁄2 Years After the Initial State Data 

Submission Before CMS Released Them to the Public 

As of June 22, 2007, 54 percent (1,655 of 3,060) of the FYs 2004–2006 MSIS files that we 

reviewed had completed all phases of CMS’s file submission and data validation processes. 

These files took on average over 11⁄2 years (595 days) to complete all phases of the processes and 

before their release to the public. On average, States took over 6 months (187 days) to submit 

files in a CMS-acceptable format. Once States submitted files in acceptable formats, CMS took 

over 4 months (127 days) to validate and an additional 9 months (281 days) to release the files to 

the public.46 

The remaining 46 percent (1,405 of 3,060) of MSIS files that had not completed file submission 

and data validation at the time of our review were in various phases of the processes. States had 

not submitted 10 percent of these MSIS files. See Appendix D for the file submission and data 

validation status of all 3,060 MSIS files that we reviewed by year. 

Table 1 provides, by file type, the average number of days spent in each phase for the 

1,655 MSIS files that completed the file submission and data validation processes. See 

Appendix E for the average, median, minimum, and maximum days during which MSIS files 

spent in each of these phases. 

46 According to CMS officials, MIG utilizes MSIS data that have not been validated to conduct preliminary fraud, 

waste, and abuse analysis. CMS technical comments on OIG’s draft memorandum report, August 2009. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Table 1: Average Days That MSIS Files Spent in Each Phase of the 

MSIS File Submission and Data Validation Processes 

Number of Days 

MSIS 

File Type 

Number 

of Files 

Initial

Submission 

Quality

Review

Final 

Release

Overall 

Processing 

Eligibility 331 195 287 113 595 

Claims 1,324 185 87 323 595 

All Files 1,655 187 127 281 595 

Averages equal the mean processing days of the 1,655 FYs 2004–2006 MSIS files reviewed. 

Source: OIG analysis of the file submission and data validation status of FYs 2004–2006 MSIS 

files as of June 2007.

States submitted nearly two-thirds of the initial MSIS file submissions after the CMS due dates. 

Of the files that had completed initial file submission and data validation, States submitted 

63 percent (1,041 of 1,655) after the CMS due dates. All but two States submitted at least one 

initial MSIS file submission after the due dates. Of those, 32 States submitted 31 percent 

(513 of 1,655) of the initial MSIS file submissions over 6 months after the due dates. 

Table 2 provides the number of initial MSIS State file submissions reviewed that occurred after 

the due dates and the number of States submitting those files. 

Table 2: Initial File Submissions That Occurred After the CMS Due Dates 

Submissions Received 

After the CMS Due Dates

Submissions Received Over 

MSIS 6 Months After the CMS Due Dates *

File Type 

Files 

Reviewed Files Percentage ** States Files Percentage ** States 

Eligibility 331 192 58% 44 95 29% 27 

Claims 1,324 849 64% 48 418 32% 31 

All 1,655 1,041 63% 49 513 31% 32 

* This group is a subset of all submissions received after the due dates. 

** Percentages pertain to aggregate characteristics of MSIS file types and will not sum to 100 percent. 

Source: OIG analysis of the file submission and data validation status of FYs 2004–2006 MSIS files as of 

June 2007. 

MSIS files requiring State correction and resubmission took more than five times longer to clear 

quality review than those that did not require correction and resubmission. Twenty-six percent 

(431 of 1,655) of the State MSIS file submissions required correction and resubmission to clear 

CMS quality review. Each State had at least one file that required correction and resubmission. 

When MSIS files did not require correction and resubmission, quality review took on average 

2 months (63 days). When MSIS files required State correction and resubmission, the quality 

review took on average 10 months (310 days), more than five times longer. 

A greater percentage of eligibility files than claims files required correction and resubmission to 

complete quality review. Over 50 percent (176 of 331) of eligibility files from 48 States required 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

correction and resubmission to complete quality review. In contrast, less than 

20 percent of claims files (255 of 1,324) from 46 States required correction and resubmission to 

complete quality review. 

CMS officials reported that midyear changes in State eligibility requirements often require States 

to correct and resubmit the MSIS eligibility files from previous quarters. As a result, MSIS 

eligibility files generally took longer to complete quality review than the claims files. On 

average, the 176 eligibility files requiring correction and resubmission took over a year (400 

days) to complete quality review. The 255 claims files requiring correction and resubmission 

completed quality review, on average, in just over 8 months (247 days). In contrast, on average, 

eligibility files not requiring correction and resubmission completed quality review in just over 

5 months (160 days), and claims files not requiring State correction and resubmission completed 

quality review in just over 11⁄2 months (49 days). 

Table 3 provides the number of days that the MSIS files we reviewed spent in quality review. 

This table compares files that required correction and resubmission to those that did not. 

Table 3: Number of Days That State MSIS File Submissions Spent in Quality Review 

State MSIS Files Requiring Correction and 

Resubmission 

State MSIS Files Not Requiring Correction 

and Resubmission 

MSIS 

File Type 

Files 

Reviewed Files Percentage * States 

Average 

Days ** Files Percentage * States 

Average 

Days ** 

Eligibility 331 176 53% 48 400 155 47% 38 160 

Claims 1,324 255 19% 46 247 1,069 81% 49 49 

All 1,655 431 26% 51 310 1,224 74% 51 63 

* Percentages pertain to aggregate characteristics of MSIS file types and will not sum to 100 percent. 

** Average days required to clear the quality review phase of the MSIS file submission and data validation process. 

Source: OIG analysis of the file submission and data validation status of FYs 2004–2006 MSIS files as of June 2007. 

CMS held validated claims files nearly three times longer than validated eligibility files, before 

releasing them to the public. Although MSIS claims files often completed quality review before 

eligibility files, CMS did not release the validated MSIS files until all five of the State’s 

quarterly file submissions (four claims files and one eligibility file) completed quality review. 

CMS held validated MSIS files for over 9 months (281 days), on average, before releasing the 

data to the public. These delays occurred because CMS was waiting for the companion files to 

complete quality review before releasing all five related claims and eligibility files 

simultaneously to the public. The final release phase accounted for nearly half (47 percent) of 

the average time MSIS files spent in all phases of file submission and data validation 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

ulent trends.48 

processes.47 However, users do not always need access to all five validated MSIS files to 

identify potentially fraud

CMS held validated MSIS eligibility files for nearly 4 months (113 days) on average before 

releasing the data to the public while waiting for companion files to complete quality review. 

In contrast, CMS held validated MSIS claims files for nearly 11 months (323 days) on average, 

nearly three times longer, for the same reason. 

CMS Did Not Fully Disclose or Document Information About the Accuracy of MSIS Data 

CMS released MSIS data to the public without disclosing or documenting individual State 

adjustments to the error tolerances in either the MSIS Data Dictionary or MSIS “Data 

Anomalies/Issues Report.” The MSIS Data Dictionary reflects only the established national 

error tolerance levels, and the “Data Anomalies/Issues Report” reflects only quality review 

results, not State-level error tolerance level changes from the National level. 

As of June 2007, 63 percent (1,528 of 2,442) of CMS’s active data validation error tolerance 

adjustments increased the error tolerances to values greater than published defaults. The 1,528 

adjustments involved 75 percent (191 of 255) of all MSIS data elements and affected at least one 

MSIS file submission from each State. CMS periodically adjusts individual State error 

tolerances to allow particular files or sets of files to pass data validation tests (e.g., when State’s 

data systems are unable to accommodate MSIS file formats, or unique State coding issues trigger 

false errors). However, it did not document and/or disclose information about the accuracy of 

adjusting these error tolerances to a value greater than published defaults. 

CMS did not fully or accurately disclose error tolerance adjustments and resulting error rates to 

MSIS data users. Neither the MSIS Data Dictionary nor the MSIS “Data Anomalies/Issues 

Report” fully discloses changes made to individual State MSIS error tolerance levels. The MSIS 

Data Dictionary describes error tolerances as defaults and indicates that adjustments are “based 

on special State circumstances.” However, CMS did not identify any of the State-specific error 

tolerance adjustments in the MSIS Data Dictionary. 

The MSIS “Data Anomalies/Issues Report” referenced 4 of the 1,528 active error tolerance 

adjustments that increased the error tolerances to values greater than published defaults. 

However, one of the four references did not disclose the adjusted error tolerance level and two of 

the four references disclosed incorrect adjusted error tolerance levels. In addition, the MSIS 

“Data Anomalies/Issues Report” posted to CMS’s Web site was over 3 years old at the time of 

47 The 281 days during which CMS held validated MSIS files is nearly half (47 percent) of the 595 days it took 

CMS on average to validate and release for public use the 1,655 FYs 2004–2006 MSIS files reviewed. 

48 Users can utilize the unique MSIS beneficiary identification numbers contained in the MSIS claims files to 

identify potentially fraudulent Medicaid billing patterns. If necessary, users can also utilize prior quarter’s validated 

MSIS eligibility file for the preliminary identification of these beneficiaries. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

our review.49 Furthermore, CMS did not publicize error rates resulting from undisclosed error 

tolerance adjustments. For example, CMS did not post error reports to its public Web site. 

CMS did not document the justification and approval of error tolerance adjustments. CMS 

could not provide documentation for the justification and approval of the 1,528 active error 

tolerance adjustments that increased the error tolerances to values greater than published 

defaults. Just over half of these error tolerance increases (765 of 1,528) had been in place for 

over 7 years. According to CMS officials, States are notified of error tolerance adjustments, but 

the justification and approval of individual adjustments are not logged or documented. See 

Appendix F for the number of undocumented error tolerance adjustments CMS made per year. 

Twenty-nine percent of CMS’s undocumented error tolerance adjustments increased MSIS data 

validation error tolerances to 100 percent. Twenty-nine percent (446 of 1,528) of CMS’s 

undocumented error tolerance adjustments we reviewed increased the default error tolerance 

from 5 percent or less to 100 percent. These undocumented error tolerance adjustments allowed 

the affected State MSIS files to clear quality review with an unknown number of errors. The 

446 adjustments occurred between April 1999 and May 2007, involved 72 MSIS data elements, 

and affected at least one MSIS file submission from all States. 

For example, between August 1999 and December 2003, CMS made 17 adjustments affecting 

13 States to increase the MSIS “Diagnosis-Code-Principal” data element error tolerance level 

from 5 percent to 100 percent.50 See Appendix G for the date CMS adjusted the MSIS 

“Diagnosis-Code-Principal” data element error tolerance in each of the 13 States.

MSIS Did Not Capture Many of the Data Elements That Can Assist in Fraud, Waste, and 

Abuse Detection 

There are no requirements for MSIS to contain specific data elements. However, MSIS does not 

currently capture a number of data elements that can assist in fraud, waste, and abuse detection. 

For example, MSIS does not include all data elements that MIG has identified as assisting in 

fraud, waste, and abuse detection. 

MSIS did not capture almost half of the consolidated data elements we reviewed that MIG

identified as useful for fraud, waste, and abuse detection. The consolidated MSIS data elements 

did not capture 46 percent (46 of 100) of the consolidated data elements reviewed that MIG 

identified as useful for fraud, waste, and abuse detection.51 Data elements were missing in all 

four categories that we developed for our review: 

49 As of October 1, 2008, the MSIS “Data Anomalies/Issues Report” linked to CMS’s MSIS Data public Web site 

was dated September 5, 2005. Available online at 

http://www.cms.hhs.gov/MedicaidDataSourcesGenInfo/02_MSISData.asp. Accessed on December 1, 2008. 

50 The MSIS Diagnosis-Code-Principal data element contains the code for the principal diagnosis on the claim. 

Principal diagnosis is the condition chiefly responsible for a patient’s admission. 

51 We compared 85 MSIS data elements consolidated from the MSIS Data Dictionary to 100 data elements 

consolidated from MIG’s list of 182 data elements. MIG identified these data elements in collaboration with other 

CMS components. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

• Service Provider Identifiers 

• Procedure, Product, and Service Descriptions 

• Billing Information 

• Beneficiary and Eligibility Information 

See Appendix C for comparisons of the consolidated data elements MIG identified as assisting in 

fraud, waste, and abuse detection to the consolidated MSIS data elements in each of these four 

categories. 

MSIS did not capture over half of the consolidated Medicaid Service Provider Identifier data 

elements reviewed. MSIS did not capture 55 percent (11 of 20) of the Medicaid Service Provider 

Identifier data elements we consolidated from the list of data elements that MIG identified as 

assisting in fraud, waste, and abuse detection. For example, MSIS did not capture the referring 

provider’s identification number. The referring provider is the physician who ordered the 

medical procedure, product, or service. Without the referring provider identification number, 

fraud analysts cannot use MSIS data to assess whether a qualified physician submitted the order 

as required to receive certain medical benefits. In a 2002 report, OIG used referring provider 

identification numbers to estimate that Medicare paid $61 million for improperly documented 

services in 1999.52 

MSIS did not capture almost half of the consolidated Medicaid Procedure, Product, and Service 

Description data elements reviewed. MSIS did not capture 48 percent (16 of 33) of the Medicaid 

Procedure, Product, and Service Description data elements we consolidated from the list of data 

elements that MIG identified as assisting in fraud, waste, and abuse detection. For example, 

MSIS did not capture data elements that specify the tooth number, quadrant, or surface subject 

for dental procedures. Without these details, fraud analysts would have difficulty using MSIS 

data to detect fraudulent Medicaid claims for duplicate or medically unnecessary dental 

procedures. Because MSIS did not include the necessary data elements, OIG obtained Medicaid 

data from individual States for its 2007 report that incorrect information about the tooth surface 

subject to dental procedures contributed to an estimated $12 million in improper Medicaid 

payments in 2003.53 

MSIS did not capture over one-third of the consolidated Medicaid Billing Information data 

elements reviewed. MSIS did not capture 42 percent (15 of 36) of the Medicaid Billing 

Information data elements we consolidated from the list of data elements that MIG identified as 

assisting in fraud, waste, and abuse detection. For example, MSIS did not capture dispensing fee 

payment information. Without details regarding fees paid, fraud analysts cannot use MSIS data 

to assess whether the total amounts claimed and reimbursed contain inappropriate fees. For 

example, in a 2008 report, OIG analyzed data obtained directly from States to determine that 

52 “Durable Medical Equipment Ordered With Surrogate Physician Identification Numbers,” OEI-03-01-00270. 

53 “Improper Payments for Dental Services,” OEI-04-04-00210. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Medicaid dispensing fee reimbursement rates were about $2 higher than the average Medicare 

Part D dispensing fee.54 

MSIS did not capture over one-third of the consolidated Medicaid Beneficiary and Eligibility 

Information data elements reviewed. MSIS does not capture 36 percent (4 of 11) of the 

Medicaid Beneficiary and Eligibility Information data elements we consolidated from the list of 

data elements that MIG identified as useful for fraud, waste, and abuse detection. Three of the 

four missing data elements were for the beneficiary’s name (i.e., first, middle, and last name). 

Absence of beneficiary names may hinder analysts’ ability to reliably match Medicaid claims 

data to other data sources for fraud, waste, and abuse data analysis and detection. Specifically, 

according to CMS, the link between data sources would be more reliable if MSIS captured the 

beneficiary’s name.55 

CONCLUSION 

MSIS is the only source of nationwide Medicaid claims and beneficiary eligibility information. 

CMS collects MSIS data directly from States to, among other things, assist in detecting fraud, 

waste, and abuse in the Medicaid program. Timely, accurate, and comprehensive MSIS data can 

contribute to more effective health care fraud, waste, and abuse identification and prevention.

We determined that during FYs 2004–2006, MSIS data were an average of 11⁄2 years old when it 

was released to all users. In addition, CMS did not fully disclose or document information about 

the accuracy of MSIS data. Furthermore, MSIS did not capture many of the data elements that 

can assist in fraud, waste, and abuse detection. 

Our results indicate opportunities for States and CMS to reduce the timeframes for file 

submission and validation, respectively. Furthermore, there are opportunities for CMS to 

improve the documentation and disclosure of error tolerance adjustments; and expand current 

State Medicaid data collection and reporting to further assist in fraud, waste, and abuse detection. 

This report is being issued directly in final form because it contains no recommendations. If you 

have comments or questions about this report, please provide them within 60 days. Please refer 

to report number OEI-04-07-00240 in all correspondence. 

54 “Review of the Relationship Between Medicare Part D Payments to Local, Community Pharmacies and the 

Pharmacies’ Drug Acquisition Costs,” A-06-07-00107. 

55 For example, CMS’s Enterprise Cross-Reference Database matches identification information from three 

independent data sources: (1) Medicare’s Enrollment Database, (2) the Outcome and Assessment Information Set, 

and (3) MSIS to identify Medicaid beneficiaries who are also eligible for Medicare benefits. The Medicare 

Enrollment Database and the Outcome and Assessment Information Set include the beneficiary’s name; MSIS does 

not. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX A 

Databases Dependent on Medicaid Statistical Information System Data

Medicaid Statistical Information System (MSIS) data are used as a source of information for the 

following Centers for Medicare & Medicaid Services (CMS) databases: 

The MSIS State Summary Data Mart: The MSIS State Summary Data Mart generates Medicaid 

eligibility and overall program utilization statistics. The MSIS State Summary Data Mart extracts 

data from both validated MSIS eligibility and claims files posted to the production database.56 

This data mart is accessible to the public via the Internet. 

The MSIS Drug Utilization Data Mart: The MSIS Drug Utilization Data Mart generates Medicaid 

drug utilization statistics for groups of drugs. The MSIS Drug Utilization Data Mart extracts MSIS 

prescription drug information only from validated MSIS claims files posted to the production 

database. This system is not dependent upon Medicaid beneficiary information from validated 

MSIS eligibility files.57 This data mart is accessible to the public via the Internet. 

The Medicaid Analytical Extract: The Medicaid Analytical Extract is a set of person-level data 

files of Medicaid eligibility, service utilization, and payments. The database extracts data from 

both validated MSIS eligibility and claims files posted to the production database to convert the 

fiscal year-based MSIS quarterly files into calendar year files. These data are only accessible to 

users who enter into a data use agreement with CMS.58

The Enterprise Cross-Reference Database: The Enterprise Cross-Reference (ECR) Database 

matches identification information from three independent data sources: (1) the Medicare 

Enrollment Database, (2) the Outcome and Assessment Information Set, and (3) MSIS. The 

ECR Database identifies name, Social Security number, and gender from each system to 

establish linkages and identify Medicare beneficiaries who are also eligible for Medicaid benefits 

(dual-eligible beneficiaries). The ECR Database extracts this information from validated MSIS 

claims files posted to the production database. These data are not accessible to the public.59

The Medicaid Integrity Group Data Engine: CMS stores the MSIS data on this system to support 

CMS fraud, waste, and abuse analysis efforts and assist Medicaid Integrity Group contractors 

perform postpayment provider audits. These data are not accessible to the public.60

56 CMS, MSIS State Summary Data Mart. Available online at http://msis.cms.hhs.gov/. Accessed on December 1, 

2008. 

57 CMS, MSIS Drug Utilization Data Mart. Available online at http://msis.cms.hhs.gov/drugmart.htm. Accessed on 

December 1, 2008. 

58 CMS, Medicaid Analytical Extract Web site. Available online at 

http://www.cms.hhs.gov/MedicaidDataSourcesGenInfo. Accessed on December 1, 2008. 

59 CMS, “Enterprise Cross-Reference User Guide,” January 2007. 

60 CMS technical comments on OIG’s draft memorandum report, August 2009. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX B 

Characteristics of Medicaid Statistical Information System Error Tolerance Adjustments 

Medicaid Statistical Information System Data Validation Error 

Tolerance Adjustments as of June 2007 

Number of 

Adjustments 

Inactive Error Tolerance Adjustments 

Adjustments to invalid Medicaid Statistical Information System (MSIS) file 

type/data element combinations (e.g., adjustments to “Age” data elements that do 

not exist in MSIS claims files) 3,470 

Adjustments to data elements not subjected to data validation tests 

(e.g., systemically generated and header data elements) 1,759 

Adjustments that change error tolerances to levels already established by 

programmed defaults 1,204 

Adjustments to unused data elements 693 

Adjustments to U.S. Territory MSIS files not currently collected by the 

Centers for Medicare & Medicaid Services 71 

 Inactive Error Tolerance Adjustments 7,197 

 Percentage of Total 75% 

Active Error Tolerance Adjustments 

Adjustments that change programmed defaults to error tolerance levels 

documented in the MSIS Data Dictionary 914 

Adjustments that increase programmed defaults above error tolerance levels 

documented in the MSIS Data Dictionary (1,528 of 2,442 = 63% of Total Active 

Adjustments) 1,528 

 Active Error Tolerance Adjustments 2,442 

 Percentage of Total 25% 

 Total Inactive and Active Error Tolerance Adjustments 9,639 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX C 

Comparison of Medicaid Data Elements 

The following tables compare 100 data elements we consolidated from a list of 182 data 

elements the Medicaid Integrity Group (MIG) identified, in collaboration with other components 

in the Centers for Medicare & Medicaid Services (CMS), Department of Justice, and Office of 

Inspector General (OIG) officials, as useful for Medicaid fraud, waste, and abuse analysis 

(hereinafter referred to as MIG-identified data elements) to 85 similar data elements we 

consolidated from 255 Medicaid Statistical Information System (MSIS) data elements. Blank 

MSIS data element fields indicate that MSIS does not contain similar data elements. We 

grouped the consolidated data elements into four categories that we developed for our review: 

• Service Provider Identifiers 

• Procedure, Product, and Service Descriptions 

• Billing Information 

• Beneficiary and Eligibility Information 

Table C-1: Comparison of MIG and MSIS Medicaid Service Provider Identifier Data Elements 

MIG Data Elements MSIS Data Elements 

01 Provider Billing Name 

02 Provider Business Employer Identification (ID) Number 

03 Provider Business Entity 

04 Provider Business Owner Name 

05 Provider Business State 

06 Provider Business Street Address 

07 Provider Business Town/City 

08 Provider Business/Practice Name 

09 Provider Category 01 Provider-Taxonomy 

10 Provider ID – Admitting 02 Provider-ID-Number-Servicing 

11 Provider ID – Billing 03 Provider-ID-Number-Billing 

12 Provider ID – Prescriber 04 Provider-ID-Number-Servicing 

13 Provider ID - Prescriber Drug Enforcement Agency ID 05 Provider-ID-Number-Servicing 

14 Provider ID – Referring 

15 Provider ID – Servicing 06 Provider-ID-Number-Servicing 

16 Provider ID 07 National-Provider-ID 

17 Provider License/Certification Number 

18 Provider Servicing Flag 

19 Provider Specialty 08 Specialty-Code 

20 Provider Type 09 Provider-Taxonomy 

Source: OIG comparison of data elements described in the CMS MSIS Data Dictionary, Release 3, effective February 15, 2009, to data elements 

MIG identified as useful for Medicaid fraud, waste, and abuse data analysis and detection as of September 2008. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Table C-2: Comparison of MIG and MSIS Medicaid Procedure, Product, and Service Description Data 

Elements 

MIG Data Elements MSIS Data Elements 

01 Admission Date 01 Admission-Date 

02 Admission Diagnosis Code 02 Diagnosis-Code 

03 Brand Necessary Drug Indicator 

04 Diagnosis Code 03 Diagnosis-Code 

05 Diagnostic Related Group (DRG) Code 04 DRG 

06 Discharge Hour 

07 DRG Allowed Charge/DRG Rate 

08 DRG Allowed Charge Source 05 DRG Indicator 

09 DRG Code Description 

10 Drug Name 

11 Drug Type (Brand/Generic) 

12 Explanation of Benefit Code 

13 National Drug Code 06 National-Drug-Code 

14 Nursing Facility Indicator 07 Nursing-Facility-Days 

15 Package Size of Drug Dispensed 

16 Patient Discharge Code 08 Patient-Status 

17 Per Diem Rate 

18 Place of Service 09 Place-of-Service 

19 Prescription Dispensed Date 

20 Prescription Written Date 10 Date-Prescribed 

21 Procedure (Proc) Code 11 Proc-Code 

22 Procedure Code Description 

23 Procedure Code Modifier 12 Proc-Code-Mod 

24 Service End Date 13 Ending-Date-of-Service 

25 Service Start Date 14 Beginning-Date-of-Service 

26 Surgery Date 15 Proc-Date-Principal 

27 Therapeutic Class of Drug 

28 Tooth Number 

29 Tooth Quadrant 

30 Tooth Surface 

31 Type of Admission 

32 Type of Bill 16 Type-of-Claim 

33 Type of Facility 17 Place-of-Service 

Source: OIG comparison of data elements described in CMS’s MSIS Data Dictionary, Release 3, effective February 15, 2009, to data elements 

MIG identified as useful for Medicaid fraud, waste, and abuse data analysis and detection as of September 2008. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Table C-3: Comparison of MIG and MSIS Medicaid Billing Information Data Elements 

MIG Data Elements MSIS Data Elements 

01 Amount Billed 01 Amount-Charged 

02 Amount of Timed Anesthesia Units Billed 02 Service-Code-Mod 

03 Amount Paid 03 Medicaid-Paid-Amount 

04 Amount Paid by Other Insurance 04 Other-Third-Party-Payment 

05 Amount Paid for DRG Outlier Payments 

06 Average Wholesale Price of Prescription 

07 Control Number of Claim 05 Internal-Control-Number-Original 

08 Control Number Per Item 06 Line-Number-Original 

09 Date Paid 07 Date-of-Payment-Adjudication 

10 Dispense Fee Paid 

11 Drug Price Paid by System 

12 Drug Strength 

13 Final Paid Claim Indicator 

14 Manual Override/Forced Claim Indicator 

15 Medicare Allowed Amount 08 Medicare-Coinsurance-Payment 

16 Medicare Coinsurance Computed 09 Medicare-Coinsurance-Payment 

17 Medicare Coinsurance Reported 10 Medicare-Coinsurance-Payment 

18 Medicare Covered Drug Indicator 

19 Medicare Crossover Amount Paid 11 Medicare-Coinsurance-Payment 

20 Medicare Crossover Date Paid 

21 Medicare Deductible Computed 12 Medicare-Coinsurance-Payment 

22 Medicare Deductible Reported 13 Medicare-Coinsurance-Payment 

23 Net Claim Charge 14 Amount-Charged 

24 Number of Days Not Reimbursable 

25 Number of Days Reimbursed 15 Medicaid-Covered-Inpatient-Days 

26 Number of Days Supplied 16 Days-Supply 

27 Number of Refills 17 New-Refill-Indicator 

28 Number of Units Billed 18 Quantity-of-Service 

29 Number of Units Paid 19 UB-Rev-Units 

30 Prior Authorization Number 

31 Quantity Billed 20 Quantity-of-Service 

32 Remittance Advice Number 

33 Revenue Code 21 UB-Revenue-Code 

34 Split Claim Indicator 

35 Suspended Claim Date 

36 Total Charges Not Covered 

Source: OIG comparison of data elements described in CMS’s MSIS Data Dictionary, Release 3, effective February 15, 2009, to data elements MIG 

identified as useful for Medicaid fraud, waste, and abuse data analysis and detection as of September 2008. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

Table C-4: Comparison of MIG and MSIS Medicaid Beneficiary and Eligibility Data Elements 

MIG Data Elements MSIS Data Elements 

01 Recipient County Code 01 County-Code 

02 Recipient Date of Birth 02 Date-Of-Birth 

03 Recipient Eligibility Code 03 Eligibility-Group 

04 Recipient Eligibility Reason Code 04 Basis-of-Eligibility 

05 Recipient Family/Client ID 

06 Recipient First Name 

07 Recipient ID Number 05 MSIS-ID-Number 

08 Recipient Last Name 

09 Recipient Middle Name 

10 Recipient State Code 06 State-Abbreviation 

11 Recipient ZIP Code 07 ZIP-Code 

Source: OIG comparison of data elements described in CMS’s MSIS Data Dictionary, Release 3, effective February 15, 2009, to data elements MIG 

identified as useful for Medicaid fraud, waste, and abuse data analysis and detection as of September 2008. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX D 

Status of Medicaid Statistical Information System Files Reviewed by Year 

The table below shows the number of Medicaid Statistical Information System (MSIS) files that 

we reviewed (1) that had not yet been submitted by States to the Centers for Medicare & 

Medicaid Services (CMS), (2) that were in the CMS data validation process, and (3) that had 

been released by CMS as valid data.

Number of MSIS Files Reviewed in Each CMS Processing Phase by Year

Fiscal Year 

Not 

Submitted

In 

Processing

Released as 

Valid Total

2004 0 0 1,020 100% 1,020 100% 

2005 40 4% 440 43% 540 53% 1,020 100% 

2006* 258 25% 667 65% 95 9% 1,020 100% 

2004–2006 298 10% 1,107 36% 1,655 54% 3,060 100% 

* Because of rounding, the fiscal year (FY) 2006 percentages do not total 100 percent. 

Source: Office of Inspector General analysis of 3,060 FYs 2004–2006 State MSIS eligibility and claims 

file submissions. 
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX E 

Days That Medicaid Statistical Information System Files Spent in Processing 

Average, Median, Minimum, and Maximum Days That Validated Medicaid 

Statistical Information System Files Spent in All Phases of the File 

Submission and Data Validation Process 

File Type Files Average 

Days 

Median 

Days 

Minimum 

Days 

Maximum 

Days 

Eligibility 331 595 572 70 1,057 

Claims 1,324 595 567 70 1,095 

All Files 1,655 595 567 70 1,095 

N=1,655 fiscal years (FY) 2004-2006 State Medicaid Statistical Information System (MSIS) file 

submissions that had cleared all three phases of the file submission and data validation process as of 

June 2007. 

Source: Office of Inspector General analysis of 3,060 FYs 2004–2006 State MSIS eligibility and claims 

file submissions.
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OEI-04-07-00240 MSIS Data Usefulness for Detecting Fraud, Waste, and Abuse 

APPENDIX F 

Number of Undocumented Medicaid Statistical Information System Error Tolerance 

Adjustments by Year 

Undocumented Active Medicaid Statistical Information System Data 

Validation Error Tolerance Adjustments From 1999 to 2007 

Year of 

Undocumented 

Adjustment 

Number of 

Undocumented 

Adjustments 

Percentage 

of Total Undocumented 

Adjustments 

1999 249 16% 

2000 516 34% 

2001 116 8% 

2002 103 7% 

2003 57 4% 

2004 239 16% 

2005 92 6% 

2006 89 6% 

2007 67 4% 

 Overall 1,528 100% 

N=1,528 active adjustments that increased Medicaid Statistical Information System (MSIS) data 

validation error tolerances over the default levels documented in the MSIS Data Dictionary. 

Because of rounding, the percentages do not total 100 percent. 

Source: Office of Inspector General analysis of 9,639 error tolerance adjustments programmed 

into the MSIS Data Validation program in June 2007.
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OEI-04-07-00240 MSIS Data Usefulness For Detecting Fraud, Waste, and Abuse

APPENDIX G 

Dates of Medicaid Statistical Information System Error Tolerance Adjustments 

The table below shows the dates when the Centers for Medicare & Medicaid Services adjusted 

the error tolerances of the Medicaid Statistical Information System (MSIS) Diagnosis-CodePrincipal data element from 5 percent to 100 percent for 13 States. These adjustments allowed 

the affected MSIS files to clear quality review with an unknown number of errors.

MSIS “Diagnosis-Code-Principal” Error Tolerances Adjusted 

From 5 Percent to 100 Percent 

MSIS File Type State Adjustment Date 

Inpatient Claims DC December 15, 2003 

GA July 19, 2000 

LA January 05, 2000 

NV March 13, 2000 

ND November 17, 1999 

OH August 18, 1999 

SC October 12, 1999 

SD March 16, 2000 

TX December 21, 2000 

WA July 18, 2000 

WV September 21, 1999 

WY May 26, 2000 

Other Claims LA January 5, 2000 

NV March 9, 2000 

TN February 1, 2001 

TX December 26, 2000 

Source: Office of Inspector General analysis of 9,639 error tolerance adjustments 

programmed into the MSIS Data Validation program in June 2007.