Medicaid: CMS Needs Better Data to Monitor the Provision of and Spending on Personal Care Services
Published: 2017-01-12T00:00:00

Fast Facts:
Millions of Medicaid beneficiaries rely on personal care services for help with daily tasks like bathing and eating. However, these types of services are at high risk for fraud and abuse—e.g., services that were paid for but never provided.
We found that the Centers for Medicare & Medicaid Services needs better data to oversee these personal care services. In 2012, for example, $4.9 billion worth of these claims did not identify the person who provided the service.
We recommended that CMS issue guidance to states for reporting key data, ensure that data meet requirements, and develop plans to use this data for oversight.

Highlights:
section_title: Why GAO Did This Study
paragraphs: A growing share of long-term care spending under Medicaid, a joint federal-state health care program, is for services provided in home and community settings. Medicaid spending on these services—about $80 billion in 2014—now exceeds spending on institutional long term care. Personal care services are key components of long-term, in-home care, providing assistance with basic activities, such as bathing, dressing, and toileting, to millions of individuals seeking to retain their independence and to age in place. However, these services are also at high risk for improper payments, including fraud.
Given the expected increase in the demand for and spending on personal care services and risk of improper payments, GAO was asked to examine available data on personal care services and CMS's use of the data. This report: (1) describes the CMS systems that collect data on personal care services and what the data reveal, and (2) examines the extent to which data from these systems can be used for oversight. GAO reviewed information from two CMS data systems, reviewed relevant federal guidance and documents, and interviewed officials and researchers.
section_title: What GAO Found
paragraphs: Two data systems managed by the Centers for Medicare & Medicaid Services (CMS)—the federal agency that oversees Medicaid—collect information from states on the provision of and spending on personal care services:
The Medicaid Statistical Information System (MSIS) collects detailed information from provider claims on services rendered to individual Medicaid beneficiaries and state payments for these services.
The Medicaid Budget and Expenditure System (MBES) collects states' total aggregate Medicaid expenditures across 80 broad service categories.
Information from these two CMS data systems can be used in the aggregate to describe broadly the provision of and spending on Medicaid personal care services. For example, MBES data show that total fee-for-service spending on these services was at least $15 billion in 2015—up $2.3 billion from 2012.
However, the usefulness of the data collected from these two systems for CMS oversight is limited because of data gaps and errors. To provide effective oversight, including decision making, external reporting, and monitoring program operations, CMS needs timely, relevant and reliable data on personal care services rendered and the amount paid. GAO found that the data collected did not always meet these standards. For example:
MSIS data were not timely, complete, or consistent. The most recent data available at the time of GAO's audit were for 2012 and only included data for 35 states. Further, 15 percent of claims lacked provider identification numbers, over 400 different procedure codes were used to identify the services, and the quantity and time periods varied widely. Without good data, CMS is unable to effectively monitor who is providing personal care services or the type, amount, and dates of services. CMS may also face challenges determining whether beneficiaries were eligible for services and assessing the reasonableness of the amount of services claimed.
MBES data were not always accurate or complete. From 2012 through 2015, GAO found that 17 percent of expenditure lines were not reported correctly. Nearly two-thirds of these errors were due to states not separately identifying personal care services expenditures, as required by CMS. Inaccurate and incomplete reporting limits CMS's ability to ensure federal matching funds are provided consistent with states' approved programs.
CMS is developing a new Medicaid claims system to replace MSIS and recently established a new office to support CMS's use of Medicaid data for program management and monitoring. However, CMS has not issued guidance related to reporting of personal care services that addresses the gaps GAO identified, or developed plans to use the data for oversight purposes. Without improved data and plans for how it can be used for oversight, CMS could continue to lack critical information on personal care service expenditures.
HHS agreed with two of GAO's recommendations to ensure state compliance with reporting requirements and develop plans to use the data. HHS neither agreed nor disagreed with two others.
section_title: What GAO Recommends
paragraphs: GAO recommends that CMS improve personal care services data by: establishing standard reporting guidance for key data; ensuring linkage between data on the provision of services and reported expenditures; ensuring state compliance with reporting requirements; and developing plans to use data for oversight.

section_title: Letter
paragraphs: Medicaid, a federal-state health financing program for low-income and  medically needy individuals, is the nation’s primary payer of long-term  care services and supports for disabled and aged individuals. Medicaid  spending on long-term care services and supports is significant,  representing more than one-quarter of Medicaid spending annually.   Historically, Medicaid spending for long-term care has been largely for  services provided in institutional settings, such as nursing homes. In  recent years, this trend has changed, and the majority of federal and state  spending has shifted towards home- and community-based services  (HCBS)—that is, services and assistance provided to beneficiaries in their  homes or other settings integrated with their communities. Personal care  services are a significant component of HCBS. Personal care services  provide assistance to beneficiaries of all ages who have limited ability to  care for themselves because of physical, developmental, or intellectual  disabilities. Personal care services assist beneficiaries with activities of  daily living such as bathing, dressing, and toileting. Such assistance can  enable disabled and aged beneficiaries to remain in their homes, maintain  their independence, and participate in community life to the fullest extent  possible.
The federal cost of Medicaid long-term care spending is expected to  increase from $75 billion in 2015 to $111 billion in 2026.  The demand for  personal care services is expected to increase as result of the aging of  the nation’s population and increased opportunities for the aged and  disabled to live in their homes instead of institutions. The increased  Medicaid spending on HCBS may also increase the risk of Medicaid  making improper payments for personal care services.  In 2014, the most  recent data available, an estimated 6 percent of all payments for personal  care services were improper, and the projected dollar amount of payment  errors was over $2 billion, the third-highest of all Medicaid services.   Despite the expected increase in spending and the risk of improper  payments for personal care services, the extent to which CMS data  systems specifically identify information about personal care services is  not well understood.
Under broad federal requirements, states administer their individual  Medicaid programs under the oversight of the Centers for Medicare &  Medicaid Services (CMS), an agency within the Department of Health and  Human Services (HHS). For example, states determine which optional  services to cover, set payments rates that different providers will receive  for various covered services, and pay providers for claims submitted for  services rendered. The provision of most HCBS, including personal care  services, is an optional Medicaid benefit that states may provide, and  every state has at least one program to provide HCBS, including personal  care services. Federal law allows states to establish and provide personal  care services under several different statutory authorities; as a result,  states may have several different programs that provide personal care  services. CMS has an important responsibility to ensure states report  Medicaid expenditures correctly, identify payments at risk for improper  payments to target resources, and provide technical assistance and  support to states to ensure they have data and oversight tools to identify  questionable payments and reduce improper payments, including and  fraud and abuse.
In light of the expected increase in demand for personal care services,  the vulnerability of Medicaid beneficiaries receiving these services, the  variety of state programs, and the high rate of improper payments, you  asked about the federal data that CMS collects on Medicaid personal  care services and CMS’s use of these data to oversee state programs.  This report: describes the CMS systems that collect data on Medicaid personal  care services and what the data reveal about the provision of and  spending on these services; and examines the extent to which data CMS collects from these systems  can be used to monitor the provision of and spending on personal  care services by state Medicaid programs.
To describe the CMS systems that collect data on Medicaid personal care  services and what the data reveal about the provision of and spending on  these services, we reviewed and analyzed the most recently available  data from two CMS data systems. These systems collect (1) detailed  records on the services rendered to Medicaid beneficiaries, and (2)  states’ aggregate Medicaid expenditures by broad categories of service.  For the system that collects information on services rendered, referred to  as the Medicaid Statistical Information System, we analyzed data for  calendar year 2012—the latest available data at the time of our review— for the 35 states that had finalized 2012 data.  We examined all records  of Medicaid services that were either associated with a known personal  care services procedure code or were categorized as personal care  services in a record’s more generic “type of service” field. We analyzed  these data across various categories, such as eligibility groups (i.e.,  children ages 0-18, adults ages 19-64, aged individuals ages 65 and  older, and disabled individuals of all ages) and delivery model (i.e., fee- for-service or managed care).  For the system that collects states’  Medicaid expenditures, referred to as the Medicaid Budget and  Expenditure System (MBES), we analyzed data for all 50 states and  Washington, D.C., for calendar years 2012 through 2015, a time period  that allowed for examining trends. We examined each of the expenditure  reporting lines for which personal care services were separately reported.  We also reviewed relevant guidance and documentation, including laws,  regulations, and CMS data forms and data dictionaries; obtained reports  issued by CMS, the HHS Office of Inspector General (OIG), and other  researchers related to the information CMS collects about Medicaid  HCBS and personal care services; and we interviewed CMS officials and  other experts familiar with the data systems. On the basis of these steps,  we determined that data reported by states were sufficiently reliable for  purposes of reporting summary-level information on personal care  services, such aggregate state-reported spending on personal care  services. However, we also identified reporting errors and data issues  that limit the use of the data for other oversight purposes. We report on  these errors and limitations, and their implications in objective 2 of this  report.
To examine the extent to which data CMS collects from these systems  can be used to monitor the provision of and spending on personal care  services, we interviewed CMS officials about the data they use to monitor  states’ Medicaid personal care services programs, including the data  systems we examined for the first objective. We also interviewed CMS  officials about how they assess the completeness and accuracy of the  data. We assessed the reliability of the data by screening for missing  data, outliers, and obvious errors, and compared reported information  with information from CMS regarding the different types of programs  under which the states provide personal care services. In addition, we  reviewed the relevant standards for internal control in the federal  government. We determined that the data were sufficiently reliable for  purposes of assessing CMS’s use of the data to monitor the provision of  and spending on personal care services, and report on limitations and  errors that we found when examining the data.
We conducted this performance audit from July 2015 to January 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our finding and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Medicaid Program Overview
paragraphs: Medicaid is jointly financed by the federal government and the states, with  the federal government matching most state Medicaid expenditures using  a statutory formula that determines a federal matching rate for each  state.  Medicaid is a significant component of federal and state budgets,  with estimated total outlays of $554 billion in fiscal year 2015, of which  $347 billion is expected to be financed by the federal government and  $207 billion by the states.  An important health care safety net, Medicaid  served about 78 million individuals during fiscal year 2014.  There are  multiple ways to be eligible for Medicaid that relate to an individual’s age,  income, and disability status.
As a federal-state partnership, both the federal government and the  states play important roles in ensuring that Medicaid is fiscally sustainable  over time and effective in meeting the needs of the vulnerable populations  it serves. States administer their Medicaid programs within broad federal  rules and according to individual state plans approved by CMS, the  federal agency that oversees Medicaid. States can also seek permission  from CMS to provide services under waivers of traditional Medicaid  requirements, for example to provide services to a segment of the state’s  eligible population.
section_title: Federal Medicaid Funds and State Medicaid Payments
paragraphs: To obtain federal matching funds for Medicaid payments to providers,  states submit their estimated Medicaid expenditures—their payments for  covered services and costs of administering the program—to CMS each  quarter for the upcoming quarter. After CMS has approved the estimated  expenditures, it makes federal matching funds available to the state for  the purpose of making Medicaid payments during the quarter. States  typically finance Medicaid payments to providers with a combination of  federal funds advanced to them and nonfederal funds (e.g., funds from  state and local government sources).
Federal matching funds are available to states for different types of  payments that states make, including payments made directly to  providers for services rendered and payments made to managed care  organizations. Under a fee-for-service delivery model, states make  payments directly to providers; providers render services to beneficiaries  and then submit claims to the state to receive payment. States review and  process fee-for-service claims and pay providers based on state- established payment rates for the services provided. Under a managed  care delivery model, states pay managed care organizations a set  amount per beneficiary; providers render services to beneficiaries and  then submit claims to the managed care organization to receive payment.  Managed care plans are required to report to the states information on  services utilized by Medicaid beneficiaries enrolled in their plans— information typically referred to as encounter data. Most states use both  fee-for-service and managed care delivery models, although the number  of beneficiaries served through managed care has grown.
Federal law requires each state to operate a mechanized claims  processing system to process and record information about the services  provided under both fee-for-service and managed care delivery models.  Provider claims and managed care encounters are required to include  information about the service provided, including the general type of  service; a procedure code that identifies the specific service provided; the  location of the service; the date the service was provided; and information  about the provider who rendered the service. For services delivered  under a fee-for-service delivery model, the claims record must also  include the payment amount. Federal law requires states to collect  managed care encounter data, but actual payment amounts to individual  providers are not required.
section_title: Medicaid Long-term Services and Supports
paragraphs: Home- and community-based services, which include personal care  services, are a component of a larger class of health and health-related  services and nonmedical supports for individuals of all ages who need  care for an extended period of time, broadly referred to as long-term  services and supports. Long-term services and supports financed by  Medicaid are generally provided in two settings: institutional facilities,  such as nursing homes and intermediate-care facilities for individuals with  intellectual disabilities; and home and community settings, such as  individuals’ homes or assisted living facilities. Under Medicaid  requirements governing the provision of services, states generally must  provide institutional care to Medicaid beneficiaries, while HCBS coverage  is generally an optional service. Medicaid spending on long-term services  and supports provided in home and community settings has increased  dramatically over time—to about $80 billion in 2014—while the share of  spending for care in institutions has declined, and HCBS spending now  exceeds long-term care spending for individuals in institutions (see fig.  1). All 50 states and the District of Columbia provide long-term care  services to some Medicaid beneficiaries in home and community  settings.
Personal care services are a key component of long-term services and  supports and include assistance with activities of daily living, such as  bathing and dressing, and in some cases instrumental activities of daily  living, such as preparing meals and housekeeping. Personal care  services are typically nonmedical services provided by personal care  attendants—home-care workers who may or may not have specialized  training. Personal care attendants may be employed by a provider agency  or self-employed. In some cases, they are friends or family members of  the beneficiary and, under certain types of Medicaid PCS programs, can  be spouses, parents, or other legally responsible relatives. Under what is  known as an agency-directed model, a provider agency employs multiple  attendants. The provider agency hires, fires, pays, and trains the  attendant to provide personal care services to Medicaid beneficiaries.  Under a participant-directed model, beneficiaries or their representatives  have the authority to manage personal care services by selecting, hiring,  firing, and training attendants themselves and have a greater say in the  personal care services the beneficiary receives. Overall, the number of  personal care attendants employed is projected to increase by 26 percent  from 2014 to 2024.
As we recently reported, states have considerable flexibility to establish  Medicaid personal care services programs under different provisions of  federal law that authorize different types of programs. States may  provide personal care services under a Medicaid state plan, a state plan  amendment, or a waiver, such as the 1915(c) waiver, referred to as an  HCBS Waiver—the most common type of program through which states  provide personal care services. Section 1915(c) authorizes states with  HHS approval to waive certain traditional Medicaid requirements, allowing  states to target services to specific groups and limit the number of  beneficiaries served. Program options available under a Medicaid state  plan or amendment include State Plan Personal Care Services, State  Plan HCBS, and Community First Choice. Individual states can and do  have multiple programs operating under different authorities. Some  requirements, such as cost neutrality and maintenance of expenditures,  are applicable only to specific program options.  In addition, under  Community First Choice programs, states receive a 6 percentage point  increase in their federal matching rate for personal care and other home-  and community-based services.
The nature of HCBS can complicate both federal and state oversight,  including understanding the time frames in which services were delivered,  the types of services delivered, and the providers delivering services  billed to and paid for by Medicaid. According to numerous HHS OIG  reviews and CMS’s annual review of Medicaid improper payments, the  provision of Medicaid personal care services is at high risk for improper  payments. For example:  In 2012, the OIG issued a report synthesizing results from 23  individual reviews of states’ programs conducted over a 6-year  timeframe between 2006 and 2012. Then, in October 2016, it issued  an investigative advisory to CMS regarding Medicaid personal care  services based on more than 200 investigations opened since the  2012 report.  The HHS OIG concluded that existing controls and  safeguards intended to prevent improper payments in the Medicaid  program and to ensure patient safety and quality of care were often  ineffective. Problems the HHS OIG found included: lack of details on  personal care services claims, including missing dates for when  services were provided and lack of information identifying the provider  of services; lack of evidence that services were rendered; and lack of  prepayment controls to prevent payments for home-based personal  care services when a beneficiary is in an institution. The HHS OIG  also noted that federal and state Medicaid investigations have found  an increasing volume of fraud involving personal care attendants. Of  particular concern were personal care services provided under the  Participant-Directed Option, where the beneficiary has direct  responsibility over the care they receive and a budget to pay personal  care attendants. These findings highlight the need to have better  information about the identity of the individuals providing personal  care services.
CMS reported for 2014 that Medicaid personal care services  accounted for an estimated $2.2 billion in improper fee-for-service  payments and had the third-highest improper payment rate of the  major categories of service, estimated at 6.3 percent. Factors that  CMS found contributed to improper personal care services payments  included a lack of documentation verifying that beneficiaries received  services; a lack of documentation of the specific services provided;  and missing or incorrect documentation on the amount, or units, of  services provided.
section_title: Two CMS Systems Collect Data on the Provision of and Spending on Personal Care Services, and the Data Suggest Wide Variations among States
paragraphs: Two CMS data systems collect Medicaid data from providers’ records of  services rendered and total Medicaid expenditures by broad Medicaid  categories of service, including for personal care services. Based on our  assessment of the data collected from the two data systems, these data  can be reliably used to provide a summary description of the provision of  and spending on personal care services, including aggregate annual  spending and proportion of Medicaid beneficiaries that received these  services. These data suggest wide variation among states in the provision  of and spending on personal care services.
subsections: section_title: Two CMS Systems Collect Data on the Provision of and Spending on Medicaid Personal Care Services
paragraphs: Two CMS data systems collect data related to the provision of and  spending on Medicaid personal care services at the state and national  level. Both data systems contain data collected by states and submitted  to CMS. Each system has a different purpose and the type and scope of  the data each collects reflects its purpose. The Medicaid Statistical  Information System (MSIS) was established to collect detailed information  on the services rendered to individual Medicaid beneficiaries. The  Medicaid Budget and Expenditure System (MBES) was established for  states to report total aggregate expenditures for Medicaid services across  broad service categories.
subsections: section_title: Medicaid Statistical Information System
paragraphs: MSIS is a national data system maintained by CMS that collects data  from state records on fee-for-service claims for services rendered to  Medicaid beneficiaries and managed care encounter records for services  delivered through managed care. Each state transmits digital files to CMS  quarterly using MSIS. MSIS was designed to provide CMS with a  detailed, national database of Medicaid program information to support a  broad range of program management functions, including health care  research and evaluation, program utilization and spending forecasting,  and analyses of policy alternatives.
MSIS collects information on the beneficiary receiving services and on the  services provided. Beneficiary information includes a beneficiary’s age  and basis for Medicaid eligibility. Information on the services provided  includes:  the date the service was provided;  the place where the service was provided;  the general type of service provided; a procedure code that identifies the specific service provided; and a provider identification number that identifies the Medicaid provider  who rendered services.
Payment information is collected for fee-for-service claims, which are paid  by the state, but not for managed care encounters, which are paid for by  managed care organizations that contract with the state. Federal law  requires that all data submitted be consistent with the standardized MSIS  format and data elements as a condition of receiving federal  reimbursement for mechanized claims processing systems.
CMS reviews these MSIS files for initial quality and proper formatting and  returns any files that do not pass its quality tests back to states for  correction and resubmission. State MSIS submissions are compiled into  calendar year data sets that provide beneficiary-level data on eligibility,  service utilization, and payments for every state Medicaid program. CMS  can make the data files available for analysis to researchers and others  that submit a data use agreement approved by CMS.
section_title: Medicaid Budget and Expenditure System
paragraphs: MBES is a national expenditure reporting system that collects each  states’ total aggregate Medicaid expenditures reported to CMS by broad  categories of service for the purpose of states’ obtaining the federal share  of their payments to providers and for other approved expenditures.
States are required to use this web-based system to input and transmit  electronically a form referred to as the CMS-64 on a quarterly basis.
MBES contains state Medicaid expenditures in over 80 broad categories  of services and total expenditures for each state. These data come from  CMS-64 reports, which CMS requires states to use to report their  Medicaid expenditures through specified, standard categories of service  such as inpatient hospital services, nursing facility services, physician  services, and HCBS services by type of program.  For each category of  service, the CMS-64 collects a state’s total Medicaid expenditure, the  federal share, and the nonfederal share. The CMS-64 does not collect  beneficiary-specific payment information or expenditures for specific  types of services. For example, all expenditures for regular inpatient  hospital services are reported on one category-of-service line. Data from  the CMS-64 do, however, represent the most reliable and comprehensive  information on aggregate Medicaid spending, including spending on  program administration.
In addition to its primary purpose of capturing states’ expenditures for  purposes of states obtaining federal matching payments for their  expenditures, MBES data are used to produce national and state-specific  Medicaid expenditure reports by the standard categories of services.  CMS compiles the reports by federal fiscal year and makes these yearly  expenditure files available to the public on its website.
section_title: Data Available from the Two CMS Systems Suggest Wide Variations across Reviewed States in the Provision of and Spending on Personal Care Services
paragraphs: Available information from MSIS and MBES suggest that the provision of  and spending on personal care services varies widely across states.  Specifically, the most recent and complete MSIS claims data available to  us for 35 states from calendar year 2012 suggest variation across these  states in the provision of personal care services, including differences in:  the types of beneficiaries served, the delivery model under which they are  served (fee-for-service or managed care), and the average payment per  beneficiary. Similarly, MBES expenditure data for all states for calendar  years 2012 through 2015 show variation across states in total spending  on personal care services and spending by type of program.
subsections: section_title: Data from the Medicaid Statistical Information System
paragraphs: Analysis of calendar year 2012 MSIS data for 35 states indicates that,  overall, nearly 3 percent of all Medicaid beneficiaries in these states— about 1.5 million individuals—received personal care services at least  once. However, the percentage of beneficiaries receiving services varied  among the states. As illustrated in figure 2, the percentage of each state’s  Medicaid beneficiaries who used personal care services at least once  ranged from less than 1 percent of beneficiaries in 9 states to almost 17  percent in 1 state.
MSIS data also show wide variation in the percentage of beneficiaries  who received personal care services across the four main eligibility  groups we analyzed (children, adults, aged individuals, and disabled  individuals).  For example, as illustrated in figure 3, all 35 of the states  with available data provided personal care services to aged and disabled  beneficiaries, but some more so than others. Across the 35 states, about  13 percent of aged and about 9 percent of disabled beneficiaries received  personal care services in 2012. The proportions receiving personal care  services in individual states ranged from less than 1 percent to about 32  percent of aged and from less than 1 percent to 36 percent of disabled  beneficiaries. The average percentage of adults and children who  received personal care services across all the 35 states was much  smaller than the aged and disabled groups (less than 1 percent), and the  data suggest that a few states did not provide any personal care services  to individuals in the adult and children groups.
When examining just those beneficiaries who received personal care  services in 2012, MSIS data show that most were in the disabled or aged  eligibility categories, but that the composition of each state’s recipients  varied widely. Of the nearly 1.5 million beneficiaries who received  personal care services that year in the 35 states, the vast majority— nearly 86 percent—were either aged or disabled. Disabled beneficiaries  represented 48 percent and aged beneficiaries represent 37 percent of all  those receiving personal care services. Children and adults represented a  much smaller share of the beneficiaries that received personal care  services in 2012 in these states, at 10 percent and 4 percent, respectively  (see figure 4). However, children and adults made up more than 90  percent of the disabled group in the 35 states.
The 2012 MSIS data for the 35 states show that most personal care  services are provided under a fee-for service delivery model, rather than  under a managed care delivery model. About 80 percent of personal care  services in the 35 states were provided under a fee-for-service model,  with 20 percent delivered through a managed care model. Most of the  claims under fee-for-service models were for services provided to  disabled beneficiaries, while most of the services under managed care  models were provided to aged beneficiaries (see figure 4).  The majority  of the 35 states (20) provided 100 percent of their personal care services  under a fee-for-service model, and nearly all of the remaining states  provided the majority of their services (i.e., greater than 50 percent) this  way; only 3 states provided a majority of personal care services through a  managed care model. No states relied exclusively on a managed care  model for all beneficiaries, although one state—Tennessee—used a  managed care model exclusively for the adult eligibility group.
MSIS fee-for-service claims data for 2012 show variation in the average  total payments made per beneficiary and by type of beneficiary for  personal care services across the 35 states. For beneficiaries who  received personal care services under a fee-for-service model that year,  the average total payment per beneficiary was $9,785. As illustrated in  figure 6, average total payments per beneficiary varied across eligibility  groups. For example, average total payments for personal care services  per beneficiary ranged from $1,742 for adults to more than $10,786 for  disabled beneficiaries. In addition, average total payments varied  significantly across states. Across all eligibility groups, average total  payments for personal care services ranged from $2,639 in Wyoming to  $33,857 in Delaware, a nearly 13-fold difference. For disabled  beneficiaries, the range in average total payment was even greater—from  $3,131 to $48,856—a nearly 16-fold difference, also represented by  Wyoming and Delaware.
Expenditure data contained in the MBES, as reported by all 50 states and  the District of Columbia, revealed total personal care spending on a fee- for-service basis of about $15 billion in calendar year 2015.  As  illustrated in figure 6, however, more than three-quarters of the reported  spending was for personal care services provided under two types of  programs: State Plan Personal Care Services and Community First  Choice. Specifically, based on state-reported data, spending under State  Plan Personal Care Services was slightly higher in 2015 at nearly $6  billion than the $5.7 billion in spending for Community First Choice. These  two programs have fewer and less stringent federal oversight  requirements than the HCBS Waiver and State Plan HCBS programs. In  contrast, spending on personal care services under these two programs  was less overall, with spending on personal care services under HCBS  Waiver programs totaling $3.2 billion and $34 million under State Plan  HCBS programs. For HCBS Waiver and State Plan Personal Care  Services programs, states reported less than 1 percent of their  expenditures for personal care services under the Participant-Directed  Option.
The state-reported expenditure data contained in the MBES reveal how  total spending on personal care services has changed over time, both in  total amounts and in the amounts associated with each program type. As  illustrated in in figure 8, state-reported expenditure data suggest that after  a spending increase of over $2 billion in from calendar year 2012 to 2013,  total fee-for-service spending on personal care services increased more  slowly, by about $100 million a year from 2013 through 2015.  Moreover,  the data show a significant share of spending on personal care services  under the Community First Choice program beginning in 2013.
section_title: Limitations in Data Hinder CMS Oversight of Personal Care Services, and Planned Improvements May not Address Data Limitations
paragraphs: CMS’s two data systems provide some basic and aggregate information  on the provision of and spending on personal care services. However, in  order to provide effective oversight, CMS needs detailed data on personal  care services that are timely, complete, consistent, and accurate,  including data on who provided the service, the type and amount of  services provided, when services were provided, and the amount the  state paid for services. We found that the detailed data collected by the  two systems were not always timely, complete, consistent, or accurate,  which limits the usefulness of these data for CMS oversight.
subsections: section_title: CMS Does Not Collect Sufficiently Complete or Consistent Data from States on Medicaid Personal Care Services Needed to Monitor the Provision of and Spending on These Services
paragraphs: CMS does not collect data that are timely, or are sufficiently complete,  consistent, and accurate to effectively monitor the provision of and  spending on Medicaid personal care services.
subsections: section_title: Medicaid Statistical Information System Data Collected by CMS Are Not Timely and are Often Incomplete or Inconsistent
paragraphs: Medicaid personal care services claims and encounter data collected by  CMS through MSIS are not timely, and available data are often  incomplete and inconsistent, based on our analysis of 2012 data from 35  states. States are required by federal law to develop and operate their  own claims-processing and information-retrieval systems and submit data  to CMS, through MSIS, that includes information on the specific services  provided, the beneficiaries receiving these services, and the providers  delivering these services.  Federal law requires states to submit data  that are consistent with the standardized MSIS format and data elements  as a condition of receiving federal reimbursement for mechanized claims  processing systems. CMS has established specific reporting guidance for  some of these data elements but not for others. MSIS was designed to  provide CMS with a detailed, national database of Medicaid program data  to support a broad range of program management functions, including  health care research and evaluation by CMS and other researchers,  program utilization and spending forecasting, and analyses of policy  alternatives.
The information CMS collects through MSIS from states is not timely.  Data are typically not available for analysis and reporting by CMS or  others for several years after services are provided. This happens for two  reasons. First, although states have 6 weeks following the completion of a  quarter to report their claims data, their reporting can be delayed as a  result of providers and managed care plans not submitting data in a  timely manner, according to the CMS contractor responsible for compiling  data files of Medicaid claims and encounters. For example, providers may  submit claims for fee-for-service payments to the state late and providers  may need to resubmit claims to make adjustments or corrections before  they can be paid by the state. Second, the contractor analyzes the MSIS  data submitted by the states and compiles annual person-level claims  files that are in an accessible format. The contractor also conducts  quality-control checks and corrects data errors and consolidates multiple  records that may exist for one claim. This process, for one year of data,  can take several years and, as a result, when information from claims and  encounters becomes available for use by CMS for purposes of program  management and oversight, it can be several years old.
Information CMS collects from states through MSIS is also incomplete in  two ways. First, specific data on beneficiaries’ personal care services  were not included in the calendar year 2012 MSIS data for 16 states.  Nevertheless, these 16 states received federal matching funds for the  $4.2 billion in total fee-for-service payments for personal care services  that year—about 33 percent of total expenditures for personal care  services reported by all states (see figure 9).
Second, even for the 35 states for which 2012 MSIS claims and  encounter data were available, certain data elements collected by CMS  were incomplete. For example, for the records we analyzed, 20 percent  included no payment information, 15 percent included no provider  identification number to identify the provider of service, and 34 percent  did not identify the quantity of services provided (see figure 10).
Incomplete data limit CMS’s ability to track spending changes and  corroborate spending with reported expenditures because they lack  important information on a significant amount of Medicaid payments for  personal care services. For example, among the 2012 claims for personal  care services under a fee-for-service delivery model, claims without a  provider identification number accounted for about $4.9 billion in total  payments. Similarly, payments for fee-for-service claims with missing  information on the quantity of personal care services provided totaled  about $5.1 billion.
Even when key information was included in claims and encounter data, it  was often inconsistent, which limits the effectiveness of the data to  identify questionable claims and encounters. For purposes of oversight, a  complete record (claims or encounters) should include data for each visit  with a provider or caregiver, with specified dates of service, and it should  use a clearly specified unit of service (e.g., 15 minutes) along with a  standard definition of the type of service provided. These data allow CMS  and states to analyze claims to identify potential fraud and abuse. The  following examples illustrate inconsistencies in the data from the 35  states:
States used hundreds of different procedure codes for personal care  services. Procedure codes on submitted claims and encounters were  inconsistent in three ways: the number of codes used by states; the  use of both national and state-specific codes; and the varying  definitions of different codes across states. More than 400 unique  procedure codes were used by the 35 states. CMS does not require  that states use standard procedure codes for personal care services;  instead, states have the discretion to use state-based procedure  codes of their own choosing or national procedure codes. As a result,  the procedure codes used for similar services can differ from state to  state, limiting CMS’s ability to use this data as a tool to compare and  track changes in the use of specific personal care services provided to  beneficiaries because CMS cannot easily compare similar procedures  by comparing service procedure codes.
States used widely varying units of service associated with numerous  procedure codes. As a result of the numerous procedure codes used  by states, the units of service for personal care services varied widely.  Depending on the code used, units of service can be in 15-, 30-, or  60-minute increments, or as per diem codes. The absence of  information about the unit of service in the millions of records for  personal care services, combined with states’ use of hundreds of  different codes, makes it difficult to efficiently assess the extent that  services provided are reasonable. Claims and encounter records  generally include the procedure code, but do not identify the unit of  service associated with the code. Claims for multiple units of service  may be reasonable if the unit represents a 15-minute increment.  However, if the unit of service represents an hour the number of units  billed may not be reasonable. For example, for a beneficiary requiring  2 hours of personal care services, a claim containing 8 units in a  single day is reasonable if the unit of service is 15 minutes but would  not be reasonable if the unit of service is an hour. Without consistent  procedure codes with defined units of service, the utilization and  expenditure analyses done by CMS and others with the data are  difficult to complete, including assessing the reasonableness of the  amount of services claimed and identifying potentially inappropriate  claims. In general, we found that claims for 2012 represented large  quantities of services. Among claims with valid quantity of service  data—that is, where the claim identified a procedure code and the  number of units provided—quantities reported ranged from 1 unit to  more than 27,000 units, with an average quantity of 15 units. For the  most commonly used procedure, which represents 15 minutes of  service by a personal care attendant, the average quantity would  translate into nearly 4 hours of personal care services billed as a  single claim. For seven states, 100 percent of cases were missing  information on the quantity of services delivered.
State-reported dates of service were overly broad. In the 35 states  whose claims we could review, some claims for personal care  services had dates of services (i.e., start and end dates) that spanned  multiple days, weeks, and in some cases months. For 12 of the 35  states, 95 percent of their claims were billed for a single day of  service. However, in other states, a number of claims were billed over  longer time periods. For example, for 10 of the states, 5 percent of  claims covered a period of at least 1 month, and 9 states submitted  claims that covered 100 or more days. When states report dates of  service that are imprecise, it is difficult to determine the specific date  for which services were provided and identify whether services were  claimed during a period when the beneficiary is not eligible to receive  personal care services—for example, when hospitalized for acute  care services.
Others have also found the poor quality of personal care services data  submitted to CMS to be a long-standing problem. Based on numerous  reviews of states’ personal care services programs, the HHS OIG  determined that the limited or missing information on personal care  service providers, dates of service, and quantity of services were an  impediment to effective program integrity and oversight.  The HHS OIG  found that the data could not be used to accurately identify overlapping  claims because it was common for providers to submit one claim for  multiple instances of personal care services provided over days, weeks,  or months. The HHS OIG also found that with overlapping dates it is  difficult to identify instances when beneficiaries were receiving  institutional services and therefore were ineligible for home-based  personal care services. Further, the HHS OIG found that claims for  personal care services did not include unique identifiers for personal care  attendants and that cases of fraud often involved impossible or  improbable volumes of service or service patterns, for example, claims for  more than 24 hours in a day or claims for services in multiple beneficiary  homes during the same day. The HHS OIG concluded that, if the  availability and quality of personal care data were improved, investigators  could analyze the data to identify and follow up on aberrancies and  questionable billing patterns. Based on its findings, the OIG  recommended that CMS takes steps to reduce variation in how states are  documenting claims for personal care services, among other  recommendations.
section_title: Medicaid Budget and Expenditure System Data Collected by CMS Are Not Always Accurate or Complete
paragraphs: Medicaid personal care services expenditure data collected from states  by CMS and contained in the MBES are not always accurate or complete,  according to our analysis of states’ reported expenditures for calendar  years 2012 through 2015. CMS requires states to report expenditures for  personal care services on specific lines on the CMS-64. The required  reporting lines correspond with the specific types of programs under  which states have received authority to cover personal care services, and  can affect the federal matching payment amounts states receive when  seeking federal reimbursement. For example, a 6 percent increase in  federal matching is available for services provided through the  Community First Choice program. For personal care services provided  under the State Plan PSC program, CMS requires states to report their  expenditures on one of two lines of the CMS-64.  For personal care  services provided under the three other programs—HCBS Waiver, State  Plan HCBS, and Community First Choice—CMS requires states to report  their expenditures for personal care services separately from other types  of services provided under each program. CMS requires these states to  submit expenditure amounts for specific service types on what CMS  refers to as feeder forms—that is, expenditure lines on the CMS-64 that  feed into the total HCBS spending amount under a state’s HCBS Waiver  program. The MBES system automatically generates the state’s total  HCBS Waiver program spending by combining the expenditures reported  for each of the various specific services.
We found that not all states are reporting their personal care services  expenditures accurately, and as result, personal care services  expenditures may be underreported or reported in an incorrect category.  We compared personal care services expenditures from all states’ CMS- 64 reports for calendar years 2012 through 2015 with each state’s  approved programs during this time period and found that about 17  percent of personal care services expenditure lines were not reported  correctly. As illustrated in figure 11, nearly two-thirds of the reporting  errors were a result of states not separately identifying and reporting  personal care services expenditures using the correct reporting lines, as  required by CMS. Without separate reporting of personal care  expenditures as required, CMS is unable to monitor how spending  changes over time across the different program types and have an  accurate estimate of the magnitude of potential improper payments for  personal care services. The other types of errors involved states  erroneously reporting expenditures that did not correspond with approved  programs. As a result, CMS is not able to efficiently and effectively  identify and prevent states from receiving federal matching funds  inappropriately, in part, because it does not have accurate fee-for-service  claims data that track payments by personal care program type that is  linked with expenditures reported for purpose of federal reimbursement.
These errors demonstrate that CMS is not effectively ensuring its  reporting requirements for personal care expenditures are met. By not  ensuring that states are accurately reporting expenditures for personal  care services, CMS is unable to accurately identify total expenditures for  personal care services, expenditures by program, and changes over time.  According to CMS, expenditures that states report through MBES are  subject to a variance analysis, which identifies significant changes in  reported expenditures from year to year. However, CMS’s variance  analysis did not identify any of the reporting errors that we found. CMS  officials told us that they will continue to review states’ quarterly  expenditure reports for significant variances and follow up on such  variances.
section_title: CMS is Taking Steps to Improve Data Collected from States, but Has Not Yet Fully Addressed Completeness, Consistency, and Accuracy of Personal Care Services Data
paragraphs: CMS has two ongoing actions intended to improve Medicaid claims data  collected from states. First, CMS is developing an enhanced Medicaid  claims data system—called the Transformed-Medicaid Statistical  Information System (T-MSIS)—that will replace MSIS. Enhancements  being made under T-MSIS include requiring states to report more timely  data, additional claims information, and improved CMS checks on the  quality of data submitted. Specifically, states will be required to do the  following, according to CMS:  report data more frequently than they are now required (monthly  rather than quarterly),  submit a new data file reporting information on the providers of  services, including provider identification numbers, and  identify for each claim which expenditure line on the CMS-64  corresponds with the type of service covered by the claim.
CMS is also improving the quality of data reported by states by subjecting  states’ submitted data to thousands of electronic checks to identify  obvious errors.
Despite the promise of T-MSIS, implementation has faced delays and is  not yet complete. Implementation of T-MSIS by all states has been  delayed for several years. The original date for nationwide  implementation was January 2014; however, according to CMS officials,  as of July 2016, 10 states were submitting T-MSIS data to CMS, but not  all of the required data were submitted. The agency expects that all  states will be submitting T-MSIS claims data by the end of calendar year  2016. However, reaching this goal depends on the remaining states’  timeliness in completing the work needed to successfully transmit the T- MSIS data. It could be a number of years before all states are submitting  complete T-MSIS data that include all required data elements, according  to officials.
Once all states are reporting T-MSIS claims data, including personal care  services claims, key data limitations we identified associated with MSIS  claims may not be fully addressed. This is because under T-MSIS, CMS  has not taken steps to improve the completeness and consistency of  personal care services claims data. For example, CMS has not issued  guidance to establish: a uniform set of procedure codes to be used by all states to more  consistently document type and quantity of personal care services  rendered;  state reporting requirements for provider identification numbers for  personal care attendants. appropriate time periods covered by individual claims—that is, the  maximum number of days that a personal care attendant may include  in a single claim.
In addition, planned improvements in T-MSIS to identify the  corresponding expenditure line on the CMS-64 may not be realized. CMS  has stated a goal that T-MSIS would identify, for each claim paid in a fee- for-service delivery system, the expenditure line on the CMS-64 that  corresponds with the type of service covered by the claim. This goal  would allow better accounting for the claims paid and the services for  which the claims were made. Further, this linking of the claims with the  associated expenditure line could facilitate more accurate state reporting  of expenditures on the CMS-64 and allow CMS to effectively reconcile  each state’s payments for personal care services with their reported  expenditures. However, CMS’s plans to have states link their T-MSIS  claims with CMS-64 expenditure lines will be effective only for one  personal care services program. For three other programs, T-MSIS  claims are not required to be associated with a specific service type.  Rather, the claims are identified simply as an HCBS service under one of  the three programs. Without this information, T-MSIS claims for personal  care services cannot be cross-walked with CMS-64 data on the  expenditures for those services.
CMS’s second ongoing action to improve Medicaid claims data collected  from the states is the establishment of a new Division of Business and  Data Analysis. This division is intended to help the agency ensure the  quality of T-MSIS data. According to CMS officials, MSIS claims data  have generally not been used for program monitoring and oversight,  because issues with data timeliness, completeness, and consistency  have limited their usefulness for these purposes. Development of T-MSIS  is intended to address data issues and the establishment of the new  division is intended to facilitate the use of state-collected data by CMS.  According to CMS officials, the new division is intended to: work with states to help ensure the completeness and consistency of  claims data as states transition to T-MSIS,  improve the quality of the data by analyzing the data for anomalies  and errors that can be corrected, build the agency’s capacity to use the data for program monitoring,  oversight, and reporting, and provide data analysis support for different CMS program offices,  including the offices that oversee states’ personal care services  programs.
According to CMS, the improved data will be used by CMS for program  monitoring, policy implementation, improving beneficiary health care, and  lowering costs. CMS efforts in building the agency’s data analysis  capacity are underway but in the early stages. Improving the quality of the  data is a continuous process that depends on identifying specific data  needed for oversight functions. According to CMS officials responsible for  implementing T-MSIS, while T-MSIS has the capability for improving the  quality of data submitted by states, policies and guidance are needed  regarding how CMS will use it. CMS recognizes it has an important  responsibility to support Medicaid agencies and leverage program data to  protect the Medicaid program from fraud, waste, and abuse in part by  improving the quality and consistency of Medicaid data reported to CMS  and improving the analysis of this data to identify potential risks.   However, as of September 2016, neither the division nor the CMS offices  responsible for managing different personal care services programs has  identified or developed plans for analyzing and using personal care  services data for program management and oversight, such as analytical  tools and standard reports. Doing so could facilitate necessary changes  to improve the quality of the data, clarify T-MSIS reporting requirements,  facilitate the integration of claims and expenditure data, and increase the  usefulness of claims data for oversight.
Federal agencies should collect data that are reasonably free from error  and bias, and represent what they purport to represent. Standards for  Internal Control in the Federal Government indicate that appropriate data  must be collected to enable program oversight and establish a strong  internal control environment.  Timely, relevant, and reliable data are  needed for decision making, external reporting, and monitoring program  operations—for example, to conduct management functions such as  tracking the growth in use of and spending on specific Medicaid services;  to identify trends related to utilization and payments per service, provider,  and beneficiary; and to identify areas at higher risk for fraud, waste, and  abuse. Without complete and consistent federal data collected from  states, CMS is unable to conduct effective oversight and perform key  management functions specific to personal care services, such as  ensuring that states report personal care services expenditures correctly;  claims for enhanced federal matching funds are accurate, verifying states’  historical spending levels for determining maintenance of expenditure  requirements, linking payments from claims with reported expenditures,  or providing technical assistance to states to identify improper personal  care services payments.
section_title: Conclusions
paragraphs: Personal care services are an important Medicaid service for millions of  vulnerable Medicaid beneficiaries. Federal and state spending on  Medicaid home- and community-based services, including personal care  services, has increased significantly in the last two decades and this  growth is projected to continue. These services present high-risk  payments for the Medicaid program and have one of the highest improper  payment rates of all Medicaid services. In light of these factors, CMS  needs complete and consistent information to effectively monitor and  oversee these services, which it currently does not collect from states.  We found that the data collected from states were often incomplete,  inconsistent, or inaccurately reported. CMS’s efforts to improve the quality  and accuracy of the data collected from states have not resulted in  guidance to states on reporting of personal care services data or plans for  using the data for oversight purposes. As a result, issues with the  completeness, consistency, and accuracy of personal care services data  reported by the states are likely to continue. With better data, CMS could  more effectively perform key management functions related specifically to  personal care services, such as ensuring that states’ claims for enhanced  federal matching funds are accurate and that maintenance of expenditure  and cost neutrality requirements are met.
section_title: Recommendations for Executive Action
paragraphs: To improve the collection of complete and consistent personal care  services data and better ensure CMS can effectively monitor the states’  provision of and spending on Medicaid personal care services, we  recommend CMS take the following four steps:
Establish standard reporting guidance for personal care services  collected through T-MSIS to ensure that key data reported by states,  such as procedure codes, provider identification numbers, units of  service, and dates of service, are complete and consistent;
Better ensure, for all types of personal care services programs, that  data on provision of personal care services and other HCBS services  collected through T-MSIS claims can be specifically linked to the  expenditure lines on the CMS-64 that correspond with those particular  types of HCBS services;
Better ensure that personal care services data collected from states  through T-MSIS and MBES comply with CMS reporting requirements;  and
Develop plans for analyzing and using personal care services data for  program management and oversight.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to HHS for review and comment. HHS  concurred with two of our four recommendations, specifically, that the  agency better ensure that states comply with reporting requirements and  develop plans for analyzing and using data. HHS did not explicitly agree  or disagree with the two other recommendations—that the agency  establish standard reporting guidance and improve the linkages between  CMS-64 and T-MSIS data on personal care services. However, in its  response to these two recommendations, HHS stated that the  Department had recently published a request for information in the  Federal Register intended to gather input on additional reforms and policy  options to strengthen the integrity of service delivery and appropriate  reporting standards for personal care services and other HCBS. HHS  indicated that the information collected will be used to determine the  agency’s next steps. In light of our findings of inconsistent and incomplete  reporting of claims and encounters, errors in reporting expenditures, and  the high risk of improper payments associated with personal care  services, we believe that action in response to these two  recommendations is needed to improve CMS oversight.
HHS also provided technical comments, which we incorporated as  appropriate. HHS’s comments are reprinted in appendix I.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of Health  and Human Services and other interested parties. In addition, the report  will be available at no charge on the GAO website at http://www.gao.gov  If you or your staffs have any questions about this report, please contact  me at (202) 512-7114 or iritanik@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix II.
section_title: Appendix I: Comments from the Department of Health and Human Services
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact name above, Tim Bushfield, Assistant Director;  Perry Parsons, Analyst-in-Charge; Anna Bonelli; Christine Davis; Barbara  Hansen; Giselle Hicks; Laurie Pachter; Vikki Porter; Bryant Torres; and  Jennifer Whitworth made key contributions to this report.