A number of states still do not report required quarterly data about services provided to Medicaid beneficiaries enrolled in managed care—information that's crucial to running Medicaid and protecting it from fraudsters, according to a study HHS' Office of Inspector General released Monday.
States have gotten better in recent years at reporting encounter data—information detailing services provided to beneficiaries in capitated managed-care programs. But work remains, and the CMS should do more to improve reporting, according to the report.
In the third quarter of 2011, eight of 38 states reviewed failed to report encounter data from any managed-care entity to a national database called the Medicaid Statistical Information System by the required deadline. Another 11 states did not report the data for all managed-care entities.
“The high proportion of beneficiaries enrolled in managed care makes accurate 'encounter data' … essential for the oversight of Medicaid as well as prevention of fraud, waste and abuse,” according to the OIG report. The data are used for rate-setting, quality assurance, utilization review and evaluation of managed care entities' performance. About 70% of Medicaid beneficiaries are enrolled in managed care.
To get more states on board, the OIG recommended the CMS use its authority under the Affordable Care Act to “withhold appropriate federal funds, to an extent commensurate with the State's level of noncompliance” from states not meeting the reporting requirements. The OIG also recommended the CMS monitor encounter data to ensure states report data for all managed care entities.
In its response to the report, the CMS noted that it has already issued a notice of proposed rulemaking that would allow withholding funds from states not meeting requirements. That rule would also extend federal funding for information systems that could help states better collect and report encounter and other data, the CMS said.
The CMS also said it agrees that it should monitor encounter data, saying that it will “continue to work with States to ensure they submit accurate and timely data.” The CMS said it already works with states in a number of ways to help them collect and report the data.
The OIG, however, said in the report the CMS should do more.
“The issues we identified in this report occurred despite the CMS's current monitoring practices,” according to the OIG report. “We suggest that the CMS either increase its monitoring of encounter data that States submit to MSIS, or expand its efforts to assist States to correct deficiencies identified through that monitoring.”
The CMS did not immediately respond to a request for further comment Monday morning.
Matt Salo, executive director of the national Association of Medicaid Directors, said the issue of states not reporting encounter data is a “multi-layer problem.”
States, for example, might not send good data because they don't have the information technology tools to get it, he said. Plans might also not be getting quality data from providers, especially as they move more toward bundled payments and risk sharing.
“These types of payment reforms are clearly the future of the Medicaid program, but one of the downsides is that there is less and less incentive to send encounter data, when such data doesn't determine your payments,” Salo said in an email.
Salo also said he doesn't believe withholding funds from non-reporting states is the best way to improve reporting.
“If part of the challenge is that states need money in order to prioritize IT/systems build outs/upgrades/investments, making sure they have less money doesn't sound too productive,” Salo said.