States still fail to report managed care encounter data to prevent fraud

Years after the Office of Inspector General (OIG) identified serious problems with states reporting encounter data for managed care beneficiaries, a new government report shows that the same reporting lapses remain.

States are required to report information about services provided to beneficiaries enrolled in Medicaid managed care plans, commonly known as encounter data, to the Medicaid Statistical Information System (MSIS). The OIG notes that 70 percent of Medicaid beneficiaries receive services through managed care, so encounter data helps to prevent fraud, waste and abuse by ensuring those services are necessary.

A 2009 OIG report found that 15 states did not report encounter data to the MSIS. Although the report released Monday showed some improvement, eight of the 38 states examined by the OIG did not report encounter data from any managed care entity to the MSIS in the third quarter of fiscal year 2011. Additionally, 11 states only reported encounter data from some, but not all, managed care entities.

The OIG recommended that the Centers for Medicare & Medicaid Services withhold federal funding from state Medicaid programs that do not submit the required encounter data to the MSIS. The agency also called for better oversight from CMS to ensure all managed care entities were accounted for in each state.

The OIG is not the only watchdog agency to call for better Medicaid managed care oversight. Last year, the Government Accountability Office found that state and federal agencies aren't holding Medicaid managed care organizations accountable for identifying and preventing overpayments. In June, a Massachusetts audit revealed $500 million in improper payments linked the coverage through Medicaid managed care plans.

For more:
- here's the OIG report