OIG: Issues with encounter data hinder Medicare Advantage oversight

A new report from the HHS OIG points out that CMS hasn’t established performance measures that ensure Medicare Advantage plans are submitting records with complete and valid encounter data. (Pixabay)

Though collecting encounter data can aid the federal government’s oversight of Medicare Advantage plans, more must be done to ensure the accuracy of those data, according to the HHS Office of Inspector General.

The OIG details its concerns in a new report, which said that 28% of MA encounter records the agency reviewed from the first quarter of 2014 had at least one potential error. However, because the Centers for Medicare & Medicaid Services reported correcting the majority of those errors, just 5% of the records in the OIG’s review would actually contain a potential error.

Still, the report noted that some of the remaining data errors could raise concerns about the legitimacy of services documented in the data—such as records that lacked a beneficiary last name or a valid identifier for the billing provider. 

That’s significant because encounter data are among the factors that CMS uses to calculate MA plans’ risk scores, which help determine their reimbursement from the government. In fact, the Obama administration was pushing to make encounter data a bigger part of the risk-score formula—over the objections of insurers—while the Trump administration has slowed down the transition.

The OIG report also pointed out that CMS may not be asking for enough information from Medicare Advantage plans. For example, while the agency requires plans to submit identifiers for billing providers, it doesn’t make them submit identifiers for ordering or referring providers, “which limits the use of these data for vital program oversight and enforcement activities,” the report said. 

Further, while CMS’ edit process is supposed to reject data that fail certain standards, it hasn’t tracked whether MA plans respond when their data are rejected. CMS also hasn’t established performance measures that ensure the plans are submitting records with complete and valid data.

To correct these issues, the OIG recommends that CMS:

  • Take actions to address potential errors in the MA encounter data, such as introducing additional reject edits and restoring data if they were inappropriately removed in the edit process.
  • Provide targeted oversight of MA plans that submitted a higher percentage of records with potential errors (as the report found that just 1% of MAOs submitted 51% of the records with potential errors).
  • Ensure that billing provider identifiers are active and valid on all records.
  • Require MA plans to submit ordering and referring provider identifiers and ensure the submission of rendering provider identifiers for applicable records
  • Track how MA plans respond to edits that reject data.
  • Establish and monitor performance thresholds related to the plans’ submission of records with complete and valid data.

CMS agreed with some of the OIG’s recommendations, but it took issue with others. For example, it said tracking MA plans' response to rejected edits would place too much administrative burden on those plans. Also, it argued that requiring MA plans to submit ordering and referring provider identifiers would be difficult, as plans “often do not have this information available to report.”