4 ways states can improve MCO data reporting

Medicaid on paper and a stethoscope

Photo credit: Getty/designer491

It's more important than ever for states and Medicaid managed care organizations to provide accurate and timely encounter data for the federal government, according to a new report.

Medicaid enrollment increased by 27 percent since the passage of the Affordable Care Act, and 60 percent of all Medicaid beneficiaries are enrolled in comprehensive, risk-based managed care, notes the report from Navigant Consulting Inc. Premium payments to MCOs now exceed $161 billion--or 34 percent of all Medicaid spending--and encounter claims are the best source of information about how that money is spent.

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Encounter data also helps with capitation rate setting, the evaluation of MCO quality and cost performance, the contribution of value-based purchasing and care management and other key tasks.

Previously, standardized encounter data for the populations served by MCOs was scarce. To address that issue, the Medicaid managed care rule finalized this spring requires states to report encounter claims through the Transformed Medicaid Statistical Information System, the report notes.

The Centers for Medicare & Medicaid Services also has indicated states that report deficient encounter data could lose federal matching funds--and states could pass down those financial penalties to MCOs. Plus, MCOs that have mastered the encounter data submissions process will be in a more favorable position with states when their contracts are up for renewal, according to Navigant.

CMS will provide further guidance on its requirements for encounter data accuracy, but in the meantime, the report recommends that states:

  • Begin review of service level agreements for encounter data reporting well in advance of new contracts with MCOs
  • Have clear contract requirements that use sanctions and incentives to promote proper encounter reporting from MCOs
  • Employ staff dedicated to monitoring and enforcing encounter submissions
  • Work with MCOs to correct any issues with deficient encounter data reporting

More broadly, CMS is investing $5 billion a year into helping states improve their Medicaid IT systems, FierceHealthPayer has reported.

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