Medicaid MCOs must use caution when reporting data


Failure to report accurate data can result in significant penalties for Medicaid managed care plans.

Medicaid enrollment has increased by 27% since the passing of the Affordable Care Act (ACA)-with the majority of these new enrollees receiving benefits from risk-based MCOs. As states continue to expand Medicaid coverage, the use of managed care plans will only continue to increase, according to a new report.

Now more than ever, it’s vital that states operating managed care programs report accurate and timely encounter data to the federal government, according to the report by Navigant. Beginning this spring, states that report deficient encounter data could lose federal matching funds, and states could pass those financial penalties to MCOs.



“Failure to collect and report Medicaid encounter claims to states and CMS can result in significant penalties for Medicaid managed care plans,” says Jason Duhon, associate director, Navigant. “Since states are likely to use Medicaid MCO data to compare performance between Medicaid MCOs, the accuracy and quality of an MCO’s claims reporting can impact payment linked to quality outcomes, how an MCO is perceived by the public and potential Medicaid enrollees, and reflect the cost effectiveness of the MCO to the state and CMS. Encounter claims can also tell an MCO executive if the state capitation rates are adequate and where there might be gaps in care, and identify targeted areas for utilization and quality improvement.”

These CMS changes will spur states to scrutinize encounter data more closely, adds Duhon.

“Also, we predict states will introduce tougher sanction language in their next round of managed care contracts,” he says.

The study also:

• Outlines the uses for accurate and timely encounter reporting and why this is important to MCOs, states and CMS.

• Describes methods for monitoring and enforcing encounter quality and how CMS is measuring timeliness, accuracy and completeness.

• Defines the CMS encounter reporting requirements and related penalties for insufficient reporting.

• Predicts state and CMS next steps with regard to the encounter reporting requirement

“The new Medicaid managed care rule emphasizes the need for encounter reporting and the application of a state penalty on CMS funding for lack of adequate reporting,” Duhon says. “Whereas in the past states and CMS may have been lax in enforcing encounter reporting requirements, this is likely to change and states will strictly monitor this area in the near future. Also, CMS suggests that part of the rationale for their changes was to incentivize states to focus on T-MSIS [Transformed. Medicaid Statistical Information. System] development.”

Based on the study, Duhon says that it’s essential for states operating managed care programs to concentrate efforts and investments on providing complete MCO encounter data to:

·      Justify capitation rate payment levels to MCOs;

·      Assure access and quality standards are met; and

·      Oversee the appropriateness of Medicaid expenditures borne by states and the federal government.

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