In January 2012, CMS began phasing-in MA encounter data collection by  type of provider. Risk Adjustment

To risk adjust payments to MAOs, CMS calculates a risk score—the  expected health care expenditures for an enrollee compared with the  average health care expenditures of all beneficiaries—for each MA  enrollee and Medicare FFS beneficiary. MA Encounter Data Are More Comprehensive and Are Reported More Frequently than Current Risk Adjustment Data

Compared with information available in RAPS data, MA encounter data,  with more elements reported, provide CMS with more comprehensive  information on all enrollee diagnoses as well as the cost and types of  services and items provided to enrollees. In contrast, more provider  types report encounter data, significantly expanding the scope of sources  for diagnosis and other information. With MA Encounter Data at Expected Volume, CMS Will Begin Using Some Data for Risk Adjustment in 2015, but Its Plans for Other Uses Remain Undeveloped

CMS is receiving MA encounter data from nearly all MAOs on all types of  services at the monthly volume that CMS officials told us they expected. 1.) Accordingly, CMS’s plans remain undeveloped and it  has not established specific time frames for any of the following potential  uses outlined in 2008:   the agency has yet to determine
Revise CMS’s risk adjustment model for MA payments. CMS Has Performed Some Steps to Ensure That MA Encounter Data Are Complete and Accurate but Has Not Yet Fully Validated the Data

As of May 2014, CMS had taken some, but not yet all, appropriate  actions—as outlined in its Medicaid encounter data validation protocol— to ensure that MA encounter data are complete and accurate before they  are used. 2.) Although  CMS intends to perform these additional quality assurance activities,  CMS officials have not specified a time frame for doing so. CMS Has Established and Publicized MA Encounter Data Submission Requirements but Has Not Developed Benchmarks for Completeness and Accuracy

CMS has established certain requirements for the MAOs’ collection and  submission of encounter data. While it has focused its efforts on educating plans about reporting  requirements, CMS has not yet established benchmarks for encounter  data completeness and accuracy and does not have a timeline for  developing such benchmarks. CMS Performs Automated Checks for Completeness and Accuracy of MA Encounter Data

CMS performs automated checks to determine encounter data quality  and identify submission issues, such as whether certain data elements  are missing, and sends automated notifications to MAOs. Generating basic statistics from the encounter data. Analyzing encounter data elements by demographic group,  provider type, and service type. However, CMS has yet to develop specifics on how or when it will use  encounter data for a variety of program management purposes. Furthermore, CMS’s decision to use MA encounter data in 2015 may be  premature because the agency has not yet fully validated the data. Recommendations for Executive Action

To ensure that MA encounter data are of sufficient quality for their  intended purposes, the Administrator of CMS should establish specific plans and time frames for using the data for all  intended purposes in addition to risk adjusting payments to MAOs and  complete all the steps necessary to validate the data, including  performing statistical analyses, reviewing medical records, and  providing MAOs with summary reports on CMS’s findings, before  using the data to risk adjust payments or for other intended purposes. HHS noted that it  has developed lists of the purposes for which it intends to use the data. Appendix I: Select Centers for Medicare & Medicaid Services (CMS) Outreach Efforts on Medicare Advantage (MA) Encounter Data

Description  CMS organized this meeting with Medicare Advantage  organizations (MAO) to disseminate information on the  requirements for encounter data submission, the transition  to submitting encounter data, and the schedule for  encounter data implementation.
Why GAO Did This Study

Medicare Advantage—the private plan alternative to the traditional Medicare program—provides health care for nearly 15.5 million enrollees, about 30 percent of all Medicare beneficiaries. After a multiyear rollout, CMS began collecting encounter data in January 2012. GAO was asked to review CMS's plans for using MA encounter data and its efforts to validate the data's quality.
This report examines (1) how the scope of MA encounter data compare with CMS's current risk adjustment data, (2) the extent to which CMS has specified plans and time frames to use encounter data for risk adjustment and other purposes, and (3) the extent to which CMS has taken appropriate steps to ensure MA encounter data's completeness and accuracy. In addition to reviewing laws, regulations, and guidance on MA encounter data collection and reporting, GAO interviewed CMS officials and representatives of MAOs. GAO also compared CMS's activities to the protocol CMS developed to validate Medicaid encounter data—comparable data collected and submitted by entities similar to MAOs.

What GAO Found

The Centers for Medicare & Medicaid Services (CMS) is collecting Medicare Advantage (MA) encounter data—information on the services and items furnished to enrollees—that are more comprehensive than the beneficiary diagnosis data the agency currently uses to risk adjust capitated payments to MA organizations (MAO). CMS, an agency within the Department of Health and Human Services (HHS), makes these adjustments to reflect the expected health care costs of MA enrollees. Encounter data have many more elements—including procedure codes and provider payments—from a wider range of provider types—such as home health agencies and skilled nursing facilities—thus expanding the scope of sources for diagnosis and other information.
CMS has not fully developed plans for using MA encounter data. The agency announced that it will begin using diagnoses from both encounter data and the data it currently collects for risk adjustment to determine payments to MAOs in 2015. However, CMS has not established time frames or specific plans to use encounter data for other potential purposes.
CMS has taken some, but not yet all, appropriate actions to ensure that MA encounter data are complete and accurate. (See figure.) The agency has established timeliness and frequency requirements for data submission, but has not yet developed requirements for completeness and accuracy. Also, the agency has certified nearly all MAOs to transmit encounter data. Although CMS performs automated checks to determine whether key data elements are completed and values are reasonable, it has not yet performed statistical analyses that could detect more complex data validity issues. For example, CMS has not yet generated basic statistics from the data by demographic group or provider type to identify inconsistencies or gaps in the data. Also, it has not yet reviewed medical records to verify diagnoses and services listed in encounter data or reported what it has learned about data quality to MAOs. Agency officials told GAO they intend to perform these additional quality assurance activities but have not established time frames to do so.

What GAO Recommends

CMS should establish specific plans for using MA encounter data and thoroughly assess data completeness and accuracy before using the data to risk adjust payments or for other purposes. While in general agreement, HHS did not specify a date by which CMS will develop plans for all authorized uses of encounter data and did not commit to completing data validation before using the data for risk adjustment in 2015.