	Background

Medicaid is a health care program jointly funded by the federal  government and states to provide care for certain low-income individuals. However,  MSIS data are not used to determine the federal share of Medicaid  expenditures, and are not used by the states to manage the daily  operations of their Medicaid programs. CMS-64 data are the  most-reliable and most-comprehensive information on Medicaid  spending. MSIS Medicaid expenditures for individual states were generally less than  CMS-64 amounts. In fiscal years 2007 through 2009, states’ MSIS  Medicaid expenditures ranged from 59 percent to 120 percent compared  with CMS-64. Specifically, MSIS Medicaid expenditures were less than CMS-64  amounts in 40 states. Differences Attributable to the Design of the Data Sets Could Be Quantified and Adjusted

MSIS is designed to report claims data, and CMS-64 is designed to  reimburse states for their federal share of Medicaid expenditures. After adjusting the MSIS data to include  expenditures for factors not related to individual enrollees’ claims,  Medicaid expenditures for the nation based on MSIS data were 92, 93,  and 94 percent of amounts shown in CMS-64 data, respectively, for fiscal  years 2007, 2008, and 2009. Some Medicaid health insurance payments were included in CMS-64  that CMS did not require states to report in MSIS.2009, total expenditures for the managed care and Medicaid premium  assistance expenditure category, as reported on CMS-64, were  approximately $82 billion, of which $3 billion were for Medicaid health  insurance payments not reported in MSIS. The remaining differences between the two data sets are potentially  explained by inconsistencies in CMS guidance and states’ reporting  practices, neither of which can be quantified. Taken together, these two data sets have the potential to offer a robust  view of the Medicaid program, enhancing CMS oversight of aggregate  spending trends, per beneficiary spending growth, and cross-state  comparisons, all of which could be useful in improving the financial  integrity of this high-risk program. However, the usefulness of these data sets as oversight tools is limited  because of delays in reporting and unnecessary inconsistencies between  the two data sets, both of which are inconsistent with federal internal  control standards. CMS has recently completed a pilot study aimed in part on improving  MSIS data. Agency Comments

HHS reviewed a draft of this report and provided technical comments,  which we incorporated as appropriate. To determine the extent to which MSIS and CMS-64 data sets on  Medicaid expenditures differ, nationally and by state, for fiscal years  2007 through 2009, we conducted a multistep analysis.expenditures from both data sets, we calculated the expenditures  reported in MSIS as a percentage of those reported in CMS-64. We also  determined the percentage difference in total expenditures between the  two data sets, by expenditure category. Step 1: Obtain MSIS and CMS-64 Data  In order to identify the baseline of total Medicaid expenditures for fiscal  years 2007 through 2009, we obtained from the Center for Medicare &  Medicaid Services (CMS) MSIS and CMS-64 data for each of the 50  states and the District of Columbia. Appendix II: Total Baseline Medicaid Expenditures in MSIS and CMS-64, by State, Fiscal Year 2009

	State Ohio

Appendix III: Total Adjusted Medicaid Expenditures in MSIS and CMS-64, by State, Fiscal Year 2009

	State Ohio

Appendix IV: Adjusted MSIS Expenditures as a Percentage of CMS-64, by State, Fiscal Year 2009

Appendix V: Adjusted MSIS Expenditures as a Percentage of CMS-64, by State and Expenditure Category, Fiscal Year 2009

Appendix V: Adjusted MSIS Expenditures as a  Percentage of CMS-64, by State and  Expenditure Category, Fiscal Year 2009 Adjustments were made by adding expenditures reported in CMS-64 to those reported in the  Medicaid Statistical Information System (MSIS). Major Management Challenges and Program Risks: Department of  Health and Human Services.
Why GAO Did This Study

CMS, within the Department of Health and Human Services, and state Medicaid agencies jointly administer the multibillion-dollar Medicaid program, which finances health care for certain low-income individuals. Medicaid is on GAOs high-risk list because of vulnerabilities to waste, fraud, abuse, and mismanagement. CMS has two data sets that report state Medicaid expenditures. The MSIS data set is designed to report individual beneficiary claims data. The CMS-64 data set aggregates states expenditures, which are used to reimburse the states for their Medicaid expenditures. However, neither data set provides a complete picture of Medicaid expenditures.
GAO was asked to compare MSIS and CMS-64 data. This report (1) examines the extent to which MSIS and CMS-64 expenditure data differ and (2) where possible, quantifies the identified differences between the two data sets. GAO reviewed documents, compared Medicaid expenditure data, and interviewed CMS and state officials. GAO used fiscal years 2007 through 2009 datathe most-recent and most-complete data available.

What GAO Found

Medicaid expenditures in the Medicaid Statistical Information System (MSIS) were generally less than CMS-64 amounts. National expenditures in MSIS were 86, 87, and 88 percent of the amounts in CMS-64 in fiscal years 2007 through 2009, respectively. In fiscal year 2009, MSIS expenditures for states ranged from 59 to 119 percent of CMS-64. Specifically, 40 states reported lower expenditures in MSIS than CMS-64; 5 states and the District of Columbia reported higher expenditures; and 5 states reported similar levels of expenditures.
GAO was able to quantify some, but not all, of the identified differences in expenditures between MSIS and the CMS-64.
GAO adjusted MSIS for expenditures that were not attributed to individual beneficiaries--such as prescription drug rebates. These adjustments increased MSIS to 92, 93, and 94 percent of the amounts in CMS-64 in fiscal years 2007 through 2009, respectively.
GAO could not account for the remaining differences in part because of inconsistencies in the Centers for Medicare & Medicaid (CMS) guidance between the two data sets. For example, CMS officials explained that expenditures for inpatient services as reported by a state in MSIS and as reported in CMS-64 are not necessarily for the same services.
GAO also found that states do not submit timely MSIS information. CMS requires states to submit MSIS data within 45 days and CMS-64 data within 30 days of the end of the quarter. However, states' reporting of MSIS data can be up to 3 years late, whereas CMS-64 data are consistently reported on time. Also, MSIS expenditure data are considered less reliable when compared with CMS-64.
GAO has reported that CMS will need more reliable data for assessing expenditures and measuring performance in the Medicaid program. MSIS and CMS-64 have the potential to offer a robust view of the Medicaid program, enhancing CMS oversight of aggregate spending trends, per beneficiary spending growth, and cross-state comparisons, all of which could be useful in improving the financial integrity of this high-risk program. However, delays in reporting MSIS data and inconsistencies between the two data sets limit their usefulness as oversight tools. CMS has recently completed a pilot study aimed in part at improving the timeliness and consistency of both systems data.
HHS provided technical comments on a draft of this report, which were incorporated as appropriate.