The Centers for Medicare and Medicaid Services has not fully developed plans for using Medicare Advantage encounter data--information on the services and items furnished to enrollees.

That is the conclusion of a Government Accountability Office report on Medicare Advantage--the private plan alternative to the traditional Medicare program--which provides healthcare for nearly 15.5 million enrollees, about 30 percent of all Medicare beneficiaries.

CMS began collecting encounter data in January 2012. And, while it announced that it will begin using diagnoses from both encounter data and the data it currently collects for risk adjustment to determine payments to Medicare Advantage organizations (MAOs) in 2015, the agency has not established timeframes or specific plans to use encounter data for other potential purposes, according to the GAO.

Auditors argue that Medicare Advantage encounter data are more comprehensive than the beneficiary diagnosis data the agency currently uses to risk adjust capitated payments to MAOs, including procedure codes and provider payments from a wider range of provider types. Nevertheless, CMS has not taken appropriate actions to ensure that Medicare Advantage encounter data are complete and accurate.

“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,” states the report. “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.”

CMS officials told GAO they intend to perform these additional quality assurance activities but have not established timeframes to do so. As a result, the report recommended that CMS establish specific plans for using Medicare Advantage encounter data and thoroughly assess data completeness and accuracy before using the data to risk adjust payments or for other purposes.

In its response, while stating that it is in general agreement with auditors, the Department of Health and Human Services 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.

The GAO report, completed July 31 and publicly released Sept. 2, is available here.

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