As we gear up to hit on some hot healthcare reform topics this month we will begin with the monumental changes which will be taking place with regard to Encounter Data and Claims under a new Center for Medicare and Medicaid Services (CMS) requirement.  Though few organizations seem to have this requirement on their radar, the impact could prove to be very costly for any organization which finds itself unprepared once the new requirement goes into effect in Jan. 2012.

What is Encounter Data and Claims

Before we dig into the topic at hand, we will begin with a brief overview of what Encounter Data and Claims is.  Encounter Data and Claims is all information related to the services provided by a States capitated Medicaid Managed Care Program, and the primary record of services for enrolled beneficiaries. This information allows CMS to know which medicaid services enrolled beneficiaries in managed care are receiving, what services Medicaid is paying for via capitated rates, and whether or not capitated rates paid to Managed Care Organizations and Local Management Entities are fair and set accordingly.

Why is Encounter Data and Claims Information Important

According to the Office of Inspector General:

Enrollment in Medicaid managed care is increasing

  • 71% of Medicaid beneficiaries receive managed care services
  • 45% of Medicaid beneficiaries are enrolled in comprehensive managed care programs

Expenditures for Medicaid managed care are increasing

  • 2000-2006 State and Federal expenditures increased form $207 to $322 Billion
  • 2008 Total Medicaid spending reached $330 billion
  • 2009-2010 Federal Medicaid budget request increased by $36 billion

What is changing under Healthcare Reform

encounter data and claims graphicHistorically, Medicaid program evaluations have been based on fee-for-service claims- providers would submit a claim and upon approval be paid for services rendered, however Medicaid is not longer a fee-for-service world and the move has been made toward capitated payments.

Plans will not need to be more focused on submitting patient encounter data to CMS for risk-adjustment purposes.  According to AIS Health “this is not only a system-change issue, although many plans seem to be way behind on making those needed modifications.  It also affects revenue cycles since plans not collecting and supplying high-quality data reflecting patient ‘encounters’ with providers could receive lower payments from CMS.”

Organizations should begin to make concrete determinations as to whether or not they are prepared for the impending Jan. 2012 changes, and what potential impact this could have on their organization.  In our next post we will be looking at some statistics that show how successful, or unsuccessful states have been thus far in regard to Encounter Data Collection and Use.  We will also be posting a list of questions that organizations should ask themselves to gauge their current level of preparedness.

We hope you will join us!

If you believe that your organization could benefit from a financial analysis which examines the intricacies of how Encounter Data and Claims is utilized in your business please visit our Financial Improvement page, or contact us at for a free consultation.