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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Department of Health
Early Assessment of the Encounter Intake System


Issued: March 29, 2016
Link to full audit report 2015-S-41
Link to 90-day response

Purpose
To determine the readiness of all Medicaid managed care organizations (MCOs) to submit Medicaid encounter transactions to the new Encounter Intake System (EIS). We conducted an early assessment of the readiness of Medicaid MCOs as of September 30, 2015.  We did not review the adequacy of the Department’s testing of Medicaid encounter data submissions. The audit covers the period January 1, 2014 through September 30, 2015.

Background
MCOs are contractually required to submit encounter transactions to inform the Department about each medical service provided to their enrolled recipients. The Department uses encounter data for numerous purposes, including, but not limited to, quality assurance, various research and analytics, managed care rate setting, and drug rebate collections. On September 14, 2015, the Department's new Encounter Intake System (EIS) began accepting encounter transactions from MCOs. (Prior to the EIS, MCOs submitted encounter transactions to the Department’s eMedNY claims processing system.) Encounter transactions must be submitted to the EIS in a format set by the Department. Specifically, the EIS collects and processes encounter transactions submitted by MCOs using four standard Health Insurance Portability and Accountability Act-compliant transaction sets (one each for professional, institutional, dental, and pharmacy encounters). The EIS then processes the data and sends it to a data warehouse.

Key Findings

  • Most Medicaid MCOs (42 of 52) were not ready to submit Medicaid encounter data to the EIS by the September 2015 implementation date. According to DOH officials, as of September 30, 2015, only 10 of 52 Medicaid MCOs had successfully completed testing for the new system, including all four transaction sets. An additional 21 MCOs had successfully completed testing of at least one of the four transaction sets. The remaining 21 MCOs either had started but had not completed testing of any transaction set (13) or had not started any testing (8). Auditors determined that 19 of these remaining 21 Medicaid MCOs were specialized health plans, which generally have fewer enrollees than mainstream Medicaid managed care plans. According to DOH officials, the specialized plans typically had less sophisticated claims processing systems than other Medicaid managed care plans prior to EIS implementation, and therefore were more challenged to meet the EIS implementation date. Despite this, prior to the September 2015 EIS implementation, DOH did not provide any additional time or special assistance to the less sophisticated plans; all plans were treated similarly regardless of the unique challenges each may have faced.
  • In response to this preliminary observation, Department officials stated that additional guidance was provided to these plans, and subsequently reported that the number of Medicaid MCOs ready to submit encounter transactions to the EIS increased from 10 to 43 (of 52) by November 20, 2015.

Key Recommendation

  • Actively monitor and guide the Medicaid MCOs that have not completed testing to ensure they become capable of submitting appropriate encounter transactions to the EIS and, if necessary, take corrective actions to enforce compliance.

Other Related Audits/Reports of Interest

Department of Health: Medicaid Program: Medicaid Drug Rebate Program Under Managed Care (2014-S-41)


State Government Accountability Contact Information:
Audit Director: Andrea Inman
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236