SHO Letter # 18-008

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop S2-26-12
Baltimore, Maryland 21244-1850

SHO # 18-008
RE: Transformed-Medicaid
Statistical Information System (TMSIS)
August 10, 2018
Dear State Health Official:
The Centers for Medicare & Medicaid Services (CMS) is issuing this letter to provide guidance
to states regarding expectations for Medicaid and Children’s Health Insurance Program (CHIP)
data and ongoing Transformed-MSIS (T-MSIS) implementation. As discussed in the August 23,
2013 State Medicaid Directors letter, 1 all states are required by law to submit certain kinds of
data.
CMS appreciates states’ continued partnership on T-MSIS, now resulting in all states, the
District of Columbia, and Puerto Rico successfully in production of T-MSIS data. 2 CMS
continues to monitor ongoing monthly T-MSIS data submissions and to work with the remaining
U.S. territories and entities not yet submitting data. CMS now is shifting our T-MSIS efforts to
assessing and improving the quality of T-MSIS data.
The purpose of this SHO letter is to inform states and other stakeholders about steps CMS plans
to take to assess, improve, and maintain T-MSIS data quality, our priorities for data quality, and
how we and other stakeholders will begin to make use of T-MSIS data. Continuous T-MSIS
data quality review and improvement will be an ongoing task, and CMS expects states to
consider it a permanent and ongoing process of state operations.
CMS is committed to working with states on improving their data submissions by addressing
known issues and through ongoing data integrity reviews. While CMS recognizes this initiative
will require some flexibility in state approaches, CMS expects states to develop achievable goals
and commit the necessary resources to make steady progress in improving the quality of their
data submissions over reasonable timeframes.
The lack of access to high quality, timely Medicaid and CHIP data is a concern of the
Government Accountability Office (GAO) and other oversight entities, and is routinely
highlighted in their reports. 3 Ongoing availability of high-quality T-MSIS data is essential to
1

https://www.medicaid.gov/federal-policy-guidance/downloads/smd-13-004.pdf
This excludes a few remaining entities (e.g., CHIP and Third Party Administrator (TPA), and other territories.
3
Examples of relevant GAO and OIG reports include: Medicaid: Further Action Needed to Expedite Use of
National Data for Program Oversight, GAO-18-70; Not All States Reported Medicaid Managed Care Encounter
2

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ensure robust monitoring and oversight of Medicaid and CHIP programs, to enable evaluation of
demonstrations under section 1115 of the Social Security Act (the Act) and to calculate quality
measures and other metrics, including those reported through the new Medicaid and CHIP
(MAC) Scorecard released on June 4, 2018. 4
States should be aware ongoing access to enhanced funding for additional systems enhancements
and operational costs is contingent upon the state’s continued ability to meet T-MSIS
requirements of complete, accurate, and timely data reporting. These requirements may be found
in statute and federal regulations. Section 4753 of the Balanced Budget Act of 1997, P.L. 10533, amended section 1903(r) of the Act to include a statutory requirement for states to submit
claims data, enrollee encounter data, and supporting information. Section 6504 of the Patient
Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education
Reconciliation Act, P.L. 111-152 (collectively, the Affordable Care Act) strengthened this
provision by requiring states to include data elements the Secretary of Health and Human
Services determines necessary for program integrity, program oversight, and administration. The
Medicaid managed care regulation published in May 2016 further describes the requirements for
the submission of encounter data (see 42 CFR 438.242, 438.604 and 438.818). As part of
encounter data reporting, CMS expects states to report all actual payment-related fields
stipulated in the T-MSIS documentation and referenced in the Medicaid managed care
regulations. Proprietary or trade secret data will be protected appropriately. States should refer
to Medicaid.gov for detailed information on submitting T-MSIS data, including the data
dictionary and coding information. 5
Ongoing State Commitments
T-MSIS data are reviewed through two data quality methods. The first is the T-MSIS system
business rules review, performed for each monthly data submission by the state, which displays
the results of the basic edits and identifies the obvious errors as the data are processed. 6 These
errors are accessible to states through the T-MSIS operational dashboard. States are expected to
proactively and continuously address errors identified by the system business rules review. The
second method reviews each state’s data through inferential validation. Inferential validation
looks at patterns in each state’s data and identifies “warnings” where data elements fall outside
of a normal range. CMS is sharing these data quality results with states during meetings as part
of its ongoing data quality monitoring efforts and expects states to make corrections to address
identified issues.
States’ ability to make complete, accurate, and timely T-MSIS data submissions is integral to the
success of the Medicaid and CHIP programs. States should therefore consider how system
changes and/or enhancements could impact T-MSIS data submission. States should notify CMS
early of potential system or operational changes potentially impacting the quality, completeness,
and/or timeliness of the state’s T-MSIS data submissions, and then work with CMS to follow
Data as Required, OEI-07-13-00120. For other examples and more information, please see https://www.gao.gov/
and https://oig.hhs.gov/
4
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-0604.html.
5
https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/index.html
6
Basic edits may include checking for valid data types (character, numeric, etc.) checking for valid data values,
checking data related elements that are key to linking for meaningful results.

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best practices in the planning, design, development, testing, and implementation of these
changes. Through its vendor contracts, states should ensure changes to the state’s systems or
operations will not result in any degradation in the level of quality, completeness, and/or
timeliness of its T-MSIS data submissions.
Data Quality Priorities
CMS has identified 12 Top Priority Items (TPI) 7 for post-production data quality all states
should address. States should resolve any data quality item identified as a pre-production issue
and implement an appropriate plan of action to address the issue. States should use the CMSprovided data quality tracking tool to document their plans of action and their planned
compliance dates for fixing identified data quality issues. CMS expects each state to resolve data
quality issues for these items no later than six months after release of this letter. If a state cannot
resolve any issue identified with respect to these 12 TPI items within the six-month timeframe,
CMS will request a corrective action plan from the state.
CMS will expand the data quality review from the 12 TPI items to a more comprehensive data
quality approach later this year. CMS will work with states to determine the priority and the
timeline for resolution of identified data quality items. States should refer to Medicaid.gov for
detailed information 8 on submitting T-MSIS data, including the data dictionary, coding
information, and new information posted regarding technical and data quality priorities.
Use of T-MSIS Data
States, oversight entities, Congress, policy researchers, entrepreneurs, and others are eager to
access the T-MSIS data set. CMS intends to make T-MSIS data available through a variety of
data products, such as analytic files, data marts, routine reports, and systems accessibility
through open application program interface. CMS anticipates making T-MSIS research-ready
files available in calendar year 2019.
CMS would like to thank states for their continued partnership in developing this robust
repository of T-MSIS data. CMS looks forward to using and strengthening the T-MSIS data set
for data-driven decision-making and improving health outcomes of Medicaid and CHIP
beneficiaries.
Sincerely,
/S/
Tim Hill
Acting Director

7

Examples of these 12 Top Priority Items include: managed care encounter data, eligibility group coding, CHIP
coding, duplicate claims, cross-file linkages. For more detail, please see https://www.medicaid.gov/medicaid/dataand-systems/macbis/tmsis/tmsis-blog/?entry=45422
8
https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/index.html

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cc:
National Association of Medicaid Directors
National Academy for State Health Policy
National Governors Association
American Public Human Services Association
Association of State Territorial Health Officials
Council of State Governments
National Conference of State Legislatures
Academy Health