SUPPORTING STATEMENT PART A
Collection of Encounter Data from MA Organizations,
Section 1876 Cost HMOs/CMPs, MMPs, and PACE Organizations
CMS-10340, OMB 0938-1152
On December 30, 2011, CMS received OMB approval to collect health care data on each item or service delivered to enrollees of the MA program. Pursuant to 42 CFR 422.310, each MA organization must submit to CMS the data necessary to characterize the context and purposes of each item and service provided to a Medicare enrollee by a provider, supplier, physician, or other practitioner. Typically, these data are collected by MA organizations, PACE organizations, 1876 Cost Plans, and Medicare-Medicaid Plans (MMPs) for general business activities such as claims payment, coordination of benefits, eligibility and enrollment, and quality improvement activities and include beneficiary diagnosis information.
CMS collects encounter data for beneficiaries enrolled in MA organizations, section 1876 Cost
Health Maintenance Organizations (HMOs)/Competitive Medical Plans (CMPs), Programs of All-inclusive Care for the Elderly (PACE) organizations, and MMPs. For PACE organizations and MMPs, encounter data serves essentially the same purposes as it does for the MA program (for Part C and Part D risk adjustment). To 1876 Cost Plans that offer Part D coverage, CMS makes risk adjusted, capitated monthly payments for Part D.
MA organizations, Part D organizations, 1876 Cost Plans, MMPs and PACE organizations must use a CMS approved Network Service Vendor to establish connectivity with the CMS secure network for operational purposes. Once connectivity is established, these entities must submit required documents to CMS’s front-end contractor to obtain security access credentials. The forms used in this process are covered under this package.
The currently approved package is being revised and we are requesting a Non-Substantive approval only to update two of the Connect:Direct forms that are completed in the process to obtain security access credentials. One of the forms is completed by Part D submitters that use the Connect:Direct option for submitting data and the other form is completed by MMP submitters that use Connect:Direct. Not all organizations use Connect:Direct to submit data so this form will not be completed by all Part D and MMP submitters. Only Part D and MMP submitters using Connect:Direct who are active in benefit year 2023 will need to provide an updated Connect:Direct form. The section of the form being updated is titled, Dataset names. In this section, the organization provides the dataset name for the file that will be sent to them from CMS so that they can differentiate files from one another and provide a secure location for CMS to send the files. As a result of the Inflation Reduction Act, there is a new report that will only be issued for Prescription Drug Event (PDE) data submitted for benefit year 2023, titled “DDPS 44 Other TrOOP Amount Indicator Summary” The Part D and MMP submitters using Connect:Direct will need to provide a dataset name so that CMS can use this name when sending the monthly file. The burden estimated for completing this form is not impacted by this change.
Section 1853 of the Social Security Act, hereafter referred to as “the Act,” requires CMS to make advance monthly payments to a Medicare Advantage (MA) organization for each beneficiary enrolled in an MA plan offered by the organization for coverage of Medicare Part A and Part B benefits. Section 1853(a)(1)(C) of the Act requires CMS to adjust the monthly payment amount for each enrollee to take into account the health status of MA plan enrollees. Under the CMS-Hierarchical Condition Category (HCC) risk adjustment payment methodology, CMS determines risk scores for MA enrollees for a year and uses the appropriate enrollee risk score to adjust the monthly payment amount.
Section 1853(a)(3)(B) of the Act directs CMS to require MA organizations and eligible organizations with risk-sharing contracts under 1876 to ‘‘submit data regarding inpatient hospital services ... and data regarding other services and other information as the Secretary deems necessary’’ in order to implement a methodology for ‘‘risk adjusting’’ payments made to MA organizations and other entities. Risk adjustments to enrollee monthly payments are made in order to take into account ‘‘variations in per capita costs based on [the] health status’’ of the Medicare beneficiaries enrolled in an MA plan.
Under section 1894(d) of the Act, CMS must make prospective monthly capitated payments to
PACE organizations in the same manner and from the same sources as payments to organizations under section 1853. Section 1894(e)(3)(A)(i) requires in part that PACE organizations collect data and make available to the Secretary reports necessary to monitor the cost, operation, and effectiveness of the PACE program.
For 1876 Cost Plans that offer Part D coverage, CMS makes risk adjusted, capitated monthly payments to these plans for Part D that are calculated using the encounter data submitted by Cost Plans. Cost Plans may voluntarily submit encounter data to CMS.
Medicare-Medicaid Plans (MMPs) are subject to the same requirements as MA Special Needs Plans (SNPs) unless CMS uses the demonstration authority to waive these requirements. CMS has not waived data submission requirements for MMPs related to data collection under MA. Therefore, MMPs are also required to submit encounter data to CMS under section 1853(a)(3)(B) of the Act and 42 CFR 422.310.
CMS uses encounter data to develop individual risk scores for risk adjusted payment to MA organizations, PACE organizations, and MMPs. Starting with Payment Year (PY) 2016, CMS began to blend risk scores calculated with Risk Adjustment Processing Data and Medicare Fee- For-Service (FFS) data with risk scores calculated with encounter data and FFS data, for risk scores calculated under both the CMS-HCC and the RxHCC models. In PY 2022, we will move to calculating risk scores under both the CMS-HCC and the RxHCC models using 100 percent of the risk score calculated using encounter data and FFS data.
For 1876 Cost Plans, encounter data is used to calculate Part D risk scores. Additionally, if Cost Plan enrollees switch to MA coverage, encounter data collected from Cost Plans would be used to calculate MA risk scores.
As stated at 42 CFR 422.310(f)(2), CMS may release the minimum data it determines is necessary for one or more of the purposes listed under 42 CFR 422.310(f) to other HHS agencies, other Federal executive branch agencies, States and external entities in accordance with the restrictions outlined in this section of the CFR.
To date, other government entities and several external researchers have been granted access to encounter data. Users include several components within CMS and HHS, as well as entities such as the Department of Justice, and the Medicare Payment Advisory Commission. Specific uses include program integrity, quality measurement, public health emergency response, and innovation and demonstration programs.
As noted above, this package includes the forms that must be completed to establish a secure connection to submit data to CMS. In order to submit files to CMS, the user must be enrolled by the front-end contractor. As part of this enrollment process, users complete the Submitter
Authorization Form (if applicable), Electronic Data Interchange (EDI) agreement,
Connect:Direct form (if applicable), and Submitter/Receiver Application. CMS and its contractor use the information in the forms as part of this enrollment process.
The risk adjustment encounter data is collected 100 percent electronically.
A summary of the data collection/submission process is as follows:
CMS has a front-end system to receive MA encounter data. The MA encounter data are further processed in a back-end system called the Encounter Data Processing System (EDPS). Together, this suite of systems is referred to as the CMS Encounter Data System (EDS). The EDS receives data from MA organizations, 1876 Cost Plans, MMPs, and PACE organizations, processes the data by applying a series of automated edits, assesses each record to produce a FFS-equivalent price, and stores the data.
All organizations required to submit encounter data use an electronic connection between the organization and CMS to submit encounter data and to receive information in return. CMS collects the data from MA organizations, 1876 Cost Plans, MMPs and PACE organizations in the X12N 837 5010 format for professional, DME, and institutional services or items provided to MA enrollees.
Submitters must sign a Submitter Authorization Form, Electronic Data Interchange (EDI) agreement, and Submitter/Receiver ID application in advance of their submission. The forms are available electronically on the CSSC Operations website (www.csscoperations.com). The Submitter Authorization Form and the EDI agreement can be printed, completed and scanned or mailed. The Submitter/Receiver ID application can be submitted through the website. Submitters have a choice between three connectivity options: CONNECT:DIRECT, File Transfer Protocol (FTP) and TIBCO MFT.
Section 1876 Cost HMOs/CMPs are allowed to have providers submit claims directly to
Medicare Administrative Contractors for adjudication and payment directly from the Medicare FFS program; therefore, 1876 Cost HMOs/CMPs may not have the claims data for all items/services covered under their policies. The 1876 Cost Plans submit encounter data only for services that are reimbursed by their organization. The encounter data submitted by 1876 Cost Plans is not duplicative of data that CMS has from other means or programs.
For MA organizations, PACE organizations, and Medicare-Medicaid Plans (MMPs), the information collection requirements are not duplicated through any other current national effort and the service-level information for Medicare beneficiaries enrolled in MA, PACE, or Medicare-Medicaid Plans is not available through other data sources.
The forms required to establish connectivity are not duplicative of other forms for CMS connectivity. They are the only source of information provided by organizations to validate submitters and establish a secure connection to submit data.
The collection of information has a minimal impact on small businesses or other small organizational entities since the applicants must possess an insurance license and be able to accept risk. Generally, state statutory licensure requirements effectively prevent small organizations from accepting the level of risk needed to provide the medical benefits required in the 1876 Cost Plan, PACE, MMP, and MA programs.
All encounter data is submitted according to a specific schedule that is based on the size of the MA organization, PACE organization, 1876 Cost Plan or MMP. The schedule in the following table is for encounter data submissions by all entities submitting data. Organizations are encouraged to submit data more frequently than the minimum submission frequencies below.
Table 1. Recommended Frequency of Submission for MA Encounter Data
Number of Medicare Enrollees in Contract |
Minimum Submission Frequency |
Greater than 100,000 |
Weekly |
50,000 – 100,000 |
Bi-weekly |
Less than 50,000 |
Monthly |
If the data is collected less frequently, MA organizations, PACE organizations, 1876 Cost Plans, and MMPs may have challenges submitting their data right before the annual deadline. The current schedule is recommended to minimize system burden for both organizations submitting encounter data and CMS.
The reported data are protected and kept confidential under System of Record (SOR) # 09-700506.
There are no special circumstances that would require an information collection to be conducted in a manner that requires respondents to:
Prepare a written response to a collection of information in fewer than 30 days after receipt of it;
Submit more than an original and two copies of any document;
Retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;
Collect data in connection with a statistical survey that is not designed to produce valid and reliable results that can be generalized to the universe of study,
Use a statistical data classification that has not been reviewed and approved by OMB; or
Include a pledge of confidentiality that is not supported by authority established in statute or regulation that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use.
8. Federal Register/Outside Consultation
The 60-day Federal Register notice published in the Federal Register on 2/12/2021 (86 FR 9348).
There were two comments received in relation to this collection of encounter data. The comments were inquiring in nature rather than suggesting changes to the actual
documentation. CMS shall take under advisement the recommendation put forth from the commenters and should further consultation be required, CMS shall contact the commenters.
The 30-day Federal Register notice published in the Federal Register on 4/28/2021 (86 FR 22438).
No comments received.
Submitting an encounter or any form in this PRA package does not result in payments or gifts to respondents, and many conditions must be met before risk adjusted payment is actually made.
The data are protected and kept confidential under System of Record Notice (SORN) #09-700506 (June 17, 2014; 79 FR 34539).
There are no sensitive questions associated with this collection. Specifically, the collection does not solicit questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
The burden associated with collecting encounter data includes the resources required to submit encounter data records as well as the resources required to establish connectivity and review guidance. Establishing connectivity is necessary for first-time submitters registering to submit data or for new contracts or MA organizations, Part D organizations, Cost Plans, PACE organizations, or MMPs that are switching third party submitters.
Specific estimates of the annual cost and hours burden on MA organizations and other entities of submitting risk adjustment encounter data are based on five factors: (1) the number of encounter data records submitted in the most recent submission year; (2) the estimated cost of processing an electronic transaction; (3) the estimated time (in minutes) of processing an electronic transaction; (4) the estimated adjusted hourly wages for a computer systems analyst; and (5) the labor time required of a computer systems analyst to complete connectivity forms and related activities and to review submission guidance. We provide a detailed explanation of the changes from our previous estimates below in section 15. Program and Burden Changes/Adjustments.
Assumptions for each of the three factors directly related to the encounter data being submitted are described below.
Number of Encounter Data Records. In 2019, MA organizations, Cost Plans, MMPs and PACE organizations submitted 1,068,204,429 encounter data records. It should be noted that this is the total number of records submitted and includes both rejected and accepted data.
Estimated Cost of Processing an Electronic Record. The estimated annual electronic processing cost per encounter data record is $1.06 according to the 2019 Council for Affordable Quality Healthcare (CAQH) Index Report
(https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqhindex.pdf?token=SP6YxT4u). The CAQH Index, formerly known as the U.S. Healthcare Efficiency Index, is the only industry source monitoring the annual progress of the commercial healthcare industry toward full adoption of electronic transactions and estimating the potential for additional cost savings from adoption of electronic transactions. The report is based on data representing calendar year 2019. The report provides detail on electronic transaction adoption and on the cost of those transactions for which there was adequate data to estimate industry benchmarks.
Estimated Time Required to Process an Electronic Record. The estimated time required to process an electronic transaction is based on the CAQH Index Report as well (https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqhindex.pdf?token=SP6YxT4u). The estimated time per record is two minutes.
Using the assumptions above, the total estimated cost of transactions is $1,132,296,695 when the industry standard of $1.06 per transaction is multiplied by the number of encounter data submissions for 2019 (1,068,204,429). We divided the total estimated cost of transactions by the total number of respondents in 2019 to get the average annual cost to a respondent which results in $1,544,743 per MA organization or other entity.
The estimated burden of hours required is based on the CAQH estimate of two minutes per transaction, which amounts to 35,606,814 hours for 1,068,204,429 transactions. The average annual burden in hours per entity is 48,577.
Over the past three years, we have seen an average of 81 new organizations requiring connectivity to submit data each year. New organizations must complete a series of forms and a certification process (or testing of system connectivity) in order to submit data to CMS’ Front End System. Once connectivity has been established, an organization does not need to revisit the connectivity process unless the organization wishes to change its existing connectivity option or make other changes to how the organization will connect to CMS systems to submit encounter data. The resources to establish connectivity are estimated below. The Part D and MMP submitters impacted by the update to the Connect:Direct form have established connectivity and therefore are only providing a new dataset name for a new report that will only be issued for PDEs submitted for benefit year 2023.
Assumptions for each of the factors related to establishing connectivity and reviewing guidance related encounter data submission are described below.
Estimated Labor Cost per Hour. To derive average wage costs, we used data from the
U.S. Bureau of Labor Statistics’ May 2019 National Occupational Employment and Wage Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, the following table presents the mean hourly wage, the cost of fringe benefits (calculated at 100 percent of salary), and the adjusted hourly wage.
Table 2. National Occupational Employment & Wage Averages, Computer Systems Analyst
Occupation Title |
Occupation Code |
Mean Hourly Wage ($/hr) |
Fringe Benefit ($/hr) |
Adjusted Hourly Wage ($/hr) |
Computer Systems Analyst |
15-11211 |
$46.23 |
$46.23 |
$92.46 |
Estimated Time Required to Establish Connectivity. The table below presents estimates of the number of new submitters and the time required to complete the forms and activities related to establishing connectivity. Note that during the most recent three years used to determine the average number of new submitters, none of the submitters needed to complete the Connect:Direct form, which is why there are no burden hours or cost for this form.
Table 3. Estimated Time Required to Establish Connectivity, by Form and Number of Submitters
Form/Activity |
Mean Hourly Wage ($/hr) |
Est. Time Required to Complete Form |
Est. Number of New Submitters |
Estimated Burden Hours |
Estimated Cost |
EDI Agreement |
$92.46 |
5 minutes |
201 |
16.8 |
$1,553 |
Submitter Application and Instructions |
$92.46 |
8 minutes |
19 |
2.5 |
$231 |
Submitter Authorization Form |
$92.46 |
10 minutes |
181 |
30.2 |
$2,792 |
Connect: Direct Form |
$92.46 |
10 minutes |
0 |
0 |
$0 |
Complete Certification |
$92.46 |
1 month |
3 |
120 |
$11,095 |
TOTALS all forms/activities |
|
|
|
274.1 |
$25,528 |
Submitters complete the EDI agreement forms to establish an
electronic connection between the organization and CMS to submit to
submit MA and Part D data and to receive information in
return. Submitters must sign an EDI agreement in advance of
submission. Submitters have a choice between three connectivity
options: CONNECT: DIRECT, File Transfer Protocol (FTP), and TIBCO
MFT. The form is completed once when a new organization enters the
program, and as stated above, this process is not required to be
updated annually or otherwise.
This form is completed if submitters request a Submitter Identification number from CMS. This submitter ID allows either party (Medicare Advantage organizations, other entities or third-party submitters) to submit data to CMS. The form is completed when a new organization enters the program or when an organization changes the entity used to submit data on its behalf.
This form is required to be completed for submitters to be authorized to submit encounter data, RAPS data, or PDE to CMS.
This form is required to be completed for submitters to be authorized to gain access to the Connect: Direct application. This allows the submitters to submit their data directly to the CMS front end system. There are separate forms for the Encounter, PDE, and MMP applications. The estimates are for new organizations completing a Connect:Direct application, regardless of data type. Existing Part D and MMP submitters will need to provide a new dataset name for the new report but the existing dataset names for the other reports will continue to be the same.
12.3 CMS Encounter Data Submission & Processing Guide
In 2017, CMS undertook an effort to consolidate, update, and streamline our operational website (www.csscoperations.com) that provides instructions for submission of encounter data as well as several resources such as edit code look up tools. As part of that effort, CMS reviewed all documents and links on the website and took into account feedback from stakeholders regarding the ability to find information related to encounter data submission quickly and in one source. CMS determined that a single updated source of information for submission of encounter data and a streamlined website would reduce burden on submitters.
The Encounter Data Submission and Processing Guide (hereafter referred to as the Guide) contains the most relevant information from the Institutional, Professional, and DME Companion Guides in a user-friendly, single document with appendices.
We estimate that it will take approximately 16 hours at $92.46/hour for a computer systems analyst to review the Guide for a single contract. The total number of hours for all 733 MA organizations, Cost Plans, MMPs and PACE organizations amounts to 11,728 total hours and a total cost of $1,084,371.
Table 4. Estimated Cost of Reviewing Encounter Data Submission Guidance
Activity |
Mean Hourly Wage ($/hr) |
Estimated Time Required |
Estimated Number of Contracts |
Estimated Burden Hours |
Estimated Cost |
Review Encounter Data Submission and Processing Guide |
$92.46 |
16 hours |
733 |
11,728 |
$1,084,371 |
12.4 Total Estimated Annual Cost and Hours Burden to Organizations of Submitting Encounter Data
The total annual estimated cost and hours burden is summarized below.
Total Annual Estimated Cost of Submitting Records = $1,132,296,695
Total Annual Estimated Cost of Forms/Activity related to Establishing Connectivity = $25,528
Total Annual Estimated Cost of Reviewing Submission Guide = $1,084,371 Total Annual Estimated Cost of Encounter Data = $1,133,406,594
Total Annual Estimated Hours Burden of Submitting Records = 35,606,814 hours
Total Annual Estimated Hours Burden related to Establish Connectivity = 274 hours
Total Annual Estimated Hours of Burden of Reviewing Submission Guide = 11,278 hours
Total Annual Estimated Hours of Burden Related to Encounter Data Submission = 35,618,366
There are no significant maintenance or start-up costs that are directly associated with this effort. Any administrative and/or capital costs incurred will be recouped through the bidding process. The number of Part C contracts per year is 733 in 2020. These entities have sufficient capital assets in place to address reporting encounter data. MA organizations, 1876 Cost Plans, PACE organizations and MMPs also have sufficient capital assets in place to address encounter data reporting.
CMS's total annual cost for encounter data collection activities using the Encounter Data System was $18.66 million in FY20.
Table 4. Estimated Costs to Federal Government
|
Cost ($) |
Infrastructure (or other direct costs) |
$17 million |
FTE |
$1.6 million |
Total |
$18.7 million |
There are no changes to burden given that only a new dataset name is required for those MMP or Part D submitters that use Connect:Direct to submit data to CMS and are active in benefit year 2023.
Publication/Tabulation Dates
There are no publication and tabulation dates.
Expiration Date
The expiration date will be displayed.
CMS has no exceptions to Item 19, “Certification for Paperwork Reduction Act Submissions” of OMB Form 83-1.
CMS does not intend to collect information employing statistical methods.
2 2019 Council for Affordable Quality Healthcare (CAQH) Index Report:
(https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqh-index.pdf?token=SP6YxT4u)
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| File Title | SUPPORTING STATEMENT PART A |
| Subject | SUPPORTING STATEMENT PART A |
| Author | CMS |
| File Modified | 0000-00-00 |
| File Created | 2023-07-31 |