The MAO-002 Encounter Data Processing Status Report is a foundational document provided by CMS to help Medicare Advantage Organizations (MAOs) understand the acceptance or rejection status of submitted encounter data. With growing emphasis on data accuracy and risk adjustment transparency, this report plays a pivotal role in compliance, reimbursement, and encounter data tracking.
🔍 What Is the MAO-002 Report?
The MAO-002 is a processing status report generated after a file passes all front-end validations and is processed through the Encounter Data Processing System (EDPS). It provides:
Disposition statuses: Accepted or Rejected
Error codes for all records and lines
Risk Adjustment (RA) assessment for diagnosis codes in EDRs and CRRs
Beginning in May 2022, the MAO-002 also began including preliminary RA assessments such as Allowed, Disallowed, or Not Applicable.
✅ How the Header Line ('000') Works
The '000' line in the MAO-002 identifies the encounter-level status:
If rejected, the entire encounter is rejected — even if line-level records are valid.
If accepted and at least one other line (001, 002, etc.) is accepted, the encounter is accepted overall.
If all lines are rejected, the header is also rejected (without error codes).
❌ Rejected Lines vs. Accepted with Errors
Rejected lines come with specific error codes and descriptions.
Accepted lines may also have informational error codes, prompting further review.
MAOs are encouraged to carefully review Accepted lines with errors as they may affect data quality or payment.
🔢 Preliminary Risk Adjustment (RA) Assessment
The MAO-002 provides a preliminary assessment of each record’s diagnosis code RA eligibility. It may be used to track risk-adjustable diagnoses prior to monthly MAO-004 reporting.
When discrepancies exist between MAO-002 and MAO-004, MAO-004 is considered the authoritative source.
RA Flag Definitions:
Blank: RA status not applied
PA (Preliminary Allowable): EDR/CCR is potentially risk adjustable
PD (Preliminary Disallowable): Not eligible for risk adjustment
PN (Preliminary Not Applicable): Encounter not applicable for RA
FR (Final Reject): Rejected by EDPS on MAO-002
📚 MAO-002 Report Layout Summary
Header Record Fields:
Record Type, Report ID ("MAO-002"), Report/Transaction Dates
Report Description: "Encounter Data Processing Status Report"
Submission Interchange Number, File Type (TEST or PROD)
Detail Record Fields:
MA Contract ID
Plan Encounter ID (Claim Control Number)
Encounter ICN
Preliminary RA flag: PA, PD, PN, FR, Blank
Reason codes (PH = CPT/HCPCS not allowable, PT = Type of Bill not allowable)
Encounter Line Number, Encounter Status (Accepted/Rejected)
Error Code and Description
Trailer Record Fields:
Totals for: processing errors, lines accepted/rejected/submitted
Totals for: records accepted/rejected/submitted
All fields are clearly labeled with fixed-length formatting, making the report both machine-readable and suitable for human review.
🚀 Final Thoughts: Why the MAO-002 Matters
The MAO-002 is more than a status report; it is a strategic compliance tool. It enables:
Accurate encounter data validation
RA eligibility tracking
Targeted resubmission of rejected encounters
Comparison with MAO-004 data for audit readiness
By understanding and using MAO-002 reports effectively, MAOs can minimize revenue leakage, maintain audit readiness, and ensure CMS-compliant submissions.