Understanding the MAO-004 Report: A 2025 Guide for Medicare Advantage Organizations

Introduction 

The MAO-004 Report is a foundational document for Medicare Advantage Organizations (MAOs) involved in risk adjustment and encounter data submissions. Issued monthly by CMS, this report provides critical feedback on diagnosis codes submitted via the Encounter Data Processing System (EDPS), identifying which are deemed eligible for risk adjustment. 

Since its launch in Payment Year (PY) 2015, and updated in August 2017 to include only EDRs accepted through EDPS, the MAO-004 has served as an essential tool for auditing, compliance monitoring, and payment validation. 

Purpose and Relevance 

The MAO-004 is more than a routine file—it is CMS’s mechanism to communicate which diagnoses tied to submitted encounters and chart reviews qualify for risk score calculation. For teams managing risk adjustment, understanding and acting on this data is essential for compliance and maximizing revenue integrity. 

Structure of the MAO-004 File 

The file format is 500-byte fixed length and consists of three main record types: 

  1. Header Record – Contains metadata, such as Contract ID, report date, submission phase, and version. 

  2. Detail Record – The core of the report, capturing diagnosis-level data and its eligibility status. 

  3. Trailer Record – Summarizes the number of records and ensures report completeness. 

Accessing the MAO-004 Report 

CMS delivers the report through two methods: 

1. EFT Mailbox (Electronic File Transfer) 

  • File Name Example: R.ZZZZZZ.MAO004FY.Dyymmdd.Thhmmss 

  • Frequency: Monthly 

  • Format: Fixed length, 500 bytes 

2. MARx User Interface 

  • Navigate to “Reports” → Select “Monthly” 

  • Choose the appropriate date range 

  • Select “Risk Adjustment Eligible Diagnosis Report” 

  • Enter Contract ID and run the search 

Detail Record Breakdown 

Each detail record corresponds to a single diagnosis entry and contains key fields such as: 

  1. Record Type
    Always “1” — indicates a detail record.

  2. Beneficiary ID
    This is either the Health Insurance Claim Number (HICN) or the Medicare Beneficiary Identifier (MBI).

  3. Encounter ICN
    Refers to the Internal Control Number assigned to each encounter.

  4. Diagnosis Codes
    The submitted ICD-10 codes that CMS will evaluate for risk adjustment eligibility.

  5. Add/Delete Flag
    Indicates whether the diagnosis was:

    • “A” for Added

    • “D” for Deleted

    • Blank/Space for previously reported

  6. Allowed/Disallowed Flag
    Indicates whether the diagnosis was considered for risk adjustment:

    • Blank means Allowed

    • “D” means Disallowed

  7. Reason Codes
    Explains the reason behind a disallowed diagnosis:

    • “H” for CPT/HCPCS mismatch

    • “T” for Type of Bill issue

    • “D” for late submission

    • “Q” for quarterly CPT/HCPCS update

    • “N” for not applicable

Common Flags: 

  • A: Allowed 

  • D: Disallowed 

  • N: Not applicable 

Reason Codes: 

  • H: Invalid due to CPT/HCPCS logic 

  • T: Invalid due to incorrect Type of Bill 

  • D: Denied due to late submission 

  • Q: Newly accepted due to quarterly code update 

Trailer Record Overview 

The trailer acts as a final checkpoint: 

  • Confirms the number of records processed 

  • Validates data completeness and alignment with the submission batch 

  • Includes the MAO’s Contract ID and record count 

Why the MAO-004 Report Matters 

For Medicare Advantage Organizations, MAO-004 reports offer: 

  • Audit Preparedness – Ensures diagnosis codes were accepted and used by CMS 

  • Revenue Assurance – Confirms codes are contributing to risk scores 

  • Error Identification – Flags denied records with reasons to guide corrections 

  • Data Integrity – Reinforces alignment with CMS submission standards 

Best Practices for Using MAO-004 Reports 

  • Review Phase and Version in the header to confirm the file layout 

  • Analyze reason codes to identify high-priority corrections 

  • Use both EFT and MARx access points for redundancy and historical comparisons 

  • Validate trailer record counts to ensure no data truncation or loss 

Frequently Asked Questions 

Q: How frequently are MAO-004 reports generated? 
A: Monthly via CMS’s EFT mailbox and MARx user portal. 

Q: What’s the difference between Phase and Version? 
A: Phase refers to the release stage (e.g., Phase 4), and Version indicates the layout version (e.g., Version 0). 

Q: What does the Add/Delete flag indicate? 
A: It shows whether a diagnosis is new, deleted, or unchanged in the system. 

Q: Which codes most commonly lead to diagnosis disallowance? 
A: Codes “H” (CPT/HCPCS issues), “T” (Type of Bill), and “D” (late submission). 

Conclusion 

The MAO-004 report is a critical compliance and operational asset in the Medicare Advantage risk adjustment lifecycle. By properly interpreting this report, MAOs can drive greater accuracy in revenue, ensure audit readiness, and uphold CMS’s standards for data integrity. 

Whether you are a coder, analyst, or compliance lead, mastering the MAO-004 gives you powerful insights to guide smarter decisions and strategic improvements. 

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