CMS AWARDS TWO CONTRACTS TO PROCESS AND PAY MEDICARE PART A AND PART B CLAIMS IN 7 STATES AND D.C.
The Centers for Medicare & Medicaid Services (CMS) today announced that it has awarded two contracts for the combined administration of Part A and Part B Medicare claims payment in seven states, the District of Columbia and three U.S. territories.
These awards represent the fourth and fifth new Medicare Administrative Contractors (MACs) to be named by CMS as required by the Medicare Modernization Act of 2003. The MAC contracts are part of an effort to streamline the fee-for-service payment system. The two contracts announced today are among the largest, in terms of claims volume, of the 15 MACs that CMS will award.
Highmark Medicare Services Inc., headquartered in Camp Hill, Pa., will be responsible for Jurisdiction 12, which includes the states of Delaware, Maryland, New Jersey and Pennsylvania, as well as the District of Columbia. Palmetto GBA, headquartered in Columbia, S.C., will serve Jurisdiction 1, which includes California, Hawaii, Nevada, American Samoa, Guam and the Northern Mariana Islands. By 2011, a total of 15 new MACs will cover every state and the District of Columbia. The first three MACs are processing Medicare claims in 10 western and four midwestern states.
The MACs will serve as the primary point of contact for the processing and payment of fee-for-service claims from providers, such as hospitals, nursing facilities, physicians and other practitioners. The MACs were selected in open competition under federal procurement rules.
“These contract awards are a major step toward improving service to beneficiaries and providers, as well as providing greater administrative efficiency and effectiveness for the original fee-for-service Medicare program,” Acting CMS Administrator Kerry Weems said. Highmark Medicare Services and Palmetto GBAwere awarded the contracts because they offered the best overall value to the government, from both a cost and technical perspective.”
Under the current system, fiscal intermediaries process claims for Medicare Part A providers, such as hospitals, skilled nursing facilities and other institutional providers. Carriers process claims for physicians, laboratories and other practitioners under Medicare Part B.
The contracts awarded today include a base period and four one-year options and will provide Highmark Medicare Services and Palmetto GBA with an opportunity to earn award fees based on their ability to meet or exceed the performance requirements set by CMS. These requirements are rooted in CMS’ key objectives for the MACs, including enhanced provider customer service, increased payment accuracy, improved provider education and training leading to correct claims submissions, and realized cost savings resulting from efficiencies and innovation. In accordance with the Medicare Modernization Act, MAC contracts are to be open for bidding at least once every five years.
As MAC contractors, Highmark Medicare Services and Palmetto GBA will immediately begin implementation activities. Highmark Medicare Services will assume full responsibility for the claims processing work in its jurisdiction no later than September 2008. Palmetto GBA will assume full responsibility for the work in its jurisdiction no later than June 2008.
When Medicare contracting reform is fully implemented, all the fiscal intermediaries and carriers will be replaced by MACs that will be responsible for both Part A and Part B claims. For beneficiaries and providers, the new structure will mean that they each will have a single point of contact with the Medicare program. When they become operational, the MACs will be the contact for all Medicare providers and physicians in the states included in their jurisdiction, while beneficiaries will pose their claims-related questions to a Beneficiary Contact Center.
CMS awarded the first MAC contract in July 2006 to Noridian Administrative Services, LLC, headquartered in Fargo, N.D. Noridian covers the states of Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming. The second contract was awarded on Aug. 3, 2007, to TrailBlazer Health Enterprises, headquartered in Richardson, Texas. TrailBlazer will cover Colorado, New Mexico, Oklahoma and Texas. The third contract was awarded on Sept. 4, 2007, to Wisconsin Physicians Health Insurance Corp., headquartered in Madison, Wis., which will cover Iowa, Kansas, Missouri and Nebraska. CMS expects to award three more MAC contracts by the end of the year.
For more information, see http://www.cms.hhs.gov/MedicareContractingReform/