23 New Medicare Administrative Contractors Replace Medicare’s Current Contracts

New contract entities called Medicare Administrative Contractors (MACs) are replacing Medicare’s 48 current claims payment contracts known as fiscal intermediaries (FI) and carriers. In California this change means Palmetto GBA, the new MAC covering Part A and B claims (A/B MAC), will replace National Government Services (NGS), our current Part A fiscal intermediary by August 18, 2008 and National Heritage Insurance Company (NHIC), our Part B Carrier by September 2, 2008. Noridian Administrative Services (NAS) has already been serving as California’s durable medical equipment (DME) MAC since January 2006.

This change over to MACs, required by Section 911 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), is streamlining Medicare’s number of contractors from 48 down to 23. The 23 MACs include:

The change is also intended to standardize contracting principles to be more in line with other Government contracts by introducing competition and performance incentives. All MAC contracts are one-year contracts with the potential of renewing for four additional years, for a total of five years. The contracts are not automatically renewed, and CMS can choose whether or not to renew the contract on a yearly basis depending on performance measures.

All MAC contracts will be re-competed every five years with CMS issuing a Request for Proposal (RFP) in each MAC jurisdiction.

The five-year contract amounts for California’s A/B MAC and DME MAC, Palmetto GBA and Noridian, are estimated at $358 million and $97 million respectively. Palmetto GBA’s region (Jurisdiction 1) includes California, Hawaii, Nevada, Guam, American Samoa, and the Northern Mariana Islands, and has over 4.7 million beneficiaries and over 127,000 providers. Noridian’s region (Jurisdiction D) includes Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Northern Mariana Islands, Oregon, South Dakota, Utah, Washington, and Wyoming, and has over 9.8 million beneficiaries and over 26,000 providers. The claims in this region amount to 19% of the national workload for DME claims.

Just as with the current contractors, these 23 MACs will serve as Medicare providers’ primary point-of-contact for the receipt, processing and payment of claims. Providers and advocates will have their own phone number to receive direct assistance with claims, while beneficiaries will still be referred to 1-800 Medicare. (See our past article “No More Access to Medicare Intermediaries and Carriers?”)

The MACs will also perform all core claims processing operations for both Parts A and B, which include:

  • Enrolling health care providers/suppliers in the Medicare program
  • Educating providers about billing requirements
  • Handling claims appeals
  • Answering provider inquiries directly
  • Answering beneficiary inquiries referred by the 1-800 MEDICARE call center

Upcoming transition information on California’s A/B MAC, Palmetto GBA

To keep up-to-date on the A/B MAC transition process, Palmetto GBA provides information and resources through their:

  • Website PalmettoGBA.com/J1 – Includes information for providers on claims processing, appeals, electronic data interchange (EDI), electronic funds transfer, customer service, provider enrollment, local coverage determinations, provider outreach and education, and other topics. Closer to the transition date it will also include information on where to submit claims and correspondence and the direct number to contact Palmetto GBA’s customer service. Providers and advocates can also register for e-mail updates through Palmetto GBA’s Listserv.
  • Ongoing Part A and Part B transition teleconference calls – Calls are scheduled each Tuesday at 12:30 PDT through the middle of September, and alternate each week between Part A and Part B transition topics. Agendas are posted online beforehand. Callers are encouraged to register and submit questions via email (J1MAC@PalmettoGBA.com) prior to the call.
      • Call number: 866-604-5969
      • Passcode: 512788
  • Workshops and webcasts – Review “Events” at palmettogba.com/j1 to check the schedule for all upcoming training seminars and webcasts.
  • A/B MAC Toll-Free Announcement Line – 888-318-7246 – This phone has recorded updated announcements on the implementation process. A provider line with customer service representatives will be available once the transition is complete; that number will be posted on the website.
  • A/B MAC Frequently Asked Questions (FAQs) – The A/B MAC FAQs page has responses to the most common issues providers have shared.

For information on other topics regarding Medicare contracting reform, visit CMS’ website.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.