Health Law and Regulation

The Centers for Medicare & Medicaid Services (CMS) has announced that National Government Services (NGS) has been awarded a contract of up to five years for the combined administration of Part A and Part B Medicare claims payment in Connecticut and New York.

NGS will serve as the first point of contact for the processing and payment of Medicare fee-for-service claims from hospitals, skilled nursing facilities, physicians and other healthcare practitioners in the two states. The new Part A/Part B Medicare Administrative Contractor (A/B MAC) was selected using competitive procedures in accordance with federal procurement rules.

“This is another step toward improving service to beneficiaries and healthcare providers, as well as giving CMS greater oversight of the Medicare contractors that process and pay Medicare claims,” said Acting CMS Administrator Kerry Weems. “In awarding these contracts, CMS is ensuring that each Medicare contractor continues to provide the best overall value to the government, and the American taxpayers, from both a cost and technical perspective.”

The new contractor will take claims payment work now performed by two fiscal intermediaries and four carriers in the two states. The A/B MAC contract, which has an approximate value of $323 million over five years, will fulfill the requirements of the Medicare Modernization Act’s (MMA) contracting reform provisions.

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 contract for NGS includes a base period and four one-year options and will provide NGS with an opportunity to earn award fees based on its 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 MMA, MAC contracts will be recompeted at least every five years.

Source: Centers for Medicare and Medicaid Services, March 18, 2008

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