CMS Awards Two Contracts to Process Medicare Claims

The Centers for Medicare and Medicaid Services (CMS) 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. These two contracts 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 health care practitioners. The MACs were selected in open competition under federal procurement rules.

“Highmark Medicare Services and Palmetto GBA were awarded the contracts because they offered the best overall value to the government, from both a cost and technical perspective,” acting CMS administrator Kerry Weems said in a press release.

The contracts 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. 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.

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