CMS Awards First of 15 Contracts to Process and Pay Medicare Part A and Part B Claims

Aug 1, 2006

The Centers for Medicare & Medicaid Services (CMS) have announced the award of the first of 15 contracts for the combined handling in six states of both Part A and Part B Medicare claims. The winning contractor is Noridian Administrative Services, LLC, (NAS), headquartered in Fargo, N.D.

As the new Part A/Part B Medicare Administrative Contractor (A/B MAC), NAS will serve as the first point-of-contact for processing and paying fee-for-service claims from hospitals and other institutional providers, physicians, and other practitioners in Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming .

“The contract award is a major step to improved Medicare service for beneficiaries and providers, and significant cost savings from greater efficiency in managing the original fee-for-service Medicare program,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “Noridian Administrative Services was selected through a full and open performance-based competition to administer the program as effectively and efficiently as possible.”

The A/B MAC contract, which has a value of $28.9 million for the first year of performance, is the first of 15 to be awarded by 2011 to fulfill requirements of the contracting reform provisions of the Medicare Modernization Act of 2003. NAS will immediately begin implementation activities and will assume full responsibilities for the claims processing work in its six-state jurisdiction no later than March 2007.

Under the current system, fiscal intermediaries process claims for Medicare Part A providers, including hospitals and skilled nursing facilities. Part B contractors, known as carriers, handle claims for doctors, laboratories and other practitioners. When contracting reform is fully implemented, the fiscal intermediaries and carriers will be replaced by MACs that will be responsible for both Part A and B claims.

“For beneficiaries and providers, the new structure will mean that they each have a single point of contact with the Medicare program,” Dr. McClellan said. “The MACs will serve as the point of contact for all Medicare providers and physicians in their respective jurisdictions, while beneficiaries will pose any questions about their claims to a Beneficiary Contact Center.”

CMS awarded the A/B/MAC contract to NAS which offered the best overall value to the federal government, when both cost and technical qualifications were considered. The contract, which includes a base period and four one-year options, will provide NAS with an opportunity to earn award fees based on its ability to meet or exceed the performance requirements set by CMS.

These requirements, based on CMS’ key objectives for MACs, are enhanced provider customer service, increased payment accuracy, improved provider education and training leading to correct claims submissions, and cost savings resulting from efficiencies and innovation. In accordance with the Medicare Modernization Act, MAC contracts must be put up for competitive bidding at least every five years.

For more information, see: http://www.cms.hhs.gov/MedicareContractingReform/

Source: CMS Press Release