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Complete Restructuring of Local Medicare Contractors Anticipated by 2009

Radiologists will see significant changes in how their Medicare claims are processed thanks to a designed overhaul of the Medicare contractor structure.

As a result of Section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Medicare contractors (carriers, fiscal intermediaries, regional home health intermediaries, and durable medical equipment regional carriers) who administer Medicare claims at the local level will be replaced by Medicare Administrative Contractors (MACs). These mandated changes are part of a broader contractor reform initiative. The goal for the Centers for Medicare and Medicaid Services (CMS) is to establish a single point of contact for Medicare beneficiaries and providers, a modernized information technology system, and consolidated, standardized administrative processes, with an ultimate objective of higher quality care for Medicare beneficiaries.

The MACs will be selected through an open competitive bidding process. Every 5 years, all of the MAC contracts will be recompeted in order to allow new contractors the opportunity to take over the jurisdictions. The current plans call for:

• 15 primary A/B MACs, which will administer both Part A and Part B claims
• 4 specialty MACs, administering home health and hospice claims
• Specialty MACs, servicing durable medical equipment suppliers

The primary A/B MAC jurisdictions (Figure 1) will replace existing Medicare carrier and fiscal intermediary jurisdictions (Table 1 compares the primary A/B MAC jurisdictions to the current Part B Medicare carrier jurisdictions.). The new jurisdictions represent distinct, nonoverlapping locations and were created to balance the number of fee-for-service beneficiaries and providers, as well as the number of claims processed. In contrast, in the current system more than 60% of all fee-for-service claims are processed by the 6 largest fiscal intermediaries and the 7 largest carriers.

CMS has begun the transition process to the new MAC structure by submitting a formal report to Congress, which outlines funding and resource requirements, a tactical plan, and the anticipated improvements and savings to Medicare. In addition, CMS recently released a formal request for information (RFI), including a draft statement of work (SOW), detailing what will be expected of the MACs in critical areas such as information technology.

The ACR provided CMS with comments on the draft SOW focusing on the lack of information regarding the future involvement of the Carrier Advisory Committee (CAC) in the local coverage determination process. The CAC process is an established mechanism that has effectively provided contractors with input from providers on the local Medicare process. The ACR strongly supports the CAC process as well as open access to a contractor medical director (CMD) at the state level. Due to the differences in geographic settings and patterns of care, it is imperative that each state have a CAC. The ACR has nationwide networks of radiology and radiation oncology CAC representatives who review draft local coverage determinations in detail and provide comments to local CMDs.

The initial MAC transition cycle began with a request for proposal (RFP) for the durable medical equipment (DME) MACs, with the inaugural DME contract expected in December. The first primary A/B MAC RFP will be issued in September, with the contract being awarded June 2006. CMS has acknowledged that changes to the procurement process may be necessary to incorporate public comments and lessons learned from problems encountered during the first transition cycle. The entire transition is expected to be completed by 2009.

For additional information regarding Medicare contractor reform, including the ACR comment letter and updates, please visit the local coverage section of the ACR Web site at www.acr.org.

If you have any questions regarding this information, please contact Kathryn Keysor at (800) 227-5463, ext 4950, or at kathrynk@acr.org.

Future Medicare Administrative Contractor (MAC) Jurisdictions