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J Oncol Pract. 2006 November; 2(6): 283.
PMCID: PMC2793651

Transitioning to Medicare Administrative Contractors

Sue Lathroum is the director of the Medicare Administrative Contractor (MAC) Information Exchange Staff of the Centers for Medicare & Medicaid Services (CMS). She has been with CMS for most of her more than 30 years with the federal government, devoting most of that time to activities concerning Medicare fee-for-service contractor management. After a decade of overseeing planning and operational aspects of CMS's annual Contractor Performance Evaluation process, Lathroum assumed responsibility for communications associated with the Medicare Contracting Reform (MCR) requirement of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003.

JOP: What was the impetus behind MCR, as called for in the MMA of 2003?

During the last four decades, while health care delivery in the United States has improved dramatically along with advances in medicine and technology, the contracting portion of Medicare's fee-for-service administrative structure has not kept pace.Since its creation in 1965, Medicare has used private insurance companies to process claims and perform related administrative services for providers and beneficiaries. This system has several shortcomings: a lack of full and open competition, separate processing of Part A and Part B claims, specialization restrictions, absence of performance-based incentives, and cumbersome contract termination procedures. The gradual realization that outdated business processes and technologies hamper Medicare's ability to meet current and anticipated health care delivery challenges (for providers and beneficiaries) prompted Congress to pass the MCR.

JOP: What is the key element of the reform that pertains to physician practices?

MCR eliminates the need to deal with a separate Part B carrier and fiscal intermediary (FI) by integrating both Part A and B contracting into a new single authority, the MAC. By September 2008, CMS expects to have awarded contracts for each of the 15 Part A and B MAC jurisdictions. Full and open competition for MAC contracts will encourage contractors to deliver better service to providers. Customer service surveys will allow providers to comment on the contractors' performance.

JOP: How will MCR affect the physician's practice?

MCR eliminates multiple interfaces between the physician and the program by designating the MAC as the single point of contact for all Medicare fee-for-service claims-related business. The MAC will also focus on providing physician practices with improved training on Medicare rules and correct claims submission, and improve access to information for better coordination of care to beneficiaries. The emphasis on education will help ensure that physicians and providers are better able to meet challenges and changes in the Medicare program. Over time, modernized IT systems that incorporate the latest technology and standardization practices will make it easier for providers to get a comprehensive view of a beneficiary's care and process claims even more efficiently.

JOP: In what ways will MCR affect beneficiaries?

CMS is meeting the customer service needs of its growing beneficiary population by establishing a single point of contact—the Beneficiary Contact Center. Beneficiaries who call 1-800-MEDICARE will be connected to a sophisticated customer service network that will respond efficiently and effectively to general inquiries. Calls from beneficiaries with more complex inquiries will be routed to the MAC.

JOP: What steps ensure a seamless transition from carriers and fiscal intermediaries to MACs?

Capitalizing on its extensive experience overseeing and managing the successful transfer of claims processing work, CMS will work with the FIs and carriers to affect a smooth transfer of records and information. During the MAC implementation period, CMS will ensure continuity, accuracy, and timeliness of claims processing and payments. Each MAC will use a variety of media, including a Web page, listserv, newsletters, and meetings, to inform physicians about necessary actions, timelines, temporary payment cycle changes, and so on.

JOP: How can physicians prepare to file Medicare claims with the new contractors?

Other than substituting the ID number for the MAC and testing that change, physicians should not incur any service disruption or cost due to the MAC implementation. MACs will notify the provider community about changes that will take effect. Physician practices will want to remain alert to this communication.

JOP: What will be the impact of the transition to MACs on the current carrier advisory committees (CACs) for Part B? And to what extent will the CAC structure be preserved?

CACs will function in the MAC environment in accordance with the instructions in Chapter 13 of the Program Integrity Manual (PIM). As with the current carriers, MACs will be expected to have an advisory committee for each state included in their jurisdictions.CMS is considering modifications to the PIM to reflect changes resulting from the implementation of the MAC environment. Among those being evaluated are establishment of separate Part A advisory committees that are similar to the current Part B advisory committees or combining the Part A and Part B committees. Also under consideration is the utilization of telephonic and videoconference meetings to broaden communication for the CACs.

JOP: We understand that Noridian was recently awarded the MAC contract for Jurisdiction 3, which includes much of the intermountain west—Arizona, Montana, North and South Dakota, Utah, and Wyoming. How is CMS working with Noridian to achieve this transition?

Noridian Administrative Services (NAS) is in the midst of activities that will prepare it to assume full MAC responsibility no later than March 2007. The transfer of work will be incremental. Throughout the implementation period, CMS will engage in weekly conference calls with NAS workgroups to monitor the contractor's progress in various areas, such as provider communication. These meetings give NAS, the current FI or carrier, and CMS an opportunity to communicate on NAS's efforts, and forestall potential problems.

JOP: How can physicians learn more about Medicare Contracting Reform and the timetable for awarding additional contracts to MACs?

Throughout the MCR implementation process, CMS will communicate information and decisions concerning MAC procurement as early and often as possible through our Web site (http://www.cms.hhs.gov/MedicareContractingReform/). Also, MCR updates are announced on Open Door Forum calls, and e-mails are sent periodically to those on the Open Door Forum listerv.


Articles from Journal of Oncology Practice are provided here courtesy of American Society of Clinical Oncology