Ask the DMERC MDs

Tuesday, February 28, 2006

Transitions and change are the topics for this month's column. In case you haven't noticed, over the past year the Centers for Medicare and Medicaid Services (CMS) has been engaged in a major rearrangement of the DMERCs as part of contractor reform. These reforms are designed to provide CMS with greater flexibility and efficiency in contracting. As this process has moved along and more folks have become aware of it, questions continue to come in.
Q. Every time I turn around it seems like there is another announcement about some new variety of DMERC contractor. Can you help me sort them all out?
A. It helps to understand what is happening if you break it into several pieces. First, functions or tasks that were all done by a single contractor are now being split apart and given to other contractors. This is what is occurring with the award of the Program Safeguard Contracts (PSCs) for DMERC Regions B, C, and D and the startup of the Qualified Independent Contractors (QICs). The traditional DMERC contractors HealthNow, AdminaStar, Palmetto and Cigna were general contractors. That is, they performed all necessary tasks and functions necessary to process DMEPOS claims. They each have mailrooms, claim processing, customer service, provider education, medical review and benefit integrity departments. In other words, they performed all of the work.
In 2001 CMS split the work for DMERC Region A between two contractors. Tricenturion was named as the PSC and took over the benefit integrity, medical review and medical director functions, while HealthNow retained the remaining tasks, e.g., claims processing, customer service, and MSP. Under this arrangement HealthNow is referred to as the Affiliated Contractor (AC). In 2005 CMS did the same for DMERC Regions B, C and D. These transitions will be complete by March 1, 2006. To summarize:
- Region A--Tricenturion (PSC), HealthNow (AC)
- Region B--Tricenturion (PSC), AdminaStar (AC)
- Region C--TrustSolutions (PSC), Palmetto (AC)
- Region D--EDS/IntegriGuard (PSC), Cigna (AC)
As a separate process, CMS also put the existing DMERC contracts out for bid. These contractors, called Medicare Affiliated Contractors (MACs), will assume all of the functions of the existing DMERCs except for medical review, medical director and benefit integrity tasks, which will be performed by their corresponding PSC. This transition is just beginning and is scheduled for completion July 1, 2006. To summarize:
- Region A--Tricenturion (PSC), National Heritage Insurance (MAC)
- Region B--Tricenturion (PSC), AdminaStar (MAC)
- Region C--TrustSolutions (PSC), Palmetto (MAC)
- Region D--EDS/IntegriGuard, Noridian (MAC)
As part of the DMERC to MAC transition, several states will change their regions. Region A will acquire Maryland and Washington, D.C., and Region B will take on Kentucky. Palmetto will add West Virginia and Virginia.
Finally, the SADMERC has been rebid. Palmetto retains the contract and as of July 1, 2006, the SADMERC becomes the Data Analysis Contractor (DAC). The DAC retains all of the current SADMERC data and HCPCS coding functions it currently has.
You can find additional information about contractor reform on the CMS Web site

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