Cigna ousts Palmetto as Region C MAC

Tuesday, October 31, 2006

NASHVILLE, Tenn. - Cigna Government Services has topped Palmetto GBA in the fight to become the new Region C Medicare Administrative Contractor. The MACs process Medicare claims for durable medical equipment.
CMS awarded the contract to Palmetto in January, as part of its transition from DMERCs to MACs. Soon after the award, however, Cigna, which also bid on the contract, filed a protest, sending it to the General Accountability Office for a ruling. The GAO ruled in Cigna's favor Sept. 28.
"CMS found the proposal from Cigna offered the best overall value to the government and, therefore, has awarded the Jurisdiction C DME MAC contract to Cigna," the agency stated following the GAO's decision.
The contract includes a base year and four one-year options valued at about $144 million. Palmetto will continue to perform carrier duties until Cigna can take over the workload. Cigna is scheduled to assume full responsibility April 1, 2007.
CMS officials and industry watchers expect the transition from Palmetto to Cigna to be mostly seamless. They expect no interruption in claims processing.
As of 2005, approximately 13.4 million fee-for-service Medicare beneficiaries reside in the states in Jurisdiction C, the largest of the four DME MAC jurisdictions. It includes Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, the U.S. Virgin Islands, Virginia and West Virginia.
Palmetto will continue to operate the National Supplier Clearinghouse (NSC) and as the Statistical Analysis Durable Medical Equipment Regional Contractor (SADMERC). A chance exists, however, that Palmetto could lose those contracts, too, because they're supposed to be awarded to one of the MACs. A decision on this issue is "pending," according to CMS. The other MACs are Noridian Administrative Services (Jurisdiction D); National Heritage Insurance Company (Jurisdiction A); and AdminaStar Federal (Jurisdiction B).
The MACs are part of Medicare's reconfiguration of the DMERCs into two specialty contractors. The MACs handle claims processing, customer service and other day-to-day operations. The Program Safeguard Contractors (PSA), overseen by a medical director, handle program integrity duties.