MAC transition delayed

Sunday, April 30, 2006

WASHINGTON – The transition from DMERCs to Medicare Administrative Contractors (MACs) in Regions D and C will be delayed three months, from July 1 to Oct. 1, CMS stated in late March. The transition to MACs in Regions A and B will occur on July 1 as planned.
The delay in Regions C and D is the result of a protest filed by Cigna Government Services, the current Region D DMERC. Cigna, which bid on the MAC contracts in Regions C and D, lost the bids and then filed a protest with CMS.
The Government Accountability Office (GAO) must rule on the protest on or before May 4. That does not leave contractors enough time to meet the July 1 transition deadline in Regions C and D, hence the delay. As a result, CMS has extended its contracts with the current DMERCs in Regions C and D through Sept. 30.
Palmetto GBA won the Region C MAC bid. Noridian Administrative Services won the Region D bid and replaced Cigna. Noridian and Palmetto have stopped work on the transition until the GAO rules on the protest.
The MACs are part of Medicare’s reconfiguring of the DMERCs into two specialty contractors. The MACs will 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 and assumed their duties March 1.
In awarding the MAC contracts, CMS stated that it chose companies that offered the best overall value to the government—in light of costs, technical qualifications and other considerations, such as past performance, corporate responsibility and their understanding of the special requirements involved in processing claims for medical equipment and prosthetics provided to beneficiaries. Delaying the transition is not all bad, say industry watchers. It allows the MACs in Regions A and B to work out the bugs. That in turn may make the transitions in Regions C and D smoother, said industry attorney Asela Cuervo.