CMS awards $305 million MAC contract

The CMS has awarded a five-year contract totaling about $305 million to Palmetto GBA, Columbia, S.C., to administer Part A and Part B Medicare fee-for-service claims under the Medicare Administrative Contractor program.

Palmetto had originally been awarded this contract in January 2009, although another bidder had protested the award to the Government Accountability Office. In reviewing the protest, the CMS determined that Palmetto “represented the best value for the government.”

The MAC program, created under the Medicare Modernization Act of 2003, was designed to improve service to providers, physicians and practitioners while resulting in greater administrative efficiency and effectiveness for fee-for-service Medicare.

Palmetto will be responsible for administering Part A and B claims in North and South Carolina, Virginia and West Virginia. The contractor's MAC responsibilities also extend to home health and hospice claims in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas.

The CMS reports that it has moved 65% of its claims administration services to MAC contractors and expects to complete the implementation of the remaining contracts by October 2011. In a recent report, GAO indicated that the CMS has made progress implementing the MAC program, but certain decisions have led to payment delays to providers.