CMS Announces New DMEPOS Contractors

BALTIMORE–CMS has named four specialty contractors that will
replace the current Durable Medical Equipment Regional Carriers
beginning July 1.

The new DMEPOS Medicare Administrative Contractors, known as
MACs, will be responsible for handling the administration of
durable medical equipment, prosthetics and orthotics claims.

Under the new the new system, the MACs, which were selected
through a competitive bidding process, will only be responsible for
claims processing in each of the four DME regions. Separate program
safeguard contractors (PSCs) for each region will handle benefit
integrity medical review and medical policy. The bids for the PSCs
were announced late last year (see HomeCare
Monday, Dec. 12).

The new MAC contracts and their jurisdictions, which are
slightly realigned from those serviced by the DMERCs, include:

–Region A, National Heritage Insurance Company (replacing
HealthNow): Connecticut, Delaware, the District of Columbia, Maine,
Maryland, Massachusetts, New Hampshire, New Jersey, New York,
Pennslyvania, Rhode Island and Vermont

–Region B, AdminaStar Federal: Illinois, Indiana, Kentucky,
Michigan, Minnesota, Ohio and Wisconsin

–Region C, Palmetto GBA: Alabama, Arkansas, Colorado, Florida,
Georgia, Louisiana, Mississippi, New Mexico, North Carolina,
Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, U.S.
Virgin Islands, Virginia and West Virginia

–Region D, Noridian Administrative Services (replacing Cigna):
Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho,
Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota,
Northern Mariana Islands, Oregon, South Dakota, Utah, Washington
and Wyoming

The DME MAC contracts, which, according to CMS have a combined
potential value of $542 million, are the first of 23 contracts that
will be awarded by 2011 to fulfill requirements of the contracting
reform provisions of the Medicare Modernization Act.

Each DME MAC contract will include a base period and four 1-year
options. The MACs will have the opportunity to earn award fees
based on their ability to meet or exceed the performance
requirements set by CMS. According to the agency, those
requirements are rooted in CMS’ key objectives for the DME MACs:
enhanced provider customer service, increased payment accuracy,
improved provider education and training leading to correct claims
submissions and realized cost savings resulting from efficiencies
and innovation. In accordance with the MMA, MAC contracts must be
put up for competitive bidding at least every five years.

In a statement released Friday about the new MACs, CMS said
transition activities will begin immediately.

For more information on Medicare contracting reform, visit
www.cms.hhs.gov/MedicareContractingReform.