CMS Begins DMERC Reform

Baltimore

Some HME providers could be dealing with a different Medicare carrier as CMS rolls out new contracts for DME claims processing.

As mandated by the Medicare Modernization Act (MMA), all fee-for-service Medicare claims-processing contractors — Part A, Part B, durable medical equipment regional carriers (DMERCs), home health and hospice — must competitively bid for the business. The law gives CMS until 2011 to award all bids, and the agency is starting with the DMERCs.

CMS plans to send a request for proposal this month and will award contracts in December. Winners will be dubbed DME Medicare Administrative Contractors, or DME MACs, that will be awarded contracts by geographic area. These areas, announced last month, closely resemble current DMERC regions but are altered to coordinate with new regions for handling Part A and B claims.

Currently, Part A and B fiscal intermediaries operate in 51 overlapping jurisdictions. In the coming years, CMS plans to award contracts to MACs that will process both Part A and B claims within only 15 jurisdictions.

So what should HME providers do to prepare for these changes? “[Providers] don’t need to take specific action, just maintain awareness as the changes occur,” said Jean Rush, vice president, Medicare administrator for Cigna, which administers the Region D DMERC. “I am confident that CMS and the contractor community will be keeping provider communication front-and-center as these contracts are rolled out.”

CMS is tackling DME claims processing first because “the workload of the four current DMERCs is stable and the risk of any significant program disruption to the provider and beneficiary communities would be minimal,” according to an agency statement.

In fiscal 2004, the DMERCs processed more than 68 million claims, with total program pay-outs of more than $9 billion.

For more information, visit cms.hhs.gov/medi-carereform/.