How does the Medicare claims payment system work?
Since Medicare’s inception in 1966, private health care insurers have processed medical claims for Medicare beneficiaries. Originally these entities were known as Part A Fiscal Intermediaries (FIs) and Part B carriers. They are now known as A/B Medicare Administrative Contractors (MACs).
According to their website, CMS relies on a network of MACs to serve as the primary operational contact between the Medicare FFS program and the health care providers enrolled in the program. MACs are multi-state, regional contractors responsible for administering both Medicare Part A and Medicare Part B claims. MACs perform many activities including:
- Process Medicare FFS claims
- Make and account for Medicare FFS payments
- Enroll providers in the Medicare FFS program
- Handle provider reimbursement services and audit institutional provider cost reports
- Handle redetermination requests (1st stage appeals process)
- Respond to provider inquiries
- Educate providers about Medicare FFS billing requirements
- Establish local coverage determinations (LCD’s)
- Review medical records for selected claims
- Coordinate with CMS and other FFS contractors
In addition, four of the A/B MACs that process typical Medicare Part A and Part B claims also process home health and hospice (HH+H) claims. Please note that the four HH+H areas do not coincide with the jurisdictional areas covered by the A/B MACs. Note also, that at this time one contractor has two contracts so there are actually only three MACs for home health and hospice claims, though there are four contracts.
The four A&B MACS which are also responsible for home health and hospice claims (HH + H) are:
- National Government Services, Inc. is responsible for HH + H for the following states: Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Michigan, Minnesota, Nevada, New Jersey, New York, Northern Mariana Islands, Oregon, Puerto Rico, US Virgin Islands, Wisconsin and Washington
- CGS Administrators, LLC is responsible for HH + H for the following states: Delaware, District of Columbia, Colorado, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Utah, Virginia, West Virginia and Wyoming
- National Government Services, Inc. is responsible for HH + H for the following states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont
- Palmetto GBA, LLC is responsible for HH + H for the following states: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas
There are also special MAC contractors for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items. Read more about them.
Part A/B Medicare Administrative Contractor Jurisdiction
Medicare Enrollment and Participation
AAPM&R has created resources to help members gain information on the Medicare enrollment process.
National Provider Identifier (NPI)
The NPI is a unique identification number for covered health care providers. Covered health care providers, and all health plans and health care clearinghouses must use the NPIs in the administrative and financial transactions adopted under HIPAA. The NPI is a 10-position, intelligence-free numeric identifier (10-digit number). This means that the numbers do not carry other information about health care providers, such as the state in which they live or their medical specialty. The NPI must be used in lieu of legacy provider identifiers in the HIPAA standards transactions.
How to Apply for an NPI
Medicare Contractor Advisory Committee (CAC)
The purpose of the CAC, in addition to participating in policy development, is to serve as a mechanism for discussing and improving administrative policies within the Carrier's (or A/B MACs) authority, and to provide a forum for exchanging information between Medicare contractors and physicians. Members are encouraged to contact info@aapmr.org with concerns.
Medicare Comparative Billing Reports
Comparative Billing Reports (CBRs) are educational tools administered by the Centers for Medicare & Medicaid Services (CMS). CBRs are disseminated to the provider community to provide insight into billing trends across regions and policy groups. Stay tuned for when the next report is available.
Medicare Documentation Webinars
Throughout the year, the Academy sponsors webinars that focus on issues concerning the regulatory, federal, quality, and coding and reimbursement issues directly related to physiatry.
Other Medicare Resources