Medicare Contracting Reform

1. Medicare Contracting Reform Regional MAC Meeting November 18, 2006 Creighton Gales

2. Medicare Contracting Reform Defined • MMA Section 911: Medicare Part A and Part B claims processing is integrated into a single entity to increase efficiency, accuracy and system responsiveness • Medicare Administrative Contractors (MACs) will perform work currently administered by fiscal intermediaries (FIs) and carriers • Competitive award of performance-based contracts with award fees; MACs rewarded when CMS operational and policy objectives met

3. Benefits to the Medicare Program • Improved efficiency in program administration • Reduced Medicare payment error rate • Sets platform for information technology improvements • Better able to meet future programmatic challenges and changes

4. Providers Will Benefit from New Operational Structure • Competitive process selects for strong customer service • Improved provider education and training. • Increased payment accuracy and consistency in payment decisions. • Interfacing needs for claims processing are simplified because a single A/B MAC will serve as point-of-contact for both Part A and Part B claims. • Providers will have input in evaluation of MACs performance through satisfaction surveys.

5. Approach to EstablishingMAC Jurisdictions • The new jurisdictions: • Reasonably balance the number of fee-for-service beneficiaries and providers • Are substantially more alike in size than existing fiscal intermediary and carrier jurisdictions • Will promote much greater efficiency in Medicare’s billion claims a year

6. Contracting Reform: On Track & On Schedule MAC Acquisition Plan • Start-up Cycle • 4 Durable Medical Equipment (DME) MACs and • 1 Part A/Part B (A/B) MAC • Cycle One -- current primary focus • 7 A/B MACs • Cycle Two • 7 A/B MACs and • 4 Home Health/ Hospice MACs

7. A NHIC D Noridian B Admina- Star C CIGNA Durable Medical Equipment (DME) MAC Jurisdictions

8. 2 14 Noridian 6 13 8 12 1 5 15 11 10 4 7 2 9 1 15 A/B MAC Jurisdictions

9. Start-Up Cycle - DME MAC Awards • Durable Medical Equipment (DME) MACs awards • January 6, 2006 • Jurisdiction A: National Heritage Insurance Company • Jurisdiction B: AdminaStar Federal, Inc. • Jurisdiction C: Palmetto GBA, LLC • Award protested; GAO upheld protest • CMS reopened discussions with offerors in competitive range • Jurisdiction D: Noridian Administrative Services • September 29, 2006 • Jurisdiction C: CIGNA Government Services, LLC • Protest of award filed with GAO October 6, 2006 • Decision deadline for GAO: January 16, 2007

10. DME MAC Implementation Status • DME MACs • DME MACs Jurisdiction A and Jurisdiction B successfully implemented July 1, 2006 • DME MAC Jurisdiction D successfully implemented September 30, 2006 • DME MAC Jurisdiction C’s implementation to be determined • Stay on implementation due to protest

11. Start-Up Cycle – A/B MAC Award & Implementation Status • First A/B MAC award • Jurisdiction 3 (J3) A/B MAC award made July 31, 2006 to Noridian Administrative Services • Implementation being done incrementally • Arizona workload transitioned as of October 1, 2006 • Scheduled to be fully implemented by March 1, 2007 • Providers in J3 serviced by Mutual will remain with Mutual for now, until HIGLAS is implemented at Noridian

12. Cycle One : 7 A/B MAC Acquisitions • Two Requests for Proposal • September 28, 2006 • RFP was published in fedbizopps for A/B MAC Jurisdictions 4, 5, & 12 • December 2006 • RFP planned to be released for A/B MAC Jurisdictions 1, 2, 7, & 13 • Streamlined process compared to Startup

13. A/B MAC Jurisdiction 4 Colorado, New Mexico, Oklahoma, and Texas

14. A/B MAC Acquisition: Cycle Two • Acquisitions for Cycle Two include: • A/B MAC Jurisdictions: J6, J8, J9, J10, J11, J14 & J15, and • 4 Home Health/Hospice MAC Jurisdictions • Anticipate releasing Requests for Proposal in September 2007; contract awards planned in September 2008 • Exploring Contract Type/Acquisition Vehicle through recent Request for Information

15. Continued Work by Functional Contractors • MACs will work cooperatively with functional contractors (current and future) • Enterprise Data Centers • Beneficiary Call Center • Qualified Independent Contractors • Coordination of Benefits Contractor • MSP Recovery Contractor • Healthcare Integrated General Ledger and Accounting System • Program Safeguard Contractors • Medical Review – DME MACs only • All interact/share data to serve FFS Medicare beneficiaries

16. Providers’ Single Point-of-Contact • MACs will serve as the single point-of-contact for providers • Call your MAC about: • Claims • Payment • Bill submission guidance, etc. • MACs are required to be responsive • Measured through satisfaction surveys and other means

17. MAC Medical Directors and Contractor Advisory Committees • MACs must have at least one Medical Director, but CMS is not stipulating how many. • MACs will follow Program Integrity Manual (PIM) requirements for CACs: • Modifications to PIM being considered • Separate part A advisory committees similar to current Part B committees or combining Part A and Part B committees • Utilization of telephone and videoconference meetings to broaden communication • A/B MACs will be expected to consolidate Local Coverage Determinations (LCDs) in a jurisdiction and educate providers, as necessary. • LCDs should be more streamlined with minimal variance between policies.

18. Moving Forward from Here… • Our primary objective is to ensure continuity in Medicare FFS operations • Essential throughout the procurements and the contract implementation • Learn from Startup Cycle Experience • Contract Award Protest • Possible with each acquisition • Can result in implementation delays • Flexibility is key

19. Information and Comments • Look for updates and additional information on Medicare Contracting Reform on the Medicare Contracting Reform Website: www.cms.hhs.gov/medicarecontractingreform/ • Formal procurement documents will be posted to the federal acquisitions website: www.fedbizopps.gov • Submit comments and questions to:Section911@cms.hhs.gov