Medicare Administrative Contractors (MACs)

As required by section 911 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), CMS is replacing its current claims payment contractors - fiscal intermediaries and carriers - with new contract entities called Medicare Administrative Contractors (MACs). For general information, and an overview of Medicare Contracting Reform, please view Medicare’s Contracting Reform Fact Sheet.  You can also view ASCO's Medicare Contracting Reform document.

CMS plans to award a total of 19 MAC contracts through three procurement cycles, the last cycle to be completed by 2009.  Fifteen of these contracts will be with entities that will cover the majority of Part A and Part B services, i.e., A/B MACs.  Currently, eight companies (see below) have been awarded a contract by CMS to act as a Medicare Administrative Contractor (A/B MAC).  Refer to the A/B Jurisdiction Map, which highlights each state within each jurisdiction.  

Noridian Administrative Services
Medicare awarded Noridian Administrative Services a contract for Jurisdiction 3 in July of 2006.  The states in A/B MAC Jurisdiction 3 are:  Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming.

Trailblazer Health Enterprises
Trailblazer Health Enterprises received the CMS-issued award on August 2, 2007 for Jurisdiction 4, which includes the states of Colorado, Oklahoma, New Mexico, and Texas. 

Wisconsin Physician Services (WPS)
CMS issued Wisconsin Physician Services (WPS) the award for Jurisdiction 5 on September 5, 2007.Jurisdiction 5 is comprised of Iowa, Kansas, Missouri, and Nebraska.

Palmetto Government Benefit Services
On October 25, 2007, CMS awarded Palmetto the A/B MAC contract for Jurisdiction 1, which includes the states of American Samoa, California, Guam, Hawaii, Nevada, and Northern
Mariana Islands.  Shortly after the award announcement, National Heritage Insurance Company (NHIC) filed a protest with the General Accountability Office (GAO) of the award for J1.  On February 12, 2008, GAO denied NHIC’s protest, and upheld the CMS award of the J1 workload to Palmetto.  

Highmark Medicare Services (HMS)
On October 25, 2007, CMS awarded Highmark Medicare Services (HMS) the A/B MAC contract for Jurisdiction 12, which includes the states of Pennsylvania, Maryland, District of Columbia, New Jersey, and Delaware.  Shortly after the award announcement, however, Palmetto GBA (Palmetto) filed a protest with the General Accountability Office (GAO) of the award for J12.  CMS notified GAO that the agency would be taking corrective action on certain aspects of the award decision. The result of this corrective action was that the original protest was dismissed by GAO. The agency has completed its corrective action and restored the contract award to HMS.  As a result, CMS authorized HMS to resume work under J12.  

National Government Services (NGS)
March 18, 2008, CMS issued National Government Services (NGS) the contract for Jurisdiction 13, which includes the states of New York and Connecticut.  

National Heritage Insurance Corporation (NHIC)
On May 06, 2008, CMS issued the National Heritage Insurance Corporation (NHIC) the contract for Jurisdiction 2, which includes the states of Alaska, Idaho, Oregon, and Washington.  This contract is currently pending investigation by the GAO, however, due to appeals made by Noridian and Palmetto.  

Pinnacle Business Solutions
On June 11, 2008, CMS issued Pinnacle Business Solutions (PBS) the contract for Jurisdiction 7, which includes the states of Arkansas, Louisiana, and Mississippi.

Carriers, CACs and LMRPs/LCDs

The Medicare program is administered at the local level through contracted insurance companies, commonly called "Carriers." As stated above, however, CMS is replacing its current claims payment contractors - fiscal intermediaries and carriers - with new contract entities called Medicare Administrative Contractors (MACs).  A Medicare Carrier (or A/B MAC) may be responsible for only one state, or may have many states within its jurisdiction. Each Carrier (or A/B MAC) is responsible for developing payment policies for those state(s) within its jurisdiction. These policies are called Local Medical Review Policies (LMRPs) or Local Coverage Determinations (LCDs).

An LMRP/LCD is an administrative tool that assists providers in submitting correct claims for payment by describing the clinical circumstances under which a service is covered by Medicare (i.e., considered "reasonable and necessary"). Although Carriers, prior to the new contracting reform, were encouraged by CMS to develop uniform LMRPs/LCDs for all the states they cover if they have multiple states, this has not always been the case.  Under the new contracting reform, however, A/B MACs are required under the MAC "Statement of Work" to develop uniform LMRPs/LCDs for all the states in their assigned A/B MAC jurisdiction.  Newly awarded A/B MACs are consolidating all of the local carrier coverage policies for each state into new local coverage policies for the MAC based on the "least restrictive" local coverage policies.

In addition to considering medical literature and comments from local medical societies, medical consultants and the public, each Carrier (or A/B MAC) must form a "Carrier Advisory Committee" (now "Contractor Advisory Committee" under the new Medicare contracting reform), referred to as a CAC, to assist in development of LMRPs/LCDs. The CAC is comprised of physician representatives from various specialties, including oncology and hematology, who each have a permanent seat on the 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 MAC contractor's) authority, and to provide a forum for exchanging information between Carriers (or A/B MACs) and physicians.

LMRP/LCD Development Process

The process by which Carriers (or A/B MAC contractors) develop LMRPs/LCDs is strictly mandated by the Centers for Medicare & Medicaid Services (CMS) in Chapter 13 of the Medicare Program Integrity Manual. A Carrier (or A/B MAC) must develop a new/revised LMRP/LCD when it has identified an item or service that is never covered under certain circumstances, and wishes to establish an automated review in the absence of a CMS-mandated Medicare National Coverage Decision (NCD) or other coverage provision that supports automated review.

A Carrier (or A/B MAC) may choose to develop an LMRP/LCD if it has identified a validated widespread problem that it sees as posing a significant risk to Medicare trust funds. Alternatively, an LMRP/LCD may be developed if it is deemed necessary by the Carrier (or MAC contractor) to ensure beneficiary access to care, if one Carrier (or A/B MAC) has assumed another's workload, or is trying to develop uniform LMRPs/LCDs across multiple states, or if frequent denials of a service are issued or anticipated.

CMS requires that Carriers (or A/B MACs) provide the physician community and the public an opportunity to contribute to the LMRP/LCD process. Open meetings are held by Carriers (or A/B MACs) to discuss draft LMRPs/LCDs, and interested parties may attend and comment. Draft LMRPs/LCDs are released for a public comment period (with some exceptions) before being implemented, and final LMRPs/LCDs may be appealed by beneficiaries, providers or other interested parties requesting a revision to part or all of an LMRP/LCD.  More information on the the National and Local Coverage Determination process can be found on ASCO's Medicare Coverage Process Overview document.

ASCO's CAC Efforts

ASCO, along with ASH and SGO, hosts an annual meeting of oncology, hematology and gynecologic oncology CAC representatives from around the country. This "CAC Network" meeting provides attendees the opportunity to strengthen communication and collaboration amongst themselves and develop tools to create stronger, more effective CACs. Participating physicians identify issues of concern regarding LMRPs/LCDs, and network with other CAC representatives about how they may attempt to resolve these issues.

In addition to the annual CAC Network meetings, ASCO actively seeks ongoing training and communication efforts for oncology and hematology CAC members nationwide.  ASCO's various CAC Network Program initiatives are listed in the CAC Program Overview document.  ASCO strongly believes that the participation of oncology and hematology CAC members in all of ASCO's oncology/hematology CAC Network activities and communications will effect positive changes concerning oncology and hematology coverage issues.