The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) authorized the Centers for Medicare & Medicaid Services (CMS) to make significant changes to the Medicare fee-for-service program’s administrative structure that will make the Medicare program “dynamic, competitive and performance-based”. Subsequently, CMS replaced the fiscal intermediary (FI) and carrier contracts and integrated the administration of both into one. The new integrated entity called Medicare Administrative Contractors (MACs) would centralize all information once held separately.
Prior to the transition to the MACs, there were 23 FIs and 17 carriers. Currently, there are 15 MACs which serve as the primary point of contact for:
- Provider enrollment,
- Medicare coverage and billing requirements,
- Training for providers, and
- Receipt, processing and payment of Medicare fee-for-service claims
Medicare providers are assigned to the local designated MAC based on their geographic location to the MAC which has jurisdiction for that benefit category and location.
The original 15 MAC jurisdictions have served as the foundation for CMS’s initial plan of consolidation. According to CMS, integrating the MACs has saved Medicare significant amount of money and increased its operational efficiencies. CMS believes that the efficiency and effectiveness of its contracted Medicare claims operations can be further increased by consolidating some of the smaller MAC workloads to form larger MAC jurisdictions. To achieve its ultimate goal, CMS will further consolidate all its MACs into 10 MAC contracts over the next few years. The process is a lengthy one since the law mandates that CMS award its claims processing contracts to the MACs through competitive bidding.
The approximate timing for each consolidation is addressed in the table below, although the exact timing of consolidation actions may be adjusted based on program considerations (contractual status, schedule, etc.):