The Aequitas Group
Medicare Administrative Contractor Protest Update
On August 19, 2009 the Government Accountability Office (GAO) dismissed Pinnacle’s protest of the Jurisdiction 7 (J7) Medicare Administrative Contractor (MAC) award to TrailBlazer. While the Centers for Medicare and Medicaid Services (CMS) has yet to make a final announcement on the status of the MAC award, it appears that TrailBlazer may continue with contractor workload cutover activities.
With the dismissal, CMS moves one step closer to realizing its goal of implementing Medicare contractor reform. This initiative, which began as a provision of the MMA 2003 and is expected to wrap up well before October 2011, is part of a broader vision to improve and modernize CMS’ current fee-for-service (FFS) administrative structure. As a result of Medicare contractor reform, the number of contractors providing claims adjudication services will decrease from 25 fiscal intermediaries (Part A contractors) and 18 carriers (Part B contractors) to 15 Part A/B MACs.
While reform will certainly create efficiencies for Medicare FFS contracting, what is arguably even more important is the impact it will have on biopharma and device manufacturers and beneficiary access to therapies. There will be a total of 15 MAC jurisdictions after the reform initiatives are complete; however, in reality there could be as few as 9 unique contractors adjudicating Medicare FFS claims. This is because some contractors (e.g., TrailBlazer, Palmetto GBA etc) have won multiple MAC awards. We see three implications of this consolidation:
Larger percentages of the Medicare beneficiary population may be impacted by changes to specific contractor medical policies
Fewer contractors means there is less probability for variation in contractor medical policies for drugs and devices – contractors may emulate each other and create de facto National Coverage Determinations (NCDs) which would effectively impact all Medicare FFS beneficiaries
New Contractor Medical Directors (CMDs) may be responsible for drafting, implementing and updating medical policies on drugs and devices that may be unfamiliar to them
It is imperative that manufacturers understand the potential impact that Medicare contractor reform will have on its reimbursement strategies. The advisors at The Aequitas Group are well versed in the nuances of Medicare contractor reform and can help you understand the “so what” for your product(s).
Contact us today for more information.
 known as Public Law 108-173.
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