BOSTON – The U.S. Centers for Medicare & Medicaid Services last week announced it has chosen the National Heritage Insurance Corporation (NHIC) to process all Medicare Part A and Part B claims for Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
Until now, Part A – hospital and other institutional services – and Part B – outpatient services and other medical benefits – claims have been handled separately, but as part of a major system-wide reform, CMS is gradually switching over to so-called “Medicare administrative contractors” who handle both and are the primary point of contact for providers.
NHIC will be taking over work now done by three fiscal intermediaries and two carriers, CMS said. The deal includes a one-year base period and four one-year options, with a total value of $176 million if the company is kept on for the full five years.
NHIC will also be able to earn “award fees,” CMS said, based on its ability to meet or exceed performance requirements set by CMS, such as enhanced provider customer service, increased payment accuracy, improved provider education and training leading to correct claims submissions, and realized cost savings resulting from efficiencies and innovation.
Under the Medicare Modernization Act, the deal will have to be put out to competitive bid again within five years.
“With this award, CMS continues its progress in re-engineering the way in which the government contracts for claims administration for the largest part of the Medicare program,” said Acting CMS Administrator Kerry Weems in a news release.
“CMS is seeking the best value, from a cost and technical perspective for this critical function,” he added. “This is another step toward improving services to beneficiaries and providers who are in the Medicare fee-for-service benefit plan.”
Medicare Advantage plans will still continue to be handled separately, through contracts with insurers, and so will Part D – prescription drug coverage – claims.
However, NHIC will serve as the first point of contact for the processing and payment of all Medicare fee-for-service claims, and it will also be the primary contact for appeals, provider outreach and education, financial management, provider enrollment, payment safeguards and information systems security, CMS said.
For more information about the National Heritage Insurance Corporation (NHIC), visit www.medicarenhic.com. For more information about contracting reform, visit the U.S. Centers for Medicare & Medicaid Services at www.cms.hhs.gov/MedicareContractingReform.
