Medicare contracting reform
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Breakout Session # Karen Jackson Director, Medicare Contractor Management Group, CMS Daniel Kane Acting Director, Office of Acquisition & Grants Management, CMS. MEDICARE CONTRACTING REFORM . Date Time. What is Medicare. Part A – Hospital Insurance (covers inpatient care in hospitals)

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MEDICARE CONTRACTING REFORM

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Medicare contracting reform

Breakout Session #

Karen Jackson

Director, Medicare Contractor Management Group, CMS

Daniel Kane

Acting Director, Office of Acquisition & Grants Management, CMS

MEDICARE CONTRACTING REFORM

Date

Time


What is medicare

What is Medicare

  • Part A – Hospital Insurance (covers inpatient care in hospitals)

  • Part B – Medical Insurance (covers physicians services)

  • Part C – Medicare Advantage Plans (also known as Medicare +Choice) Private health insurance plan similar to HMO

  • Part D – Prescription Drug Plan


Medicare statistics

Medicare Statistics

  • Medicare serves over 45 million beneficiaries

  • Medicaid serves over 51 million individuals

  • The Medicare Administrative Contractors process over 1 billion claims per year and pay out over $305 billion in benefit dollars from the Trust Fund

  • In 2011, total net Federal outlays for CMS programs are expected to be $828.1 Billion


History of medicare

History of Medicare

  • President Lyndon B. Johnson signed the Social Security Act on July 30, 1965, establishing Medicare and Medicaid

  • Contracting Authority - Section 1816 of SSA for Medicare Part A and Section 1842 of SSA for Medicare Part B

  • Fiscal Intermediaries (FI) were awarded through a nomination process

  • Carriers were selected based on meeting the definition as described in Section 1842 of SSA. Contracts could be entered into without regard to competition.

  • FI agreements and carrier contracts were awarded for 1 year term and contained renewal clauses

  • Annual contract amount was negotiated each year with one year funding. Notice of Budget Action (NOBA) issued specifying quarterly apportionment of funds. Contractor draws down on funds

  • Contractor may submit notice of termination to Government.


Medicare contracting reform1

Established by Section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003

Medicare Part A and Part B claims processing is integrated into a single entity to increase efficiency, accuracy and the program’s responsiveness to Medicare stakeholders

Medicare Contracting Reform


Medicare contracting reform2

Brings changes to CMS and the fee-for-service (FFS) program intended to improve Medicare services to beneficiaries and healthcare providers

Medicare Administrative Contractors (MACs) to perform work formerly 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

Medicare Contracting Reform


Goals of contracting reform

Provide flexibility to CMS and its contractors to work together more effectively and better adapt to changes in the Medicare program

Promote competition, leading to more efficiency and greater accountability

Establish better coordination and communication between CMS, contractors and providers

Promote CMS’s ability to negotiate incentives to reward Medicare contractors that perform well

Goals of Contracting Reform


Macs the cornerstone of cms s medicare claims administration contract network

MACs - The Cornerstone of CMS’s Medicare Claims Administration Contract Network


Complex contracts

Complex Contracts

  • Contract Type - Cost Plus Award Fee due to ever changing program requirements

  • In FY 2010, CMs issued 431 Medicare Fee for Service Change Requests (CRs) , 427 Joint signature Memorandums/Technical Direction Letters (JSM/TDLs), and 182 contract modifications

  • CR – Form instruction from CMS to the Claims Administration Contractors, shared system maintainers (SSMs), HIGLAS Maintenance Contractor, and CWF Maintenance Contractor in the form of Business Requirements

  • JSM/TDL – formal CMS communication vehicled used to provide technical direction and/or clarification to existing instructions that does not add cost to a contract, administrative announcements, emergency alerts, and one-time informational requestes that do not involve shared system changes


Medicare contracting reform

Fiscal Intermediaries

(FY 2002)

Premera BC

Anthem

NH

AHS

MT BC

Noridian

Regence BC of Oregon

WI BC

(UGS)

AL BC

(Cahaba)

Empire BC

WY BC

RI BC

Highmark

TN BC

(Riverbend)

NE BC

WI BC (UGS)

Anthem Ins. Companies

Empire BC

WI BC

(UGS)

KS BC

BC MD

SC BC

TN BC

(Riverbend)

AZ BC

OK BC

AR

BC

AL

BC

(Cahaba)

GA

BC

MS

BC

TrailBlazer

Premera

BC

FL

BC

WI BC (UGS)

Cooperativa

* Mutual of Omaha serves as a Fiscal Intermediary to providers in all but two states (Alaska and New York)


Medicare contracting reform

Carriers - FY 2002

Noridian

Empire

BCBS

BCBS MT

Noridian

Wisconsin

Physicians

Service

BS WNY

(HealthNow)

NHIC

CIGNA

BS WNY

BCBS RI

Highmark

BCBS FL

(First Coast)

Regence BS UT

Nationwide

GHI

Noridian

BCBS KS

NHIC

AdminaStar

TrailBlazer

CIGNA

BCBS

AR

Noridian

BCBS AR

BCBS

SC

BCBS AL

TrailBlazer

BCBS FL

(First Coast)

Noridian

Guam

SSS

Hawaii

Puerto Rico and

Virgin Islands


A b mac jurisdictions 15

2

14

6

13

3

8

12

1

5

15

11

10

4

7

2

9

1

A/B MAC Jurisdictions (15)


Durable medical equipment mac jurisdictions 4

D

A

B

C

Durable Medical Equipment MAC Jurisdictions (4)


Status of implementation

The four Durable Medical Equipment Medicare Administrative Contractors (MACs) are fully implemented and operational

Nine A/B MACs are fully implemented and operational (65 percent of national claims volume)

Two A/B MACs are recently awarded and in process of being implemented (15 percent of national claims volume)

Four A/B MAC jurisdictions remain delayed due to bid protests (20 percent of national claims volume)

Status of Implementation


Protest summary

Protest Summary

  • CMS has awarded 19 MAC Contracts (4 DME and 15 A/B)

  • Protests received - 22

    (2 at competitive range and 20 at award)

    • GAO sustained – 4

    • GAO denied – 8

    • GAO/ADR & adverse agency decision resulted in corrective action – 9

    • Protest withdrew - 1


Many positive results

In instances where MACs are operational

Medicare’s administrative costs have gone down

Provider satisfaction survey scores have increased

CMS identified and eliminated operational inconsistencies as contracts were consolidated

Performance improvements in system security, provider customer service, beneficiary inquiry support, appeals processing and resolution

Reduction in variation in local medical coverage determinations

Consolidation of regional processing has enabled better coordination of provider outreach activities

Many Positive Results


Medicare contracting reform

Trends in Selected Medicare

FFS Operating Costs FYs 2003-2009


Cms observations

The competitive process is time-consuming and subject to external scrutiny (multiple GAO reviews of protest allegations)

Three procurement cycles (start-up, Cycles 1 & 2)

No new entrants to Medicare claims administration as a result of competitive process

Some companies outside of existing pool attempted to bid, in partnership with current Medicare claims contractors

CMS adapted competitive selection process throughout cycles of procurement

CMS Observations


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

Benefits to the Medicare Program


Providers will benefit from new operational structure

Competitive process promotes 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

Providers Will Benefit from New Operational Structure


Contract administration structure

Contract Administration Structure

  • Contracting Officer (CO)

  • Contracting Officer Technical Representative (COTR)

  • Business Function Leads (BFLs)

  • Technical Monitors (TMs)

  • Contract Administration Team (CAT)


Roles and responsibilities

ROLES AND RESPONSIBILITIES

  • Contracting Officer

  • Authorized to commit/bind the Government by contract for supplies or services

  • Authority to accept nonconforming work or waive any requirement of the contract

  • Authorize reimbursement to the contractor for any costs incurred during the performance of the contract

  • Modify any term or condition of the contract

    • Make any changes in the SOW

    • Modify/extend the period of performance

    • Change the delivery schedule


Roles and responsibilities1

ROLES AND RESPONSIBILITIES

Contracting Officer Technical Representative

(COTR)

The COTR is housed in theCMM/MCMG program office

Authorized to provide technical direction in accordance with the AB MAC contract

Monitors the Contractor’s technical progress, including interpreting the Statement of Work and any other technical performance requirements

Assists in the resolution of technical problems encountered during performance

Reviews invoices/vouchers/deliverables


Roles and responsibilities2

ROLES AND RESPONSIBILITIES

  • CMS Business Function Leads (BFLs)

  • Subject matter expert for policy/operational area

  • Provides support to the COTR by performing the following:

    • Monitors the contractor’s technical progress

    • Provides interpretation of the SOW and other

    • technical requirements

    • Assists in the performance evaluation of the

    • contractor

    • Assists in the resolution of technical problems

    • Assists in the review of invoices/ vouchers/

    • and deliverables


Roles and responsibilities3

ROLES AND RESPONSIBILITIES

  • CMS Technical Monitors (TMs)

  • Monitors the contractor’s performance in the “field”

  • Provides support to the COTR by performing the following:

    • Monitors the contractor’s technical progress

    • Provides interpretation of the SOW and other

    • technical requirements

    • Assists in the performance evaluation of the

    • contractor particularly with regard to assigned

    • technical reviews

    • Assists in the resolution of technical problems

    • Assists in the technical evaluation inspection


Roles and responsibilities4

ROLES AND RESPONSIBILITIES

  • Contract Administration Team (CAT)

  • The CAT is housed in the CMM/MCMG

  • program office

  • Provides support to the COTR by performing the following:

    • Day to day oversight of contract

    • Administer changes to the MAC SOW

    • Coordinate with the BFLs and TMs to resolve

    • any contractor performance issues


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