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HH03: Healthcare Law - 3.0 Lecture Hours

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Module 3, Topic 1
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HH01: History of Home Health – CMS and MACs Copy

Ian V. Chestnut July 26, 2021

What is CMS?
Centers for Medicare & Medicaid Services

The Centers for Medicare & Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA)which was formed in 1977, is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children’s Health Insurance Program (CHIP), and health insurance portability standards.


The CMS employs over 6,000 people, of whom about 4,000 are located at its headquarters in Woodlawn, Maryland. The remaining employees are located in the Hubert H. Humphrey Building in Washington, D.C., the 10 regional offices listed below, and in various field offices located throughout the United States.
The head of the CMS is the Administrator of the Centers for Medicare & Medicaid Services. The position is appointed by the president and confirmed by the Senate.[3] On March 13, 2017, Seema Verma was confirmed by the US Senate as Administrator of CMS.

What is MAC?

A Medicare Administrative Contractor (MAC), previously called carriers and intermediaries, is a private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries.


Since Medicare’s inception in 1966, private health care insurers have processed medical claims for Medicare beneficiaries.  Originally these entities were known as Part A Fiscal Intermediaries (FI) and Part B carriers. In 2003 the Centers for Medicare & Medicaid Services (CMS) was directed via Section 911 of the Medicare Prescription Drug Improvement, and Modernization Act (MMA) of 2003 to replace the Part A FIs and Part B carriers with A/B Medicare Administrative Contractors (MACs) in accordance with the Federal Acquisition Regulation (FAR).

Medicare Administrative Contractor (MAC)

In March 2007, the Centers for Medicaid & Medicare Services (CMS) announced that the Home Health and Hospice workloads would be consolidated into four of the Part A and Part B (A/B) Medicare Administrative Contractor (MAC) contracts instead of being procured separately.  CMS integrated the four Home Health and Hospice jurisdictional claims workloads into the following four A/B MAC jurisdictions:

  • Jurisdiction 6 — National Government Services, Inc. – (Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Michigan, Minnesota, Nevada, New Jersey, New York, Northern Mariana Islands, Oregon, Puerto Rico, US Virgin Islands, Wisconsin and Washington)
  • Jurisdiction 15 — CGS Administrators, LLC – (Delaware, District of Columbia, Colorado, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Utah, Virginia, West Virginia, and Wyoming)
  • Jurisdiction M —Palmetto GBA, LLC – (Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, and Texas)
  • Jurisdiction K — National Government Services, Inc.  – (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont)

Medicare contractor competitive bidding process

All Medicare administrative contracts are open to a competitive bidding process no less frequently than once every five years. CMS is required to select Medicare contractors based on both price and performance evaluations. Any contract renewal must demonstrate that the Medicare contractor exceeded performance requirements. The Medicare Modernization Act requires each Medicare contractor have a compliance program in place to monitor its conduct and to ensure that it follows the requirements of the Medicare program. Medicare contractors must also submit to periodic audits and quality assurance reviews.