Four firms awarded CMS Medicare claims contracts

Four companies have won contracts totaling $430.3 million from the Centers for Medicare and Medicaid Services to process Medicare claims from suppliers of such durable medical equipment as respiratory equipment, custom braces and prosthetic devices.

The awards are part of initiatives from CMS, an agency of the Health and Human Services Department, designed to improve service to beneficiaries and providers, support the delivery of coordinated and quality care, and provide greater administrative efficiency and effectiveness for fee-for-service Medicare.

Beneficiaries and suppliers are expected to have a single point of contact connecting them to a network for information. The contracts all have a one-year base period and four option years.

"These awards are the first step in the significant reengineering of Medicare's claims administration process and signal a change from the 'business as usual' of the past 40 years," CMS said in a recent announcement.

The four new regional providers will begin claims processing July 1. The four current regional carriers processed more than 68 million claims in fiscal 2004 from suppliers of durable medical equipment, amounting to more than $9.1 billion.

The awardees are:

• EDS Corp.'s National Heritage Insurance Co. of Biddeford, Maine, won a $58.8 million contract to process electronically submitted claims for Medicare beneficiaries and durable medical-equipment suppliers in East Coast states. NHIC will review and edit claims for payments, make coverage decisions for new procedures and devices, and provide help services for suppliers and beneficiaries.


• AdminaStar Federal Inc. of Indianapolis was awarded an $89.9 million contract to process claims for Midwestern states.


• Palmetto GBA LLC of Columbia, S.C., landed a $184.2 million contract to process claims for Southern states. It will also provide a national supplier clearinghouse, data analysis and coding, data center and Medicare electronic data interchange system.


• Noridian Administrative Services of Fargo, N.D., won a $97.4 million contract to process claims in the West, Alaska and Hawaii.