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Transcript for audio podcast: Medicare Administrative Contractors' Performance

From the Office of Inspector General of Department of Health and Human Services

[Linda Ragone] I'm Linda Ragone, Deputy Regional Inspector General for the Office of Evaluation and Inspections in Philadelphia. I'm speaking with Tara Bernabe, a team leader in our office to discuss the recent report on Medicare Administrative Contractors' Performance. Tara, can you tell us about the role of these contractors and also about their oversight?

[Tara Bernabe] Sure. Medicare Administrative Contractors, also called MACs, play a critical role in the Medicare program. Their responsibilities include things like processing claims, collecting overpayments, enrolling health care providers, and handling appeals. The Centers for Medicare & Medicaid Services, or CMS, is the agency responsible for overseeing the MACs and assessing their performance.

[Linda Ragone] Would you talk a little about why it's important for CMS to assess MACs' performance?

[Tara Bernabe] Well, CMS pays MACs billions of dollars over the course of their contracts to carry out their responsibilities. CMS performs a variety of reviews to assess MACs' performance to ensure that they are meeting their contract requirements. One type of review that CMS conducts is a quality assurance review.

[Linda Ragone] Would you tell us more about these reviews?

[Tara Bernabe] Sure. For quality assurance reviews, CMS evaluates the MACs on certain standards. So, for example, CMS can evaluate whether or not the MACs are processing claims in a timely fashion, or if they are accurately handling appeals.

[Linda Ragone] You looked at 2 years' worth of performance data for 13 MACs. What did you find regarding these quality assurance reviews?

[Tara Bernabe] We found that MACs did not meet one quarter of the quality assurance standards that CMS required.

[Linda Ragone] What were the specific problem areas?

[Tara Bernabe] There were three areas where MACs did not meet over 40 percent of standards. The top problem area for MACs was enrolling providers in the Medicare program. MACs did not meet 51 percent of the standards in this area. For example, some MACs did not meet the timeliness or accuracy requirements for processing provider enrollment applications.

[Linda Ragone] For a quarter of unmet standards, you also found that MACs didn't fix the issues identified. What can CMS do to make sure they resolve these issues?

[Tara Bernabe] CMS can require MACs to have an action plan to help resolve outstanding issues. But we found that CMS did not require an action plan for 12 percent of unmet standards. And unmet standards without action plans were almost four times more likely to go unresolved. We recommended that CMS require action plans for all unmet standards.

[Linda Ragone] You talked a little bit about the standards you reviewed, but what about the individual MACs? Did you find any differences in how MACs performed?

[Tara Bernabe] Yes, we found two MACs that consistently underperformed across various CMS reviews.

[Linda Ragone] Are these two contractors still operating?

[Tara Bernabe] The contract for one MAC has already been awarded to a different contractor. The process to award the second MAC contract is still in progress, so that contractor is still operating. In our report, we recommended that CMS seek legislative change so it would have more flexibility in awarding new contracts when MACs are not meeting its contractual requirements.

[Linda Ragone] Overall, how well did CMS do in overseeing the MACs?

[Tara Bernabe] We found that CMS's performance reviews were extensive, but they weren't always completed timely as required by CMS's own standards. Because CMS wasn't meeting the performance review timeframes, we made some recommendations to address this.

[Linda Ragone] What did CMS say about your report's recommendations?

[Tara Bernabe] CMS concurred with all six of our recommendations and it has already begun to make changes.

[Linda Ragone] Thank you, Tara, for sharing this important work on Medicare Administrative Contractors.

[Tara Bernabe] Thank you.


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