DME MAC Transition’s Impact on O&P Providers

The following is an update on the DME MAC transition. Cigna filed a formal protest of the award of the Region C and Region D contracts. This triggered an automatic stay of the transition of these regions from DMERC to DME MAC. CMS overrode this stay (in order to proceed with the transition), but a court granted Cigna a temporary restraining order that reinstated the stay until the GAO renders a decision on Cigna’s appeal. A GAO decision is due by May 4th.

As a result of this stay, the transition is proceeding on schedule for July 1st for Regions A and B, but no transition for Regions C and D will occur at that time. Additionally, the other four contracts that were awarded to Palmetto GBA (the Medicare Electronic Data Interchange System (MEDIS) contract, the Data Center contract, a new National Supplier Clearinghouse (NSC) contract, and the Data Analysis and Coding contract) will not be implemented on July 1st. Instead, Palmetto will continue under its current SADMERC (which would have been replaced by the Data Analysis and Coding) and NSC contracts. Because the MEDIS contract has been stayed, O&P providers will continue to send their claims to their respective DMERCs/DME MACs, rather than to a centralized MEDIS.

For O&P providers, this means that providers in Region A will experience a change of contractor on July 1st, going from HealthNow to the National Heritage Insurance Company (NHIC). Region A providers will continue to submit electronic claims to HealthNow (these claims will be forwarded to NHIC), but will need to establish an electronic connection with NHIC for purposes of receiving remittance advices (we recommend testing this connection prior to July 1st). As of July 1st, paper claims will be submitted to NHIC rather than HealthNow.

Providers in Maryland and D.C. will go from Region B to Region A. Accordingly, as of July 1st, these providers will need to start sending paper claims to NHIC. They also should establish an electronic connection to NHIC for purposes of receiving remittance advices. With respect to electronic claims, providers in Maryland and D.C. may submit their claims to either AdminaStar or HealthNow; either way the claims will be forwarded to NHIC.

Providers in Kentucky will change from Region C to Region B. Accordingly, as of July 1st, these providers will need to start sending paper claims to AdminaStar. They also should establish an electronic connection to AdminaStar for purposes of receiving remittance advices. With respect to electronic claims, providers in Kentucky may submit their claims to either Palmetto GBA or AdminaStar; either way the claims will be forwarded to AdminaStar.

Additionally, the transition of the Program Safeguard Contractors (PSCs) will go into effect on July 1st. This will mean a change in the entities conducting provider audits. Part of the PSC transition has already occurred, with the PSCs taking over local coverage determinations as of March 1st.

Other than the above changes, O&P providers should not notice a significant impact on July 1st. With the exception of Kentucky, Maryland, and D.C., Region B operations will remain unchanged. Likewise, because of the stay, there will be no changes to providers in Regions C and D. CMS is currently expecting that the remainder of the transition (e.g., the DME MAC transition for Regions C and D, and the specialty contracts such as MEDIS) will occur on October 1st.

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