In brief, Original Medicare is government-run health coverage that uses private organizations to perform operations.
Medicare uses private carriers for business functions, durable medical equipment, processing insurance claims and reviewing appeals. Notable health insurers include Humana, Aetna, and UnitedHealthcare.
Basically, Medicare employs different Part A and Medicare Part B (Original Medicare) administrative carriers for various regions of the country.
Likewise, other private insurance companies, such as Humana insurance company, manage claims, and reimbursements for Medicare Advantage, Medigap, and Part D health plans.
In short, Original Medicare operates as a fixed-fee-for-services organization.
In doing so, the Centers for Medicare and Medicaid Services create contracts with well-qualified doctors and facilities, like hospitals, that will accept Medicare’s terms and prices for patient services.
Following treatment from Medicare contracted providers, Part A/B carriers process claims from members, handling duties from accounting to case-by-case coverage decisions.
Naturally, medical claims arise in many ways. Of these, most are unpaid medical bills or charges initially paid by customers for which they seek reimbursement.
All in all, comparison shopping is a great method for finding value in Medicare Advantage, Part D, and Medigap. Individually, these programs offer private plans with a variety of features, rules, and benefits.
In short, a fixed-fee-for-services organization is a type of managed care that provides freedom of choice for customers at agreed upon fees.
Essentially, ‘fixed-fee-for-service’ means Medicare sets prices for services and supplies, and healthcare providers participate in this agreement.
With that, beneficiaries get a nationwide choice of medical providers and facilities instead of a sparse, restrictive network for everyone.
Likewise, in this type of organization customers can use any doctor or hospital that accepts Medicare.
To boot, the Centers for Medicare & Medicaid Services (CMS) pays most for health care in the United States, covering nearly 90 million Americans.
Original Medicare members are not required to consult with a primary care doctor or get referrals to see specialists within the fee-for-service network of Part A and Part B.
Generally, if they use services outside of the network, then they must appeal to a carrier for reimbursement of coverage or face the full cost.
Previously, these were called Part A Fiscal Intermediaries (or FI) and Part B carriers.
Following 2003, the names of Medicare’s contracted carriers changed with the passage of the Part D prescription drug amendments.
After new regulations were set, CMS began to call these companies A/BMedicare Administrative Contractors (or MACs).
Still, many people rightly refer to these entities simply as carriers.
Carriers Are the Hub of Original Medicare
Amazingly, in 2020 alone Part A and Part B carriers processed more than $400 billion in claims, bills, disputes, and appeals for the Medicare Fee-For-Service program.
As well as handling the ins-and-outs of medical claims, Medicare Administrative Carriers educate providers to develop improvements for claims standards.
Recruit doctors and facilities for Original Medicare
Review claim appeals for individuals denied coverage
Review medical records as needed for claims
Establish Local Coverage Determinations to include more procedures as medicinal innovations grow
Handle inquiries from service providers, like doctors
Coordinate with CMS and the other administrative contractors under CMS
The Importance of Local Coverage Determinations
Collectively, Medicare A and B serves a diverse population of millions of older Americans and persons with disabilities.
Of course, these varied groups of Americans have tremendously more varied health needs.
Importantly, hundreds of millions of determinations of coverage each year means maintaining consistency of coverage standards from state to state and region to region.
Local coverage determinations help the system work consistently by providing peer guidance to the process of review and approval of billings and procedures.
In summary, Medicare Administrative Contractors that handle Part A and Part B claims and payments can grant local coverage determinations for medical situations or procedures for which no national rule yet exists.
As one state advances a new determination for medical procedures, every other carrier gets the information and can apply it.
Carriers Process Claims by State or Territory
Who is my Medicare Administrative Contractor? Regularly, Medicare publishes a list of medical carrier name and the territories they serve.
When a claim occurs, Medicare requests the member to send the claim to the carrier responsible for the area in which the claim occurred.
Currently, there are 12 Medicare Administrative Contractors that serve the nation, four of which process home healthcare and hospice claims.
In 2020 alone, the MACs served over 1.1 million health care providers who participate with the Medicare program.
Together, these regional organizations process Medicare claims for nearly 60% of the total Medicare beneficiary population.
Filing a Claim With the Designated Carrier
In case of unpaid medical bills, Medicare beneficiaries file claims or disputes with the carrier for the state or region where the costs occurred.
Often, the carrier receiving your claim may ask for more information to confirm the facts and may review medical records if needed to understand the situation.
Routinely, the carriers handle cases in which the provider bills the wrong party.
For example, they may customer rather than Medicare, bill the wrong amount, or fail to bill Medicare at all.
MACs Service Customers and Providers
Together, MACs cover most of the processing that occurs in claims, disputes, and appeals.
In conjunction, they learn and grow in knowledge and experience and help the system expand its ability to recognize situations and make decisions that carry out the intent of the laws and promote positive patient outcomes.
In total, there are twelve Part A/B MACs covering the fifty states and territories; there are four MACs for durable medical equipment processing (called DME MAC).
In conjunction, MACs work with the below-listed groups to make the claims and processing system work smoothly.
Medicare Part A and B customers
Medicare Part A and B medical service providers
Durable Medical Equipment suppliers
Medicare Functional Contractors
Medicare: The Seniors’ Medical Services Program
Basically, Medicare is the national program for comprehensive hospital and medical insurance for older or disabled Americans.
Largely, Medicare operations have two categories: Original Medicare and private Medicare health plans.
First, Medicare Part A and B manages operations through organizations awarded contracts with the federal government.
Secondly, private plans provide coverage equal or greater than Original Medicare, managed by other health insurance carriers.
Predominantly, the private Medicare health plans are the prescription drug coverage in Part D, Part C Medicare Advantage and the gap insurance of Medicare Supplement.
Medicare Supplement plans, or Medigap, help pay medical charges not fully covered under Original Medicare.
MACS Work With Functional Contractors
Within the Original Medicare system, Medicare administrative contractors (MACs) work with Medicare customers, and other private contractors to ensure effective operations.
By and large, MAC functions include accounting, record keeping, claims, appeals for denied claims, call center support, durable medical equipment, and reviews to improve program integrity.
In total, Medicare uses four MACs to process requests and payments for durable medical equipment. Vitally important, durable medical equipment provides part of treatment around the clock such as an oxygen tank or wheelchair.
Of course, relaying these matters also requires a responsive network of communication, whether by phone, by mail, or online.
Together, MACs work with functional contractors to provide specialized capabilities for Medicare operations and improvements.
Medicare Provides the Names of Carriers
Undoubtedly, regional carriers serve indispensable functions in the operation of Original Medicare.
Medicare maintains a list of carriers and the areas that they serve.
Original Medicare beneficiaries must direct claims and questions to the carrier that serves the areawhere the claim occurred.
In summary, the private plans offered through Medicare include Medicare Advantage, Part D Prescription Drugs, and Medicare Supplement insurance.
Comparison shopping is important when selecting additional coverage outside of Original Medicare.
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