Medicare Contracting Reform to Replace Carriers and Fiscal Intermediaries

As part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), a Medicare contracting reform (MCR) initiative has been established. The MCR initiative will replace the current Medicare fiscal intermediaries and carriers with Medicare Administrative Contractors (MACs) by October 1, 2011. A competitive bidding process will be used to appoint the MACs. The aim of the MCR initiative is to provide CMS with the opportunity to improve and modernize the Medicare fee-for-service system.

Beginning October 1, 2005, the existing carrier and fiscal intermediary contracting authorities will sunset and the new MACs become effective. However, carrier and fiscal intermediary contracts in effect on this date may be continued until their expiration, at which time they will subject to competitive bidding. By October 1, 2011, all carrier and fiscal intermediary contracts must end and all new MAC contracts must have been let through the competitive bidding process. Additional information on this change will be disseminated as it becomes available.