The Centers for Medicare & Medicaid Services (CMS) Friday announced that it awarded the contract for combined administration and payment of Part A and Part B Medicare claims in California to South Carolina-based Palmetto GBA. Palmetto will also administer Medicare claims in Hawaii, Nevada, American Samoa, Guam, and the Northern Mariana Islands. The new contract takes effect July 1, 2008.

Palmetto is one of five new Medicare Administrative Contractors (MACs) named by CMS as required by the Medicare Modernization Act of 2003. The MAC contracts, which combine administration of both Part A and Part B claims, are part of an effort to streamline the fee-for-service payment system.

As you know, NHIC has been California’s Medicare carrier for more than a decade, processing claims for physicians, laboratories and other practitioners under Medicare Part B. NHIC will continue processing Medicare claims for California through June 30, 2008, when its current contract expires.

Understandably, CMA is concerned about the impact this significant change will have on physicians and patients. The association is reviewing the situation and will work with CMS, NHIC, and Palmetto to help ensure a smooth transition. Stay tuned for more information.

Click here to read CMS's press release on this issue.

Contact: Frank Navarro, 916/551-2046 or gfonseca@cmanet.org.