California Medicare carrier NHIC has filed a formal protest over the Centers for Medicare & Medicaid Services’ recent decision to name South Carolina-based Palmetto GBA as California’s new carrier for both Part A and Part B claims. The protest was filed with the federal Government Accountability Office, which has 100 days to respond.

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. 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.

CMA is supporting NHIC in its protest. NHIC consistently pays claims on time and with fewer payment hassles than other payors, and has always been extremely helpful and responsive in resolving physician payment problems. While CMA was concerned that UGS, NHIC’s subcontractor for Part A Claims, is owned by WellPoint (the Indiana-based corporate parent of Blue Cross of California), NHIC was able to demonstrate to our satisfaction that there were adequate firewalls and conflict-of-interest protections in place.

CMA is also concerned that Palmetto will not commit the necessary resources to ensure effective provider relations in California.

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