GAO Report Says Medicare Contract Reform Accelerated, but with Setbacks - May 5, 2010

On April 26, the Government Accountability Office (GAO) published a report assessing Medicare contracting reform efforts under the Medicare Prescription Drug, Modernization, and Improvement Act of 2003. Under the law, CMS began transitioning Medicare claims administration for fee-for-service payments to 19 Medicare Administrative Contractors (MACs). The report found that CMS has accelerated the transition process, and it should be completed ahead of the October 1, 2011 deadline required by law. However, the report also found that implementation has not always corresponded with other Medicare payment initiatives, such as requiring providers to re-enroll in order to get paid, leading to delayed claims payment. In addition, CMS underestimated workloads for some MACs, also causing significant backlogs. Despite these setbacks, however, GAO found that CMS is learning from mistakes and adjusting to make implementation run more effectively.