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Overview of the “Medicare Administrative Contractor” (MAC) Program and its Impact on Medicare Audit

Among its many provisions, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) permitted the Centers for Medicare & Medicaid Services (CMS) to overhaul the Intermediary (Part A) and Contractor (Part B) systems, consolidating the two systems and centralizing the Medicare contractor system into a new system administered by Medicare Administrative Contractors (MACs) covering separate jurisdiction covering both Part A and Part B claims.

In consolidating the processing of Part A and Part B claims, many providers now submit Medicare audit claims denials to a new contractor for Redetermination appeal.. Additionally, in many jurisdictions, initial post-payment claims audits are now being conducted by Zone Program Integrity Contractors (ZPICs) rather than Program Safeguard Contractors (PSC). Together, newly-appointed MACs and ZPICs sometimes appear to be taking different approaches (from that of the provider’s previous contractors) when conducting Medicare audits.

MAC Program Benefits:

When first announced, there were a number of anticipated benefits that would result from the implementation of the consolidated, MAC approach to claims processing. These include, but are not limited to:

  • The consolidation was expected to result in significant cost savings.
  • CMS anticipated that this consolidated approach would result in “more accurate claims payments and greater consistency in payment decisions.
  • This change was also intended to standardize contracting principles to be more in line with other Government contracts by introducing competition and performance incentives. All MAC contracts are one-year contracts with the potential of renewing for four additional years, for a total of five years. The contracts are not automatically renewed, and CMS can choose whether or not to renew the contract on a yearly basis depending on performance measures.
  • All MAC contracts will be re-competed every five years with CMS issuing a Request for Proposal (RFP) in each MAC jurisdiction.
  • The MAC system was intended to provide Medicare providers a single, primary point-of-contact for the receipt, processing and payment of Part A and Part B claims.

In consolidating existing systems, MAC are now responsible for:

o Enrolling health care providers/suppliers in the Medicare program.

o Educating providers about billing requirements.

o Handling claims appeals. (initial levels only)

o Answering provider inquiries directly.

o Answering beneficiary inquiries referred by the 1-800 MEDICARE call center.

Ongoing Concerns with the MAC Program:

While the consolidation of the Part A and Part B programs under a single contractor will hopefully result in significant cost savings and a more uniform approach to claims decision-making, a number of problems have been noted by providers we have worked with. Current concerns include:

  • In one jurisdiction, it has become apparent that the newly-appointed MAC has no interest in how the previous contractor interpreted applicable LCD guidance.
  • Despite promises to the contrary, Customer Service has been almost non-existent. It remains extraordinarily difficult to speak with anyone involved with the “Rebuttal" or “Redetermination" appeals process.
  • Despite efforts at consolidation, claims guidance covered by jurisdiction-specific LCDs continues to vary, sometimes in a significant way, from one MAC to another.

Medicare Audit Appeal Recommendations:

Should you choose to handle claims appeals at the initial level (Redetermination) yourself, we strongly recommend that you check and see of the new MAC has issued any guidance covering the claims at issue. Carefully review both new and previous claims guidance, identifying possible errors made when the ZPIC conducted the initial claims review. Additionally, map out any and all arguments in support of payment. Finally, if you have not already done so, you will need to submit any documentation that will support the claims billed.

While you may prevail with regard to the claims at issue at the Redetermination level, more often than not, providers find that the claims denials are readily denied once again, often citing new, additional reasons for denial.

Don’t give up. Overall, we have found that the administrative appeals system does, in fact, provide most providers a fair opportunity to have their arguments heard.

Additional resources provided by the author

Liles Parker attorneys and staff handle the administrative appeal of literally thousands of individual claims each year. We have the experience and knowledge needed to present your case persuasively. Should you have any questions regarding the administrative appeals process, please call us for a free consultation. 1 (800) 475-1906.

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