Staff Report
Published Jan. 9, 2009

Palmetto GBA, a provider of technical and administrative services for the federal government, has been selected by the federal Centers for Medicare and Medicaid Services to process and pay all fee-for-service Medicare claims and perform related duties for South Carolina, North Carolina, Virginia and West Virginia.

The contract has a potential value of approximately $300 million. The federal agency awarded Palmetto GBA the contract with a base period of one year and four one-year options to serve as the Medicare administrative contractor for those states, known as MAC Jurisdiction 11.

Palmetto GBA will process and pay claims for Parts A and B of the Medicare benefit program.

The contract also calls for Palmetto GBA to continue the processing and paying of Medicare claims from home health agencies and hospices in 16 states.

Nearly 600 full-time employees, most working from Palmetto GBA’s headquarters in Columbia, will support the contract. All jobs are expected to be filled by current employees.

Palmetto GBA will begin implementation activities immediately, conducting extensive outreach to health care providers, state medical associations and beneficiaries in the four states to provide education and information about the transition.

Over the past three years, the agency selected 15 Medicare administrative contractors nationwide to process claims for Parts A and B of Medicare. The contractors are replacing fiscal intermediaries, which currently process Part A claims, and carriers, which currently process Part B claims. Medicare Part A helps cover fees from hospitals, skilled nursing facilities and other institutional providers. Part B covers fees from physicians, laboratories and other practitioners.

The Medicare Modernization Act of 2003 mandated creation of the Medicare administrative contractors to increase efficiency and improve service by giving beneficiaries and providers a single point of contact for the Medicare program.

In 2007, Palmetto GBA was selected as the contractor for Jurisdiction 1, which includes California, Hawaii, Nevada, American Samoa, Guam and the Northern Mariana Islands.