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Medicare - Claims Processing

Medicare HI and SMI fee-for-service claims are processed by non-government organizations or agencies that contract to serve as the fiscal agent between providers and the Federal Government. These claims processors are known as intermediaries and carriers. They apply the Medicare coverage rules to determine the appropriateness of claims.

Medicare intermediaries process HI claims for institutional services, including inpatient hospital claims, SNFs, HHAs, and hospice services. They also process outpatient hospital claims for SMI. Examples of intermediaries are BC/BS (which utilize their plans in various States) and other commercial insurance companies. Intermediaries' responsibilities include the following:

·   Determining costs and reimbursement amounts.

·   Maintaining records.

·   Establishing controls.

·   Safeguarding against fraud and abuse or excess use.

·   Conducting reviews and audits.

·   Making the payments to providers for services.

·   Assisting both providers and beneficiaries as needed.

Medicare "carriers" handle SMI claims for services by physicians and medical suppliers. Examples of carriers are the Blue Shield plans in a State, and various commercial insurance companies. Carriers' responsibilities include the following:

·   Determining charges allowed by Medicare.

·   Maintaining quality of performance records.

·   Assisting in fraud and abuse investigations.

·   Assisting both suppliers and beneficiaries as needed.

·   Making payments to physicians and suppliers for services that are covered under SMI.

Quality improvement organizations (QIOs; formerly called peer review organizations, or PROs) are groups of practicing health care professionals who are paid by the Federal Government to generally oversee the care provided to Medicare beneficiaries in each State and to improve the quality of services. QIOs educate other health care professionals and assist in the effective, efficient, and economical delivery of health care services to the Medicare population. The ongoing effort to combat monetary fraud and abuse in the Medicare program was intensified after enactment of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), which created the Medicare Integrity Program. Prior to this 1996 legislation, CMS was limited by law to contracting with its current carriers and fiscal intermediaries to perform payment safeguard activities. The Medicare Integrity Program provided CMS with stable, increasing funding for payment safeguard activities, as well as new authorities to contract with entities to perform specific payment safeguard functions.

See these topics for additional information:

·   Medicare - Overview

·   Medicare - Coverage

·   Medicare - Managed Care Plans

·   Medicare - Financing, Liabilities, and Payments

·   Medicare - Administration

·   Medicare - Data Summary

·   Medicare - Other Considerations

·   Relationship of Medicaid and Medicare

·   Medicare (Part D) Prescription Drug Coverage

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