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CMS Selects Palmetto GBA to Administer Medicare Program in Four States

COLUMBIA, S.C., Jan. 9 /PRNewswire-USNewswire/ -- Palmetto GBA, a leading provider of technical and administrative services for the federal government, has been selected by the federal Centers for Medicare & Medicaid Services (CMS) to process and pay all fee-for-service Medicare claims and perform related duties for South Carolina, North Carolina, Virginia and West Virginia.

After a full and open competitive process, CMS awarded Palmetto GBA a contract with a base period of one year and four one-year options to serve as the Medicare Administrative Contractor (MAC) for those states, known as MAC Jurisdiction 11. The contract has a potential value of approximately $300 million. As the MAC, Palmetto GBA will process and pay claims for both Parts A and B of the Medicare benefit program.

The contract also calls for Palmetto GBA to continue processing and paying 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, S.C., will support the contract. All jobs are expected to be filled by current employees of Palmetto GBA, which under previous contracts processes all Medicare claims in South Carolina, as well as Part A claims in North Carolina and Part B claims in West Virginia.

Palmetto GBA will begin implementation activities immediately, conducting extensive outreach to health care providers, state medical associations and beneficiaries in Jurisdiction 11 to provide education and information about the transition. It will assume full responsibility for all fee-for-service claims in Jurisdiction 11 no later than March 2010.

Over the past three years, CMS selected 15 MACs nationwide to process claims for both Parts A and B of Medicare. The MACs 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 MACs 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 MAC for Jurisdiction 1, which includes California, Hawaii, Nevada, American Samoa, Guam and the Northern Mariana Islands.

"We are honored with our selection to serve beneficiaries, physicians and other health care providers in two of the new MAC jurisdictions," Palmetto GBA President Bruce Hughes said. "We appreciate and value the confidence CMS has placed in Palmetto GBA to serve the people with Medicare and those who provide care for them in Jurisdictions 1 and 11."

The competitive selection of the new MACs was made on a "best value" basis, CMS said in a statement. Primary consideration was given to the technical quality of the companies' proposals. CMS conducted a technical and past performance evaluation, performed a cost realism analysis, and assessed overall cost reasonableness for each award.

About Palmetto GBA

Based in Columbia, S.C., Palmetto GBA is a wholly owned subsidiary of BlueCross BlueShield of South Carolina. Palmetto GBA's principal business is providing administrative services for the Medicare health benefit program. The company has offices in South Carolina, Georgia, Ohio and Illinois. Palmetto GBA and BlueCross BlueShield of South Carolina are independent licensees of the Blue Cross and Blue Shield Association.

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