12 Medicare Administrative Contractors Process 70% of All Medicare Claims

This video provides an in-depth exploration of Medicare Administrative Contractors (MACs), revealing their critical yet often opaque role in processing traditional Medicare Part A and B claims. Dr. Eric Bricker explains that the federal government does not process its own Medicare claims, instead contracting this massive undertaking to 12 private MACs across the United States. These entities are responsible for handling 70% of all Medicare beneficiaries (those in fee-for-service or traditional Medicare), processing an astounding $367 billion worth of claims annually, which translates to 1.2 billion individual claims. The speaker's primary purpose is to shed light on these powerful, privately-run organizations and advocate for greater transparency regarding their operations and financial structures.

The presentation delves into the operational scale and corporate structures behind two prominent MACs: Novitas and Noridian. Novitas, a major MAC covering numerous states including Texas, Pennsylvania, and Maryland, is highlighted for its "antiquated" website and its ownership by Guidewell Source, which is a subsidiary of Guidewell, the parent company of Florida Blue (the Blue Cross Blue Shield plan for Florida). Guidewell itself is a colossal entity with $19 billion in annual revenue, making it larger than many Fortune 500 companies like Netflix or Kimberly-Clark, if it were publicly traded. Similarly, Noridian, which processes Medicare claims for California and the rest of the Western United States (accounting for 15% of all Medicare claims), is identified as part of Blue Cross Blue Shield of North Dakota. The speaker emphasizes the difficulty in finding financial information for Noridian, further underscoring the lack of transparency.

Dr. Bricker stresses the immense power and influence of MACs, noting that they are not only responsible for processing claims but also for determining all Medicare denials and managing all provider relations. Doctors and hospitals do not call the government with Medicare questions; they call these MACs. The video concludes with a strong call for increased public scrutiny and transparency regarding MACs, especially in light of ongoing discussions about potential healthcare reforms such as expanding Medicare coverage or implementing "Medicare-for-All." The speaker believes that understanding the inner workings and financial details of these private contractors is paramount for any meaningful discussion about the future of healthcare in America.

Key Takeaways:

• Central Role of MACs: Medicare Administrative Contractors (MACs) are private entities, not the federal government, responsible for processing 70% of all traditional Medicare Part A and B claims, which includes fee-for-service beneficiaries.
• Massive Scale of Operations: There are 12 MACs with exclusive geographic territories across the U.S., collectively processing $367 billion in Medicare claims and 1.2 billion individual claims annually.
• Corporate Ownership and Financial Power: Many MACs are subsidiaries of large, well-known health insurance companies or their holding companies, such as Guidewell (parent of Florida Blue) and Blue Cross Blue Shield of North Dakota. These parent companies often have multi-billion dollar revenues, rivaling or exceeding those of major Fortune 500 corporations.
• Lack of Transparency: There is a significant lack of public information and transparency regarding the financial performance, operational details, and decision-making processes of MACs, making it difficult to ascertain their true revenue or internal workings.
• Influence on Denials and Provider Relations: MACs hold substantial power as they determine all Medicare claim denials and serve as the primary point of contact for all provider relations, meaning doctors and hospitals interact directly with MACs, not the government, for Medicare inquiries.
• Antiquated Systems: Some MACs, like Novitas, are noted for having "antiquated" websites, suggesting potential inefficiencies and a need for modernization in their digital infrastructure.
• Implications for Healthcare Reform: The speaker argues that understanding MACs is crucial for any discussion about expanding Medicare coverage or implementing "Medicare-for-All," as these private entities would become even more central to the healthcare system.
• Data Volume for Analytics: The processing of 1.2 billion claims annually by MACs represents an enormous volume of healthcare data, which could be a rich source for analytics, market insights, and operational optimization if made more accessible.
• Interplay of Public and Private: The system highlights the complex relationship between public healthcare programs and powerful private contractors, where private companies manage critical functions of a government-funded system.
• Call for Public Scrutiny: The video serves as a call to action for greater public and journalistic investigation into MACs to uncover more details about their operations, revenue, and accountability.

Tools/Resources Mentioned:

• Novitas Solutions Website: novitas-solutions.com
• Guidewell Website: guidewell.com
• Noridian Solutions Website: noridiansolutions.com
• Experian Healthcare Blog: experian.com/blogs/healthcare/2016/08/review-of-current-medicare-administrative-contractors/
• Jax Daily Record: jaxdailyrecord.com/article/jacksonville-based-guidewell-had-dollar19-billion-in-revenue

Key Concepts:

• Medicare Administrative Contractors (MACs): Private companies contracted by the Centers for Medicare & Medicaid Services (CMS) to process Medicare Part A and Part B claims for specific geographic regions.
• Traditional Medicare (Fee-for-Service): Medicare Part A (hospital insurance) and Part B (medical insurance), where beneficiaries can choose any doctor or hospital that accepts Medicare. This contrasts with Medicare Advantage (Part C).
• Medicare Denials: The rejection of a claim for payment by Medicare, often determined by MACs based on medical necessity, coding, or administrative rules.
• Provider Relations: The interactions and support services provided to healthcare professionals and facilities regarding Medicare policies, claims, and inquiries.