The Medicare Modernization Act of 2003 (the “MMA”) requires the Centers for Medicare and Medicaid Services (“CMS”) to enter into contracts with “Part A/Part B Medicare Administrative Contractors” by the year 2011. The contracts with these entities will replace the existing contracts that CMS has with intermediaries for Medicare Part A claims and with carriers for Medicare Part B claims. The new contracts will be awarded to entities on a state-grouped, geographic basis. These entities will be expected to handle both Part A and Part B claims.

The first such contract has been awarded and will cover Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming. This contract offers an opportunity to receive payments for meeting or exceeding performance requirements set by CMS. The areas CMS will consider are enhanced customer service, increased accuracy of payments, improved training and education of providers, and cost savings. The NAS contract is effective March, 2007. All of the contracts, fifteen in number, are to be awarded over the next five years.

Combining Part A and Part B claims processing and provider services can be of benefit to providers in those instances when they are involved in or have an interest in the payment for both Part A and Part B reimbursements. This can be true especially for physicians who provide services for hospitals, such as pathologists.