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What is a Medicare Carrier?

By Jessica Saras
Updated Mar 03, 2024
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A Medicare carrier, or Medicare Administrative Contractor (MAC), serves as the primary point of contact for Medicare providers. Contracted by the government, a Medicare carrier is typically a regional company that oversees the administration and processing of both Medicare part A and part B policies. The carrier is also the provider’s chief source for coverage, billing, and enrollment questions. In addition, Medicare carriers also handle claims appeals, identify billing errors, and answer any beneficiary inquires.

Medicare carriers vary by state and work with their area’s assigned providers to ensure they meet enrollment requirements. To become a Medicare provider, applicants must submit an application, hold a valid medical license in their state, and comply with the U.S. government’s specified non-discrimination standards. In addition, the provider must agree to the Medicare program’s terms of reimbursement. It is the Medicare carrier’s responsibility to ensure the provider understands these conditions.

Although carriers are required to process claims according to the government’s regulations, as regional companies, they do have the authority to set local policies. A Medicare carrier, therefore, must review all Medicare claims and determine whether or not the claim qualifies for Medicare reimbursement. The carrier is then responsible for developing payment policies for the states in its area. Once these local medical review policies, which are also known as local coverage determinations, are established, the Medicare carrier then evaluates each Medicare claim to ensure that the services provided are reasonable and necessary.

Generally, Medicare providers receive payment in one of two ways, through either prospective payments or relative values. Used for part A Medicare, a prospective payment is a set amount of money that is allotted for the type of care provided. Providers receive this standard rate for their services, regardless of their actual fees for any procedures or services. Relative value fees, on the other hand, are used for part B Medicare policies and, similar to private insurance reimbursement, assign a standard value for each service. The physician is then reimbursed according to the outlined fee schedule.

Initially contracted on a one-year basis, Medicare carriers are reviewed annually to ensure they meet the guidelines set forth by the Center for Medicare and Medicaid Services (CMS). If deemed eligible, the carrier can then renew its contract for up to four additional years. To be eligible for renewal, a carrier must stay up to date on policy changes through regular, ongoing training and development.

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Discussion Comments
By icecream17 — On Jun 26, 2011

@Cafe41 - I think that Medicare eligibility benefits vary per state, so you might want to check with your local state. I do like the idea of checking out rehab centers and I am sure I could probably do that with nursing home care as well. Having some sort of stamp of approval really helps me in narrowing down my choices for my parents. Thanks for the tip.

By cafe41 — On Jun 26, 2011

I remember when I was looking for a rehab facility for my father; I had to look up which facilities accepted Medicare and which were reputable. I went to the medicare.gov website and it offered a list of carriers in the area where my father lived along with their rating.

At one rehab center they told me that his Medicare eligibility allowed him to receive in treatment care fully covered for the first twenty days. After that, the coverage fell to 80% for the next eighty days. They explained to me at the rehab center that many seniors have secondary insurance to cover these gaps otherwise it would be out of pocket which would amount to $135 a day.

They also told me that in home care was also covered for physical therapy and occupational therapy for three times per week for two hours at a time.

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