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On September 7, 2017, CMS awarded Palmetto GBA a new contract to administer the claims processing for Medicare for Part A and Part B for MAC Jurisdiction J.  This is a one year guaranteed contract with up to four additional one year extensions.

The transition occurs officially Feb 26, 2018.

Expected to be “Smooth”?

CMS “anticipates that implementation of the new contract will go smoothly, with few (if any) disruptions in service for Medicare beneficiaries and providers.”

We have been through a number of MAC billing transitions with different carriers including Palmetto, and few if any go through “few (if any) disruptions”.  Often the two carriers are arguing about who takes the claims for a period of time.  This can be complicated by DOS vs submit date where each says you should bill the other.  In theory, anything submitted to the old MAC prior to the transition should be sent over to the new MAC and the new MAC processes it.  For example, a claim submitted on Feb 20, 2018, would be submitted to Cahaba then in early March it should be registered into the new Palmetto system, and in theory we would follow up with Palmetto and Palmetto would process the claim and pay it.

In past transitions, claims submitted to the old carrier prior to the changeover didn’t get to the new carrier, medical billing was thrown into disarray, the carrier can’t even find your claims and large numbers of claims go unpaid for some time.  In the first month or so, often the new carrier will tell you to wait a while for their systems to catch up.  They will likely make excuses about how Cahaba hasn’t gotten them all the information or that they are processing all of the claims that has been given to them.  However, after suggesting waiting they will likely later tell you after wasting a lot of time they never got the claim and you need to resubmit all of the claims outstanding from the old carrier.

Our Forecast

We remember the Palmetto transition to take over the J1 MAC in 2008 and it did NOT go smoothly with “few (if any) disruptions”.  Other transitions also had little “hiccups”.

Our advice to all providers in this region: Be prepared for disruption.  If it turns out we are wrong, then we were all extremely vigilant and planned to avoid a major disruption.  If we are right, then we will be mitigating the problems with all the extra work and providers will be better prepared to weather a little financial storm while claims are held up by Palmetto.

Financial Planning

We would expect that at least a significant portion if not everything that isn’t paid by the end of February by the old MAC Cahaba is likely to not be paid in March.  Moreover, we would expect payment cycle for claims submitted in early March to be extended beyond the average turnaround of a few weeks so that a large portion of March claim submissions will not be paid until late April or possibly May.

Following is the Fact Sheet provided by CMS regarding the awarded contract and transition:

A/B MAC Jurisdiction J Award Fact Sheet.

Molecular Diagnostics (MolDx) & Annual Gap Fill
This award of the contract to Palmetto gives the MolDx program enough clinical laboratory fee schedule (CLFS) states or zones to control the median in the annual gap fill process, assuming that all of the MolDx MACs submit the same price recommendations to CMS.  This new award leaves Noridian with 2 MACs J-E, J-F; WPS with two MACs J-5, J-8; and Palmetto with two MaCS J-M; and J-J.

About Ibex RCM

Ibex Billing is a laboratory revenue cycle management (RCM) company.  We only do laboratory and pathology billing. Ibex‘s management team has hundreds of years of revenue cycle management experience. Lab billing is different than physician billing and we only do laboratory revenue cycle management.


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