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Medicare Contracting Reforms

Dear NAAOP Member:

The National Association for the Advancement of Orthotics and Prosthetics has recently published a government relations update entitled, “Major Changes at DMERCs Coming.” This update concerns Medicare contracting reforms. This is an important opportunity for O&P providers to not only be informed about the upcoming changes, but to participate in the process by providing NAAOP with your feedback prior to and during the implementation process. Below is a brief summary of the information included in NAAOP’s update, “Major Changes at DMERC Coming.”

Summary of Medicare Contract Reforms

Proposed effective date: 7-1-06

  1. DMERCs or Durable Medical Equipment Regional Carriers will be replaced with DME MACs, Durable Medical Equipment Medicare Administrative Contractors.

  2. The new DME MACs will have performance incentives built into their contracts. The performance measures to be used have not yet been determined.

  3. CMS intends to hold monthly meetings to solicit the feedback of the O&P provider community through provider organizations such as NAAOP.

Contractors by region as of 7-1-06:

  1. Region A National Heritage Insurance Company (replacing HealthNow)

  2. Region B AdminaStar Federal

  3. Region C Palmetto GBA

  4. Region D Noridian, (replacing CIGNA)

Changes in contactor jurisdictions as of 7-1-06:

Claims for residents of four states and the District of Columbia will change jurisdiction.

  1. Maryland Region A (rather than Region B)

  2. District of Columbia Region A (rather than Region B)

  3. Virginia Region C (rather than Region B)

  4. West Virginia Region C (rather than Region B)

  5. Kentucky Region B (rather than Region C)

Changes for the handling of electronic claims:

  1. If you are an O&P provider who conducts electronic transactions as of 7-1-06 all electronic transactions for DMEPOS services will go through MEDIS, Medicare Electronic Data Interchange System (both submission of claims and receipt of electronic remittances).

Name change:

  1. The SADMERC, statistical analysis durable medical equipment regional carrier will be replaced by Data Analysis Coding contractor, DAC. This is a change in name only. The contract has been awarded to Palmetto GBA.

Changes for program integrity safeguard contractors (PSCs) as of 3-1-06:

As of 3-1-06, fraud and abuse functions (all pre- and post- payment reviews) will be performed solely by PSCs.

  1. Region A TriCenturion

  2. Region B TriCenturion

  3. Region C TrustSolutions

  4. Region D Electronic Data Systems through its subcontractor IntegriGuard

Please consider providing NAAOP with your input on these proposed changes and also your thoughts on what performance incentives would have the most valuable impact on your O&P practice. Also, please forward this message to other O&P professionals who may not be NAAOP members.

Thank you, George W. Breece Executive Director – NAAOP

1875 Eye Street, NW Twelfth Floor Washington, DC 20006-5409 Phone: 910-583-2162 E-mail: or

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