J-01 Statement of Work_JE_Jan-6-2012_redline.docx

Part A and Part B Medicare Administrative Contractor Statement of Work Jurisdiction E (formerly Jurisdiction 1)

ATTACHMENT J-01

1/6/201212/05/11

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RFP-CMS-2011-0026

Attachment J-01

For Official Use Only - Procurement Sensitive Table of Contents

RFP-CMS-2011-0026

Attachment J-01

Table of Contents xiii

Scope of Statement of Work 7 Scope The Contractor, as an independent Contractor and not as an agent of the government, shall furnish all the necessary services, qualified personnel, material, equipment, and facilities, not otherwise provided by the government, as needed to perform the work described in this Statement of Work (SOW).

The Contractor shall perform all Medicare Administrative Contractor (MAC) functions specified in this SOW and further defined in either the Internet-Only-Manuals (IOMs, http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage) or the Paper-Based Manuals, in accordance with Section C.2.3 of this SOW. For purposes of this contract, when differences or conflicts occur, this SOW shall take precedence over the IOMs unless otherwise specified. The Contractor shall contact the Contracting Officer (CO) and the Contracting Officer’s Representative (COR) if budgetary concerns occur because of this conflict. The Contractor is advised that any and all references in the SOW (including manuals, IOMs, etc.) to “RO-Regional Office” shall be replaced with “CO-Contracting Officer” unless otherwise specified in this SOW. Appendix A contains definitions of all abbreviations used in this SOW.

Purpose of Contract The purpose of this contract is to obtain a Medicare Administrative Contractor (hereinafter, referred to as “the Contractor” or “MAC”) to provide specified health insurance benefit administration services, including Medicare claims processing and payment services, in support of the Medicare fee-for-service (FFS) program. The Contractor will perform its responsibilities under the direction of the Centers for Medicare & Medicaid Services (CMS).

Under this contract, the Contractor will perform numerous functions to support health care services for Medicare beneficiaries, which include performing claims-related activities and establishing relationships with providers of health care services, both institutional and professional, for a defined geographic area or “jurisdiction.” The Contractor will perform the requirements of this contract in accordance with applicable laws, regulations, Medicare manuals, and CMS requirements to ensure the financial integrity of the Medicare program. The Medicare program’s legal, policy, and operating environment is complex, and the Contractor will utilize or interact with certain CMS-required payment schedules, systems, equipment, and operational capabilities in the performance of its functions. Further, the Contractor will coordinate its activities not only with the CMS, but also with a broad range of agencies (at the federal, state, and local levels of government), other CMS partners and Contractors, and a diverse range of stakeholders within the health care system of the United States.

The Contractor will receive and control Medicare claims from institutional and professional providers, suppliers, and beneficiaries within its jurisdiction and will perform standard or required editing on these claims to determine whether the claims are complete and should be paid. In addition, the Contractor will calculate Medicare payment amounts and arrange for remittance of these payments to the appropriate party. The Contractor also will enroll new providers; conduct redeterminations on appeals of claims; operate a Provider Customer Service Program (PCSP) that educates providers about the Medicare program and responds to provider telephone and written inquiries; respond to complex inquiries from Beneficiary Contact Centers (BCCs); and make coverage decisions for new procedures and devices in local areas. The Contractor also will conduct a variety of different provider services, such as enrolling new providers in the program, answering written inquiries, and educating providers on Medicare’s rules, regulations, and billing procedures.

The Contractor shall furnish services to all the providers CMS designates as within the Contractor’s workload. The Contractor’s workload will, from time to time, contain out-of-jurisdiction providers. Out-of-jurisdiction providers will be moved to their destination workloads at a later date when CMS systems are capable of supporting the move.

The mission of CMS is to ensure health care security for beneficiaries. This contract specifically applies to that mission by fostering excellence in the design and administration of CMS’ programs.

Background The Medicare program is an integral component of the federal government’s commitment to the health and welfare of the American people, which includes the Social Security system, the Medicaid program (which is primarily administered by the states), and other programs. The Medicare program provides affordable health insurance to (1) eligible individuals aged 65 and over; (2) certain individuals eligible for disability benefits under the Social Security system; and (3) individuals with acute kidney failure (end-stage renal disease, or ESRD). Approximately 47 million people were enrolled for Medicare coverage in Fiscal Year (FY) 2010.

Nearly all Medicare beneficiaries may access their insurance benefits through one of two health care delivery systems:

a. First, in all areas of the country, a beneficiary may enroll in the traditional Medicare program (the Medicare FFS program) under which benefits are largely provided in keeping with an indemnity insurance model. That is, the beneficiary chooses his/her health care providers, the providers bill the appropriate Medicare claims administrator for their services, and the claims administrator pays the provider based on the eligibility, coverage, and payment rules of the Medicare Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) programs. The federal government bears all financial (underwriting) risk for the cost of program benefits and develops detailed administrative requirements and processes to support the claim administration process. This national entitlement program has a strong imperative to provide a common level of benefits and service in all areas of the country, while maintaining adequate flexibility to account for local and regional medical practices. More than 76% of all Medicare beneficiaries participate in the traditional Medicare program.

b. Second, in many areas of the country, beneficiaries have the option to enroll in one or more privately sponsored Medicare plans under the Medicare Advantage (MA, formerly Medicare+ Choice) program. These private Medicare plans may organize themselves in keeping with one of several health care delivery and payment models (health maintenance organizations, preferred provider organizations, etc.). These private Medicare plans are required to cover the same basic benefits that the traditional Medicare program offers, but they are given fairly broad responsibility and latitude to set up their internal requirements and processes as they see fit. About 24% of Medicare beneficiaries are enrolled in Medicare Advantage.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) includes significant incentives to increase the participation in Medicare Advantage. However, for the next decade at least, a significant majority of all Medicare beneficiaries will likely remain enrolled in the traditional FFS Medicare program. FFS coverage in the Medicare program consists of two distinct parts: (1) HI, and (2) SMI, which provides coverage for the professional medical services of physicians and certain other licensed practitioners, as well as coverage for a variety of other services and items (ambulance, durable medical equipment, etc.). In common usage, the HI program is known as “Medicare Part A,” although both the Part A and B trust funds are used to reimburse institutional claims. The SMI program is known as “Medicare Part B”; only the Medicare Part B trust fund is used to reimburse Part B claims.

Services covered under Part A are: hospital inpatient services, skilled nursing facility (SNF)…