What Is a Fiscal Intermediary?

A fiscal intermediary (FI) is a privately held company that serves as an intermediary between two parties that are trying to work together to resolve conflicts. For Medicare beneficiaries, you could define intermediary as someone who might make determinations on how local providers may cover a specific service or piece of medical equipment for local beneficiaries, or they may help process and resolve your Medicare appeals.

The Centers for Medicare & Medicaid Services (CMS) once included fiscal intermediaries, but in 2003, CMS replaced the Part A fiscal intermediaries and Part B carriers with Medicare Administrative Contractors (MACs).

A MAC is a “private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries.”¹ 

CMS uses this network of MACs to serve as “the primary operational contact between the Medicare FFS program and the health care providers enrolled in the program.” MACs are multi-state, regional contractors responsible for administering both Medicare Part A and Medicare Part B claims. 

What Does a MAC Do?

According to CMS, MACs perform many functions, including:

• Process Medicare FFS claims
• Make and account for Medicare FFS payments
• Enroll providers in the Medicare FFS program
• Handle provider reimbursement services and audit institutional provider cost reports
• Handle redetermination requests (first-stage appeals process)
• Respond to provider inquiries
• Educate providers about Medicare FFS billing requirements
• Establish local coverage determinations (LCDs)
• Review medical records for selected claims
• Coordinate with CMS and other FFS contractors

They are also charged with providing information and offering guidance to physicians and other health care providers about Medicare-approved services. They are involved in decision-making about coverage issues and payments for those services.

How Does a Fiscal Intermediary Serve Medicare?

CMS says there are currently 12 Part A and Part B MACs and 4 durable medical equipment MACs in the program. They process Medicare FFS claims for nearly 60% of the total Medicare beneficiary population, or 37.5 million Medicare FFS beneficiaries.¹

In Fiscal Year 2020, MACs served more than 1.1 million health care providers who are enrolled in the Medicare FFS program. They processed more than 1.1 billion Medicare FFS claims, comprised of approximately 203 million Part A claims and 909 million Part B claims, and paid out approximately $400 billion in Medicare FFS benefits.  

Claims Processing

MACs primarily handle the payment of the Medicare fee-for-service (FFS) program.

The regional MAC receives and processes the claim. They help providers enroll in the FFS program in order to receive payment from Medicare. They also are charged with helping to run the FFS program, conduct audits and educate providers.

Appeals 

MACs are important in the Medicare appeals process. They act as the intermediary between the beneficiary, the provider and CMS.

If you choose to appeal a coverage decision from Medicare, the regional MAC will be involved in the dispute, including holding a redetermination of coverage. MACs process these appeals claims and decide on that redetermination.

These include Medicare Part D (prescription drug) appeals. If you disagree with your Part D costs or coverage decisions, the MAC will work with CMS to determine appropriate coverage, bases on regional or national law.

MACs that handle DME claims are fewer in number and oversee a larger region. They only work on DME issues, including DME claims for reimbursement and appeals.

How to Find a MAC

To find the MAC in you region, you can review CMS list of MAC resources and click on your state’s link. That will take you to links to websites of your Part A and B and DME MACs.

You can also find out more information about your jurisdictions on the CMS Who Are MACs list on cms.gov, the official website for the Centers for Medicare & Medicaid Services.

Learn more about your Medicare coverage and Medicare costs to make sure you’re getting the most out of your benefits.