Large DME MAC Contract Awarded to Nashville-Based Company

A contract to administer Medicare fee-for-service claims for durable medicare equipment, prosthetics, orthotics, and supplies (DMEPOS) in Jurisdiction C was awarded for the second time to CGS Administrators, LLC, on August 31st, according to CMS. The contract is valued at more than $170 million. The new contract will span a maximum of five years, a base year and four option years, and is a “cost plus award fee” contract, where CGS may be granted an award fee if it exceeds the base requirements of the contract. 

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) (P.L. 108-173) mandates that Medicare Administrative Contractor (MAC) contracts be recompeted every five years. The original contract for this jurisdiction was awarded in 2006. During the competitive process, a major factor that is considered during evaluation is the company’s past performance. CMS aims to uphold its “stringent standards for contract performance on these [DME MAC] contracts and measures performance through a variety of processes, including on-site oversight, data reviews and protocol-driven quality assurance reviews, as well as independent audits.”

The Jurisdiction C DME MAC serves Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, Puerto Rico, and the U.S. Virgin Islands, and represents more than 13 million Medicare beneficiaries and 37,000 suppliers. 

When this company was first awarded the contract in September of 2006, when the company was known as CIGNA Government Services, CGS is now owned by Blue Cross and Blue Shield of South Carolina. CGS is based out of Nashville, Tennessee and has offices in Des Moines, Iowa, and High Point, North Carolina and has more than 1,000 employees. CGS Being the incumbent DME MAC contractor for this jurisdiction, CMS expects the transition to the new contract to be a smooth one.

CGS has other CMS contracts, including being the MAC for Parts A and B for Jurisdiction 15 and for Medicare Home Health and Hospice administrative services in other areas of the country.

A fact sheet regarding the awarded contract is available at: