Medicare Administrative Contractor (MAC)

Key facts

Legal basis

Section 1874A of the Social Security Act, added in 2003

Replaced

Fiscal intermediaries (Part A) and carriers (Part B)

Jurisdiction types

A/B MACs for hospital and clinician claims; DME MACs for equipment

Jurisdiction count

12 A/B MAC jurisdictions and 4 DME MAC jurisdictions

Not responsible for

Medicare Advantage and Part D claims, which plans process

What is a Medicare Administrative Contractor?

CMS does not process most Original Medicare claims itself. It hires MACs, private health care insurers selected through competitive contracting, to act as the operational arm of Medicare fee-for-service in each region. Each contract covers a set of states or territories, and CMS periodically recompetes the contracts.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created the MAC structure, replacing the older system of fiscal intermediaries for Part A and carriers for Part B. Four of the A/B MACs also process home health and hospice claims for broader regions.

What MACs do

MAC responsibilities include:

• Processing and paying Part A and Part B claims, or durable medical equipment claims for DME MACs.
• Enrolling providers and suppliers in Medicare and maintaining their enrollment records.
• Handling redeterminations, the first level of the Medicare claims appeal process.
• Conducting medical review and auditing institutional provider cost reports.
• Writing Local Coverage Determinations (LCDs) and educating providers on billing rules.

Why MACs matter

The MAC jurisdiction a provider bills through can change what Medicare covers in practice. LCDs, billing articles and medical review priorities differ by contractor, so a diagnostic test or device can face different coverage rules across jurisdictions. For molecular diagnostics, several MACs participate in the MolDX program, which applies shared coverage and technical assessment rules across their jurisdictions.

For reimbursement and market access teams, identifying the relevant MAC is often the first step in a coverage strategy. For provider analysts, MAC enrollment processing and cost report audits underpin public files on Medicare-enrolled providers and hospital finances.

MACs vs other Medicare contractors

MACs are not the only private contractors in Medicare. Qualified Independent Contractors (QICs) handle the second level of appeals, Recovery Audit Contractors (RACs) look for improper payments after claims are paid, and Unified Program Integrity Contractors (UPICs) investigate fraud. Medicare Advantage and Part D plans process their own claims and are not MACs.