The Part A intermediary is a national, State, or other public or private agency or organization which has entered into an agreement with CMS to process Medicare claims received from providers of services. (Providers may choose to deal directly with CMS rather than an intermediary.)

These agencies or organizations perform such administrative duties as:

1. 1. 

   Determining the reasonable cost for provider services under both Part A and Part B;

2. 2. 

   Making payments directly to providers (in certain instances Part A intermediaries also make payments to beneficiaries);

3. 3. 

   Providing consultative services to assist hospitals, SNFs and HHA’s to maintain necessary fiscal records and otherwise qualify as providers;

4. 4. 

   Serving as a center for, and communicating to providers, any information or instruction furnished by CMS;

5. 5. 

   Making audits of provider records;

6. 6. 

   Helping providers with utilization review procedures;

7. 7. 

   Providing the Bureau of Quality Control and the Office of Investigations (OI) with needed information and assistance in the investigation of claims of fraud or abuse against the Medicare program, and, establish controls developed in conjunction with BQC, to minimize the possibility of incorrect Medicare payments;

8. 8. 

   Making payment directly to nonprovider renal dialysis facilities under Part B.

CMS makes payment for the intermediary’s cost of administration and advances funds such as the Government determines to be necessary and proper for carrying out the functions covered by the contract.

The agreement to serve as an intermediary may be terminated by either the intermediary or CMS under certain conditions specified in the Act and in regulations.

The Part B carrier is an organization which has entered into an agreement with CMS to perform specified administrative functions under the medical insurance program. These functions include:

1. 1. 

   Determining the amount of and making payments to beneficiaries and/or physicians, suppliers and others who furnish covered Part B services and supplies;

2. 2. 

   Maintaining benefit payment and related program records which will permit a determination of the quality of the carriers performance;

3. 3. 

   Relaying information pertinent to the administration of the Health Insurance Program;

4. 4. 

   Otherwise assisting in the administration of the medical insurance plan;

5. 5. 

   Providing the Bureau of Quality Control and OI with needed information and assistance in the investigation of claims or fraud or abuse against the Medicare program, and establish controls, developed in conjunction with BQC, to minimize the possibility of incorrect Medicare payments.

Carrier contracts are for a term of at least one year, and are automatically renewed for successive periods of one year in the absence of a 90 day advance notice by the carrier or the Secretary of intention not to renew. A contract provides for payment of the carrier’s cost of administration (including the advances of funds) as the Government determines to be necessary and proper for carrying out the functions covered by the contract. CMS can terminate a contract if it is found that the carrier has failed substantially to carry out its contract or is carrying it out in a manner inconsistent with the efficient administration of the medical insurance program.