Medicare Wants Small Businesses for Big Claims, Payment Services

The Centers for Medicare & Medicaid Services (CMS) has issued a sources-sought notice looking for small businesses that can perform a wide range of benefit and claims administration services in multiple states. The work is currently performed by large companies and could be worth more than $100 million if a portion of the incumbent work converts to small business.

CMS wants to discover whether small businesses (e.g., 8(a), service-disabled veteran-owned; HUBZone; small disadvantaged; veteran-owned; and women-owned) are capable of providing specific fee-for-service health insurance benefit administration services.

CMS needs vendors that can make health care claims-related payments on behalf of Medicare beneficiaries and establish relationships with health providers and suppliers of healthcare services, according to the notice details.

The contract could last as long as 10 years, increasing the potential value. The scope of work includes services in support of Medicare parts A (hospital insurance) and B (doctor and other health care provider services, and durable medical equipment).

The notice includes draft statements of work for durable medical equipment support in the South and Southwest regions, and hospital and provider service support for the Northeast and mid-Atlantic areas.

BGOV has identified three incumbentsAnthem Inc. provides Medicare A/B support services for the Northeast region with $463 million in obligations since the start of fiscal 2016; the contract is scheduled to be completed Feb. 29, 2020. Blue Cross & Blue Shield of Florida Inc. provides Medicare A/B support service for the Mid-Atlantic region, with $360 million in obligations and completion scheduled for Jan. 21, 2020. Blue Cross & Blue Shield of South Carolina provides durable medical equipment support to the South region with nearly $200 million in obligations, with completion scheduled for Dec. 31.

The incumbents are large businesses, and the sources-sought notice makes it clear that CMS wants to know whether small businesses can do the work. Responses are due Oct. 15.

To contact the reporter on this story: Cameron Leuthy in Washington, D.C. at