CMS Pub. 100-01, ch. 1, § 40

The A/B MAC (A) and (HHH) is a public or private agency or organization that has entered into

an agreement with CMS to enroll legitimate providers into the Medicare program and process

Medicare claims under both Part A and Part B services under the supplementary medical

insurance program (e.g., hospitals, SNFs, HHAs, hospices, CORFs, OPTs, occupational therapy,

and speech-language pathology providers, and ESRD facilities).

A/B MACs (A) and (HHH) make payments to providers. The amount of payment to a provider

is restricted to the lower of the billed charge, the reasonable cost of covered services or the fee

schedule amount. Hospices are paid on a per diem amount that is prospectively set. SNFs and

HHAs are paid based on a Prospective Payment System (PPS). (See Provider Reimbursement

Manual, Part 1, §§2800ff.)

Hospitals are paid based on the PPS. Under this system, Medicare payment is made at a

predetermined, specific rate for each hospital discharge. This statement applies to inpatient for

acute care hospitals and to inpatient rehabilitation hospitals. Whereas inpatient acute and rehab

PPS payment is based on the discharge date, Outpatient PPS (OPPS) payments are based on

Ambulatory Patient Classification payment for the date of service.

The amount of payment to other types of providers is restricted to the lesser of (a) the reasonable

cost of covered services and items; or (b) the billed charges with respect to such services; or (c)

the fee schedule amount.

In addition, A/B MACs (A) and (HHH) assist in applying safeguards against unnecessary use of

covered services, furnish consultative services to serve as a center for communicating with

providers, conduct audits of provider records, assist in the beneficiary appeals process, and

provide information and advice to institutions and organizations that wish to qualify as providers

of services.

(See http://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-

Contractors/Home-Health-Hospice-Regions.html for a list of A/B MACs (A) and (HHH) and

service areas.)