About that overhead claim, Medicare actually contracts out its work to contractors:
As government agencies go, Centers for Medicare and Medicaid Services (CMS) is not a very large organization, about 4100 employees. Mostly they contract out the actual work via Medicare Administrative Contractors (MACs). According to their website "CMS plans to award a total of 19 MAC contracts through three procurement cycles. Fifteen of these contracts will be with entities that will cover the majority of Part A and Part B services, i.e., A/B MACs." [http://www.cms.hhs.gov/MedicareContractingReform/07_PartAandPartBMedicareAdministrativeContractor.asp]. A pdf with the MAC jurisdictions and description of contractors is available in [http://www.cms.hhs.gov/MedicareContractingReform/Downloads/PrimaryABMACJurisdictionFactSheets.pdf].
Here's one of the contractors:
Trailblazer Health Enterprise is a private company categorized under Health Services and located in Dallas, TX. Current estimates show this company has an annual revenue of $100 to 500 million and employs a staff of approximately 500 to 999.
manta.com
You can be sure that Trailblazer Health Enterprise is a profit making company and has its own administrative burden - for things like Information Systems, HR, Law, Facilities Mgmt, Accounting, Payroll, you name it. Just like any insurance company.
But Trailblazer's profit margin and administrative burden - its not part of that 3% that people talk about. Medicare doesn't even know what Trailblazer's admin burden and profit margin are. |
