Jobs at risk as WPS is losing contract for Medicare claims [The Wisconsin State Journal]

Oct. 09--Madison-based WPS Health Insurance is losing a federal contract it had since 1966, handling Part B Medicare claims in Wisconsin, Illinois and Minnesota, threatening jobs again at the company.

"It's not for sure exactly when or where yet, but there will be (job) cuts, when you lose a chunk of business this big," WPS CEO Michael Hamerlik said Tuesday.

On Sept. 27, as part of a nationwide, competitive reorganization that started in 2003, the federal Centers for Medicare & Medicaid Services (CMS) awarded a contract to administer Part A and Part B Medicare claims in the three states to Indianapolis-based National Government Services.

The contract, worth up to $318 million over five years, will begin after a roughly six-month transition period, CMS said. NGS also will process Medicare billings from home health and hospice providers in 13 states, including Wisconsin, and five U.S. territories.

Under the just-completed reorganization, one contractor will handle Medicare Part A and Part B claims for each jurisdiction. The reorganization also redrew the boundaries of various jurisdictions. About eight companies nationwide provide Medicare claims processing for the federal government.

The three-state region of Wisconsin, Illinois and Minnesota, known as Jurisdiction 6, or J6, that was awarded to NGS, represents about 8.1 percent of Medicare claims nationally. The region includes more than 500 Medicare hospitals and about 64,000 doctors, according to CMS, and the process to award it to a contractor began in 2009 and was delayed over a series of challenges.

Prior to the September contract award, Medicare claims processing in J6 had been split among three contractors -- WPS for Part B claims in all three states; Noridian Administrative Services of Fargo, N.D., for Part A claims in Minnesota; and NGS for Part A in Wisconsin and Illinois.

Despite losing its portion of J6, WPS isn't out of the Medicare claims processing business. It has an existing contract to administer Part A and Part B Medicare claims in Iowa, Kansas, Missouri and Nebraska, known as J5, and it was re-awarded that contract for $217.2 million this summer, along with adding J8, made up of Michigan and Indiana, to its jurisdiction under the plan.

WPS Insurance is Wisconsin's only not-for-profit insurer offering health plans statewide to the public and private sectors. It employs about 3,600 people, including 2,547 in Dane County. It has offices in Wausau, Milwaukee, Appleton, Eau Claire and Green Bay.

The job cuts related to the loss of its Medicare J6 contract will come on top of a likely big reduction in WPS' Wausau office, which Hamerlik said would be downsized because of the company's pending loss of a federal contract handling managed care claims for military personnel in 21 states for a Defense Department program known as TRICARE. The TRICARE contract ends March 31.

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