The MACs (Medicare Administrative Contractors) audit claims submitted by providers within their jurisdictions. These organizations are mostly insurance companies who administer the contracts awarded by CMS to process claims submitted electronically by providers in a given geographic area. As part of this responsibility, these MACs are required to make sure that the claims submitted are complete and submitted in accordance with the rules developed by Medicare to assure that these claims are for services that are medically necessary and properly documented.
They work similar to the IRS, examining submitted claim data for outliers and patterns of suspicious behavior. Like the IRS, they perform this service as part of their contractual obligation to the government, not as a revenue generating activity.