VA's $1.98B Patient Centered Community Care contract awarded to TriWest Healthcare Alliance Corp

Contract Overview

Contract Amount: $1,981,031,881 ($2.0B)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-04-01

End Date: 2020-06-30

Contract Duration: 90 days

Daily Burn Rate: $22.0M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: EXPRESS REPORT FOR THE PATIENT CENTERED COMMUNITY CARE (PC3) CONTRACT FOR THE OFFICE OF COMMUNITY CARE (OCC).

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.98 billion to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT FOR THE PATIENT CENTERED COMMUNITY CARE (PC3) CONTRACT FOR THE OFFICE OF COMMUNITY CARE (OCC). Key points: 1. Contract aims to provide community-based healthcare services to veterans, supplementing VA facilities. 2. The fixed-price incentive contract structure incentivizes cost efficiency and performance. 3. Awarded via full and open competition, suggesting a robust vetting process. 4. Geographic focus on Arizona indicates a targeted approach to veteran care access. 5. Contract duration of 90 days suggests a short-term or bridging requirement. 6. The significant dollar value warrants close monitoring of performance and cost outcomes.

Value Assessment

Rating: good

The contract's value of approximately $1.98 billion is substantial, reflecting the scale of community care needed for veterans. Benchmarking this specific contract's value is challenging without direct comparisons of similar large-scale, short-duration community care contracts. However, the fixed-price incentive (FPI) pricing structure suggests an effort to control costs by aligning contractor incentives with performance and budget adherence. The VA's extensive experience with community care programs provides a basis for evaluating the reasonableness of this award, though specific cost-per-member-per-month or cost-per-service metrics would be needed for a more granular assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This process is designed to foster a competitive environment, potentially leading to better pricing and service quality. The number of bidders is not specified, but the 'full and open' designation suggests a sufficient level of competition to ensure fair market price discovery. The VA's procurement regulations typically require a thorough evaluation of technical capabilities, past performance, and price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring that the government receives the best value. It reduces the risk of overpayment and encourages innovation among potential contractors.

Public Impact

Veterans in Arizona will benefit from expanded access to healthcare services outside of traditional VA facilities. The contract facilitates the delivery of medical and health services, potentially including primary care, specialty care, and ancillary services. The geographic impact is concentrated in Arizona, addressing specific regional needs for veteran healthcare. This contract supports the healthcare workforce by creating opportunities for providers and staff within the community care network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the broad nature of community care services.
Ensuring consistent quality of care across a dispersed network of community providers.
Monitoring contractor performance to ensure adherence to VA standards and veteran satisfaction.
Managing the transition of care and data sharing between community providers and VA facilities.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Fixed-price incentive contract structure aligns contractor goals with VA objectives.
Focus on community care addresses potential capacity issues within VA facilities.
TriWest Healthcare Alliance has prior experience in managing large-scale VA community care programs.

Sector Analysis

The healthcare services sector, particularly within government contracting, is characterized by significant spending aimed at serving specific populations like veterans. The Patient Centered Community Care (PC3) program represents a major initiative by the VA to leverage private sector healthcare providers to supplement its own infrastructure. This contract fits within the broader trend of outsourcing healthcare delivery to manage demand and improve access. Comparable spending benchmarks would involve analyzing other large-scale VA community care contracts or similar managed care contracts with other federal agencies.

Small Business Impact

The provided data does not indicate whether this contract included specific small business set-asides or subcontracting requirements. However, given the large scale of the contract and the nature of healthcare services, it is plausible that a portion of the work could be subcontracted to smaller healthcare providers or specialized service companies. Analysis of the contractor's subcontracting plan, if available, would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' Office of Community Care (OCC). Mechanisms likely include regular performance reviews, quality assurance checks, data reporting requirements from the contractor, and potentially site visits to network providers. Accountability measures are embedded in the contract terms, including performance metrics and the fixed-price incentive structure. Transparency is generally maintained through contract awards databases and public reporting, though specific operational details may be sensitive.

Related Government Programs

Patient Centered Community Care (PC3)
Veterans Choice Program
VA Community Care Network (CCN)
TRICARE

Risk Flags

Potential for network adequacy issues in specific geographic areas within Arizona.
Risk of inconsistent quality of care across diverse community providers.
Challenges in seamless data exchange between community providers and VA systems.
Ensuring timely and accurate claims processing and reimbursement for providers.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.98 billion to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT FOR THE PATIENT CENTERED COMMUNITY CARE (PC3) CONTRACT FOR THE OFFICE OF COMMUNITY CARE (OCC).

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $1.98 billion.

What is the period of performance?

Start: 2020-04-01. End: 2020-06-30.

What is the historical spending pattern for the Patient Centered Community Care (PC3) program and how does this award compare?

The Patient Centered Community Care (PC3) program was a significant initiative by the VA to provide eligible veterans with healthcare services through a network of private sector providers. The total value of this specific contract awarded to TriWest Healthcare Alliance Corp. is approximately $1.98 billion. While this represents a substantial investment, understanding its place in the broader PC3 program requires examining the total program expenditure over its lifecycle. The PC3 program itself was part of a larger effort to expand veteran access to care, and its funding levels fluctuated based on demand and legislative changes. Without specific data on the total PC3 program budget and awards to all contractors, a direct comparison is difficult. However, this single award to TriWest indicates a major component of the PC3 strategy, likely covering a large geographic region or a significant veteran population within Arizona.

How does the pricing structure (Fixed Price Incentive) of this contract compare to other VA community care contracts?

The contract utilizes a Fixed Price Incentive (FPI) pricing structure. In an FPI contract, the final price is determined after performance based on a formula that establishes target costs, target profits, and maximum prices. This structure incentivizes the contractor to control costs and meet performance targets, as they share in any savings below the target cost or incur a larger share of cost overruns up to the maximum price. Compared to other VA community care contracts, FPI is often used for services where performance can be clearly defined and measured, and where cost control is a priority. Other VA contracts might use Firm-Fixed Price (FFP) for simpler services or Cost-Plus contracts for research and development where costs are less predictable. The FPI here suggests the VA sought to balance cost certainty with performance incentives for a large-scale service delivery.

What are the key performance indicators (KPIs) used to evaluate TriWest Healthcare Alliance Corp.'s performance under this contract?

While the specific KPIs are not detailed in the provided data, typical performance indicators for VA community care contracts like this one often include metrics related to access to care, quality of care, patient satisfaction, and administrative efficiency. Access metrics might involve timely appointment scheduling (e.g., within VA-mandated timeframes), geographic reach of the provider network, and referral completion rates. Quality metrics could encompass adherence to clinical best practices, patient safety incident rates, and appropriate use of services. Patient satisfaction surveys are crucial for gauging veteran experience. Administrative efficiency might involve claims processing times and accuracy. The FPI structure implies that performance against these or similar KPIs would directly influence the final contract price and profit.

What is the track record of TriWest Healthcare Alliance Corp. in managing large federal healthcare contracts, particularly with the VA?

TriWest Healthcare Alliance Corp. has a significant track record of managing large-scale healthcare contracts for the Department of Defense and the Department of Veterans Affairs. They were a major contractor for the former TRICARE West Region and have been involved in various VA community care initiatives, including the Patient Centered Community Care (PC3) program and its successor, the VA Community Care Network (CCN). Their experience includes managing extensive provider networks, processing claims, and ensuring access to care for a large number of beneficiaries across broad geographic areas. While their performance has generally been viewed as capable, like any large contractor, they have faced scrutiny and challenges related to network adequacy, claims processing, and coordination of care in the past. This contract represents a continuation of their established role in supporting VA community care efforts.

How does the geographic concentration in Arizona impact the overall strategy and effectiveness of this community care contract?

Concentrating this substantial contract within Arizona suggests a strategic decision by the VA to address specific needs or gaps in veteran healthcare access within that state. Arizona has a significant veteran population, and this focused approach allows for tailored network development and management. It enables TriWest to build a dense network of providers within the state, potentially leading to better appointment availability and reduced travel times for veterans compared to a more dispersed, multi-state contract. This geographic focus also allows for closer collaboration with state and local healthcare systems. However, it also means that the effectiveness of this contract is primarily measured by its impact on Arizona veterans, and it doesn't directly address needs in other regions. The VA likely uses such targeted contracts alongside broader national initiatives to optimize care delivery.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 16010 N 28TH AVE, PHOENIX, AZ, 85053

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,981,031,881

Exercised Options: $1,981,031,881

Current Obligation: $1,981,031,881

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline