VA awards $742.9M contract to TriWest Healthcare Alliance Corp for health services in July FY23

Contract Overview

Contract Amount: $742,892,762 ($742.9M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-07-01

End Date: 2023-07-31

Contract Duration: 30 days

Daily Burn Rate: $24.8M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT FOR JULY FY23 R4 EXPRESS REPORT

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $742.9 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT FOR JULY FY23 R4 EXPRESS REPORT Key points: 1. Contract value represents a significant investment in healthcare delivery for veterans. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The contract's duration and scope require careful monitoring for performance and cost control. 4. This award aligns with the VA's ongoing efforts to expand healthcare access and quality. 5. The fixed-price nature of the contract shifts some cost risk to the contractor.

Value Assessment

Rating: good

The total award amount of $742.9 million for a single month's delivery order is substantial. Benchmarking against similar large-scale healthcare contracts within the VA or other federal agencies would be necessary for a precise value-for-money assessment. However, the firm fixed-price structure generally indicates a predictable cost outcome, assuming performance is met. The contract's value, relative to the services provided and the number of beneficiaries served, will be a key indicator of its efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a competitive environment where multiple companies vied for the contract. The number of bidders is not specified, but the open competition is generally a positive sign for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a marketplace that drives down prices and encourages innovation, leading to more cost-effective service delivery.

Public Impact

Veterans in Virginia and potentially surrounding regions will benefit from continued access to healthcare services. The contract ensures the provision of direct health and medical insurance carrier services. Geographic impact is centered in Virginia, supporting local healthcare infrastructure. The contract supports a network of healthcare providers and administrative staff within the service area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly given the broad nature of healthcare services.
Ensuring consistent quality of care across all contracted providers is crucial.
Monitoring contractor performance against service level agreements is essential for accountability.

Positive Signals

The firm fixed-price contract provides cost certainty for the VA.
Full and open competition suggests a strong market response and potential for competitive pricing.
The award to an established provider like TriWest may indicate a reliable partner for service delivery.

Sector Analysis

The healthcare sector, particularly within federal procurement, is characterized by large, complex contracts aimed at serving specific populations. This contract falls under the Direct Health and Medical Insurance Carriers category, which is a significant segment of the federal healthcare market. Spending in this area is driven by the government's commitment to providing healthcare to beneficiaries, such as veterans. Comparable spending benchmarks would involve analyzing other large-scale healthcare service contracts awarded by the VA and other agencies like TRICARE.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific award is not detailed in the provided data. However, large contracts of this nature often include provisions for small business participation. The extent to which TriWest Healthcare Alliance Corp engages small businesses as subcontractors will impact the small business ecosystem within the healthcare services sector.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to quality standards and delivery timelines. Transparency is facilitated through federal procurement databases where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

TRICARE contracts
VA Community Care Network (CCN)
Federal Health Insurance Programs

Risk Flags

Contract performance monitoring
Quality of care assurance
Cost control and budget adherence
Network adequacy and provider availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $742.9 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT FOR JULY FY23 R4 EXPRESS REPORT

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 $742.9 million.

What is the period of performance?

Start: 2023-07-01. End: 2023-07-31.

What is the historical spending pattern of the VA with TriWest Healthcare Alliance Corp?

Analyzing historical spending with TriWest Healthcare Alliance Corp requires access to detailed contract databases beyond this single award. However, TriWest has been a significant contractor for the VA and TRICARE, particularly in managing community care networks. Their past performance on similar large-scale contracts, including any issues related to cost overruns, performance deficiencies, or contract modifications, would provide crucial context for evaluating the current award. Examining the total value of contracts awarded to TriWest over multiple fiscal years would reveal trends in VA reliance on the company for healthcare services and assess the consistency of their performance and pricing.

How does the per-unit cost of services under this contract compare to similar VA or TRICARE contracts?

A direct per-unit cost comparison is challenging without specific service line data and detailed pricing breakdowns from comparable contracts. The provided data indicates a firm fixed-price contract, which aims to standardize costs. However, the 'unit' could refer to a patient visit, a specific procedure, or a capitated rate for a defined population. To benchmark effectively, one would need to identify contracts with similar scopes of work, geographic coverage, and patient demographics. Comparing negotiated rates for common services (e.g., primary care visit, specialist consultation, diagnostic imaging) against established VA fee schedules or TRICARE rates would reveal whether this contract offers competitive pricing. Variations could be explained by regional cost differences, specific service requirements, or the overall risk assumed by the contractor.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) for this $742.9 million delivery order are not detailed in the provided summary data. However, for a contract of this magnitude and nature, typical KPIs would likely include metrics related to appointment wait times, network adequacy (availability of providers), patient satisfaction scores, claims processing timeliness, and adherence to clinical quality standards. SLAs would define the acceptable thresholds for these KPIs, with potential penalties for non-compliance and incentives for exceeding targets. The Department of Veterans Affairs would closely monitor these metrics to ensure the contractor is meeting its obligations and providing timely, high-quality healthcare services to veterans.

What is the potential risk associated with the contractor's track record on similar large-scale healthcare contracts?

TriWest Healthcare Alliance Corp has a substantial track record with both the VA and the TRICARE program, managing large regional networks. While this experience suggests familiarity with federal healthcare operations, it also presents potential risks. Past performance reviews, contract disputes, or findings from audits on previous contracts could indicate areas of concern, such as challenges in network management, claims processing efficiency, or patient access. Evaluating the contractor's history of contract modifications, cost overruns on prior awards, or any sanctions imposed by federal agencies is crucial. A thorough review of their past performance data would help assess the likelihood of successful execution and identify potential risks that need proactive mitigation strategies.

How does this contract contribute to the VA's overall strategy for healthcare delivery, particularly regarding community care?

This contract is a significant component of the VA's strategy to leverage community care providers to supplement its direct healthcare services. The VA faces challenges in meeting the healthcare needs of all veterans through its own facilities alone, due to capacity limitations, geographic distribution, and specialized care requirements. By awarding large contracts like this one to entities like TriWest, the VA aims to expand access to care, reduce wait times, and offer veterans more choices. This approach allows the VA to manage a broader network of providers, ensuring veterans can receive care closer to home or access specialized services not readily available within the VA system. The success of this contract directly impacts the VA's ability to fulfill its commitment to veterans' healthcare.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15810 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: $742,892,762

Exercised Options: $742,892,762

Current Obligation: $742,892,762

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline