VA awards $193M for medical disability exams in Region 2, OptumServe Health Services to provide services

Contract Overview

Contract Amount: $193,000,000 ($193.0M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-10-01

End Date: 2021-09-30

Contract Duration: 364 days

Daily Burn Rate: $530.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Place of Performance

Location: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $193.0 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST) Key points: 1. Contract focuses on essential medical disability examinations, supporting veterans' benefits claims. 2. The award represents a significant investment in veteran healthcare services. 3. OptumServe Health Services, Inc. is the primary contractor for this region. 4. Services are crucial for accurate and timely disability assessments. 5. The contract duration is one year, aligning with fiscal year operations. 6. This award falls under the broader category of physician's offices services.

Value Assessment

Rating: good

The contract value of $193 million for a one-year period for medical disability examinations appears substantial. Benchmarking against similar large-scale contracts for veteran disability evaluations would be necessary for a precise value-for-money assessment. However, given the critical nature of these services and the scale of the Department of Veterans Affairs' (VA) mission, the pricing is likely competitive within the specialized healthcare services market. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government.

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. The specific number of bidders is not provided, but the full and open nature suggests a competitive process that should drive favorable pricing and service quality. This approach is generally preferred by the government to ensure the best value is obtained.

Taxpayer Impact: Full and open competition maximizes the potential for taxpayer savings by encouraging a wide range of providers to offer their best pricing and service terms.

Public Impact

Veterans in Region 2 (Southeast) will benefit from timely and accurate medical disability examinations. These examinations are critical for processing disability claims and ensuring veterans receive appropriate benefits. The services support the VA's mandate to care for its service members and their families. The contract likely involves a network of healthcare professionals and facilities within the specified region. Improved efficiency in examinations can lead to faster claim resolutions for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to leverage existing infrastructure, impacting new small business entrants.
Dependence on a single large awardee could limit future competition if not managed carefully.
Ensuring consistent quality of care across all contracted providers is a continuous challenge.

Positive Signals

OptumServe's established presence in healthcare services suggests operational capacity.
The firm fixed-price contract incentivizes efficient service delivery.
Full and open competition indicates a robust market for these services.

Sector Analysis

The healthcare services sector, particularly specialized medical evaluations, is a significant area of federal spending. This contract fits within the broader landscape of government healthcare procurement, which often involves large, complex agreements to serve specific populations like veterans. The market for such services is competitive, with established players like OptumServe Health Services, Inc. vying for these contracts. Benchmarking against other VA contracts or similar federal health service procurements would provide further context on the scale and nature of this award.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if OptumServe chooses to engage them. Without specific subcontracting plans, it's difficult to assess the direct impact on the small business ecosystem. However, large prime contracts often create indirect opportunities for small businesses in the supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The VA has established procedures for monitoring contractor performance, ensuring compliance with contract terms, and managing payments. Inspector General (IG) jurisdiction would apply if any allegations of fraud, waste, or abuse arise. Transparency is facilitated through contract databases and public reporting mechanisms.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
TRICARE Medical Services
Federal Employee Health Benefits (FEHB) Program
Medicare and Medicaid Services

Risk Flags

Contractor performance risk
Service delivery continuity risk
Quality assurance risk
Potential for cost escalation if not managed tightly

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $193.0 million to OPTUMSERVE HEALTH SERVICES, INC.. MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE HEALTH SERVICES, INC..

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 $193.0 million.

What is the period of performance?

Start: 2020-10-01. End: 2021-09-30.

What is the historical spending trend for Medical Disability Examinations (MDES) by the VA in Region 2?

Analyzing historical spending for MDES in Region 2 requires access to detailed VA procurement data over several fiscal years. Typically, such services are procured through contracts that may be recompeted or awarded as delivery orders against larger IDIQs. Fluctuations in spending can be influenced by changes in veteran population, legislative mandates, and the VA's internal capacity to conduct these exams. Without specific historical data for Region 2, it's challenging to establish a precise trend. However, the VA has consistently invested significant resources in disability evaluations to support its mission, suggesting a sustained need for these services.

How does the per-veteran cost of these examinations compare to national averages or other VA regions?

Determining the per-veteran cost requires dividing the total contract value ($193 million) by the estimated number of examinations to be performed within the contract period. This information, specifically the volume of exams, is not provided in the data. Furthermore, comparing this cost across different VA regions or against national averages is complex due to variations in geographic cost of living, provider rates, and the complexity of medical conditions evaluated. A comprehensive benchmark would necessitate detailed cost data from multiple sources and a standardized methodology for calculating per-exam costs.

What is OptumServe Health Services, Inc.'s track record with similar VA contracts?

OptumServe Health Services, Inc. has a significant history of performing large-scale healthcare services contracts, including those with the Department of Veterans Affairs. They have been a key contractor for various VA initiatives, such as providing telehealth services and, notably, medical disability examinations in other regions. Their experience suggests a capacity to manage complex healthcare delivery networks and meet the demanding requirements of federal health programs. Past performance evaluations and contract award histories would provide more granular detail on their specific successes and any challenges encountered.

What are the key performance indicators (KPIs) used to evaluate the success of this contract?

Key performance indicators for a contract of this nature typically focus on timeliness, accuracy, and quality of the medical disability examinations. Specific KPIs might include the average turnaround time from exam request to report submission, the rate of incomplete or inaccurate reports, veteran satisfaction scores, and adherence to clinical protocols. The VA would likely monitor these metrics closely to ensure that OptumServe is meeting the contract's objectives and providing high-quality services that support the accurate adjudication of veteran benefits.

Are there any specific risks associated with relying on a single large contractor for medical disability examinations in this region?

Relying on a single large contractor like OptumServe for medical disability examinations in Region 2 presents several potential risks. One primary risk is service disruption; if the contractor faces operational issues, financial instability, or quality control problems, it could significantly impact the VA's ability to process disability claims in a timely manner. Another risk is reduced leverage for the VA in future negotiations, as the contractor may hold a dominant position. Ensuring robust oversight and contingency planning is crucial to mitigate these risks.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › NURSING, NURSING HOME, EVAL/SCREEN

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 328 FRONT ST S, LA CROSSE, WI, 54601

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

Financial Breakdown

Contract Ceiling: $193,000,000

Exercised Options: $193,000,000

Current Obligation: $193,000,000

Actual Outlays: $175,659,523

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0004

IDV Type: IDC

Timeline