VA awards $160.7M for medical disability exams in Northeast region, OptumServe Health Services to provide services

Contract Overview

Contract Amount: $160,722,783 ($160.7M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $441.5K/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 1 (NORTHEAST) - OY4 TASK ORDER

Place of Performance

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

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $160.7 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 1 (NORTHEAST) - OY4 TASK ORDER Key points: 1. Contract focuses on essential medical disability examinations, crucial for veterans' benefits. 2. The award represents a significant investment in supporting veterans' healthcare needs. 3. OptumServe Health Services, Inc. is the primary contractor for this task order. 4. The contract duration is one year, aligning with specific regional needs. 5. Services are categorized under physician offices, indicating a focus on diagnostic and evaluative care. 6. The contract was awarded under full and open competition, suggesting a robust bidding process.

Value Assessment

Rating: good

The contract value of $160.7 million for a one-year period for medical disability examinations appears to be within a reasonable range for the scope of services. Benchmarking against similar large-scale contracts for veteran healthcare services would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be beneficial for the government if managed effectively. However, without detailed service delivery metrics and cost breakdowns, a definitive assessment of cost efficiency is challenging.

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 presence of a competitive bidding process is generally expected to drive down prices and encourage innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of market interest. This approach allows the Department of Veterans Affairs to select the offer that provides the best overall value, considering factors beyond just price.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to better pricing and service quality for essential veteran healthcare.

Public Impact

Veterans in the Northeast region will benefit from timely and accurate medical disability examinations. These examinations are critical for determining eligibility and levels of compensation for various veteran benefits. The contract supports the delivery of essential healthcare services, contributing to the overall well-being of the veteran population. The geographic impact is focused on Region 1 (Northeast), ensuring localized support for veterans in that area. This contract likely supports a workforce of medical professionals, including physicians and administrative staff, involved in conducting these examinations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased wait times if contractor performance falters.
Ensuring consistent quality of examinations across all providers.
Managing the administrative burden of processing a high volume of claims.

Positive Signals

Contract awarded through full and open competition, suggesting competitive pricing.
Firm-fixed-price contract shifts cost risk to the contractor.
Focus on a critical service for veteran benefits administration.

Sector Analysis

The healthcare services sector, particularly within government contracting, is highly competitive. This contract falls under the 'Offices of Physicians' NAICS code (621111), which encompasses a broad range of medical diagnostic and treatment services. The market for medical disability examinations is substantial, driven by the ongoing needs of veterans and other government programs. Comparable spending benchmarks would involve analyzing other large-scale contracts awarded by the VA or other agencies for similar examination services, considering regional variations and service scope.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-value contract awarded through full and open competition, it is likely that large businesses, such as OptumServe Health Services, Inc., are the primary recipients. There is no explicit information on subcontracting plans for small businesses within this specific task order. The impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for support services, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs (VA) contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and verifying the quality of services delivered. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through contract award databases and public reporting mechanisms, though detailed performance metrics may not always be publicly accessible.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
VA Benefits Administration (VBA) Claims Processing
TRICARE Medical Services
Federal Employee Health Benefits Program (FEHBP)

Risk Flags

Contract Performance Risk
Quality Assurance Risk
Timeliness of Service Delivery Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $160.7 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 1 (NORTHEAST) - OY4 TASK ORDER

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 $160.7 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is the historical spending pattern of the VA for medical disability examinations in Region 1?

Analyzing historical spending for medical disability examinations in VA Region 1 requires access to detailed VA procurement data over several fiscal years. Typically, such spending fluctuates based on veteran population growth, changes in benefits legislation, and the number of claims filed. Prior to this $160.7 million award to OptumServe Health Services, Inc. for the 2022-2023 period, the VA likely awarded contracts to various entities, potentially including incumbent contractors, for similar services. Understanding the trend would involve comparing this award amount to previous years' expenditures, noting any significant increases or decreases, and identifying the contractors that held these awards. Factors such as the scope of services, the number of examinations performed, and the average cost per examination in prior periods would be crucial for a comprehensive historical analysis.

How does the per-unit cost of these medical disability examinations compare to industry benchmarks or other VA contracts?

Determining the precise per-unit cost for these medical disability examinations is challenging without specific data on the number of examinations to be conducted under this $160.7 million contract. However, the firm-fixed-price nature of the contract suggests that the VA has negotiated a set price per examination or a bundled price for a defined scope of services. To benchmark this against industry standards or other VA contracts, one would need to identify the average cost per examination for similar services (e.g., Compensation and Pension exams). This comparison would involve looking at data from other VA regions, other federal agencies (like the DoD), or even private insurance providers. A higher or lower per-unit cost could indicate differences in service complexity, geographic overhead, or the level of competition during the bidding process. Without the total number of exams, a direct per-unit calculation is not feasible from the provided data.

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

OptumServe Health Services, Inc. has a significant track record of providing healthcare services to the Department of Veterans Affairs. They have been a major contractor for various VA initiatives, including telehealth services and, notably, the Veterans Affairs Health Care and Benefits Management Support Services (VHA-HBMSS) contract, which involves a broad range of health IT and administrative support. Their experience extends to managing large-scale healthcare delivery networks and processing complex medical information. Given their established presence and past performance with the VA, it is likely that their bid for this medical disability examination contract was evaluated based on their demonstrated capabilities, past performance metrics, and ability to manage substantial healthcare contracts effectively. Past performance reviews and contract data would offer more specific insights into their success rates and any challenges encountered.

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

While specific Key Performance Indicators (KPIs) are not detailed in the provided contract abstract, typical metrics for medical disability examination contracts awarded by the VA would likely include: 1. Timeliness of appointments and report generation (e.g., average days from request to exam, average days from exam to report submission). 2. Quality of examination reports (e.g., completeness, accuracy, adherence to VA guidelines, low error rates). 3. Veteran satisfaction scores related to the examination process. 4. Contractor's ability to meet volume targets for examinations. 5. Compliance with all regulatory and legal requirements. The VA contracting officer would monitor these KPIs to ensure OptumServe Health Services, Inc. is meeting the performance standards outlined in the contract, which are crucial for efficient and fair benefits adjudication.

Are there any identified risks associated with OptumServe Health Services, Inc. as a contractor for this specific task order?

Assessing specific risks associated with OptumServe Health Services, Inc. for this particular task order requires a deeper dive into their performance history, financial stability, and any past issues with VA contracts. Generally, risks in large healthcare service contracts can include contractor performance failures (delays, quality issues), data security breaches, cost overruns (though mitigated by firm-fixed-price), and challenges in workforce management (recruiting and retaining qualified medical professionals). Given OptumServe's size and experience, the primary risks might revolve around ensuring consistent service quality and timely delivery across the extensive Northeast region. The VA's oversight mechanisms, including performance reviews and potential penalties for non-compliance, are designed to mitigate these risks. A review of past performance evaluations and any contract disputes involving OptumServe would provide a more concrete risk assessment.

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: $160,722,783

Exercised Options: $160,722,783

Current Obligation: $160,722,783

Actual Outlays: $154,140,945

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0001

IDV Type: IDC

Timeline