VA spent $148.7M on nationwide dialysis services in FY19, with Fresenius Medical Care as the primary awardee

Contract Overview

Contract Amount: $148,731,700 ($148.7M)

Contractor: Fresenius Medical Care Holdings Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-04-01

End Date: 2019-09-30

Contract Duration: 182 days

Daily Burn Rate: $817.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: NATIONWIDE DIALYSIS - APR-SEPT FY19 TOTALS

Place of Performance

Location: GOLDEN, JEFFERSON County, COLORADO, 80401

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $148.7 million to FRESENIUS MEDICAL CARE HOLDINGS INC for work described as: EXPRESS REPORT: NATIONWIDE DIALYSIS - APR-SEPT FY19 TOTALS Key points: 1. The contract represents a significant investment in essential healthcare services for veterans. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and quality. 3. Performance context indicates a need for consistent, high-quality dialysis care. 4. Sector positioning highlights the VA's role in providing specialized medical services. 5. Risk indicators may include patient outcomes, service availability, and cost containment.

Value Assessment

Rating: good

The total award of $148.7 million for a six-month period suggests a substantial need for dialysis services. Benchmarking against similar contracts would require access to detailed service delivery metrics and pricing structures across different regions. However, the scale of this award indicates a significant commitment by the VA to veteran healthcare. The firm-fixed-price nature of the contract provides cost certainty for the government, assuming the scope of work is well-defined and executed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This approach is generally favorable for price discovery and ensuring the government receives competitive pricing. The number of bidders and the specific evaluation criteria would provide further insight into the strength of the competition. A robust competitive process can lead to better value for taxpayer dollars.

Taxpayer Impact: Full and open competition increases the likelihood that the VA secured the best possible pricing and service quality for dialysis, maximizing the value of taxpayer funds.

Public Impact

Veterans requiring kidney dialysis services nationwide benefit from access to essential medical treatment. The contract ensures the provision of critical healthcare services, improving the quality of life for affected veterans. Geographic impact is nationwide, covering all regions where veterans require dialysis. Workforce implications include the employment of healthcare professionals, technicians, and support staff at dialysis facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for inconsistent service quality across different facilities if not rigorously monitored.
Risk of price escalation in future contract periods if competition weakens.
Dependence on a single large contractor could pose supply chain or service disruption risks.

Positive Signals

Commitment to providing essential, life-sustaining healthcare to a vulnerable veteran population.
Full and open competition suggests a structured procurement process aimed at achieving value.
Firm-fixed-price contract offers budget predictability for the Department of Veterans Affairs.

Sector Analysis

The healthcare sector, specifically the provision of specialized medical services like dialysis, is a critical component of national health infrastructure. This contract falls within the broader category of healthcare services procurement, where government agencies like the VA are significant purchasers. Market size for dialysis services is substantial, driven by an aging population and increasing prevalence of chronic kidney disease. Comparable spending benchmarks would involve analyzing other large-scale government or private sector contracts for similar services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Analysis of subcontracting opportunities for small businesses would require further details on the prime contractor's subcontracting plan and performance. The absence of set-asides might mean that larger, established providers are better positioned to compete for and fulfill such extensive service contracts.

Oversight & Accountability

Oversight of this contract would likely involve the Department of Veterans Affairs' contracting officers and program managers, ensuring compliance with service level agreements and quality standards. Accountability measures would be tied to performance metrics and patient outcomes. Transparency is facilitated through contract award data, though detailed operational oversight mechanisms are typically internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medicare End-Stage Renal Disease (ESRD) program
TRICARE healthcare services
Other VA medical services contracts
Federally Qualified Health Centers (FQHCs)

Risk Flags

Potential for service gaps in remote or underserved areas.
Dependence on a single large contractor for critical healthcare services.
Need for robust quality assurance to ensure consistent patient care.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $148.7 million to FRESENIUS MEDICAL CARE HOLDINGS INC. EXPRESS REPORT: NATIONWIDE DIALYSIS - APR-SEPT FY19 TOTALS

Who is the contractor on this award?

The obligated recipient is FRESENIUS MEDICAL CARE HOLDINGS 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 $148.7 million.

What is the period of performance?

Start: 2019-04-01. End: 2019-09-30.

What is the historical spending trend for nationwide dialysis services by the Department of Veterans Affairs?

Analyzing historical spending for nationwide dialysis services by the VA requires accessing multi-year contract data. Without specific historical figures, it's difficult to establish a precise trend. However, given the consistent and growing need for dialysis due to factors like an aging veteran population and increased diagnosis rates of chronic kidney disease, it is reasonable to infer that VA spending in this area has likely remained stable or increased over time. The $148.7 million expenditure in FY19 for a six-month period suggests a significant and ongoing commitment. Future analysis should aim to compare this figure against previous fiscal years to identify any patterns of increase, decrease, or stabilization in spending, which could inform budget planning and identify potential efficiencies or emerging needs.

How does the per-patient cost of dialysis under this VA contract compare to Medicare or private insurance rates?

Directly comparing the per-patient cost of dialysis under this VA contract to Medicare or private insurance rates is challenging without granular data on the number of unique patients served and the specific services rendered per patient. The $148.7 million award covers a nationwide scope for six months, implying a large patient base. Medicare reimbursement rates for dialysis vary by region and specific treatment modalities. Private insurance rates are also subject to negotiation and network agreements. To perform a meaningful comparison, one would need to calculate an average cost per treatment or per patient per month from the VA contract data and benchmark it against publicly available average reimbursement rates from Medicare and typical commercial payer rates. Factors such as administrative overhead, geographic distribution of services, and the acuity of patient populations could explain significant differences.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance under this delivery order?

Key Performance Indicators (KPIs) for a contract of this nature, providing nationwide dialysis services, would typically focus on ensuring the quality, accessibility, and timeliness of care. Common KPIs might include patient outcomes such as mortality rates, hospitalization rates, and adherence to treatment schedules. Measures related to patient satisfaction, facility accreditation status, and compliance with clinical best practices would also be critical. Furthermore, KPIs could encompass operational aspects like appointment availability, wait times for treatments, and emergency response capabilities. The contract likely specifies these KPIs, along with acceptable performance thresholds and remedies for non-compliance, to ensure the VA receives high-quality, effective dialysis services for its beneficiaries.

What is the potential impact of this contract on the overall market for dialysis services in the United States?

A contract of this magnitude, awarding approximately $148.7 million for six months of nationwide dialysis services to the Department of Veterans Affairs, can have a notable impact on the dialysis services market. As a major purchaser, the VA's procurement decisions influence market dynamics, particularly for large providers like Fresenius Medical Care. The full and open competition aspect suggests that the VA sought to leverage market competition to achieve favorable terms. However, the concentration of such a large award with a single entity can solidify their market position and potentially influence pricing strategies or service availability for other payers. It also signals the significant demand for dialysis services, underscoring the importance of this sector within the broader healthcare industry.

Are there any specific geographic areas or veteran populations that are disproportionately served or underserved by this contract?

The contract specifies 'NATIONWIDE DIALYSIS,' suggesting an intent to serve veterans across all geographic regions. However, the actual distribution of services and the specific veteran populations served can vary based on the location of dialysis facilities, veteran population density, and the contractor's operational reach. It is possible that certain rural or remote areas might have fewer available facilities or longer travel times for veterans requiring treatment. Similarly, specific demographic groups within the veteran population might face unique challenges accessing care. A thorough analysis would require mapping the locations of awarded facilities against veteran population centers and demographic data to identify any potential disparities in service access or utilization.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › Kidney Dialysis Centers

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL 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

Parent Company: Fresenius Medical Care Lake Charles Home, LLC

Address: 920 WINTER ST, WALTHAM, MA, 02451

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

Financial Breakdown

Contract Ceiling: $148,731,700

Exercised Options: $148,731,700

Current Obligation: $148,731,700

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0021

IDV Type: IDC

Timeline