Air Force medical coding audit services awarded to Serco Inc. for $8.66 million over five years

Contract Overview

Contract Amount: $8,660,642 ($8.7M)

Contractor: Serco Inc

Awarding Agency: General Services Administration

Start Date: 2018-05-01

End Date: 2023-03-29

Contract Duration: 1,793 days

Daily Burn Rate: $4.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: AWARD OF TASK ORDER FOR MEDICAL CODING COMPLIANCE SERVICES (MEDICAL CODING AUDITORS) ON BEHALF OF THE UNITED STATES AIR FORCE MEDICAL CODING PROGRAM OFFICE (AFMS MCPO).

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78226

State: Texas Government Spending

Plain-Language Summary

General Services Administration obligated $8.7 million to SERCO INC for work described as: AWARD OF TASK ORDER FOR MEDICAL CODING COMPLIANCE SERVICES (MEDICAL CODING AUDITORS) ON BEHALF OF THE UNITED STATES AIR FORCE MEDICAL CODING PROGRAM OFFICE (AFMS MCPO). Key points: 1. Contract value appears reasonable given the five-year duration and specialized nature of medical coding audits. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type (Time and Materials) carries inherent risk of cost overruns if not closely managed. 4. Performance period spans from May 2018 to March 2023, indicating a mature service delivery. 5. This contract falls within the 'Other Accounting Services' NAICS code, a broad category. 6. The award was a delivery order under a larger contract vehicle, common for task-specific needs.

Value Assessment

Rating: good

The award of $8.66 million for medical coding compliance services over approximately five years represents a significant investment by the Air Force. Benchmarking against similar contracts for specialized auditing services is challenging without more granular data on scope and deliverables. However, the duration and the nature of the work suggest a fair market value, assuming effective service delivery and cost controls. The Time and Materials pricing structure, while flexible, necessitates diligent oversight to ensure value for money.

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 offers. The data shows two bids were received, which is a relatively low number for a full and open competition. This limited number of bidders could suggest potential challenges in the market for these specific services or a narrow scope that attracted fewer participants. While competition was present, the low bid count warrants attention to ensure optimal price discovery.

Taxpayer Impact: A competitive process, even with few bidders, generally benefits taxpayers by encouraging providers to offer competitive pricing. However, the limited number of bids may have restricted the full potential for cost savings that a more robust competition could have yielded.

Public Impact

The United States Air Force Medical Coding Program Office (AFMS MCPO) is the primary beneficiary, receiving essential services for accurate medical coding and compliance. The services delivered include medical coding audits, crucial for ensuring the integrity of healthcare billing and reimbursement processes within the Air Force. The contract is managed by the General Services Administration (GSA), facilitating efficient procurement for the Air Force. The contract is being performed in Texas (ST: TX, SN: TEXAS), indicating a geographic focus for service delivery or administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type increases risk of cost escalation without strict oversight.
Low number of bids (2) in a full and open competition may indicate limited market interest or potential for higher pricing.
Specific details on performance metrics and quality assurance are not readily available, making it difficult to fully assess value.
The contract is a delivery order, meaning its specific scope and value are part of a larger contract vehicle, potentially obscuring full cost visibility.

Positive Signals

Awarded under full and open competition, ensuring a baseline level of market engagement.
Contract duration of nearly five years allows for stable service provision and potential for contractor expertise development.
Managed by GSA, which typically adheres to established procurement best practices.
The service is critical for maintaining compliance and financial integrity within the Air Force's medical programs.

Sector Analysis

This contract falls under the 'Other Accounting Services' (NAICS 541219) sector, which encompasses a wide range of financial and accounting support. The market for specialized medical coding and auditing services is a niche within this broader category, driven by regulatory compliance requirements in healthcare. Comparable spending benchmarks are difficult to establish without detailed service scope, but government spending on healthcare administration and compliance services is substantial, reflecting the complexity and importance of accurate financial management in public health.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Serco Inc., is a large business, and any subcontracting would likely be at their discretion and not mandated by a small business set-aside requirement.

Oversight & Accountability

Oversight for this contract is primarily managed by the General Services Administration (GSA) as the contracting agency, and the Air Force Medical Coding Program Office (AFMS MCPO) as the requiring activity. The Time and Materials (T&M) contract type necessitates robust oversight to monitor labor hours, costs, and ensure that the services provided align with the contract's objectives and prevent cost overruns. Transparency is facilitated through contract award data, but detailed performance reports and specific oversight mechanisms are not publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Medical Services
Medical Coding and Billing Services
Healthcare Compliance Audits
GSA Federal Acquisition Service Contracts
Accounting and Auditing Services

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Limited number of bidders (2) in a full and open competition.
Lack of detailed performance metrics in summary data.
Contract is a delivery order under a larger vehicle, potentially limiting transparency on total cost.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $8.7 million to SERCO INC. AWARD OF TASK ORDER FOR MEDICAL CODING COMPLIANCE SERVICES (MEDICAL CODING AUDITORS) ON BEHALF OF THE UNITED STATES AIR FORCE MEDICAL CODING PROGRAM OFFICE (AFMS MCPO).

Who is the contractor on this award?

The obligated recipient is SERCO INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $8.7 million.

What is the period of performance?

Start: 2018-05-01. End: 2023-03-29.

What is Serco Inc.'s track record with federal contracts, particularly in healthcare or auditing services?

Serco Inc. is a large government contractor with a significant portfolio of federal contracts across various agencies and service areas, including defense, health, and civilian services. While specific details on their performance for this particular medical coding audit contract are not provided in the summary data, Serco has a history of managing complex service delivery contracts. A deeper dive into their contract performance history, including any past performance evaluations, awards, or disputes related to similar healthcare or auditing services, would be necessary for a comprehensive assessment of their track record on this specific task order.

How does the $8.66 million award compare to similar medical coding audit contracts within the federal government?

Direct comparison of the $8.66 million award for medical coding audit services is challenging without specific details on the scope of work, number of audits performed, complexity of coding systems used, and the duration of comparable contracts. The provided data indicates a five-year period (May 2018 - March 2023) and a Time and Materials (T&M) pricing structure. Generally, T&M contracts can vary significantly in total cost based on actual hours worked. To benchmark effectively, one would need to compare this contract's total value and duration against other federal contracts for similar auditing services, considering factors like the number of beds audited, types of medical services coded, and the specific compliance standards required (e.g., ICD-10, CPT codes).

What are the primary risks associated with a Time and Materials (T&M) contract for medical coding audits?

The primary risk with a Time and Materials (T&M) contract for medical coding audits is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. If not managed diligently, this structure can incentivize longer task durations or less efficient work, as the contractor is compensated for time spent. For medical coding audits, risks include extended audit timelines, increased labor hours due to unforeseen complexities in medical records, or higher-than-anticipated material costs. Robust oversight, clear task definitions, and strong performance monitoring by the government are crucial to mitigate these risks and ensure the contract remains within budget and delivers value.

How effective is the Air Force's Medical Coding Program Office (AFMS MCPO) in ensuring accurate medical coding and compliance?

The effectiveness of the Air Force's Medical Coding Program Office (AFMS MCPO) in ensuring accurate medical coding and compliance cannot be directly assessed from the provided contract award data alone. This contract is for services that *support* the AFMS MCPO's mission. The success of the program hinges on the quality of the audits performed by the contractor (Serco Inc. in this case), the AFMS MCPO's ability to implement corrective actions based on audit findings, and the overall compliance framework established by the Air Force. Metrics such as error rates in coding, reduction in claim denials, and successful compliance reviews would be needed to evaluate the program's effectiveness.

What has been the historical spending trend for medical coding compliance services by the Air Force or similar DoD entities?

The provided data focuses on a single award of $8.66 million for medical coding compliance services to Serco Inc. by the GSA on behalf of the Air Force. It does not offer historical spending trends. To understand historical spending, one would need to analyze procurement data over multiple fiscal years for the Air Force Medical Coding Program Office or similar Department of Defense (DoD) healthcare entities. This would involve identifying all contracts related to medical coding audits, compliance services, and potentially related revenue cycle management support, summing their values annually, and observing any patterns of increase or decrease in spending, which could be influenced by changes in healthcare regulations, audit requirements, or program priorities.

What is the significance of the NAICS code 541219 (Other Accounting Services) in the context of this contract?

The classification under NAICS code 541219, 'Other Accounting Services,' indicates that this contract falls into a broad category that includes accounting, bookkeeping, payroll, and related services not elsewhere classified. For medical coding audit services, this classification is appropriate as it involves reviewing financial and operational data related to medical services to ensure accuracy and compliance, which aligns with the broader definition of accounting support. However, it's a very general code. More specific codes might exist for specialized healthcare consulting or auditing, but 541219 serves as a functional descriptor for the type of professional service procured. This broad classification can make direct spending comparisons difficult without examining the specific task orders issued under such codes.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: ID07170050

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 12930 WORLDGATE DR STE 600, HERNDON, VA, 20170

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

Financial Breakdown

Contract Ceiling: $11,730,312

Exercised Options: $11,730,312

Current Obligation: $8,660,642

Actual Outlays: $148,084

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $6,403,926

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU219

IDV Type: IDC

Timeline