MAXIMUS FEDERAL SERVICES awarded $30.8M for Durable Medical Equipment services by HHS

Contract Overview

Contract Amount: $30,821,038 ($30.8M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2018-03-29

End Date: 2023-08-31

Contract Duration: 1,981 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE

Sector: Healthcare

Official Description: IGF::OT::IGF DURABLE MEDICAL EQUIPMENT QUALIFIED INDEPENDENT CONTRACTOR (DME QIC)

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.8 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: IGF::OT::IGF DURABLE MEDICAL EQUIPMENT QUALIFIED INDEPENDENT CONTRACTOR (DME QIC) Key points: 1. Contract value represents a significant investment in DME quality assurance. 2. Competition dynamics suggest a robust market for these specialized administrative services. 3. Performance risk appears moderate given the fixed-price award fee structure. 4. This contract supports a critical function within Medicare and Medicaid operations. 5. The sector positioning is within healthcare administration and consulting services. 6. Spending aligns with the government's ongoing efforts to manage healthcare program integrity.

Value Assessment

Rating: good

The contract value of $30.8 million over approximately five years appears reasonable for specialized administrative management and consulting services related to Durable Medical Equipment (DME) quality. Benchmarking against similar contracts for healthcare program integrity and oversight functions would provide a more precise value-for-money assessment. However, the fixed-price award fee structure incentivizes performance, suggesting a focus on achieving specific outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach generally fosters price discovery and allows the government to select the most capable and cost-effective solution. The presence of multiple bidders suggests a healthy competitive environment for these types of administrative support services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs and ensures the government receives competitive pricing for essential services.

Public Impact

Beneficiaries include Medicare and Medicaid recipients who rely on durable medical equipment. Services delivered focus on ensuring the quality and appropriateness of DME services. Geographic impact is national, affecting all states and territories covered by Medicare and Medicaid. Workforce implications include support for administrative and quality assurance roles within the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not clearly defined.
Reliance on contractor performance for critical program integrity functions.
Ensuring consistent application of quality standards across diverse DME providers.

Positive Signals

Fixed-price award fee structure incentivizes contractor performance and efficiency.
Full and open competition suggests a competitive market leading to potentially better value.
Contract duration allows for sustained focus on program objectives.

Sector Analysis

This contract falls within the healthcare administration and consulting services sector, specifically focusing on the oversight and management of Durable Medical Equipment (DME) for federal healthcare programs. The market for such services is driven by the complexity of healthcare regulations and the need for specialized expertise in program integrity and quality assurance. Comparable spending benchmarks would involve other contracts for Medicare/Medicaid program integrity, claims review, and provider oversight.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the prime contractor may engage small businesses for specialized support services, which would be detailed in subcontracting plans not provided here.

Oversight & Accountability

Oversight is likely managed by the Centers for Medicare and Medicaid Services (CMS) program officials. Accountability measures are embedded in the fixed-price award fee structure, which ties a portion of the payment to performance outcomes. Transparency is generally maintained through contract awards databases, though detailed performance reports are typically internal. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Medicare Durable Medical Equipment Services
Medicaid Program Integrity
Healthcare Quality Assurance Contracts
Federal Healthcare Consulting Services
CMS Administrative Support Contracts

Risk Flags

Contract performance risk
Data security and privacy concerns
Potential for undefined scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.8 million to MAXIMUS FEDERAL SERVICES, INC.. IGF::OT::IGF DURABLE MEDICAL EQUIPMENT QUALIFIED INDEPENDENT CONTRACTOR (DME QIC)

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $30.8 million.

What is the period of performance?

Start: 2018-03-29. End: 2023-08-31.

What is the track record of MAXIMUS FEDERAL SERVICES, INC. in managing similar federal healthcare contracts?

MAXIMUS FEDERAL SERVICES, INC. has a substantial track record in managing large-scale federal and state health and human services programs. They are a significant player in areas such as Medicaid, Medicare, and health insurance marketplace administration. Their experience often includes eligibility determination, call center operations, claims processing, and program integrity functions. For contracts specifically related to Durable Medical Equipment (DME) quality or oversight, their past performance would need to be reviewed against specific contract requirements. However, their broad experience in healthcare administration suggests a capacity to handle complex programs like this DME QIC contract. Past performance evaluations and contract close-outs would provide more granular detail on their success in meeting performance metrics and managing costs on similar engagements.

How does the awarded amount of $30.8 million compare to similar contracts for DME quality assurance or related administrative services?

The awarded amount of $30.8 million over approximately five years for the DME QIC contract represents a significant investment in ensuring the quality and integrity of durable medical equipment services within federal healthcare programs. To benchmark this value, one would need to compare it against other contracts awarded by CMS or other agencies for similar functions, such as program integrity, provider auditing, claims review, or specialized administrative management for specific healthcare categories. Factors such as the scope of work, duration, geographic coverage, and the specific services provided (e.g., data analysis, provider education, policy development) heavily influence contract values. Without direct comparable contract data, it's challenging to definitively state if $30.8 million is high or low, but it indicates a substantial commitment to managing this aspect of healthcare delivery.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks for this contract likely include performance risk (ensuring the contractor effectively meets quality assurance objectives), data security and privacy risk (handling sensitive beneficiary and provider information), and potential for cost overruns if not managed tightly, although the fixed-price award fee structure aims to mitigate this. Mitigation strategies typically involve robust contract oversight by the agency, clearly defined performance metrics and deliverables tied to the award fee, regular performance reviews, and strict adherence to data security protocols mandated by federal regulations (e.g., HIPAA). The contractor's own internal quality control processes and risk management plans are also crucial for mitigating these risks. The fixed-price nature of the base contract provides a ceiling, while the award fee incentivizes meeting or exceeding performance expectations.

How effective is the fixed-price award fee (FP-AF) contract type in achieving program goals for DME quality assurance?

The Fixed-Price Award Fee (FP-AF) contract type is designed to balance cost control with performance incentives. In the context of DME quality assurance, the fixed-price component establishes a ceiling on the government's cost, providing budget predictability. The award fee component is crucial; it allows the government to reward the contractor for achieving or exceeding specific performance objectives outlined in the contract. This incentivizes the contractor to focus on high-quality service delivery, efficiency, and meeting program goals, such as improving DME provider compliance or reducing improper payments. The effectiveness hinges on the clarity and measurability of the award criteria and the rigor of the government's performance evaluation process. If well-defined, FP-AF can be highly effective in driving desired outcomes while managing costs.

What is the historical spending trend for Durable Medical Equipment Quality Independent Contractor services by CMS?

Analyzing historical spending trends for DME QIC services requires access to detailed federal procurement data over multiple fiscal years. This specific contract, awarded in March 2018 and ending in August 2023, represents a significant portion of spending within this niche. To understand the trend, one would need to examine prior contracts for similar functions, including any predecessor contracts or related initiatives aimed at DME oversight. Factors influencing spending trends include changes in healthcare policy, evolving DME market dynamics, legislative mandates, and CMS's strategic priorities regarding program integrity and cost containment. A year-over-year analysis of obligated amounts for DME-related oversight and administrative contracts would reveal whether spending in this area is increasing, decreasing, or remaining stable.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFPQIC04001

Offers Received: 2

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Address: 11419 SUNSET HILLS ROAD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $51,344,870

Exercised Options: $30,821,038

Current Obligation: $30,821,038

Actual Outlays: $15,176,430

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500200400007I

IDV Type: IDC

Timeline