HHS Awards $228M Medicare MAC Contract for Jurisdiction C to CGS Administrators
Contract Overview
Contract Amount: $228,251,917 ($228.3M)
Contractor: CGS Administrators, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2020-09-01
End Date: 2026-08-31
Contract Duration: 2,190 days
Daily Burn Rate: $104.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: DURABLE MEDICAL EQUIPMENT (DME) MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) FOR JURISDICTION C (JC)
Place of Performance
Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37228
Plain-Language Summary
Department of Health and Human Services obligated $228.3 million to CGS ADMINISTRATORS, LLC for work described as: DURABLE MEDICAL EQUIPMENT (DME) MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) FOR JURISDICTION C (JC) Key points: 1. Contract awarded to CGS Administrators, LLC for Durable Medical Equipment (DME) MAC services in Jurisdiction C. 2. The contract has a base period and option periods, with a total potential value of $228.25 million. 3. Competition was full and open, indicating a competitive bidding process. 4. The sector is Healthcare, specifically related to health insurance carriers.
Value Assessment
Rating: good
The contract type is Cost Plus Award Fee, which incentivizes performance. The total award value of $228.25 million over approximately 5 years suggests a reasonable annual spend for managing Medicare administrative functions for a large jurisdiction.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, allowing multiple bidders to submit proposals. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The competitive process aims to ensure taxpayer funds are used efficiently for essential Medicare administrative services.
Public Impact
Ensures continued access to durable medical equipment for Medicare beneficiaries in Jurisdiction C. Supports the operational efficiency of the Medicare program by outsourcing administrative functions. The contract's performance impacts the timely processing of claims and payments for DME providers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns with Cost Plus Award Fee contracts if not managed closely.
- Dependence on a single contractor for critical administrative functions in a large jurisdiction.
Positive Signals
- Full and open competition likely led to a competitive price.
- Contract duration provides stability for service delivery.
- Award Fee structure incentivizes contractor performance.
Sector Analysis
This contract falls within the Healthcare sector, specifically for health insurance carriers managing administrative functions for Medicare. The spending benchmark for similar contracts can vary widely based on jurisdiction size and services covered.
Small Business Impact
The data indicates that small business participation was not a specific requirement or achievement noted for this contract (ss: false, sb: false). Further analysis would be needed to determine if subcontracting opportunities exist for small businesses.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. The Cost Plus Award Fee structure includes performance metrics that CMS will use to determine award fees, providing a mechanism for oversight.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost creep in Cost Plus Award Fee contracts.
- Contractor performance risk if KPIs are not met.
- Dependence on a single entity for critical administrative functions.
- Lack of explicit small business participation goals.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, tn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $228.3 million to CGS ADMINISTRATORS, LLC. DURABLE MEDICAL EQUIPMENT (DME) MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) FOR JURISDICTION C (JC)
Who is the contractor on this award?
The obligated recipient is CGS ADMINISTRATORS, LLC.
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 $228.3 million.
What is the period of performance?
Start: 2020-09-01. End: 2026-08-31.
What is the historical performance of CGS Administrators, LLC in managing similar Medicare contracts?
Historical performance data for CGS Administrators, LLC in managing similar Medicare contracts would be crucial for a comprehensive value assessment. Past performance can indicate their ability to meet service level agreements, manage costs effectively, and ensure beneficiary satisfaction. Without this, the 'good' rating relies heavily on the competitive nature of the award and the contract's incentive structure.
What are the key performance indicators (KPIs) tied to the award fee structure, and how are they measured?
Understanding the specific KPIs for the Cost Plus Award Fee is essential for assessing risk and effectiveness. These metrics likely relate to claims processing timeliness, accuracy, provider satisfaction, and beneficiary access to services. Robust measurement and transparent reporting of these KPIs by CMS are critical to ensuring the contractor is meeting objectives and that taxpayer money is being spent wisely.
How does the annual spending on this contract compare to the average annual spending for DME MAC contracts in other jurisdictions?
Benchmarking the annual spending against other DME MAC jurisdictions is key to evaluating cost-effectiveness. Factors like the size of the jurisdiction (population, number of beneficiaries), complexity of services, and prevailing market rates influence costs. A comparative analysis would reveal if Jurisdiction C's contract value is within expected ranges or if there are potential areas of over or under-spending.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 75FCMC19R0041
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 26 CENTURY BLVD STE 610, NASHVILLE, TN, 37214
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $303,616,814
Exercised Options: $257,076,659
Current Obligation: $228,251,917
Actual Outlays: $165,889,940
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-09-01
Current End Date: 2026-08-31
Potential End Date: 2027-08-31 00:00:00
Last Modified: 2025-12-11
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