HHS Spends $47.6M on No Surprises Act Provider Enforcement and Transparency with KPMG LLP

Contract Overview

Contract Amount: $47,634,516 ($47.6M)

Contractor: Kpmg LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-30

End Date: 2025-06-29

Contract Duration: 1,368 days

Daily Burn Rate: $34.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Healthcare

Official Description: NO SURPRISES ACT PROVIDER ENFORCEMENT AND TRANSPARENCY

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $47.6 million to KPMG LLP for work described as: NO SURPRISES ACT PROVIDER ENFORCEMENT AND TRANSPARENCY Key points: 1. KPMG LLP secured a significant contract for critical healthcare policy implementation. 2. The contract value is substantial, indicating a major initiative by CMS. 3. Full and open competition was utilized, suggesting a robust procurement process. 4. The 'Time and Materials' pricing model introduces potential cost variability. 5. This initiative directly impacts healthcare providers and patient access to information.

Value Assessment

Rating: good

The contract value of $47.6M over its duration appears reasonable given the scope of implementing the No Surprises Act, which involves complex regulatory and technological challenges. Benchmarking against similar large-scale federal IT and consulting contracts for policy implementation suggests this is within a typical range.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery and achieving value for money. This method allows multiple qualified vendors to bid, fostering a competitive environment that should drive down costs and improve service quality.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for funds allocated to enforcing the No Surprises Act and enhancing transparency in healthcare.

Public Impact

Enhances enforcement of the No Surprises Act, protecting patients from surprise medical bills. Increases transparency in healthcare pricing and provider practices. Supports the implementation of key provisions of the Affordable Care Act. Potentially reduces out-of-pocket costs for individuals facing unexpected medical expenses. Improves the overall fairness and accessibility of the healthcare system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing.
Contract duration extends into mid-2025, requiring ongoing monitoring.
Dependence on a single contractor (KPMG LLP) for a critical function.

Positive Signals

Awarded through full and open competition.
Addresses a significant consumer protection issue in healthcare.
Supports a major federal legislative initiative.

Sector Analysis

This contract falls within the professional services sector, specifically related to government consulting and IT support for healthcare policy implementation. Spending benchmarks for similar large-scale federal contracts involving regulatory enforcement and technology integration often range in the tens of millions, making this expenditure comparable.

Small Business Impact

While the primary awardee is KPMG LLP, a large firm, the contract's nature may involve subcontracting opportunities for smaller businesses specializing in data analysis, software development, or specific healthcare consulting areas. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Robust oversight will be crucial to manage the Time and Materials pricing, ensure deliverables meet the objectives of the No Surprises Act, and track performance effectively.

Related Government Programs

Offices of Certified Public Accountants
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Contract duration extends into mid-2025, requiring ongoing monitoring.
Dependence on a single contractor (KPMG LLP) for a critical function.
Complexity of implementing and enforcing the No Surprises Act provisions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $47.6 million to KPMG LLP. NO SURPRISES ACT PROVIDER ENFORCEMENT AND TRANSPARENCY

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

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 $47.6 million.

What is the period of performance?

Start: 2021-09-30. End: 2025-06-29.

What is the projected impact of this contract on reducing surprise medical billing incidents?

The contract aims to bolster enforcement mechanisms and transparency related to the No Surprises Act. By providing CMS with enhanced capabilities, it is expected to lead to more effective identification and resolution of violations, thereby reducing the incidence of surprise medical bills and improving patient financial predictability.

How will the 'Time and Materials' pricing model be managed to control costs?

Effective management of the 'Time and Materials' (T&M) model requires stringent oversight, detailed tracking of labor hours and material costs, and clear task definitions. CMS will need to establish robust reporting requirements and potentially set not-to-exceed limits for specific task orders to mitigate the risk of cost overruns and ensure value.

What are the key performance indicators (KPIs) for measuring the success of this contract?

Key performance indicators should focus on the effectiveness of enforcement actions taken, the measurable increase in provider and patient transparency regarding costs, the successful implementation of reporting systems, and the overall reduction in reported surprise billing cases. Timeliness of deliverables and adherence to budget will also be critical.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,634,516

Exercised Options: $47,634,516

Current Obligation: $47,634,516

Actual Outlays: $47,117,935

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $400,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00F275CA

IDV Type: FSS

Timeline