HHS awards $26.4M contract to Palmetto GBA for Medicare supplier privilege management

Contract Overview

Contract Amount: $26,425,996 ($26.4M)

Contractor: Palmetto GBA, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-08-08

End Date: 2026-08-07

Contract Duration: 1,460 days

Daily Burn Rate: $18.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE CONTRACTOR SHALL PROPERLY ISSUE AND/OR REVOKE MEDICARE SUPPLIER BILLING PRIVILEGES FOR DMEPOS SUPPLIERS AND MAINTAIN SUPPLIER FILES IN PECOS THAT CONTAIN INFORMATION COLLECTED VIA THE MEDICARE ENROLLMENT APPLICATION, INTERNET-BASED PECOS, AND THE

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29202

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $26.4 million to PALMETTO GBA, LLC for work described as: THE CONTRACTOR SHALL PROPERLY ISSUE AND/OR REVOKE MEDICARE SUPPLIER BILLING PRIVILEGES FOR DMEPOS SUPPLIERS AND MAINTAIN SUPPLIER FILES IN PECOS THAT CONTAIN INFORMATION COLLECTED VIA THE MEDICARE ENROLLMENT APPLICATION, INTERNET-BASED PECOS, AND THE Key points: 1. Contract focuses on managing Medicare supplier billing privileges and maintaining supplier files. 2. The contract value of $26.4 million over four years suggests a significant operational scope. 3. Competition was full and open, indicating a potentially competitive bidding process. 4. The fixed-price contract type aims to control costs for the government. 5. Performance is concentrated in South Carolina, with potential national implications for Medicare suppliers. 6. This contract supports the integrity of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) program.

Value Assessment

Rating: good

The contract value of $26.4 million over four years for managing Medicare supplier privileges appears reasonable given the critical function of maintaining the PECOS system and ensuring supplier compliance. Benchmarking against similar contracts for program integrity and supplier management within HHS would provide a more precise value assessment. However, the scope of managing billing privileges for DMEPOS suppliers nationwide suggests a substantial undertaking that justifies the allocated funds.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of 5 bidders indicates a healthy level of interest and competition for this service. This competitive environment is expected to drive fair pricing and encourage the selection of the most capable contractor.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better service quality.

Public Impact

Beneficiaries of this contract include Medicare suppliers who rely on accurate and efficient processing of their billing privileges. The services delivered ensure the integrity of the Medicare program by managing supplier enrollment and preventing fraudulent activities. The geographic impact is national, as it pertains to the Medicare supplier database (PECOS) which covers all states. Workforce implications include the need for skilled personnel at Palmetto GBA to manage supplier data, process applications, and ensure compliance with Medicare regulations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in processing supplier applications impacting provider operations.
Risk of data inaccuracies in the PECOS system if not rigorously maintained.
Dependence on a single contractor for a critical function of Medicare oversight.

Positive Signals

Palmetto GBA has a history of managing Medicare administrative contracts, suggesting relevant experience.
The contract's focus on program integrity aligns with HHS's mission to protect Medicare funds.
Full and open competition indicates a robust selection process.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically related to administrative and support services for government programs. The market for such services is substantial, driven by the ongoing need for government agencies to manage complex databases, ensure compliance, and maintain program integrity. Comparable spending benchmarks would involve other contracts for claims processing, provider enrollment, and program integrity functions within healthcare and other regulated sectors.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract. However, the prime contractor, Palmetto GBA, may engage small businesses for subcontracting opportunities to fulfill specific aspects of the contract requirements. The impact on the small business ecosystem would depend on the extent to which subcontracting is utilized and the nature of the services provided by any small business subcontractors.

Oversight & Accountability

Oversight for this contract is likely managed by the Centers for Medicare and Medicaid Services (CMS), a division of HHS. Accountability measures would be embedded in the contract's performance standards and deliverables. Transparency is facilitated through contract awards databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Medicare Administrative Contractor (MAC) services
Provider enrollment and credentialing
Program integrity initiatives
DMEPOS supplier oversight
Healthcare data management

Risk Flags

Data integrity risk
Cybersecurity risk
Operational efficiency risk
Fraud and abuse risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $26.4 million to PALMETTO GBA, LLC. THE CONTRACTOR SHALL PROPERLY ISSUE AND/OR REVOKE MEDICARE SUPPLIER BILLING PRIVILEGES FOR DMEPOS SUPPLIERS AND MAINTAIN SUPPLIER FILES IN PECOS THAT CONTAIN INFORMATION COLLECTED VIA THE MEDICARE ENROLLMENT APPLICATION, INTERNET-BASED PECOS, AND THE

Who is the contractor on this award?

The obligated recipient is PALMETTO GBA, 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 $26.4 million.

What is the period of performance?

Start: 2022-08-08. End: 2026-08-07.

What is Palmetto GBA's track record in managing Medicare supplier data and enrollment systems?

Palmetto GBA has extensive experience as a Medicare Administrative Contractor (MAC), managing various aspects of the Medicare program, including provider enrollment and claims processing. They are responsible for administering Medicare benefits in multiple jurisdictions, which includes maintaining supplier files and ensuring compliance with program requirements. Their long-standing presence in managing Medicare operations suggests a deep understanding of the systems and regulations involved, including the Provider Enrollment, Chain, and Ownership System (PECOS). This experience is critical for the successful execution of the current contract, which focuses on issuing and revoking Medicare supplier billing privileges and maintaining accurate supplier files within PECOS.

How does the $26.4 million contract value compare to similar contracts for managing Medicare supplier privileges?

Benchmarking the $26.4 million contract value requires comparing it to contracts with similar scope and duration for managing Medicare supplier enrollment, privileging, and data integrity. While specific comparable contract values are not publicly detailed, the amount appears consistent with the scale of operations for a national Medicare contractor responsible for a critical function like DMEPOS supplier management. The contract duration of four years (2022-2026) with a total value of $26.4 million translates to an average annual value of approximately $6.6 million. This figure should be assessed against the complexity of managing a large database of suppliers, ensuring compliance, and preventing fraud within the DMEPOS sector, which is known for its susceptibility to improper payments.

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

The primary risks associated with this contract include potential inaccuracies in the Medicare supplier database (PECOS), leading to improper payments or allowing ineligible suppliers to bill Medicare. There's also a risk of delays in processing supplier applications or changes, which could impact legitimate providers. Furthermore, cybersecurity risks related to managing sensitive supplier data are a concern. Mitigation strategies likely involve robust data validation processes, strict adherence to established protocols for issuing and revoking privileges, regular audits, and comprehensive security measures to protect the PECOS system. The contract's performance standards and reporting requirements also serve as oversight mechanisms to identify and address risks.

How does this contract contribute to the overall effectiveness and integrity of the Medicare program?

This contract is crucial for maintaining the integrity and effectiveness of the Medicare program, particularly within the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) sector. By ensuring that only properly qualified and enrolled suppliers are granted billing privileges, the contract helps prevent fraud, waste, and abuse. Accurate and up-to-date supplier information in PECOS is essential for correct claims processing and payment. The active management of these privileges directly supports CMS's mission to protect Medicare trust funds and ensure beneficiaries receive services from legitimate providers.

What are the historical spending patterns for Medicare supplier management and program integrity functions?

Historical spending on Medicare supplier management and program integrity functions has been substantial and generally increasing, reflecting the growing complexity of the healthcare system and the persistent threat of fraud. CMS consistently allocates significant resources to contractor support for tasks such as provider enrollment, claims review, data analytics, and investigations aimed at safeguarding program funds. While specific historical figures for DMEPOS supplier privileging are not detailed here, overall spending on program integrity efforts by CMS has been in the billions of dollars annually. This contract represents a component of that broader investment in ensuring the financial health and operational integrity of Medicare.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical 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: 75FCMC22R0007

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203

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

Financial Breakdown

Contract Ceiling: $38,300,791

Exercised Options: $26,425,996

Current Obligation: $26,425,996

Actual Outlays: $16,839,922

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 75FCMC20D0021

IDV Type: IDC

Timeline