CMS awards $17.2M for End Stage Renal Disease System, focusing on patient-centric enhancements

Contract Overview

Contract Amount: $17,256,912 ($17.3M)

Contractor: Flexion Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2024-07-08

End Date: 2027-03-02

Contract Duration: 967 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE END STAGE RENAL SUPPORT SYSTEM (EQRS) REQUIREMENT DEVELOPS, MAINTAINS, AND ENHANCES EXISTING FUNCTIONALITY TO CREATE A USER-FRIENDLY, PATIENT-CENTRIC SYSTEM THAT SUPPORTS LEGISLATIVELY MANDATED CONDITIONS FOR COVERAGE IN DIALYSIS FACILITIES IN A

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $17.3 million to FLEXION INC for work described as: THE END STAGE RENAL SUPPORT SYSTEM (EQRS) REQUIREMENT DEVELOPS, MAINTAINS, AND ENHANCES EXISTING FUNCTIONALITY TO CREATE A USER-FRIENDLY, PATIENT-CENTRIC SYSTEM THAT SUPPORTS LEGISLATIVELY MANDATED CONDITIONS FOR COVERAGE IN DIALYSIS FACILITIES IN A Key points: 1. Contract aims to improve user-friendliness and patient focus for dialysis facility support. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Fixed-price contract type shifts performance risk to the contractor. 4. The system supports legislatively mandated conditions for dialysis coverage. 5. This award represents a significant investment in healthcare IT infrastructure. 6. Contract duration of nearly 3 years indicates a need for sustained development.

Value Assessment

Rating: good

The contract value of $17.26 million over approximately 32 months (967 days) for custom computer programming services appears reasonable given the scope of developing and enhancing a patient-centric system for End Stage Renal Disease (ESRD) support. Benchmarking against similar large-scale healthcare IT development contracts, this value falls within expected ranges for systems requiring significant user interface improvements and data management capabilities. The firm fixed-price structure also suggests that the government has a clear understanding of the requirements and has negotiated a price that accounts for contractor risk.

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. With four bids received, the competition level suggests a healthy market interest in this type of healthcare IT service. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by fostering a competitive environment that drives down costs and encourages innovation.

Public Impact

Patients with End Stage Renal Disease will benefit from a more user-friendly and patient-centric system for managing their care and coverage. Dialysis facilities will receive enhanced tools and functionality to support patient care and comply with regulatory requirements. The Centers for Medicare and Medicaid Services (CMS) will gain improved operational efficiency and data management for ESRD programs. Healthcare IT professionals and developers will be engaged in critical work supporting public health initiatives. The geographic impact is national, as the system supports dialysis facilities across the United States.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed throughout the contract lifecycle.
Dependence on contractor expertise for critical system development and maintenance.
Risk of integration challenges with existing CMS systems.
Ensuring data security and patient privacy compliance is paramount.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Full and open competition suggests a robust selection process and potential for competitive pricing.
Clear focus on patient-centric design indicates alignment with modern healthcare IT goals.
Contract duration allows for sustained development and enhancement of the system.

Sector Analysis

This contract falls within the Health Information Technology sector, specifically focusing on custom computer programming services for a government healthcare agency. The market for healthcare IT solutions is substantial, driven by the need for interoperability, patient engagement, and regulatory compliance. Comparable spending benchmarks for developing and maintaining large-scale federal health systems often run into tens or hundreds of millions of dollars over their lifecycle, making this $17.26 million award a moderate investment for a critical system.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor, Flexion Inc., is not explicitly identified as a small business in the provided data, the contract's nature suggests potential opportunities for small businesses to participate as subcontractors, particularly in specialized areas of custom computer programming and IT support.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon budget. Transparency is facilitated through the federal procurement process and contract award databases. The Department of Health and Human Services' Office of Inspector General (OIG) may also conduct audits or investigations related to the program's effectiveness and financial integrity.

Related Government Programs

End Stage Renal Disease Quality Incentive Program (ESRD QIP)
Medicare Part B Physician Fee Schedule
Healthcare Quality Information System (HQIS)
Centers for Medicare & Medicaid Services (CMS) IT Modernization

Risk Flags

Potential for scope creep
Data security and privacy concerns
Technological obsolescence risk
Contractor performance dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $17.3 million to FLEXION INC. THE END STAGE RENAL SUPPORT SYSTEM (EQRS) REQUIREMENT DEVELOPS, MAINTAINS, AND ENHANCES EXISTING FUNCTIONALITY TO CREATE A USER-FRIENDLY, PATIENT-CENTRIC SYSTEM THAT SUPPORTS LEGISLATIVELY MANDATED CONDITIONS FOR COVERAGE IN DIALYSIS FACILITIES IN A

Who is the contractor on this award?

The obligated recipient is FLEXION 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 $17.3 million.

What is the period of performance?

Start: 2024-07-08. End: 2027-03-02.

What is the historical spending trend for the End Stage Renal Support System (EQRS) requirement prior to this award?

The provided data does not include historical spending for the EQRS requirement. However, the current award of $17.26 million over approximately 32 months (967 days) suggests a significant, ongoing investment in this system. To understand historical trends, one would need to access prior contract awards and task orders related to the EQRS, potentially through federal procurement databases like FPDS-NG or SAM.gov. Analyzing past expenditures would reveal whether this award represents an increase, decrease, or stable level of funding for the system's development and maintenance, and identify any significant shifts in program scope or contractor.

How does the per-unit cost of this contract compare to similar custom computer programming services for healthcare IT?

A direct per-unit cost comparison is challenging without a clearly defined unit of service (e.g., per user, per transaction, per module developed). The total contract value is $17,256,911.56 over approximately 32 months. If we consider a rough daily rate, it's approximately $17,846 per day. However, this is a blended rate encompassing all development, maintenance, and enhancement activities. Benchmarking against industry standards for custom healthcare IT development, which can range widely based on complexity, team size, and specific technologies used, suggests this rate is within a reasonable, albeit high-end, range for a government contract of this scale and importance. The firm fixed-price nature implies the contractor has factored in all costs and profit margins.

What are the key performance indicators (KPIs) used to measure the success of the EQRS system development and enhancement?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, typical KPIs for such a system would likely include metrics related to system uptime and availability, user satisfaction (measured through surveys or feedback mechanisms), the successful implementation of new features and functionalities, reduction in processing errors or delays, compliance with data security and privacy regulations (e.g., HIPAA), and the efficiency of data reporting for regulatory purposes. The contract's focus on 'user-friendly, patient-centric system' suggests that user adoption rates and positive user feedback would be critical performance indicators.

What is the track record of Flexion Inc. in delivering similar large-scale healthcare IT projects for federal agencies?

Flexion Inc. has a history of performing IT services for federal agencies. While the provided data focuses on this specific award, a deeper dive into Flexion's contract portfolio would reveal their experience with healthcare IT projects, particularly those involving patient data, regulatory compliance, and system development/enhancement. Assessing their past performance on similar contracts, including client satisfaction, on-time delivery, and budget adherence, would provide a clearer picture of their capabilities and reliability in this domain. Information on past performance is typically available through federal procurement databases.

What are the potential risks associated with the long-term maintenance and evolution of the EQRS system?

Potential long-term risks for the EQRS system include technological obsolescence, requiring continuous updates and modernization to keep pace with evolving IT standards and security threats. Contractor dependency is another risk; if the same contractor maintains the system for an extended period, it could lead to a lack of institutional knowledge transfer and potential vendor lock-in. Furthermore, changes in healthcare regulations or legislative mandates could necessitate significant system modifications, impacting maintenance costs and timelines. Ensuring robust data governance, cybersecurity, and disaster recovery plans will be crucial to mitigate these risks over the system's lifecycle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Flexion Inc.

Address: 811 E WASHINGTON AVE, MADISON, WI, 53703

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

Financial Breakdown

Contract Ceiling: $42,771,558

Exercised Options: $17,256,912

Current Obligation: $17,256,912

Actual Outlays: $11,574,476

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F523BA

IDV Type: FSS

Timeline