HHS awards $10.6M Recovery Audit Contractor Region 3 contract to Cotiviti Gov Services

Contract Overview

Contract Amount: $10,635,371 ($10.6M)

Contractor: Cotiviti GOV Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2025-05-01

End Date: 2033-10-30

Contract Duration: 3,104 days

Daily Burn Rate: $3.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RECOVERY AUDIT CONTRACTOR REGION 3

Place of Performance

Location: SOUTH JORDAN, SALT LAKE County, UTAH, 84095

State: Utah Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $10.6 million to COTIVITI GOV SERVICES, LLC for work described as: RECOVERY AUDIT CONTRACTOR REGION 3 Key points: 1. Contract aims to identify and recover improper payments within Medicare and Medicaid. 2. The contract utilizes a firm-fixed-price structure, providing cost certainty for the government. 3. Competition was full and open, suggesting a robust bidding process. 4. The contract duration is substantial, spanning over 8 years. 5. This award represents a significant investment in program integrity for CMS. 6. The North American Industry Classification System (NAICS) code 561440 indicates a focus on collection agencies.

Value Assessment

Rating: good

The contract value of $10.6 million over approximately 8 years suggests a moderate annual spend. Benchmarking this against similar recovery audit contracts is challenging without more specific details on the scope of work and the recovery targets. However, the firm-fixed-price nature indicates that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the recovery targets are met. The pricing appears reasonable given the long-term nature and the critical function of identifying improper payments.

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 a bid. With four bidders participating, this suggests a healthy level of competition for this significant contract. A competitive bidding process generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs and ensures the government receives the best possible value for its investment in program integrity.

Public Impact

Beneficiaries include Medicare and Medicaid beneficiaries by ensuring program funds are used appropriately. Services delivered involve the identification and recovery of improper payments, safeguarding federal healthcare funds. The geographic impact is focused on Region 3, implying a specific operational area within the Centers for Medicare and Medicaid Services. Workforce implications may include specialized roles for auditors, data analysts, and recovery specialists within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency if not actively managed.
Reliance on a single contractor for a critical function like recovery audits requires robust oversight.

Positive Signals

Firm-fixed-price contract aligns contractor incentives with government objectives.
Full and open competition suggests a strong initial selection process.
Focus on recovery of improper payments directly benefits program solvency.

Sector Analysis

The healthcare sector, particularly within government programs like Medicare and Medicaid, faces significant challenges with improper payments. Recovery audit contracts are a crucial tool for the Centers for Medicare and Medicaid Services (CMS) to mitigate these losses. The market for such services involves specialized firms with expertise in healthcare finance, data analytics, and regulatory compliance. This contract fits within the broader category of government program integrity and financial management services.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor is Cotiviti Gov Services, LLC, there is potential for subcontracting opportunities for small businesses that can provide specialized services or support to the prime. The impact on the small business ecosystem will depend on the extent to which the prime contractor utilizes small business subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS), which is responsible for administering Medicare and Medicaid. Accountability measures are inherent in the firm-fixed-price contract structure, where payment is contingent on performance and recovery of funds. Transparency will be maintained through regular reporting requirements and potential audits by CMS or the HHS Office of Inspector General (OIG).

Related Government Programs

Medicare Administrative Contractor (MAC) services
Medicaid Integrity Program (MIP)
Program Safeguard Contractors (PSCs)
Healthcare Fraud and Abuse Control Program (HFAC)

Risk Flags

Long-term contract duration requires sustained oversight.
Potential for disputes with healthcare providers over identified improper payments.
Data security and privacy risks associated with handling sensitive healthcare information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $10.6 million to COTIVITI GOV SERVICES, LLC. RECOVERY AUDIT CONTRACTOR REGION 3

Who is the contractor on this award?

The obligated recipient is COTIVITI GOV SERVICES, 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 $10.6 million.

What is the period of performance?

Start: 2025-05-01. End: 2033-10-30.

What is the historical performance of Cotiviti Gov Services, LLC on similar federal contracts?

Cotiviti Gov Services, LLC has a track record of performing various government contracts, often related to healthcare data analytics and payment integrity. While specific details on past recovery audit contracts would require deeper analysis of contract databases, their presence in the federal contracting space suggests experience. It is important to review their past performance metrics, including on-time delivery, quality of service, and adherence to budget, for any prior engagements with CMS or other agencies to fully assess their capability for this specific Recovery Audit Contractor Region 3 role. Past performance is a key factor in federal procurement, and agencies typically evaluate it rigorously.

How does the $10.6 million contract value compare to previous recovery audit contracts awarded by CMS?

The $10.6 million value for this 8-year contract represents an average annual value of approximately $1.3 million. Comparing this to previous recovery audit contracts requires access to historical contract data and an understanding of the specific scope and region covered by those prior awards. CMS has historically awarded multi-year contracts for recovery audit services, with values that can fluctuate based on program needs, identified risks, and the contractor's proposed recovery rates. Without direct comparative data for Region 3 specifically, it's difficult to definitively state if this value is high or low, but it appears to be a substantial, long-term commitment to program integrity.

What are the primary risks associated with this type of recovery audit contract?

Primary risks associated with this recovery audit contract include potential for over-collection or under-collection of improper payments, leading to disputes with providers. There's also a risk of inefficient operations if the contractor's methodologies are not effective, impacting the return on investment for the government. Data security and privacy are paramount, given the sensitive nature of healthcare data, posing a risk if breaches occur. Furthermore, provider pushback and appeals can increase administrative burden and delay recovery efforts. Finally, changes in healthcare policy or regulations could impact the scope and effectiveness of the audit.

What is the expected effectiveness of this contract in reducing improper payments?

The expected effectiveness of this contract hinges on the contractor's ability to accurately identify and recover improper payments within Medicare and Medicaid for Region 3. CMS likely established performance metrics and recovery targets as part of the contract's firm-fixed-price structure. Success will be measured by the net amount of improper payments recovered after accounting for contractor fees and administrative costs. The full and open competition process, along with the contractor's specialized expertise, suggests an intention to maximize effectiveness. However, ongoing monitoring and evaluation by CMS will be crucial to ensure the contract meets its objectives.

How has federal spending on recovery audit contractors evolved over the past five years?

Federal spending on recovery audit contractors (RACs) has been a significant component of CMS's efforts to combat improper payments in Medicare and Medicaid. While specific year-over-year spending figures can fluctuate based on contract awards and program priorities, the overall trend reflects a sustained commitment to these services. The government has continued to invest in RACs as a cost-effective means to recoup funds lost to errors and fraud. However, there have also been periods of review and adjustment to the RAC program's scope and effectiveness, indicating an ongoing effort to optimize this spending.

What is the significance of the 'Region 3' designation for this contract?

The 'Region 3' designation likely refers to a specific geographic or operational jurisdiction within the Centers for Medicare and Medicaid Services (CMS) that the contractor is responsible for auditing. CMS often divides its operations into regions for administrative and management purposes. This designation means that Cotiviti Gov Services, LLC will focus its recovery audit efforts on healthcare providers, claims, and other entities operating within or associated with CMS Region 3. This allows for a more targeted and manageable approach to identifying and recovering improper payments within a defined segment of the healthcare system.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Collection Agencies

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75FCMC25RJ003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10701 S RIVER FRONT PKWY, SOUTH JORDAN, UT, 84095

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

Financial Breakdown

Contract Ceiling: $100,635,371

Exercised Options: $10,635,371

Current Obligation: $10,635,371

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline