HHS awarded $19.8M for Medicare appeals services, with 4 bidders competing

Contract Overview

Contract Amount: $19,879,147 ($19.9M)

Contractor: Rivertrust Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2006-09-30

End Date: 2009-12-31

Contract Duration: 1,188 days

Daily Burn Rate: $16.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: TAS::75 0511::TASMEDICARE 2ND LEVEL OF APPEALS

Place of Performance

Location: CHATTANOOGA, HAMILTON County, TENNESSEE, 37402

State: Tennessee Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $19.9 million to RIVERTRUST SOLUTIONS, INC. for work described as: TAS::75 0511::TASMEDICARE 2ND LEVEL OF APPEALS Key points: 1. Value for money appears reasonable given the specialized nature of Medicare appeals. 2. Competition dynamics indicate a moderately contested market for these services. 3. Risk indicators are low, suggesting a stable and well-defined service requirement. 4. Performance context is within the administrative support sector for healthcare. 5. Sector positioning is within government administrative and management consulting services.

Value Assessment

Rating: good

The contract value of approximately $19.8 million over three years for Medicare appeals services seems aligned with industry benchmarks for specialized administrative support. While specific cost breakdowns are not provided, the competitive nature of the award suggests that pricing was scrutinized. Comparing this to similar contracts for administrative appeals processing, this award falls within a typical range, indicating a fair market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a competitive delivery order process, indicating that multiple vendors were invited to bid. With four bidders participating, the competition level suggests a healthy interest in this service area. This level of competition is generally sufficient to drive price discovery and ensure that the government receives competitive offers, although a higher number of bidders could potentially yield even lower prices.

Taxpayer Impact: The competitive award process for this contract is beneficial for taxpayers as it likely resulted in a more cost-effective solution compared to a sole-source or limited competition scenario. The presence of four bidders suggests that taxpayer funds were used efficiently to secure necessary services.

Public Impact

Beneficiaries of Medicare services who are undergoing appeals processes will receive administrative support. The services delivered ensure the proper functioning of the Medicare appeals system. The geographic impact is national, as Medicare serves beneficiaries across the United States. Workforce implications include employment for administrative staff and legal professionals involved in appeals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in complex appeals cases.
Ensuring consistent application of appeal regulations across all cases.
Maintaining data security and privacy for sensitive beneficiary information.

Positive Signals

Awarded through a competitive process, indicating potential for cost efficiency.
Contract duration of over three years suggests stability in service provision.
Focus on a critical government function (Medicare appeals) implies adherence to strict standards.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically serving the healthcare industry. The market for government administrative support services is substantial, with significant spending allocated to agencies like HHS. Comparable spending benchmarks in this area often relate to the volume and complexity of administrative tasks, such as claims processing and appeals management, where efficiency and accuracy are paramount.

Small Business Impact

The data indicates this was a competitive delivery order, and there is no explicit mention of small business set-asides or subcontracting goals. Therefore, the direct impact on small businesses is unclear from this award alone. However, larger prime contractors often utilize small business subcontractors, so there may be indirect opportunities. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are inherent in the Cost Plus Award Fee (CPAF) contract type, which incentivizes performance. Transparency is generally maintained through contract databases and reporting, though specific performance metrics and IG oversight details would require deeper investigation.

Related Government Programs

Medicare Administrative Contractor (MAC) services
Healthcare claims processing
Federal administrative support services
Government consulting contracts

Risk Flags

Contract duration exceeds 3 years
Cost-reimbursement contract type (CPAF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $19.9 million to RIVERTRUST SOLUTIONS, INC.. TAS::75 0511::TASMEDICARE 2ND LEVEL OF APPEALS

Who is the contractor on this award?

The obligated recipient is RIVERTRUST SOLUTIONS, 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 $19.9 million.

What is the period of performance?

Start: 2006-09-30. End: 2009-12-31.

What is the track record of RIVERTRUST SOLUTIONS, INC. in performing similar federal contracts?

RIVERTRUST SOLUTIONS, INC. has a history of performing federal contracts, primarily within the administrative and management consulting domain. While specific details on past performance for Medicare appeals are not immediately available from this summary, their engagement with HHS suggests a level of qualification. A deeper dive into their contract history, including past performance evaluations and any awards or penalties, would provide a more comprehensive understanding of their capabilities and reliability in handling complex government contracts. Examining their portfolio for similar administrative support or healthcare-related services would offer further insight into their suitability for this type of work.

How does the awarded amount compare to the estimated value or ceiling of the contract?

The provided data indicates an 'awarded amount' of $19,879,146.65. However, the schema does not explicitly provide the contract's ceiling value or estimated value at the time of award. Without this information, a direct comparison to assess if the contract was awarded at or near its maximum potential value is not possible. Typically, a Cost Plus Award Fee (CPAF) contract has a cost ceiling and a fixed fee, with the award fee determined by performance. Understanding the ceiling would help determine if the awarded amount represents full utilization of the contract's financial scope or if there was significant room for additional spending.

What are the primary risks associated with providing Medicare 2nd level of appeals services?

The primary risks associated with providing Medicare 2nd level of appeals services include the complexity and volume of cases, potential for regulatory changes impacting appeal processes, and the need for strict adherence to privacy and security regulations (like HIPAA). Ensuring consistent and accurate adjudication of appeals is critical, as errors can lead to financial implications for providers and beneficiaries, as well as potential legal challenges. Maintaining qualified personnel with expertise in healthcare law and policy is another key risk area. Furthermore, managing the administrative workload efficiently to meet performance standards and avoid backlogs presents an ongoing operational risk.

What is the historical spending trend for Medicare 2nd level of appeals services under this TAS?

The provided data focuses on a single contract award from 2006 to 2009. To understand historical spending trends for Medicare 2nd level of appeals services under TAS 75 0511, a broader analysis of contract awards over multiple years would be necessary. This would involve examining all contracts awarded for this specific service, potentially across different contractors and contract types, within the relevant fiscal periods. Analyzing the total obligated amounts, contract durations, and the number of awards over time would reveal patterns in spending, identify periods of increased or decreased investment, and highlight any shifts in contracting strategies or market dynamics for these essential services.

How does the number of bidders (4) impact the potential for cost savings for taxpayers?

A competition involving four bidders generally provides a reasonable level of market pressure, which is conducive to achieving cost savings for taxpayers. With multiple entities vying for the contract, they are incentivized to offer competitive pricing and demonstrate superior value to win the award. While four bidders suggest a healthy competition, a larger pool of bidders (e.g., five or more) could potentially intensify this pressure further, possibly leading to even more aggressive pricing. However, the quality of the bidders and the specific structure of the solicitation also play significant roles. A well-structured competition with qualified bidders, even if numbering four, can effectively drive down costs compared to limited or sole-source awards.

What is the significance of the 'COST PLUS AWARD FEE' (CPAF) contract type in this context?

The Cost Plus Award Fee (CPAF) contract type is significant because it allows the government to reimburse the contractor for allowable costs while also providing an incentive for superior performance. In the context of Medicare appeals, where accuracy, timeliness, and adherence to complex regulations are crucial, CPAF encourages the contractor to go beyond basic requirements. The contractor earns a base fee plus an award fee, which is determined by the government based on performance against pre-defined criteria. This structure aims to align the contractor's objectives with the government's needs, promoting efficiency and effectiveness while managing costs, as the award fee is contingent on meeting or exceeding performance expectations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFPQIC040001

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bluecross Blueshield of Tennessee, Inc. (UEI: 074901380)

Address: 801 PINE ST, CHATTANOOGA, TN, 37402

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,879,147

Exercised Options: $19,879,147

Current Obligation: $19,879,147

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200400011I

IDV Type: IDC

Timeline