HHS awards $171.7M Medicare Administrative Contractor contract to Wisconsin Physicians Service
Contract Overview
Contract Amount: $171,666,524 ($171.7M)
Contractor: Wisconsin Physicians Service Insurance Corp.
Awarding Agency: Department of Health and Human Services
Start Date: 2007-09-10
End Date: 2013-02-15
Contract Duration: 1,985 days
Daily Burn Rate: $86.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: JURISDICTION 5 A/B MEDICARE ADMINISTRATIVE CONTRACTOR
Place of Performance
Location: MONONA, DANE County, WISCONSIN, 53713
Plain-Language Summary
Department of Health and Human Services obligated $171.7 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP. for work described as: JURISDICTION 5 A/B MEDICARE ADMINISTRATIVE CONTRACTOR Key points: 1. Contract awarded to a single entity for administrative services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Award Fee, which incentivizes performance. 4. The sector is healthcare insurance, a critical area for government spending.
Value Assessment
Rating: good
The contract value of $171.7 million over its period is substantial. Benchmarking against similar Medicare Administrative Contractor (MAC) contracts would be necessary for a precise value assessment, but the use of Cost Plus Award Fee suggests an effort to control costs while incentivizing performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This method generally promotes price discovery and can lead to more favorable pricing for the government.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers, as it likely resulted in a more efficient use of funds for essential Medicare administrative services.
Public Impact
Ensures continued operation of Medicare services for beneficiaries. Supports the administrative infrastructure of a major federal healthcare program. Impacts healthcare providers through claims processing and payment. Contributes to the efficiency and integrity of the Medicare system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration is long (1985 days).
- Cost Plus Award Fee contracts can lead to cost overruns if not managed carefully.
Positive Signals
- Awarded under full and open competition.
- Incentivizes performance through award fee structure.
Sector Analysis
This contract falls within the Healthcare sector, specifically for health and medical insurance carriers. Spending in this area is crucial for the functioning of federal healthcare programs like Medicare. Benchmarks for similar MAC contracts would provide further context.
Small Business Impact
The data indicates that small businesses were not directly awarded this contract, as it went to a large insurance corporation. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. The Cost Plus Award Fee structure implies performance metrics and oversight to ensure the contractor meets objectives and earns award fees.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Long contract duration.
- Potential for cost overruns with CPFF.
- Lack of small business prime awardee.
- Complexity of Medicare administration.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, wi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $171.7 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP.. JURISDICTION 5 A/B MEDICARE ADMINISTRATIVE CONTRACTOR
Who is the contractor on this award?
The obligated recipient is WISCONSIN PHYSICIANS SERVICE INSURANCE CORP..
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 $171.7 million.
What is the period of performance?
Start: 2007-09-10. End: 2013-02-15.
What were the key performance metrics and award fee criteria used in this Cost Plus Award Fee contract?
The specific performance metrics and award fee criteria are not detailed in the provided data. Typically, for Medicare Administrative Contractor contracts, these would include metrics related to claims processing timeliness and accuracy, customer service responsiveness, fraud detection, and overall program integrity. The agency would establish a fee structure where the contractor earns a base fee plus an award fee based on exceeding or meeting these defined performance standards.
How did the 'full and open competition' process ensure the best value was achieved for this significant contract?
Full and open competition allows all responsible sources to submit bids, fostering a competitive environment. This process typically involves detailed evaluation criteria, including technical approach, past performance, and price. By evaluating multiple proposals, the agency can identify the offer that provides the best overall value, balancing cost-effectiveness with the ability to meet complex program requirements and deliver high-quality administrative services for Medicare.
What is the potential risk associated with the long contract duration and the Cost Plus Award Fee structure?
A long contract duration (1985 days) increases the risk of cost escalation due to inflation and potential changes in program requirements over time. The Cost Plus Award Fee structure, while incentivizing performance, carries a risk of cost overruns if the award fee criteria are not rigorously defined and monitored, or if the 'cost' component is not adequately controlled. Effective oversight is crucial to mitigate these risks.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1717 W BROADWAY, MADISON, WI, 53713
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $171,666,524
Exercised Options: $171,666,524
Current Obligation: $171,666,524
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2007-09-10
Current End Date: 2013-02-15
Potential End Date: 2020-09-04 00:00:00
Last Modified: 2023-01-24
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