HHS Awards $212.5M Medicare MAC Contract to Palmetto GBA for 16 Years
Contract Overview
Contract Amount: $212,508,417 ($212.5M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2008-07-01
End Date: 2024-07-31
Contract Duration: 5,874 days
Daily Burn Rate: $36.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: NATIONAL SUPPLIER CLEARINGHOUSE MEDICARE ADMINISTRATIVE CONTRACTOR
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29203
Plain-Language Summary
Department of Health and Human Services obligated $212.5 million to PALMETTO GBA, LLC for work described as: NATIONAL SUPPLIER CLEARINGHOUSE MEDICARE ADMINISTRATIVE CONTRACTOR Key points: 1. Contract value of $212.5M over 16 years indicates significant long-term investment. 2. Palmetto GBA, LLC is the sole awardee, raising questions about competition. 3. The contract covers 'All Other Insurance Related Activities,' a broad category. 4. Risk of cost overruns or performance issues exists given the long duration and cost-plus award fee structure.
Value Assessment
Rating: fair
The contract's cost-plus award fee structure allows for flexibility but necessitates close monitoring to ensure cost-effectiveness. Benchmarking against similar large-scale administrative contracts is difficult without more granular cost data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and specific nature of the services may limit the pool of potential bidders.
Taxpayer Impact: Taxpayer funds are being used for essential Medicare administrative functions. The long-term nature of the contract aims for stability but requires ongoing scrutiny to ensure value for money.
Public Impact
Ensures continued operation of critical Medicare administrative functions. Impacts beneficiaries through the efficient processing of claims and services. Supports the healthcare industry by providing a stable administrative partner.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (16 years) increases risk of vendor lock-in and potential for complacency.
- Cost-plus award fee structure can incentivize spending if not tightly managed.
- Broad service category may lead to scope creep or unclear performance metrics.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process.
- Long-term contract provides stability for essential Medicare operations.
- Experienced contractor likely to ensure continuity of services.
Sector Analysis
This contract falls within the healthcare administration sector, focusing on insurance-related activities for Medicare. Spending benchmarks for such long-term, comprehensive administrative contracts are typically high due to the scale and complexity of managing federal healthcare programs.
Small Business Impact
The data does not indicate specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The contract's long duration necessitates robust performance monitoring and regular reviews to ensure accountability and adherence to terms.
Related Government Programs
- All Other Insurance Related Activities
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Long contract duration (16 years)
- Cost-plus award fee structure
- Broad service category ('All Other Insurance Related Activities')
- Sole awardee (Palmetto GBA, LLC)
- Potential for vendor lock-in
Tags
all-other-insurance-related-activities, department-of-health-and-human-services, sc, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $212.5 million to PALMETTO GBA, LLC. NATIONAL SUPPLIER CLEARINGHOUSE MEDICARE ADMINISTRATIVE CONTRACTOR
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 $212.5 million.
What is the period of performance?
Start: 2008-07-01. End: 2024-07-31.
What is the specific breakdown of costs within the $212.5M award, and how does it compare to industry standards for similar administrative functions?
The provided data lacks a detailed cost breakdown. A cost-plus award fee structure means costs are reimbursed plus a fee based on performance. Benchmarking requires comparing specific cost categories (personnel, overhead, profit) against similar contracts, which is not possible with the current information. This lack of transparency hinders a precise value assessment.
Given the 16-year duration, what mechanisms are in place to mitigate the risk of Palmetto GBA becoming complacent or less efficient over time?
The contract utilizes a cost-plus award fee structure, which includes performance metrics and award fees tied to achieving specific goals. Regular performance reviews and potential contract modifications or renegotiations are crucial oversight mechanisms. However, the sheer length of the contract inherently carries a risk of reduced competitive pressure and potential for complacency if oversight is not rigorous.
How effectively does this contract ensure the efficient and accurate processing of Medicare claims and administrative tasks, and what are the key performance indicators?
The contract's effectiveness hinges on the performance metrics defined within the award fee structure. While the long duration suggests a stable provider, the specific KPIs are not detailed here. Success would be measured by metrics like claims processing timeliness, accuracy rates, beneficiary satisfaction, and cost containment. Without access to these specific KPIs and performance reports, a definitive assessment of effectiveness is challenging.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Blue Cross & Blue Shield of South Carolina
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: $241,704,268
Exercised Options: $225,219,756
Current Obligation: $212,508,417
Actual Outlays: $14,636,102
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-07-01
Current End Date: 2024-07-31
Potential End Date: 2024-09-06 00:00:00
Last Modified: 2024-08-10
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