HHS Awards $359M Contract for Medicare Administrative Contractor Services to National Government Services, Inc
Contract Overview
Contract Amount: $358,994,770 ($359.0M)
Contractor: National Government Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2008-03-18
End Date: 2014-10-30
Contract Duration: 2,417 days
Daily Burn Rate: $148.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: A/B MAC JURISDICTION 13 REQUIREMENT
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46250
State: Indiana Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $359.0 million to NATIONAL GOVERNMENT SERVICES, INC. for work described as: A/B MAC JURISDICTION 13 REQUIREMENT Key points: 1. The contract value of $358.99M over approximately 6.7 years indicates a significant investment in healthcare administration. 2. National Government Services, Inc. secured this contract through full and open competition, suggesting a competitive bidding process. 3. The Cost Plus Award Fee (CPAF) contract type introduces performance incentives but also carries potential for cost overruns. 4. This spending falls within the IT and Healthcare sectors, supporting essential government functions for Medicare operations.
Value Assessment
Rating: good
The contract value of $358.99M over 2417 days (approx. 6.7 years) averages to roughly $148,529 per day. This appears reasonable for a large-scale government administrative contract of this nature, though specific benchmarks for MAC services would provide a more precise comparison.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: Taxpayer funds are being used for essential Medicare administrative services. The competitive award process aims to ensure efficient use of these funds.
Public Impact
Ensures continued operation of Medicare administrative services for beneficiaries in Jurisdiction 13. Supports the Centers for Medicare and Medicaid Services (CMS) in managing healthcare claims and provider payments. Impacts healthcare providers through the administration of their claims and reimbursements. Contributes to the overall stability and efficiency of the U.S. healthcare system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to higher costs if not managed tightly.
- Contract duration of over 6 years requires ongoing monitoring for performance and cost efficiency.
- Potential for vendor lock-in if follow-on contracts are not competitively re-awarded.
Positive Signals
- Awarded through full and open competition, suggesting a fair and competitive process.
- Contract aims to ensure continuity of essential Medicare administrative services.
- Performance incentives in CPAF structure can drive better outcomes.
Sector Analysis
This contract falls under the Healthcare and IT sectors, specifically for the administration of Medicare services. Spending benchmarks for similar government administrative contracts are typically high due to the complexity and scale of operations.
Small Business Impact
The data indicates that small businesses were not primary awardees for this specific contract. Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Robust oversight mechanisms are crucial to manage the CPAF structure and ensure performance objectives are met.
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
- Cost Plus Award Fee structure.
- Long contract duration.
- Potential for performance slippage impacting beneficiary services.
- Reliance on a single contractor for a critical function.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, in, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $359.0 million to NATIONAL GOVERNMENT SERVICES, INC.. A/B MAC JURISDICTION 13 REQUIREMENT
Who is the contractor on this award?
The obligated recipient is NATIONAL GOVERNMENT SERVICES, 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 $359.0 million.
What is the period of performance?
Start: 2008-03-18. End: 2014-10-30.
What is the specific performance metric threshold for the 'award fee' component of this contract, and how does it align with achieving program goals?
The specific performance metric thresholds for the award fee are not detailed in the provided data. Typically, these metrics are tied to key performance indicators (KPIs) such as claims processing timeliness, accuracy rates, customer service satisfaction, and adherence to regulatory compliance. The alignment with program goals would depend on how CMS has structured these KPIs to reflect the overall mission of efficient and effective Medicare administration.
Given the Cost Plus Award Fee structure, what are the primary risks associated with cost overruns and how are they mitigated?
The primary risk with CPAF is that the 'cost plus' element can incentivize higher spending, while the 'award fee' is intended to reward efficiency. Cost overruns can occur if performance targets are difficult to achieve, leading to higher costs without commensurate award fees, or if the base cost projections are inaccurate. Mitigation strategies include stringent baseline cost controls, clear and measurable performance standards for award fees, regular audits, and robust government oversight to challenge any unjustified cost increases.
How does the performance of National Government Services, Inc. on this contract impact the overall efficiency and beneficiary experience of Medicare?
The performance of National Government Services, Inc. directly impacts Medicare beneficiaries through the efficiency and accuracy of claims processing, provider payments, and beneficiary inquiries. Strong performance leads to timely reimbursements for providers and accessible support for beneficiaries, contributing to a positive healthcare experience. Conversely, poor performance could result in payment delays, administrative errors, and frustration for both providers and beneficiaries, potentially undermining trust in the Medicare system.
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
Parent Company: Elevance Health, Inc. (UEI: 037955940)
Address: 8115 KNUE RD, INDIANAPOLIS, IN, 46250
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $431,041,179
Exercised Options: $431,041,179
Current Obligation: $358,994,770
Actual Outlays: $-165,210
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2008-03-18
Current End Date: 2014-10-30
Potential End Date: 2018-09-17 00:00:00
Last Modified: 2022-01-19
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