HHS awarded $62.3M for debt collection services, with a significant portion going to Group Health Incorporated

Contract Overview

Contract Amount: $62,331,476 ($62.3M)

Contractor: Group Health Incorporated

Awarding Agency: Department of Health and Human Services

Start Date: 2011-09-06

End Date: 2012-09-05

Contract Duration: 365 days

Daily Burn Rate: $170.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE

Sector: Healthcare

Official Description: DEBT COLLECTION SERVICES

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10004

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $62.3 million to GROUP HEALTH INCORPORATED for work described as: DEBT COLLECTION SERVICES Key points: 1. The contract value of $62.3 million for debt collection services represents a substantial investment in recovering outstanding funds. 2. The 'NOT COMPETED' award type raises questions about the procurement process and potential missed opportunities for competitive pricing. 3. The contract duration of 365 days suggests a focused, short-term effort for specific debt recovery objectives. 4. The award to Group Health Incorporated, operating in 'All Other Insurance Related Activities,' indicates a specialized focus within the healthcare sector. 5. The fixed-price award fee structure implies performance incentives tied to successful debt recovery outcomes. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable data for similar debt collection services procured by the Centers for Medicare and Medicaid Services (CMS). The fixed-price award fee structure suggests that the government aims to control costs while incentivizing performance. However, the lack of competition makes it difficult to assess if the pricing reflects fair market value or if a more competitive process could have yielded better rates for the taxpayer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procurement method, indicating that a full and open competition was not conducted. This typically occurs when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of multiple bidders means there was no direct price comparison or market pressure to drive down costs, potentially leading to a higher price than if multiple firms had vied for the contract.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution for debt collection services. Without a competitive bidding process, there is a risk that the awarded price is not the lowest possible, impacting the overall return on investment for these services.

Public Impact

The primary beneficiaries of this contract are the Centers for Medicare and Medicaid Services (CMS), which aims to recover outstanding debts owed to federal healthcare programs. The services delivered involve the identification, contact, and recovery of unpaid medical bills and other financial obligations. The geographic impact is primarily within New York, where Group Health Incorporated is based, though the debt collection activities may extend nationally. The contract supports administrative functions within CMS, indirectly impacting the healthcare provider and patient ecosystem by ensuring program solvency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency into the selection process due to sole-source award.
Performance metrics and actual debt recovery rates are not detailed, making value assessment difficult.

Positive Signals

Award fee structure incentivizes performance and successful debt recovery.
Contract awarded to an entity within the insurance-related activities sector, suggesting relevant expertise.
Fixed-price element provides some cost certainty for the government.

Sector Analysis

This contract falls within the broader 'Insurance Related Activities' sector, specifically focusing on debt collection for federal healthcare programs administered by CMS. The market for debt collection services is competitive, with numerous firms specializing in various types of debt recovery. However, government contracts often have specific requirements and security protocols that can limit the pool of eligible contractors. Comparable spending benchmarks for similar government debt collection contracts are not readily available, but the $62.3 million award indicates a significant scope of work.

Small Business Impact

The data indicates that this contract was not subject to small business set-aside provisions (ss: false, sb: false). This suggests that the procurement was not specifically designed to award a portion of the work to small businesses. Consequently, there are no direct subcontracting implications for small businesses mandated by this specific award. The absence of set-asides means that larger, established firms were likely the primary focus of this procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be tied to the performance metrics outlined in the fixed-price award fee structure. Transparency is limited due to the sole-source nature of the award, making it difficult for the public to scrutinize the selection process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medicare Administrative Contractor (MAC) services
Medicaid Integrity Program
Healthcare Fraud and Abuse Control Program
Federal Debt Collection Practices Act (FDCPA) compliance

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency
Uncertainty of Contractor's Specific Experience

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $62.3 million to GROUP HEALTH INCORPORATED. DEBT COLLECTION SERVICES

Who is the contractor on this award?

The obligated recipient is GROUP HEALTH INCORPORATED.

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 $62.3 million.

What is the period of performance?

Start: 2011-09-06. End: 2012-09-05.

What is the track record of Group Health Incorporated in providing debt collection services to the federal government?

Information regarding Group Health Incorporated's specific track record in providing federal debt collection services is not detailed in the provided data. The data indicates their primary sector is 'All Other Insurance Related Activities.' To assess their track record, further investigation into their past performance on similar government contracts, client references, and any history of performance issues or successes would be necessary. Understanding their experience with federal regulations, particularly those related to debt collection and healthcare programs, is crucial for evaluating their capability to fulfill this contract effectively.

How does the $62.3 million contract value compare to other federal debt collection contracts?

Direct comparison of the $62.3 million contract value to other federal debt collection contracts is difficult without access to a comprehensive database of similar procurements. However, this amount suggests a substantial scope of work, likely involving a large volume of outstanding debts or complex recovery processes. Federal debt collection contracts can vary significantly in value depending on the agency, the type of debt, and the duration of the contract. A value of this magnitude indicates a significant investment by HHS in debt recovery efforts, potentially targeting a large portfolio of unpaid healthcare-related debts.

What are the primary risks associated with a 'NOT COMPETED' contract for debt collection services?

The primary risks associated with a 'NOT COMPETED' contract for debt collection services include potential overpayment due to lack of price competition, reduced incentive for the contractor to innovate or provide superior service, and a lack of transparency in the procurement process. Taxpayers may not benefit from the lowest possible price. Furthermore, without a competitive evaluation, there's a risk that the selected contractor may not be the most qualified or experienced, potentially impacting the effectiveness of debt recovery efforts. This procurement method bypasses the standard checks and balances inherent in a competitive bidding process.

What are the expected outcomes or performance metrics for this debt collection contract?

The provided data indicates a 'FIXED PRICE AWARD FEE' contract type, suggesting that performance metrics are tied to the successful recovery of debts. While specific metrics are not detailed, typical outcomes would include a target percentage of debt recovery, adherence to collection timelines, compliance with legal and regulatory requirements (e.g., FDCPA), and potentially customer service standards in dealing with debtors. The 'award fee' component implies that the contractor will receive additional compensation based on achieving or exceeding these performance targets, incentivizing efficient and effective debt collection.

How has federal spending on debt collection services evolved over recent years?

Analyzing the evolution of federal spending on debt collection services requires access to historical spending data across various agencies. Generally, federal agencies are mandated to collect debts owed to the government, and spending on debt collection services fluctuates based on factors such as the volume of delinquent debt, legislative priorities, and agency budget allocations. Increased focus on deficit reduction and revenue generation can lead to higher spending in this area. However, without specific historical data for HHS or CMS debt collection contracts, a precise trend analysis is not possible from the given information.

What is the significance of the contract being awarded to an entity in 'All Other Insurance Related Activities'?

Awarding a debt collection contract to an entity categorized under 'All Other Insurance Related Activities' suggests that the contractor possesses specialized knowledge and experience relevant to the healthcare and insurance sectors. This could include familiarity with healthcare billing codes, insurance claim processes, patient financial responsibilities, and relevant privacy regulations (like HIPAA). Such specialization can be advantageous for recovering debts related to healthcare services, as it implies a deeper understanding of the underlying financial transactions and potential complexities compared to a general debt collection agency.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emblemhealth, Inc. (UEI: 075199265)

Address: 441 9TH AVE FRNT, NEW YORK, NY, 90

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $62,331,476

Exercised Options: $62,331,476

Current Obligation: $62,331,476

Contract Characteristics

Cost or Pricing Data: NO

Timeline