Medicare Administrative Contract for Jurisdiction 8 Awarded to Wisconsin Physicians Service for $324.6M

Contract Overview

Contract Amount: $324,617,926 ($324.6M)

Contractor: Wisconsin Physicians Service Insurance Corp.

Awarding Agency: Department of Health and Human Services

Start Date: 2011-09-30

End Date: 2019-04-30

Contract Duration: 2,769 days

Daily Burn Rate: $117.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: PART A AND PART B MEDICARE ADMINISTRATIVE CONTRACT JURISDICTION 8

Place of Performance

Location: MONONA, DANE County, WISCONSIN, 53713

State: Wisconsin Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $324.6 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP. for work described as: PART A AND PART B MEDICARE ADMINISTRATIVE CONTRACT JURISDICTION 8 Key points: 1. The contract, valued at $324.6 million, covers direct health and medical insurance carrier services. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. The contract type is Cost Plus Award Fee, which incentivizes performance. 4. The duration of the contract was 2769 days, spanning from 2011 to 2019.

Value Assessment

Rating: good

The contract's Cost Plus Award Fee structure suggests a focus on performance-based incentives. Benchmarking against similar Medicare Administrative Contracts (MAC) would provide a clearer picture of value, but the extensive duration and significant value indicate a substantial service provision.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, allowing all eligible vendors to bid. This method generally promotes competitive pricing and ensures the government receives the best value by considering multiple offers.

Taxpayer Impact: The competitive nature of the award is expected to have resulted in a fair price for the services rendered, benefiting taxpayers by optimizing spending on essential Medicare administration.

Public Impact

Ensures continued administration of Medicare services for beneficiaries in Jurisdiction 8. Supports the operational efficiency of the Centers for Medicare and Medicaid Services (CMS). Impacts healthcare providers and patients through the processing of claims and payments. Maintains continuity of essential health insurance functions for a significant population.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration is exceptionally long (2769 days).
Cost Plus Award Fee contracts can sometimes lead to cost overruns if not managed tightly.

Positive Signals

Awarded under full and open competition.
Performance-based fee structure incentivizes contractor success.

Sector Analysis

This contract falls within the Healthcare sector, specifically for health insurance carriers administering government programs. Spending benchmarks for similar administrative contracts are typically high due to the complexity and scale of Medicare operations.

Small Business Impact

The data indicates the primary awardee is Wisconsin Physicians Service Insurance Corp. There is no explicit information on small business participation within this specific contract award, but large insurance corporations often subcontract to smaller entities.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The Cost Plus Award Fee structure implies performance metrics and reviews are in place to ensure accountability and value for taxpayer money.

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 may indicate potential for vendor lock-in or missed opportunities for modernization.
Cost Plus Award Fee contracts require robust oversight to prevent cost overruns.
Lack of explicit small business participation data.
No specific data on the competitive landscape beyond the awardee.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $324.6 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP.. PART A AND PART B MEDICARE ADMINISTRATIVE CONTRACT JURISDICTION 8

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 $324.6 million.

What is the period of performance?

Start: 2011-09-30. End: 2019-04-30.

What was the final award amount compared to the initial estimated cost?

The provided data shows the final award amount was $324,617,925.83. Without the initial estimated cost or a breakdown of the 'Cost Plus Award Fee' components (base cost, award fee), a direct comparison of value realization is difficult. Further analysis would require access to the contract's detailed financial structure and performance evaluations.

What were the key performance indicators (KPIs) that determined the award fee?

The specific Key Performance Indicators (KPIs) that determined the award fee are not detailed in the provided summary. Typically, for Medicare Administrative Contracts, KPIs would include claims processing accuracy, timeliness, beneficiary and provider satisfaction, and adherence to program integrity standards. These metrics are crucial for assessing contractor performance and justifying the award fee.

How did the competition under 'full and open' impact the final negotiated price?

Full and open competition generally exerts downward pressure on prices as multiple bidders vie for the contract. The presence of strong competition likely led to a more favorable negotiated price for the government compared to a sole-source or limited competition scenario. However, the Cost Plus Award Fee structure means the final cost is also tied to performance, not just the initial bid.

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

Solicitation ID: RFPCMS20070018

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 1717 W BROADWAY, MADISON, WI, 53713

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

Financial Breakdown

Contract Ceiling: $407,003,075

Exercised Options: $407,003,070

Current Obligation: $324,617,926

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline