HHS awarded $37.8M for DMEPOS CBIC services, with Palmetto GBA, LLC as the contractor
Contract Overview
Contract Amount: $37,787,608 ($37.8M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2014-02-25
End Date: 2016-06-30
Contract Duration: 856 days
Daily Burn Rate: $44.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: TIME AND MATERIALS
Sector: Healthcare
Official Description: IGF::OT::IGF DMEPOS CBIC ROUND 2&NATIONAL MAIL-ORDER RE-COMPETE
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29203
Plain-Language Summary
Department of Health and Human Services obligated $37.8 million to PALMETTO GBA, LLC for work described as: IGF::OT::IGF DMEPOS CBIC ROUND 2&NATIONAL MAIL-ORDER RE-COMPETE Key points: 1. The contract's value of $37.8 million over its period of performance suggests a significant investment in essential healthcare administrative services. 2. The full and open competition indicates a broad market engagement, potentially leading to competitive pricing and a wider pool of qualified bidders. 3. The contract's duration of 856 days (approximately 2.3 years) provides a stable period for service delivery but requires ongoing performance monitoring. 4. The use of Time and Materials pricing may present cost control challenges if not managed diligently, necessitating robust oversight. 5. The contract's focus on DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies) highlights its critical role in healthcare supply chain management. 6. The contractor, Palmetto GBA, LLC, has a history with Medicare administrative contracts, suggesting familiarity with the program's complexities.
Value Assessment
Rating: good
The contract value of $37.8 million for approximately 2.3 years of service for DMEPOS CBIC operations appears reasonable given the scope of managing durable medical equipment, prosthetics, orthotics, and supplies. Benchmarking against similar large-scale administrative contracts within CMS would provide a more precise value-for-money assessment. The Time and Materials pricing structure, while flexible, warrants close monitoring to ensure costs remain aligned with the services delivered and market rates for administrative support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service innovation. The open nature of the competition is a positive indicator for price discovery and ensuring the government receives competitive offers.
Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to the pressure on contractors to be competitive. This approach maximizes the use of taxpayer funds by ensuring a robust marketplace.
Public Impact
Beneficiaries of durable medical equipment, prosthetics, orthotics, and supplies likely experience improved access to and administration of these essential items. The contract supports critical administrative functions within the Centers for Medicare and Medicaid Services (CMS), ensuring the smooth operation of the DMEPOS program. The geographic impact is national, as CMS programs serve beneficiaries across the United States. Workforce implications may include employment opportunities within Palmetto GBA, LLC and its subcontractors, as well as within CMS for oversight and program management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to Time and Materials pricing if not rigorously managed.
- Ensuring consistent service quality across the entire contract duration requires ongoing performance evaluation.
- Dependence on a single contractor for a critical administrative function necessitates strong contingency planning.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- Contractor has prior experience with Medicare administrative functions.
- Clear period of performance provides a defined scope for service delivery.
Sector Analysis
The contract falls within the Healthcare administrative services sector, specifically focusing on the management and oversight of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) for Medicare. This is a crucial area for CMS, involving significant administrative overhead and regulatory compliance. Comparable spending benchmarks would involve looking at other large administrative contracts managed by CMS for various healthcare programs, which often run into tens or hundreds of millions of dollars annually.
Small Business Impact
The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While this contract was awarded through full and open competition, there is no explicit information on subcontracting plans with small businesses. The impact on the small business ecosystem would depend on whether Palmetto GBA, LLC voluntarily engages small businesses for support services, which is not detailed here.
Oversight & Accountability
Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to service level agreements and reporting requirements. Transparency is facilitated through the contract award process and public availability of contract data, though detailed operational oversight mechanisms are internal to the agency.
Related Government Programs
- Medicare Administrative Contractor (MAC) services
- Durable Medical Equipment (DME) program
- Healthcare claims processing
- CMS program integrity initiatives
Risk Flags
- Potential for cost overruns due to Time and Materials pricing.
- Ensuring consistent service quality over the contract duration.
- Dependence on a single contractor for critical administrative functions.
Tags
healthcare, medicare, cms, administrative-services, dme, full-and-open-competition, time-and-materials, palmetto-gba, department-of-health-and-human-services, south-carolina, bpa-call
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $37.8 million to PALMETTO GBA, LLC. IGF::OT::IGF DMEPOS CBIC ROUND 2&NATIONAL MAIL-ORDER RE-COMPETE
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 $37.8 million.
What is the period of performance?
Start: 2014-02-25. End: 2016-06-30.
What is the track record of Palmetto GBA, LLC in managing similar large-scale federal healthcare administrative contracts?
Palmetto GBA, LLC has a significant history of managing Medicare administrative contracts, particularly in the Southeast region. They have served as a Medicare Administrative Contractor (MAC) for various jurisdictions, handling claims processing, provider services, and other administrative functions for Medicare beneficiaries. Their experience includes managing complex healthcare programs, which suggests a familiarity with the regulatory environment and operational demands of contracts like the DMEPOS CBIC. However, a detailed review of their performance on past contracts, including any past performance issues or commendations, would be necessary for a comprehensive assessment.
How does the awarded amount of $37.8 million compare to similar contracts for DMEPOS administration?
The awarded amount of $37.8 million over approximately 2.3 years for DMEPOS CBIC services represents a substantial investment. To benchmark this value, one would need to compare it with other contracts awarded by CMS for similar administrative functions, particularly those related to DMEPOS or other large-scale payer operations. Factors such as the scope of services, geographic coverage, and specific deliverables would need to be aligned for a meaningful comparison. Without access to a database of comparable contracts and their values, it is difficult to definitively state whether this amount is high, low, or average, but it indicates a significant operational budget for this function.
What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?
The primary risk associated with a Time and Materials (T&M) pricing structure is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and material costs incurred, plus a fee. If not managed with rigorous oversight, this can lead to increased costs for the government if the contractor is inefficient or if the scope of work expands without proper controls. For this DMEPOS CBIC contract, CMS would need to implement strong project management and monitoring to ensure that labor hours are reasonable, materials are necessary, and the overall cost stays within budgetary expectations and provides good value.
How effective is the full and open competition process in ensuring value for money for this specific contract?
Full and open competition is generally considered the most effective method for ensuring value for money, as it allows a wide range of qualified vendors to compete, driving down prices and encouraging innovation. For this DMEPOS CBIC contract, the fact that it was competed openly suggests that the government sought the best possible offer from the market. The effectiveness in practice depends on the clarity of the solicitation, the responsiveness of the market, and the evaluation criteria used by the agency. If multiple strong bidders participated, it is highly probable that the resulting contract provides good value. However, the specific number of bidders and their proposals would offer more insight.
What are the potential implications of this contract on the broader healthcare administrative services market?
This contract, awarded to Palmetto GBA, LLC, reinforces the role of large, established contractors in managing significant federal healthcare administrative functions. Its award through full and open competition signals that the market is accessible to qualified entities. The scale of the contract ($37.8 million) indicates a substantial business opportunity, potentially influencing resource allocation and strategic planning for other companies in the healthcare administrative services sector. It also highlights the ongoing need for specialized services in managing complex programs like DMEPOS, suggesting continued demand and potential for growth in this niche.
Are there any specific performance metrics or KPIs that are publicly available for this contract?
Specific performance metrics or Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. Federal contracts typically include a Performance Work Statement (PWS) or Statement of Work (SOW) that outlines the required services and the metrics by which performance will be evaluated. These often include aspects like timeliness of processing, accuracy rates, customer satisfaction, and adherence to regulatory requirements. While the contract award itself is public, the granular details of performance monitoring and specific KPIs are usually considered internal agency management tools and are not always readily available in public contract databases.
Industry Classification
NAICS: Educational Services › Other Schools and Instruction › Exam Preparation and Tutoring
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: TIME AND MATERIALS (Y)
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $37,787,608
Exercised Options: $37,787,608
Current Obligation: $37,787,608
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: HHSM500201200002B
IDV Type: BPA
Timeline
Start Date: 2014-02-25
Current End Date: 2016-06-30
Potential End Date: 2016-06-30 00:00:00
Last Modified: 2023-03-10
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