HHS awarded $19.9M for Medicare appeals, with Rivertrust Solutions Inc. managing administrative functions

Contract Overview

Contract Amount: $19,912,198 ($19.9M)

Contractor: Rivertrust Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-01-01

End Date: 2012-04-30

Contract Duration: 850 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: MEDICARE 2ND LEVEL OF APPEALS

Place of Performance

Location: CHATTANOOGA, HAMILTON County, TENNESSEE, 37402

State: Tennessee Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $19.9 million to RIVERTRUST SOLUTIONS, INC. for work described as: MEDICARE 2ND LEVEL OF APPEALS Key points: 1. Contract value appears reasonable given the scope of administrative management and consulting services. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The contract type (Cost Plus Award Fee) can incentivize performance but requires careful oversight. 4. Performance period spans over two years, indicating a sustained need for these services. 5. This contract falls under administrative management consulting, a common service category for federal agencies. 6. The award amount is a significant investment in the Medicare appeals process.

Value Assessment

Rating: good

The contract value of approximately $19.9 million for a duration of over two years for Medicare's second level of appeals seems aligned with the complexity and importance of the service. Benchmarking against similar administrative management contracts for large federal programs suggests this is within a reasonable range. The Cost Plus Award Fee structure, while potentially leading to higher costs if performance targets are exceeded, also provides an incentive for efficient and effective service delivery, which can be a form of value for money if managed properly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding process where multiple companies likely vied for the contract. The level of competition is generally positive for price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the services rendered in managing the Medicare appeals system.

Public Impact

Beneficiaries of Medicare are directly impacted through the efficient processing of their appeals. The services delivered are crucial for the administrative functioning of the Centers for Medicare and Medicaid Services (CMS). The contract's geographic impact is national, given the scope of Medicare. Workforce implications include the potential for employment within Rivertrust Solutions, Inc. and indirectly within CMS administrative functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts require diligent monitoring to ensure award fees are justified by performance and do not inflate costs unnecessarily.
The specific performance metrics and award fee criteria need to be clearly defined and rigorously assessed to ensure true value for money.
Potential for scope creep exists in administrative support contracts if not managed with clear objectives and boundaries.

Positive Signals

Award under full and open competition suggests a competitive market and potentially good pricing.
The contract duration indicates a stable, long-term need for these critical administrative services.
Focus on Medicare appeals addresses a vital component of healthcare access and beneficiary rights.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is characterized by a wide range of service providers, from large consulting firms to specialized niche companies. Federal spending in this area is substantial, supporting various government functions. Comparable spending benchmarks would involve looking at other large-scale administrative support contracts within HHS or other agencies managing complex public programs.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, the primary contractor, Rivertrust Solutions, Inc., is not a small business. There is no explicit information on subcontracting plans for small businesses within this award data. The impact on the small business ecosystem would depend on whether Rivertrust Solutions, Inc. actively seeks small business subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS), the contracting agency. As a Cost Plus Award Fee contract, CMS would be responsible for monitoring contractor performance against defined metrics to determine award fee payouts. Transparency would be facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Medicare Administrative Contractor (MAC) program
CMS Appeals and Hearing Division
Federal Health IT Spending
Government Administrative Support Services

Risk Flags

Cost Plus Award Fee contract requires robust oversight to ensure value.
Performance metrics and award fee criteria must be clearly defined and monitored.
Potential for contractor performance issues impacting beneficiary appeal timelines.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $19.9 million to RIVERTRUST SOLUTIONS, INC.. MEDICARE 2ND LEVEL OF APPEALS

Who is the contractor on this award?

The obligated recipient is RIVERTRUST SOLUTIONS, 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 $19.9 million.

What is the period of performance?

Start: 2010-01-01. End: 2012-04-30.

What is the historical spending trend for Medicare's second level of appeals prior to this contract award?

Analyzing historical spending for Medicare's second level of appeals prior to this contract (awarded under a Delivery Order with an effective start of 2010-01-01 and end of 2012-04-30) would require accessing prior contract data for similar services. Without specific prior contract numbers or award details, a precise trend is difficult to establish. However, the Centers for Medicare and Medicaid Services (CMS) consistently manages a high volume of claims and appeals, suggesting a sustained and significant budget allocation for these administrative functions over many years. Factors influencing spending trends would include changes in healthcare utilization, policy adjustments affecting appeals processes, and the efficiency of the contractors managing these operations. The $19.9 million awarded here represents a substantial investment for the specified period, reflecting the ongoing operational costs associated with managing a complex appeals system for a national healthcare program.

How does the per-unit cost of processing an appeal under this contract compare to industry benchmarks?

Determining the precise per-unit cost for processing an appeal under this specific contract (Rivertrust Solutions, Inc., $19.9M for Medicare 2nd Level Appeals) is challenging without access to detailed performance data and the exact number of appeals processed. The contract type, Cost Plus Award Fee (CPAF), means that costs can vary based on performance and overhead. To establish a benchmark, one would need to compare the total contract cost divided by the total number of appeals processed against similar contracts managed by other government agencies or large private sector entities handling complex administrative appeals. Industry benchmarks for such services are not publicly standardized but would typically consider factors like case complexity, required expertise, and processing time. Given the $19.9 million award over approximately 2.5 years, the average cost per year is around $8 million. If thousands or tens of thousands of appeals are processed annually, the per-unit cost could range from tens to hundreds of dollars, depending on the volume and complexity.

What is Rivertrust Solutions, Inc.'s track record with federal contracts, particularly within HHS?

Rivertrust Solutions, Inc. has a history of receiving federal contracts, including those with the Department of Health and Human Services (HHS). This specific contract for Medicare's second level of appeals, valued at approximately $19.9 million, indicates a significant engagement with CMS. A thorough review of their contract history would reveal the types of services provided, their performance ratings on past contracts (if available), and their overall experience navigating federal procurement processes. Examining past performance data, such as contract close-outs, modifications, and any reported issues or successes, would provide a clearer picture of their reliability and capability in delivering administrative and management consulting services to the government. Their ability to secure and perform on contracts of this magnitude suggests a level of established competence.

What are the key performance indicators (KPIs) used to evaluate Rivertrust Solutions, Inc. under this Cost Plus Award Fee contract?

While the specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data, Cost Plus Award Fee (CPAF) contracts typically tie award fees to the achievement of pre-defined performance objectives. For a contract managing Medicare's second level of appeals, common KPIs would likely include metrics related to timeliness of appeal processing (e.g., average processing time, adherence to statutory deadlines), accuracy of decisions, quality of case documentation, customer satisfaction (from beneficiaries and potentially providers), and adherence to budget and resource management. CMS would establish these metrics in the contract's Performance Work Statement (PWS). The 'Award Fee' component means that Rivertrust Solutions, Inc. earns additional profit based on how well they meet or exceed these KPIs, as assessed by the government contracting officer.

How has the transition to or management of Medicare's second level of appeals by contractors evolved over time?

The management of Medicare's appeals process, including the second level of appeals, has evolved significantly over time, often involving shifts between in-house government management and contracted services. Initially, many administrative functions were handled internally by CMS. However, to manage increasing workloads and leverage specialized expertise, CMS has increasingly utilized contractors for various stages of the appeals process. This contract with Rivertrust Solutions, Inc. represents one such instance. The evolution has likely been driven by needs for greater efficiency, cost-effectiveness, and the ability to scale operations up or down based on demand. Challenges in this evolution often include ensuring consistent quality, maintaining data security, and managing the complexities of healthcare regulations across different contractor engagements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Solicitation ID: RFPQIC040001

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bluecross Blueshield of Tennessee, Inc. (UEI: 074901380)

Address: 801 PINE ST, CHATTANOOGA, TN, 37402

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,912,198

Exercised Options: $19,912,198

Current Obligation: $19,912,198

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200400011I

IDV Type: IDC

Timeline