HHS Awards $131M to Advancemed for Zone Program Integrity in Zone 5

Contract Overview

Contract Amount: $131,190,785 ($131.2M)

Contractor: Advancemed Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2009-02-02

End Date: 2018-07-31

Contract Duration: 3,466 days

Daily Burn Rate: $37.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 5

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37214

State: Tennessee Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $131.2 million to ADVANCEMED CORPORATION for work described as: ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 5 Key points: 1. Significant contract value of $131.2 million over its lifespan. 2. Advancemed Corporation is the sole awardee, raising questions about competition. 3. The contract spans nearly a decade, indicating long-term program needs. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, potentially masking specific service costs.

Value Assessment

Rating: fair

The contract type is Cost Plus Award Fee, which can incentivize performance but also lead to cost overruns if not managed tightly. Benchmarking is difficult without specific service details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive process. However, the single awardee implies Advancemed was the most competitive bidder at the time of award.

Taxpayer Impact: The substantial value of this contract represents a significant taxpayer investment in program integrity services.

Public Impact

Ensures the integrity of Medicare and Medicaid programs, protecting taxpayer funds from fraud and abuse. Supports the Centers for Medicare and Medicaid Services (CMS) in its mission to safeguard healthcare programs. The long duration suggests a critical and ongoing need for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it hard to assess value for money.
Broad NAICS code limits transparency into specific service costs.
Cost Plus Award Fee contracts require diligent oversight to control costs.

Positive Signals

Awarded under full and open competition.
Focus on program integrity is crucial for fiscal responsibility.
Long-term contract indicates sustained need and potential for stable service delivery.

Sector Analysis

This contract falls under professional, scientific, and technical services, a broad category. Spending in this area is often driven by government needs for specialized expertise and support functions, with benchmarks varying widely by specific service.

Small Business Impact

The data does not indicate any specific set-aside for small businesses. The contract was awarded to Advancemed Corporation, and further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

The Cost Plus Award Fee structure necessitates robust oversight from CMS to ensure that award fees are justified by performance and that costs remain reasonable. The long duration implies ongoing monitoring is essential.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Cost Plus Award Fee contract type can lead to higher costs if not managed properly.
Broad NAICS code lacks specificity for detailed cost analysis.
Long contract duration increases exposure to evolving risks and performance degradation.
No explicit mention of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $131.2 million to ADVANCEMED CORPORATION. ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 5

Who is the contractor on this award?

The obligated recipient is ADVANCEMED CORPORATION.

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 $131.2 million.

What is the period of performance?

Start: 2009-02-02. End: 2018-07-31.

How effectively did Advancemed Corporation perform its program integrity functions, and were the award fees justified?

Assessing the effectiveness of Advancemed's program integrity functions requires access to performance reports, audit findings, and CMS evaluations. Without this data, it's difficult to determine if the award fees accurately reflected achieved outcomes and taxpayer value. The Cost Plus Award Fee structure implies a performance-based component, but the specific metrics and their outcomes are not detailed here.

What specific risks were identified during the contract's lifecycle, and how were they mitigated?

Potential risks include cost overruns due to the Cost Plus Award Fee structure, potential for fraud or abuse in program integrity services themselves, and contractor performance issues. Mitigation strategies would involve rigorous CMS oversight, clear performance standards, regular audits, and prompt corrective actions. The long duration of the contract increases the importance of proactive risk management.

To what extent did this contract contribute to the overall goals of reducing healthcare fraud and abuse?

The contract's contribution to reducing healthcare fraud and abuse is central to its purpose. Success would be measured by metrics such as dollars saved through investigations, prevention of improper payments, and successful prosecution of fraudulent activities. The $131.2 million investment suggests a significant expected impact on program integrity.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

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: HIG Capital Management, Inc.

Address: 15245 SHADY GROVE RD, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $131,190,785

Exercised Options: $131,190,785

Current Obligation: $131,190,785

Actual Outlays: $47,438

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200900001I

IDV Type: IDC

Timeline