DoD's TRICARE Medicare Eligible Program Services Contract Awarded to Wisconsin Physicians Service for $202.8M
Contract Overview
Contract Amount: $202,813,672 ($202.8M)
Contractor: Wisconsin Physicians Service Insurance Corp.
Awarding Agency: Department of Defense
Start Date: 2021-05-01
End Date: 2026-04-30
Contract Duration: 1,825 days
Daily Burn Rate: $111.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: TRICARE MEDICARE ELIGIBLE PROGRAM (TMEP) SERVICES
Place of Performance
Location: MONONA, DANE County, WISCONSIN, 53713
Plain-Language Summary
Department of Defense obligated $202.8 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP. for work described as: TRICARE MEDICARE ELIGIBLE PROGRAM (TMEP) SERVICES Key points: 1. The contract supports pharmacy benefit management for Medicare-eligible TRICARE beneficiaries. 2. Wisconsin Physicians Service Insurance Corp. is the incumbent contractor. 3. The contract is a firm-fixed-price definitive contract with a 5-year duration. 4. This award falls under the Pharmacy Benefit Management and Third Party Administration sector.
Value Assessment
Rating: good
The contract value of $202.8 million over five years appears reasonable for pharmacy benefit management services. Benchmarking against similar TRICARE contracts or large-scale PBM contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to competitive pricing as multiple vendors are allowed to bid.
Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential healthcare services.
Public Impact
Ensures continued pharmacy benefits for Medicare-eligible TRICARE beneficiaries. Supports the health and well-being of a critical segment of the military community. Maintains continuity of essential pharmacy services, minimizing disruption for beneficiaries.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price increases in future contract periods.
- Dependence on a single contractor for critical pharmacy services.
Positive Signals
- Full and open competition ensures market forces drive value.
- Firm-fixed-price contract provides cost certainty.
- Long-term contract (5 years) allows for stable service delivery.
Sector Analysis
This contract falls within the healthcare administration and pharmacy benefit management sector, which is a significant area of federal spending. Benchmarks for similar PBM contracts are often in the hundreds of millions to billions of dollars annually.
Small Business Impact
The data indicates this contract was not set aside for small businesses and the incumbent is a large corporation. There is no specific information provided regarding small business participation in this contract.
Oversight & Accountability
The Department of Defense, through the Defense Health Agency, is responsible for overseeing this contract. Standard oversight mechanisms for federal contracts, including performance monitoring and financial audits, would apply.
Related Government Programs
- Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Potential for vendor lock-in due to incumbent status.
- Complexity of managing pharmacy benefits for a large population.
- Risk of rising pharmaceutical costs impacting contract value.
- Ensuring equitable access to medications for all eligible beneficiaries.
Tags
pharmacy-benefit-management-and-other-th, department-of-defense, wi, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $202.8 million to WISCONSIN PHYSICIANS SERVICE INSURANCE CORP.. TRICARE MEDICARE ELIGIBLE PROGRAM (TMEP) SERVICES
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 Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $202.8 million.
What is the period of performance?
Start: 2021-05-01. End: 2026-04-30.
What is the specific scope of pharmacy benefits covered under this contract and how does it compare to previous contract awards?
The contract covers Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds. While the specific services are not detailed, it's crucial to understand if the scope has expanded or contracted compared to prior awards. This impacts the overall value assessment and ensures the government is paying appropriately for the services rendered, aligning with beneficiary needs.
What are the key performance indicators (KPIs) for this contract and how is contractor performance being measured?
Key performance indicators are essential for ensuring the effectiveness of the TRICARE Medicare Eligible Program Services. These likely include metrics related to prescription fulfillment rates, drug cost management, beneficiary satisfaction, and claims processing timeliness. Robust monitoring of these KPIs by the Defense Health Agency is critical to identify any performance deficiencies early and mitigate risks to service delivery.
Are there any provisions for cost savings or efficiency improvements within the contract terms?
The firm-fixed-price nature of the contract provides cost certainty for the government. However, it does not inherently include specific incentives for cost savings or efficiency improvements by the contractor. Future contract negotiations could explore gain-sharing models or performance-based incentives to encourage the contractor to identify and implement cost-saving measures while maintaining or improving service quality.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HT940219R0003
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
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: $427,837,344
Exercised Options: $226,801,457
Current Obligation: $202,813,672
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-05-01
Current End Date: 2026-04-30
Potential End Date: 2028-04-30 00:00:00
Last Modified: 2026-01-08
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