VA's $86.6M patient account management contract awarded to Peraton Healthcare Solutions LLC

Contract Overview

Contract Amount: $86,642,223 ($86.6M)

Contractor: Peraton Healthcare Solutions LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-03-31

End Date: 2013-12-31

Contract Duration: 1,371 days

Daily Burn Rate: $63.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: REVENUE IMPROVEMENT SYSTEMS ENHANCEMENT (RISE) CONSOLIDATED PATIENT ACCOUNT CENTERS (CPAC) MANAGEMENT CONSULTING SERVICES AND REVENUE WORKFLOW MANAGEMENT TOOL.

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $86.6 million to PERATON HEALTHCARE SOLUTIONS LLC for work described as: REVENUE IMPROVEMENT SYSTEMS ENHANCEMENT (RISE) CONSOLIDATED PATIENT ACCOUNT CENTERS (CPAC) MANAGEMENT CONSULTING SERVICES AND REVENUE WORKFLOW MANAGEMENT TOOL. Key points: 1. Contract focuses on enhancing revenue cycle management for patient accounts. 2. Utilizes a firm-fixed-price structure, indicating defined scope and cost. 3. Awarded under full and open competition, suggesting broad market participation. 4. Duration of over three years implies a significant, ongoing need. 5. The contract's value places it as a substantial investment in administrative efficiency. 6. Performance is tied to revenue improvement and workflow management.

Value Assessment

Rating: good

The contract value of $86.6 million over approximately 3.7 years suggests a significant investment in revenue cycle management. Benchmarking this against similar large-scale IT and management consulting contracts for healthcare revenue cycle optimization would be necessary for a precise value-for-money assessment. However, the firm-fixed-price nature implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the scope is well-defined. The specific metrics for revenue improvement will be key to evaluating the ultimate value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a reasonably competitive environment for this type of specialized service. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions, but three bidders still provide a basis for price discovery and selection.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of services received, ensuring the government obtains the best value.

Public Impact

Benefits veterans by improving the efficiency of their interactions with the patient accounting system. Delivers enhanced revenue cycle management and workflow tools for the VA. Geographic impact is likely nationwide, affecting all VA medical centers utilizing these services. Workforce implications include potential for streamlined administrative processes and improved data management for VA staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if revenue improvement targets are not clearly defined and measured.
Dependence on contractor expertise for critical revenue cycle functions.
Risk of data security breaches given the sensitive patient financial information involved.

Positive Signals

Firm-fixed-price contract structure aligns incentives for cost control.
Full and open competition suggests a robust selection process.
Long-term contract duration indicates a strategic commitment to improving a core function.

Sector Analysis

This contract falls within the broader administrative management and general management consulting services sector, specifically targeting healthcare revenue cycle management. This is a critical area for healthcare providers, as efficient revenue cycle operations directly impact financial health and the ability to serve patients. The market for such services is competitive, with numerous firms offering specialized solutions for optimizing billing, collections, and patient financial engagement. The VA's spending in this area reflects a significant investment in modernizing its administrative and financial infrastructure.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no specific small business set-aside (ss) for this contract. This suggests that the contract was not specifically targeted towards small businesses, and larger, established firms were likely the primary participants. Subcontracting opportunities for small businesses may exist within the awarded contract, but this information is not detailed here. The overall impact on the small business ecosystem for this particular award appears minimal based on the available data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would be tied to the performance metrics outlined in the firm-fixed-price contract, focusing on revenue improvement and workflow efficiency. Transparency is generally facilitated through contract award databases and public reporting mechanisms, although detailed operational oversight specifics are internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Electronic Health Record (EHR) Modernization
Healthcare IT Services
Revenue Cycle Management Software
Financial Management Consulting
Patient Financial Services

Risk Flags

Potential for vendor lock-in
Data security and privacy risks
Reliance on contractor performance metrics
Need for ongoing VA oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $86.6 million to PERATON HEALTHCARE SOLUTIONS LLC. REVENUE IMPROVEMENT SYSTEMS ENHANCEMENT (RISE) CONSOLIDATED PATIENT ACCOUNT CENTERS (CPAC) MANAGEMENT CONSULTING SERVICES AND REVENUE WORKFLOW MANAGEMENT TOOL.

Who is the contractor on this award?

The obligated recipient is PERATON HEALTHCARE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $86.6 million.

What is the period of performance?

Start: 2010-03-31. End: 2013-12-31.

What specific performance metrics were used to evaluate the success of Peraton Healthcare Solutions LLC in improving revenue and workflow?

The contract details likely include specific Key Performance Indicators (KPIs) related to revenue cycle efficiency. These could encompass metrics such as days in accounts receivable (AR), clean claim submission rates, denial rates, collection rates for patient responsibility, and overall revenue capture. The firm-fixed-price nature suggests that achieving predefined targets for these metrics would be crucial for successful contract performance. Without access to the full contract statement of work, the exact KPIs remain unspecified, but they would logically align with standard industry benchmarks for revenue cycle management effectiveness.

How does the $86.6 million contract value compare to other VA or federal healthcare revenue cycle management contracts?

The $86.6 million contract value over approximately 3.7 years represents a substantial investment, averaging around $23.4 million annually. This figure is significant, placing it among larger contracts for specialized IT and management consulting services within the federal healthcare sector. Comparable contracts might include those for electronic health record (EHR) system implementations or broader healthcare IT modernization efforts. However, direct comparisons are challenging without knowing the exact scope and duration of other contracts. It suggests a significant commitment by the VA to optimize a core financial function, likely reflecting the scale of its operations and the complexity of its patient accounting systems.

What are the potential risks associated with a long-term contract for revenue cycle management consulting services?

Long-term contracts for revenue cycle management consulting services carry several potential risks. One primary risk is vendor lock-in, where the VA becomes heavily reliant on Peraton's systems and expertise, making future transitions difficult or costly. There's also the risk of complacency, where the contractor might reduce innovation or efficiency efforts over time if performance incentives are not robustly structured. Furthermore, changes in healthcare regulations or VA policies could necessitate contract modifications, potentially leading to cost increases or scope adjustments. Finally, data security and privacy remain paramount concerns, as the contractor handles sensitive patient financial information, making breaches a significant risk.

What was the historical spending pattern for patient account centers and revenue workflow management at the VA prior to this contract?

Historical spending patterns for patient account centers and revenue workflow management at the VA prior to this contract (awarded in 2010) would likely show a trend towards modernization and consolidation. Before large-scale IT solutions and comprehensive consulting services, such functions might have been managed through more decentralized, less integrated systems. The VA, like many large healthcare organizations, has been investing in improving its revenue cycle efficiency to better manage costs and optimize reimbursements. This $86.6 million contract suggests a strategic decision to centralize and enhance these capabilities, likely building upon or replacing previous, possibly smaller or less integrated, service contracts or internal efforts.

How does the 'Administrative Management and General Management Consulting Services' NAICS code (541611) apply to this specific contract's focus on patient accounts and revenue workflow?

The NAICS code 541611, 'Administrative Management and General Management Consulting Services,' is a broad category that encompasses a wide range of advisory and assistance services. This contract fits within that code because it involves providing expert advice and solutions to improve the VA's administrative processes related to patient accounts and revenue workflow management. Consulting firms under this code help organizations analyze existing operations, identify inefficiencies, recommend strategic changes, and often assist in implementing new systems or processes. Therefore, Peraton Healthcare Solutions LLC is providing management consulting to optimize the VA's financial and administrative operations within its healthcare system, aligning perfectly with the scope of 541611.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA118-10-RP-0009

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 1150 1ST AVE #910, KING OF PRUSSIA, PA, 90

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $86,644,561

Exercised Options: $86,644,561

Current Obligation: $86,642,223

Contract Characteristics

Cost or Pricing Data: YES

Timeline