VA's $38.2M dental code modification for Community Care Network Region 1 with Optum Public Sector Solutions, Inc

Contract Overview

Contract Amount: $38,227,215 ($38.2M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-10-15

End Date: 2021-09-30

Contract Duration: 716 days

Daily Burn Rate: $53.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COMMUNITY CARE NETWORK (CCN) REGION 1 MODIFICATION - UPDATE DENTAL CDT CODES / CONTRACTOR PRICING

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $38.2 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: COMMUNITY CARE NETWORK (CCN) REGION 1 MODIFICATION - UPDATE DENTAL CDT CODES / CONTRACTOR PRICING Key points: 1. Contract modification focused on updating dental codes and contractor pricing, indicating a need for current market alignment. 2. The contract's duration of 716 days suggests a significant period for service delivery and potential for evolving needs. 3. Fixed-price contract type aims to control costs, but requires careful monitoring of scope changes. 4. The modification's value is substantial, necessitating a review of its necessity and impact on overall program costs. 5. This contract falls within the Direct Health and Medical Insurance Carriers sector, a critical area for healthcare services. 6. The modification's impact on patient access to dental care within Region 1 needs to be assessed.

Value Assessment

Rating: fair

The contract modification's value of $38.2 million for updating dental codes and pricing requires careful scrutiny. Without direct benchmarks for similar code update modifications, it's difficult to definitively assess value for money. However, the fixed-price nature suggests an attempt to cap costs. The pricing updates should reflect current market rates for dental services to ensure fair compensation and prevent overpayment. The duration of the contract (716 days) implies a substantial commitment, and the modification's cost should be evaluated against the expected service delivery over this period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust bidding process. This approach typically fosters competitive pricing and allows for a wide range of potential contractors to participate. The number of bidders is not specified, but the full and open nature implies that multiple entities vied for this contract, which should theoretically lead to a more favorable price for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives competitive bids, leading to better value.

Public Impact

Veterans in Community Care Network Region 1 will benefit from updated dental services reflecting current coding standards. The contract ensures the continued provision of dental care services through a third-party administrator. Geographic impact is focused on Region 1 of the Community Care Network, serving veterans in that specific area. The contract supports the healthcare workforce by engaging dental providers and administrative staff. This modification aims to improve the accuracy and efficiency of dental care billing and reimbursement for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the 'update' involves more than just coding and pricing adjustments.
Ensuring the updated pricing accurately reflects current market rates and doesn't lead to overpayment.
Monitoring contractor performance to ensure timely and accurate implementation of the updated codes and pricing.

Positive Signals

Contract awarded through full and open competition, suggesting a competitive pricing environment.
Fixed-price contract type helps to control costs and provides budget certainty.
Modification indicates an effort to keep service delivery aligned with current industry standards.

Sector Analysis

The contract operates within the healthcare services sector, specifically focusing on dental care administration and delivery for veterans. This falls under the broader category of health insurance carriers and medical support services. The market for such services is competitive, with numerous large and small companies offering solutions for government healthcare programs. Benchmarking would involve comparing the per-veteran cost or administrative fee structure to similar VA or other federal healthcare contracts.

Small Business Impact

Information regarding small business set-asides or subcontracting plans for this specific modification is not provided. As the contract was awarded under full and open competition, it's possible that small businesses were among the bidders or could be involved as subcontractors. Further analysis would be needed to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' program management and contracting offices. Accountability measures would include performance metrics, adherence to contract terms, and financial audits. Transparency is generally maintained through contract databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Community Care Programs
TRICARE Dental Program
Federal Health Insurance Contracts
Medical Coding and Billing Services

Risk Flags

Potential for pricing inaccuracies
Risk of scope creep
Need for robust performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $38.2 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. COMMUNITY CARE NETWORK (CCN) REGION 1 MODIFICATION - UPDATE DENTAL CDT CODES / CONTRACTOR PRICING

Who is the contractor on this award?

The obligated recipient is OPTUM PUBLIC SECTOR SOLUTIONS, INC..

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 $38.2 million.

What is the period of performance?

Start: 2019-10-15. End: 2021-09-30.

What was the specific rationale for updating the dental CDT codes and contractor pricing at this time?

The rationale for updating dental Current Dental Terminology (CDT) codes and contractor pricing typically stems from the need to align with industry standards and ensure fair market compensation. Dental codes are updated annually by the American Dental Association (ADA), and it's crucial for healthcare providers, including those contracted by the VA, to use the most current codes for accurate billing and claims processing. Contractor pricing also needs periodic review to reflect changes in the cost of labor, materials, and overhead, as well as to maintain competitiveness in the market. For the VA's Community Care Network (CCN), ensuring accurate and up-to-date pricing is vital for managing program costs effectively and ensuring veterans receive appropriate care at fair market rates.

How does the pricing in this modification compare to similar dental care contracts administered by the VA or other federal agencies?

Direct comparison of pricing for this specific modification is challenging without access to detailed pricing structures and benchmarks for similar dental code update contracts. However, the VA aims to ensure competitive pricing through its procurement processes, including full and open competition. The fixed-price nature of the contract suggests an effort to control costs. To assess value, one would typically benchmark the per-unit costs or administrative fees against other VA contracts for similar services or against rates paid by other federal agencies like the Department of Defense for its dental programs. Variations in geographic regions, service scope, and administrative overhead can significantly influence pricing, making direct apples-to-apples comparisons difficult.

What are the potential risks associated with a contract modification focused on pricing and coding updates?

Potential risks associated with a contract modification focused on pricing and coding updates include the possibility of inaccurate pricing adjustments leading to over or underpayment, scope creep if the 'update' extends beyond simple code and price revisions, and administrative burdens in implementing and verifying the changes. There's also a risk that the updated pricing may not fully reflect the current market, potentially impacting provider participation or the quality of services. Ensuring that the new codes and prices are correctly implemented across all relevant systems and processes is critical to avoid disruptions in service delivery and accurate financial reporting. Effective oversight is necessary to mitigate these risks.

What is the expected impact of this modification on the delivery of dental care services to veterans in CCN Region 1?

This modification is expected to have a positive impact on the delivery of dental care services to veterans in CCN Region 1 by ensuring that the services are billed and reimbursed using the most current industry standards. Accurate coding and appropriate pricing are fundamental to the efficient functioning of the Community Care Network. By updating these elements, the VA aims to streamline administrative processes, reduce potential billing errors, and ensure that providers are compensated fairly according to current market conditions. This, in turn, should support the continued availability and accessibility of quality dental care for eligible veterans within the region.

How has spending on the Community Care Network (CCN) program evolved over time, and where does this modification fit in?

Spending on the VA's Community Care Network (CCN) program has generally increased as the VA shifts towards greater utilization of community-based healthcare providers to supplement its direct care services. The CCN program itself is relatively new, having been established to consolidate various community care programs under a standardized network. This specific $38.2 million modification represents a component of the overall CCN spending, focused on administrative and pricing adjustments for dental services within a particular region. It's not indicative of a new program launch but rather an operational update to an existing service delivery mechanism. Analyzing historical spending trends for CCN, particularly for dental services, would provide context on the scale and frequency of such modifications.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 800 KING FARM BLVD STE 500, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,174,344

Exercised Options: $47,174,344

Current Obligation: $38,227,215

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0004

IDV Type: IDC

Timeline