VA awarded $572M to TriWest Healthcare Alliance for physician services in FY17, with a 91-day duration

Contract Overview

Contract Amount: $572,309,695 ($572.3M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-07-01

End Date: 2017-09-30

Contract Duration: 91 days

Daily Burn Rate: $6.3M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: IGF::CT::IGF FY17 4TH QTR EXPRESS REPORT:

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $572.3 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: IGF::CT::IGF FY17 4TH QTR EXPRESS REPORT: Key points: 1. The contract value represents a significant investment in healthcare services for veterans. 2. Competition dynamics for this contract are crucial for ensuring fair pricing and service quality. 3. Performance context is essential to understand the effectiveness of physician services delivered. 4. Sector positioning highlights the VA's reliance on external providers for specialized medical care. 5. Risk indicators may include service delivery challenges, cost overruns, or beneficiary satisfaction.

Value Assessment

Rating: fair

The contract value of $572 million for a 91-day period is substantial. Benchmarking this against similar contracts for physician services within the VA or other federal agencies is difficult without more specific service details. The fixed-price incentive structure suggests an attempt to control costs while incentivizing performance, but the ultimate value for money depends heavily on the quality and efficiency of services rendered. The relatively short duration might indicate a bridge contract or a specific, time-bound need.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally expected to yield better pricing and service options for the government. The number of bidders and the specifics of the evaluation process would provide further insight into the level of competition and its impact on the final award.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it promotes a competitive environment that can drive down costs and improve the quality of services received by veterans.

Public Impact

Veterans in Arizona are the primary beneficiaries of the physician services provided under this contract. The contract delivers essential medical services, likely including primary care and specialist consultations. The geographic impact is focused on Arizona, as indicated by the state code 'AZ'. Workforce implications include the employment of physicians and support staff by TriWest Healthcare Alliance to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service gaps if contractor performance is suboptimal.
Ensuring consistent quality of care across all delivered services.
Managing the fixed-price incentive structure to achieve desired outcomes without unintended consequences.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Fixed-price incentive contract type aims to align contractor and government interests.
Focus on physician services addresses a critical need within the VA healthcare system.

Sector Analysis

The healthcare sector, particularly within the federal government, relies heavily on contracts for specialized services. The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists)', represents a significant segment of the healthcare market. Federal spending in this area often involves large contracts to serve specific populations like veterans, with competition playing a key role in price discovery and service quality.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if TriWest Healthcare Alliance chooses to engage them. Without specific subcontracting plans, it's difficult to assess the direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, though detailed performance metrics and audits may not always be publicly available.

Related Government Programs

VA Community Care Network
TRICARE contracts
Medicare/Medicaid provider services

Risk Flags

High contract value for a short duration
Potential for quality compromises in FPI contracts
Need for detailed performance metrics to assess value

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $572.3 million to TRIWEST HEALTHCARE ALLIANCE CORP. IGF::CT::IGF FY17 4TH QTR EXPRESS REPORT:

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

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 $572.3 million.

What is the period of performance?

Start: 2017-07-01. End: 2017-09-30.

What was the specific scope of physician services covered under this contract?

The provided data indicates the contract (NAICS code 621111) is for 'Offices of Physicians (except Mental Health Specialists)' and was awarded to TriWest Healthcare Alliance Corp by the Department of Veterans Affairs. While the exact scope isn't detailed, it implies services provided by physicians, excluding mental health specialists. This could encompass a wide range of medical consultations, diagnoses, treatments, and potentially referrals for veterans within Arizona. The short duration of 91 days suggests it might have been for a specific, time-limited need, such as bridging a gap in services or addressing a surge in demand.

How does the contract value of $572 million for 91 days compare to typical physician service contracts?

A contract value of $572 million for a 91-day period is exceptionally high, averaging over $6.29 million per day. This suggests either a very large patient population being served, highly specialized and expensive medical services, or potentially a contract that includes significant overhead and administrative costs. Without knowing the specific services, patient volume, and geographic coverage, it's difficult to make a direct comparison. However, such a high daily expenditure warrants scrutiny to ensure efficiency and value for taxpayer dollars.

What are the potential risks associated with a fixed-price incentive contract for physician services?

Fixed-price incentive (FPI) contracts aim to share cost savings or overruns between the government and the contractor, incentivizing performance. For physician services, risks include the contractor potentially cutting corners on quality to meet cost targets, leading to suboptimal patient care. Conversely, if targets are too lenient, costs could escalate. Ensuring accurate baseline cost estimates and performance metrics is critical. There's also a risk that the incentive structure might not perfectly align with the complex, often unpredictable nature of healthcare delivery, potentially leading to disputes or unintended consequences.

What was the historical spending pattern for similar physician services by the VA in Arizona?

The provided data only pertains to a single contract award in FY17. To assess historical spending patterns, one would need to analyze VA's expenditures on physician services (NAICS 621111) in Arizona over multiple fiscal years, looking at contracts awarded to various providers, including TriWest Healthcare Alliance and others. This would reveal trends in contract values, competition levels, and the VA's overall reliance on external physician services in the region. Without this broader dataset, it's impossible to determine if this $572 million award represents an anomaly or a continuation of past spending.

What is TriWest Healthcare Alliance's track record with the Department of Veterans Affairs?

TriWest Healthcare Alliance has a significant history of contracting with the Department of Veterans Affairs, particularly for providing healthcare services to veterans in specific regions, including the Western United States. They have been involved in various iterations of VA's community care programs. Their track record includes both successes and challenges, with past contracts sometimes facing scrutiny regarding network adequacy, patient access, and administrative efficiency. Understanding their performance on prior VA contracts is crucial for evaluating their suitability and performance on this specific $572 million award.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 16010 N 28TH AVE, PHOENIX, AZ, 85053

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

Financial Breakdown

Contract Ceiling: $572,309,695

Exercised Options: $572,309,695

Current Obligation: $572,309,695

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline