Medicare drug integrity contract awarded to Qlarant Integrity Solutions for $165.4M over 8 years

Contract Overview

Contract Amount: $165,425,952 ($165.4M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2018-09-13

End Date: 2026-09-14

Contract Duration: 2,923 days

Daily Burn Rate: $56.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::CT::IGF AWARD OF THE INVESTIGATIONS MEDICARE DRUG INTEGRITY CONTRACTOR (INVESTIGATIONS MEDIC) TASK ORDER UNDER UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC)

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $165.4 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: IGF::CT::IGF AWARD OF THE INVESTIGATIONS MEDICARE DRUG INTEGRITY CONTRACTOR (INVESTIGATIONS MEDIC) TASK ORDER UNDER UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC) Key points: 1. Contract value appears reasonable given the 8-year duration and scope of work. 2. Full and open competition suggests a competitive bidding process. 3. Potential risks include contractor performance and evolving program needs. 4. This contract supports critical oversight of Medicare drug programs. 5. The sector involves professional, scientific, and technical services for healthcare. 6. No small business set-aside was utilized for this award.

Value Assessment

Rating: good

The contract's total value of $165.4 million over approximately 8 years suggests an average annual value of around $20.6 million. Benchmarking this against similar large-scale integrity and investigative contracts within federal healthcare programs is challenging without more specific data on scope and deliverables. However, the cost-plus-fixed-fee structure allows for flexibility while maintaining cost control, provided effective oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This process typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the method suggests a robust selection process.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the most advantageous offer.

Public Impact

Beneficiaries include Medicare beneficiaries by ensuring program integrity. Services delivered involve investigations and integrity monitoring for Medicare drug programs. Geographic impact is national, covering all Medicare operations. Workforce implications include potential support roles for investigative and analytical staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in a cost-plus-fixed-fee contract if not managed tightly.
Ensuring sustained contractor performance and responsiveness over an 8-year period.
Adapting to evolving fraud schemes and program integrity challenges within Medicare.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Long-term contract provides stability for program integrity efforts.
Focus on a critical area of healthcare spending (Medicare drug programs).

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on healthcare program integrity. The market for such services is substantial, driven by the complexity and high value of federal healthcare programs like Medicare. Comparable spending benchmarks would involve other large contracts for investigative, audit, and program integrity support within agencies like CMS and HHS.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate specific subcontracting requirements for small businesses. The award to Qlarant Integrity Solutions LLC, a single entity, suggests that the primary contractor will manage the bulk of the work. This means direct opportunities for small businesses may be limited unless Qlarant actively engages them as subcontractors.

Oversight & Accountability

Oversight is likely managed by the Centers for Medicare and Medicaid Services (CMS) through contract officers and technical representatives. Accountability measures would be embedded in the contract's performance standards and deliverables. Transparency is generally maintained through contract awards databases, though specific performance metrics and audit findings may not always be publicly disclosed.

Related Government Programs

Medicare Drug Integrity Contractor (MEDIC)
Program Integrity Contracts
Healthcare Fraud Prevention
Federal Contract Oversight

Risk Flags

Cost-Plus-Fixed-Fee contract type requires diligent oversight to manage costs.
Long contract duration (8 years) necessitates sustained performance monitoring.
Scope of work is complex and requires specialized investigative and analytical expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $165.4 million to QLARANT INTEGRITY SOLUTIONS LLC. IGF::CT::IGF AWARD OF THE INVESTIGATIONS MEDICARE DRUG INTEGRITY CONTRACTOR (INVESTIGATIONS MEDIC) TASK ORDER UNDER UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC)

Who is the contractor on this award?

The obligated recipient is QLARANT INTEGRITY SOLUTIONS LLC.

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 $165.4 million.

What is the period of performance?

Start: 2018-09-13. End: 2026-09-14.

What is the specific scope of work for the Investigations Medicare Drug Integrity Contractor (INVESTIGATIONS MEDIC) task order?

The Investigations Medicare Drug Integrity Contractor (INVESTIGATIONS MEDIC) task order, awarded under the Unified Program Integrity Contract (UPIC), is designed to support the Centers for Medicare and Medicaid Services (CMS) in its mission to combat fraud, waste, and abuse within the Medicare program. While the provided data does not detail the specific scope, such contracts typically involve activities like data analysis to identify suspicious billing patterns, conducting investigations into potential fraud schemes, providing analytical support for enforcement actions, and developing strategies to enhance program integrity. The focus on drug integrity suggests a specialization in investigating issues related to prescription drugs, such as improper prescribing, dispensing, or billing.

How does the cost-plus-fixed-fee (CPFF) contract type influence the overall cost-effectiveness for taxpayers?

The Cost-Plus-Fixed-Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. For taxpayers, this structure can be a double-edged sword. On one hand, it allows for flexibility in scope, which is beneficial for complex, evolving programs like Medicare integrity where the exact challenges may not be fully known upfront. On the other hand, it carries a risk of cost overruns if the contractor's costs are higher than anticipated, as the fixed fee remains constant. Effective government oversight is crucial to ensure that costs remain reasonable and that the contractor operates efficiently to deliver value.

What are the key performance indicators (KPIs) typically used to evaluate the success of such an integrity contract?

Key performance indicators for an integrity contract like this often revolve around the effectiveness of fraud detection and prevention efforts. This can include metrics such as the number of investigations initiated and completed, the value of detected fraud, waste, and abuse, the success rate of recovery efforts (dollars recovered versus dollars spent on the contract), the timeliness of investigations, and the quality of analytical reports provided to CMS. Additionally, KPIs might measure the contractor's ability to adapt to new fraud schemes and contribute to policy recommendations for improving program integrity.

What is the historical spending trend for Medicare drug integrity efforts prior to this contract?

The provided data focuses on a single contract award and does not offer historical spending trends for Medicare drug integrity efforts. However, federal spending on program integrity, particularly within large programs like Medicare, has generally been on an upward trajectory. This is driven by increasing healthcare expenditures, the sophistication of fraud schemes, and a growing emphasis by Congress and federal agencies on combating waste, fraud, and abuse. Understanding the historical context would require analyzing aggregate spending data for similar contracts and program integrity initiatives over several fiscal years.

What is the potential impact of this contract on the broader healthcare anti-fraud ecosystem?

This contract plays a significant role in the broader healthcare anti-fraud ecosystem by providing dedicated resources and expertise to investigate and mitigate fraud within the Medicare drug program. By identifying and addressing fraudulent activities, it helps protect taxpayer funds and ensures the sustainability of the Medicare program. The insights gained from these investigations can also inform policy changes, improve detection methods used by other entities (including law enforcement and other government agencies), and contribute to a more robust deterrent effect against potential fraudsters operating within the healthcare sector.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HHSM5002015RFP0122

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 28464 MARLBORO AVE, EASTON, MD, 21601

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

Financial Breakdown

Contract Ceiling: $216,225,278

Exercised Options: $165,425,952

Current Obligation: $165,425,952

Actual Outlays: $96,085,845

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500201600080I

IDV Type: IDC

Timeline