CMS awards $512M contract for Beneficiary Family Centered Care Quality Improvement Organization services to Ohio KePRO, LLC

Contract Overview

Contract Amount: $512,347,225 ($512.3M)

Contractor: Ohio Kepro, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-05-01

End Date: 2029-04-30

Contract Duration: 3,652 days

Daily Burn Rate: $140.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: BENEFICIARY FAMILY CENTERED CARE QUALITY IMPROVEMENT ORGANIZATION (BFCC-QIO) BENEFICIARY PROTECTION: CASE REVIEW SERVICES

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17111

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $512.3 million to OHIO KEPRO, LLC for work described as: BENEFICIARY FAMILY CENTERED CARE QUALITY IMPROVEMENT ORGANIZATION (BFCC-QIO) BENEFICIARY PROTECTION: CASE REVIEW SERVICES Key points: 1. Contract focuses on quality improvement and beneficiary protection within Medicare. 2. The contract duration is extensive, spanning 10 years. 3. Ohio KePRO, LLC is the incumbent contractor for these services. 4. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 5. Services are delivered in Pennsylvania, indicating a specific geographic focus. 6. The contract falls under 'Other Management Consulting Services' but has a direct impact on healthcare quality.

Value Assessment

Rating: fair

The contract value of $512 million over 10 years averages to $51.2 million annually. Benchmarking this against similar BFCC-QIO contracts is challenging without specific data on scope and performance metrics. The Cost Plus Fixed Fee (CPFF) structure requires careful oversight to ensure cost efficiency, as it allows for reimbursement of allowable costs plus a fixed fee, potentially incentivizing higher spending if not strictly managed. The historical performance of Ohio KePRO, LLC in this role would be a key factor in assessing value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting multiple bidders were considered. The number of bidders and the specific evaluation criteria would determine the intensity of competition. A robust competition typically leads to better pricing and service offerings for the government. However, the fact that the incumbent was awarded the contract suggests they maintained a competitive edge.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it drives down costs and encourages innovation. It ensures that the government is not locked into a single provider without exploring alternatives, maximizing the potential for cost savings and improved service delivery.

Public Impact

Beneficiaries of Medicare in Pennsylvania will receive case review and quality improvement services. The contract aims to enhance the quality of care and protect patient rights within the Medicare program. The services provided are critical for ensuring accountability and effectiveness of healthcare providers. The contract supports a specific geographic region (Pennsylvania), impacting local healthcare delivery systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost escalation if not tightly managed.
Long contract duration (10 years) may reduce flexibility to adapt to changing healthcare needs or technologies.
Reliance on incumbent contractor may limit opportunities for new entrants and innovative solutions.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Focus on quality improvement and beneficiary protection aligns with core CMS mission.
Extensive contract duration provides stability for essential services.

Sector Analysis

This contract falls within the broader healthcare services sector, specifically focusing on quality improvement and oversight for government healthcare programs. The market for such services is dominated by specialized organizations that understand the complexities of Medicare and Medicaid regulations. Comparable spending benchmarks would involve looking at other Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) contracts awarded by CMS, as well as other quality assurance and case management contracts within the federal healthcare space.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large-scale healthcare services contract, it is unlikely to be primarily focused on small business participation, though the prime contractor may engage small businesses for subcontracting opportunities. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS), a division of the Department of Health and Human Services. CMS is responsible for monitoring contractor performance, ensuring compliance with contract terms, and managing the Cost Plus Fixed Fee structure. The Department of Health and Human Services Office of Inspector General (HHS-OIG) would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

Medicare Quality Improvement Program
Beneficiary Protection Services
Healthcare Quality Improvement Organizations
Case Management Services
CMS Oversight Contracts

Risk Flags

Potential for cost overruns due to CPFF structure
Risk of service stagnation over a long contract duration
Need for robust oversight to ensure value for money

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $512.3 million to OHIO KEPRO, LLC. BENEFICIARY FAMILY CENTERED CARE QUALITY IMPROVEMENT ORGANIZATION (BFCC-QIO) BENEFICIARY PROTECTION: CASE REVIEW SERVICES

Who is the contractor on this award?

The obligated recipient is OHIO KEPRO, 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 $512.3 million.

What is the period of performance?

Start: 2019-05-01. End: 2029-04-30.

What is the historical performance of Ohio KePRO, LLC as a BFCC-QIO?

Ohio KePRO, LLC has served as a Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) for CMS. Their performance would be evaluated based on metrics related to case reviews, quality improvement initiatives, and beneficiary satisfaction. While specific performance reports are not detailed here, CMS would have assessed their track record during the competitive bidding process. Key indicators would include their ability to meet performance standards, manage case reviews efficiently, and contribute to measurable improvements in healthcare quality for Medicare beneficiaries in their designated region. The renewal or award of a subsequent contract suggests a satisfactory level of performance, though a deeper dive into past performance evaluations and any corrective actions would provide a more comprehensive picture.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is well-defined but the exact costs are uncertain, as is common in complex service contracts like quality improvement. It allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be more attractive to contractors for services with unpredictable cost drivers. It requires robust government oversight to control costs and ensure value. Other types like Cost Plus Incentive Fee (CPIF) could offer better cost control by linking fee to performance targets. For services where outcomes are highly predictable and costs manageable, FFP might be preferred for greater cost certainty.

What are the primary risks associated with a 10-year contract for quality improvement services?

A significant risk with a 10-year contract is the potential for technological obsolescence and evolving healthcare best practices. The healthcare landscape changes rapidly, and a long-term contract might not adequately adapt to new methodologies, digital health advancements, or shifts in patient care paradigms. Another risk is contractor complacency; a long tenure can sometimes lead to reduced innovation or a less proactive approach to performance improvement if oversight is not rigorous. Furthermore, market dynamics can change, and a long-term commitment might prevent the government from leveraging more competitive pricing or innovative solutions that emerge mid-contract. Ensuring flexibility and performance-based incentives within the contract is crucial to mitigate these risks.

What is the expected impact of these services on Medicare beneficiary outcomes in Pennsylvania?

The expected impact of these Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) services on Medicare beneficiary outcomes in Pennsylvania is multifaceted. Primarily, these services aim to improve the quality of healthcare received by beneficiaries by reviewing cases, identifying areas for improvement in care delivery, and implementing quality initiatives. This can lead to better health outcomes, reduced hospital readmissions, and enhanced patient safety. Furthermore, the 'beneficiary protection' aspect ensures that patient rights are upheld and grievances are addressed, leading to increased patient satisfaction and trust in the Medicare system. By focusing on quality and protection, the contract contributes to a more efficient and effective healthcare system for Medicare enrollees in the state.

How does this contract align with the broader goals of the Centers for Medicare and Medicaid Services (CMS)?

This contract directly aligns with the core mission of the Centers for Medicare and Medicaid Services (CMS) to improve the health and well-being of Americans. The BFCC-QIO program is a critical component of CMS's strategy to ensure quality of care, patient safety, and efficient use of healthcare resources for Medicare beneficiaries. By focusing on quality improvement and beneficiary protection, the contract supports CMS's objectives of enhancing patient outcomes, reducing healthcare costs, and promoting accountability within the healthcare system. The emphasis on case review and data-driven quality initiatives helps CMS monitor and influence healthcare provider performance, ultimately contributing to a more effective and responsive Medicare program.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75FCMC18R0034

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5700 LOMBARDO CTR STE 100, CLEVELAND, OH, 44131

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

Financial Breakdown

Contract Ceiling: $512,347,225

Exercised Options: $512,347,225

Current Obligation: $512,347,225

Actual Outlays: $231,403,336

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0069

IDV Type: IDC

Timeline