CMS Awards $44.8M Medicare Drug Integrity Contract to Qlarant Integrity Solutions

Contract Overview

Contract Amount: $44,817,310 ($44.8M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-06-29

End Date: 2026-06-28

Contract Duration: 2,190 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACT (PPI MEDIC)- THE PURPOSE OF THE PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACTOR (PPI MEDIC) IS TO ASSIST WITH THOSE EFFORTS BY CONDUCTING MEDICARE PART C AND PART D PROACTIVE DATA ANAL

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $44.8 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACT (PPI MEDIC)- THE PURPOSE OF THE PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACTOR (PPI MEDIC) IS TO ASSIST WITH THOSE EFFORTS BY CONDUCTING MEDICARE PART C AND PART D PROACTIVE DATA ANAL Key points: 1. Contract aims to enhance Medicare Part C and D program integrity through proactive data analysis. 2. Focus on identifying and preventing fraud, waste, and abuse in prescription drug programs. 3. Qlarant Integrity Solutions, a new entrant in this specific contract type, will perform the work. 4. The contract is a Cost Plus Fixed Fee type, indicating potential for cost overruns if not managed effectively.

Value Assessment

Rating: good

The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility but requires robust oversight to manage costs. Benchmarking CPFF contracts for similar data analysis and integrity services is challenging due to unique scope and performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a competitive bidding process that should drive fair pricing. The fixed fee component provides some cost certainty, but the cost-reimbursement aspect necessitates careful monitoring.

Taxpayer Impact: This contract aims to save taxpayer money by reducing fraud, waste, and abuse in Medicare's drug programs, though the direct cost of the contract itself is substantial.

Public Impact

Improved oversight of Medicare drug benefits, potentially leading to lower healthcare costs for beneficiaries. Enhanced efforts to combat pharmaceutical fraud, protecting taxpayer funds. Increased data analysis capabilities for CMS to identify emerging threats and vulnerabilities. Potential for more efficient prescription drug utilization and management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure requires diligent cost control.
New contractor for this specific program integrity function.
Potential for scope creep in data analysis requirements.

Positive Signals

Full and open competition should ensure competitive pricing.
Focus on program integrity is critical for Medicare's financial health.
Contract duration allows for sustained effort and impact.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on data analysis for program integrity. Spending in this area is crucial for government agencies to ensure efficient and effective program delivery and prevent financial losses.

Small Business Impact

The contract was awarded to Qlarant Integrity Solutions LLC, and the data does not indicate any specific subcontracting goals for small businesses. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Given the CPFF structure and the sensitive nature of program integrity, robust oversight mechanisms are essential to ensure performance and prevent waste.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Effectiveness relies heavily on the quality of data provided by Medicare.
Contractor's ability to adapt to evolving fraud schemes.
Ensuring robust data security and privacy protocols.
Measuring the true impact of preventative measures versus recovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $44.8 million to QLARANT INTEGRITY SOLUTIONS LLC. PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACT (PPI MEDIC)- THE PURPOSE OF THE PLAN PROGRAM INTEGRITY MEDICARE DRUG INTEGRITY CONTRACTOR (PPI MEDIC) IS TO ASSIST WITH THOSE EFFORTS BY CONDUCTING MEDICARE PART C AND PART D PROACTIVE DATA ANAL

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 $44.8 million.

What is the period of performance?

Start: 2020-06-29. End: 2026-06-28.

What is the expected return on investment (ROI) from this contract in terms of fraud and abuse recovered versus contract cost?

Quantifying the exact ROI is complex as it relies on the successful identification and prevention of future fraud, waste, and abuse. However, the contract's primary objective is to safeguard billions in taxpayer funds allocated to Medicare Part C and D. The $44.8 million investment is expected to yield significant savings by deterring and recovering illicit payments, thereby improving the financial sustainability of these critical healthcare programs.

What are the key performance indicators (KPIs) used to measure the effectiveness of Qlarant Integrity Solutions in program integrity?

Key performance indicators likely include metrics related to the number and value of potential fraud cases identified, the accuracy and timeliness of data analysis, the reduction in improper payments, and the successful implementation of preventative measures. CMS will monitor these KPIs to ensure Qlarant is meeting its objectives in enhancing Medicare drug program integrity and achieving cost savings.

How will CMS ensure that the Cost Plus Fixed Fee structure does not lead to excessive costs without commensurate program integrity improvements?

CMS will implement stringent oversight and performance management. This includes regular reviews of Qlarant's incurred costs against the fixed fee, detailed performance evaluations based on defined KPIs, and audits to verify the necessity and reasonableness of expenses. The agency will also ensure clear communication channels to address any potential scope changes or cost escalations proactively.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75FCMC19R0042

Offers Received: 7

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: $44,817,310

Exercised Options: $44,817,310

Current Obligation: $44,817,310

Actual Outlays: $31,111,741

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline