HHS awards $44.3M for claim review services, with Livanta LLC as prime contractor

Contract Overview

Contract Amount: $44,307,015 ($44.3M)

Contractor: Livanta LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2021-02-12

End Date: 2025-08-11

Contract Duration: 1,641 days

Daily Burn Rate: $27.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BENEFICIARY OVERSIGHT: CLAIM REVIEW SERVICES MULTI-YEAR TASK ORDER

Place of Performance

Location: ANNAPOLIS JUNCTION, HOWARD County, MARYLAND, 20701

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $44.3 million to LIVANTA LLC for work described as: BENEFICIARY OVERSIGHT: CLAIM REVIEW SERVICES MULTI-YEAR TASK ORDER Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration spans over four years, indicating a long-term need for these services. 3. Task order awarded under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, common for flexible service needs. 4. The fixed-price contract type aims to control costs by establishing a set price for services. 5. Services are for claim review, a critical function for healthcare program integrity. 6. Contractor Livanta LLC has experience in healthcare services, potentially indicating a good fit. 7. The contract is managed by the Centers for Medicare and Medicaid Services (CMS).

Value Assessment

Rating: good

The contract's fixed-price nature provides cost certainty for the government. Benchmarking against similar claim review contracts is difficult without more specific service details and performance metrics. However, the competitive award process suggests that pricing was evaluated against market rates. The total value of $44.3 million over approximately four years indicates a significant investment in ensuring the accuracy and integrity of healthcare claims processed by CMS.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit an offer. The presence of two bids suggests a moderate level of competition for this specific task order. While two bidders participated, the extent of the competition and the nature of the bidding process would need further investigation to fully assess its impact on price discovery and overall value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to offer competitive pricing, potentially leading to cost savings. A competitive process helps ensure that the government is receiving services at a fair market price.

Public Impact

Beneficiaries of Medicare and Medicaid programs indirectly benefit from improved claim accuracy and integrity. The services delivered focus on reviewing claims to ensure compliance and prevent fraud, waste, and abuse. The geographic impact is national, as CMS oversees programs across the United States. Workforce implications include potential employment opportunities for claim reviewers and administrative staff within Livanta LLC and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'claim review' is not tightly managed.
Dependence on contractor performance for critical program integrity functions.
Risk of data security breaches given the sensitive nature of healthcare claims data.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm fixed-price contract type helps control costs and provides budget predictability.
Contractor Livanta LLC has prior experience in related healthcare services.
Long contract duration suggests a stable, ongoing need and potential for contractor efficiency gains.

Sector Analysis

The healthcare services sector is a significant area of federal spending, particularly for agencies like HHS. Claim review services are a crucial component of managing programs like Medicare and Medicaid, aiming to ensure program integrity and prevent financial losses due to errors or fraud. This contract fits within the broader category of healthcare consulting and administrative services, which are essential for the efficient operation of large-scale government health programs. Comparable spending benchmarks would typically involve analyzing the cost per claim reviewed or the percentage of claims reviewed against the total volume.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no explicit information provided regarding subcontracting plans or goals for small businesses. Further analysis would be needed to determine if Livanta LLC has committed to or achieved specific small business subcontracting targets as part of this award.

Oversight & Accountability

Oversight for this contract is likely managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is facilitated through contract databases like FPDS-NG, which provide public access to award details. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise related to the contract's performance.

Related Government Programs

Medicare Claims Processing
Medicaid Integrity Program
Healthcare Fraud Prevention Partnership
Program Integrity Contracts
CMS Administrative Support Services

Risk Flags

Contract performance risk
Data security risk
Potential for scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $44.3 million to LIVANTA LLC. BENEFICIARY OVERSIGHT: CLAIM REVIEW SERVICES MULTI-YEAR TASK ORDER

Who is the contractor on this award?

The obligated recipient is LIVANTA 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 $44.3 million.

What is the period of performance?

Start: 2021-02-12. End: 2025-08-11.

What is Livanta LLC's track record with federal contracts, particularly with HHS and CMS?

Livanta LLC has a history of performing contracts with federal agencies, including HHS. Information from contract databases indicates prior awards for services related to healthcare quality improvement, patient safety, and program integrity. Their experience with Medicare and Medicaid programs suggests familiarity with the operational and regulatory environment. A detailed review of past performance evaluations and any past performance issues would provide a more comprehensive understanding of their track record. However, their continued selection for significant contracts implies a generally satisfactory performance history.

How does the value of this contract compare to similar claim review services awarded by CMS?

Direct comparison of the $44.3 million value is challenging without detailed service scope and performance metrics. However, CMS frequently awards large contracts for program integrity and claims processing support. Task orders under IDIQ vehicles can range from a few million to tens of millions of dollars. The duration of over four years for this contract is typical for substantial service agreements. To benchmark effectively, one would need to analyze the cost per claim reviewed, the number of claims processed, or the complexity of the review services provided in relation to other similar contracts.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential contractor underperformance affecting program integrity, data security breaches of sensitive health information, and cost overruns if the fixed-price model is not adequately managed. Mitigation strategies likely involve robust performance monitoring by CMS, adherence to strict data security protocols (e.g., HIPAA compliance), and clear contractual terms defining deliverables and quality standards. The competitive award process itself can mitigate risks by selecting a contractor with a proven ability to perform. Regular contract reviews and performance reviews are standard mitigation practices.

How effective are claim review services in preventing fraud, waste, and abuse within Medicare and Medicaid?

Claim review services are a cornerstone of federal efforts to combat fraud, waste, and abuse in healthcare programs. By scrutinizing claims for accuracy, medical necessity, and compliance with program rules, these services help identify improper payments. Studies and reports from CMS and the HHS Office of Inspector General (OIG) consistently highlight the importance of robust program integrity functions, including claim reviews, in recovering funds and deterring future misconduct. The effectiveness is measured by metrics such as dollars recovered, fraud cases identified, and reduction in improper payment rates.

What is the historical spending trend for claim review services by CMS over the past five years?

Historical spending on claim review and program integrity services by CMS has generally been substantial and has seen fluctuations based on legislative priorities and funding allocations. While specific figures for 'claim review services' as a distinct category are not always granularly reported, overall spending on program integrity functions, which encompass claim reviews, has been in the hundreds of millions to billions of dollars annually. Factors influencing spending include the volume of claims processed, the complexity of healthcare services, and evolving strategies to combat healthcare fraud. This $44.3 million award represents a portion of that broader investment.

What specific types of claims are subject to review under this contract?

The specific types of claims subject to review under this contract would be detailed in the Statement of Work (SOW) and associated task order documentation. Generally, claim review services for CMS encompass a wide range of healthcare services billed under Medicare and Medicaid. This can include medical procedures, prescription drugs, durable medical equipment, hospital stays, and physician services. The focus is typically on identifying potential errors, overpayments, or patterns indicative of fraud, waste, or abuse, often prioritizing high-risk claim types or providers.

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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10820 GUILFORD RD STE 202, ANNAPOLIS JUNCTION, MD, 20701

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

Financial Breakdown

Contract Ceiling: $52,296,927

Exercised Options: $44,307,015

Current Obligation: $44,307,015

Actual Outlays: $42,113,560

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $16,545,098

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0070

IDV Type: IDC

Timeline