HHS Awards $423M Medicare Contractor Contract to National Government Services for Jurisdiction K
Contract Overview
Contract Amount: $423,381,048 ($423.4M)
Contractor: National Government Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2022-01-01
End Date: 2026-12-31
Contract Duration: 1,825 days
Daily Burn Rate: $232.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: PART A/PART B MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) JURISDICTION K (JK)
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46250
State: Indiana Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $423.4 million to NATIONAL GOVERNMENT SERVICES, INC. for work described as: PART A/PART B MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) JURISDICTION K (JK) Key points: 1. Contract value of $423.4M over 5 years. 2. Awarded via full and open competition. 3. Risk of service disruption if contractor underperforms. 4. Sector: Healthcare - Health Insurance Carriers.
Value Assessment
Rating: good
The contract type is Cost Plus Award Fee, which incentivizes performance. The total award value appears reasonable for a multi-year MAC contract covering a large jurisdiction.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing.
Taxpayer Impact: Competitive bidding in this large contract is expected to yield efficient use of taxpayer funds for Medicare administration.
Public Impact
Ensures continued administration of Medicare benefits for beneficiaries in Jurisdiction K. Impacts healthcare providers through claims processing and payment. Supports the operational efficiency of the Medicare program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns with Cost Plus Award Fee structure.
- Contractor performance risk impacting Medicare beneficiaries.
- Dependency on a single contractor for critical services.
Positive Signals
- Awarded through full and open competition.
- Clear performance incentives via Award Fee structure.
- Long-term contract provides stability for service delivery.
Sector Analysis
This contract falls within the Health and Medical Insurance Carriers sector, which is crucial for the functioning of the US healthcare system. Spending in this area is significant and directly tied to Medicare program operations.
Small Business Impact
The provided data does not indicate any specific set-asides for small businesses. Analysis of small business participation would require further review of subcontracting plans.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. Performance will be monitored through award fee criteria and contract management processes.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost creep in CPAF contracts.
- Contractor performance failure could disrupt Medicare services.
- Lack of explicit small business participation goals.
- High concentration of spending on a single contractor.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, in, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $423.4 million to NATIONAL GOVERNMENT SERVICES, INC.. PART A/PART B MEDICARE ADMINISTRATIVE CONTRACTOR (MAC) JURISDICTION K (JK)
Who is the contractor on this award?
The obligated recipient is NATIONAL GOVERNMENT SERVICES, INC..
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 $423.4 million.
What is the period of performance?
Start: 2022-01-01. End: 2026-12-31.
What is the benchmark for administrative costs per Medicare beneficiary for this contract?
Benchmarking administrative costs per beneficiary requires detailed data on the number of beneficiaries within Jurisdiction K and historical cost data for similar MAC contracts. Without this specific data, a precise benchmark is difficult to establish. However, the total contract value of $423.4M over five years suggests an average annual cost of approximately $84.7M. Further analysis would compare this to the beneficiary count and industry standards.
What are the key performance indicators (KPIs) tied to the award fee structure?
The award fee structure is designed to incentivize high performance. Key performance indicators likely include metrics related to claims processing timeliness, accuracy rates, customer service satisfaction for beneficiaries and providers, and adherence to program integrity requirements. Specific KPIs would be detailed in the contract's performance work statement and award fee plan.
How does the Cost Plus Award Fee structure compare to other contract types for similar services in terms of cost control?
Cost Plus Award Fee (CPAF) contracts offer flexibility and incentivize performance but can be susceptible to cost overruns if not managed tightly. Compared to fixed-price contracts, CPAF provides less upfront cost certainty for the government. However, the award fee component aims to mitigate this by rewarding efficient performance, potentially leading to better overall value than a poorly managed fixed-price contract.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 75FCMC21R0001
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Elevance Health, Inc.
Address: 8115 KNUE RD, INDIANAPOLIS, IN, 46250
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $817,903,412
Exercised Options: $579,983,170
Current Obligation: $423,381,048
Actual Outlays: $358,847,110
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $34,875,390
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-01-01
Current End Date: 2026-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2026-03-31
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