HHS awards $30M contract for pharmacy switching services to Change Healthcare Operations, LLC

Contract Overview

Contract Amount: $30,000 ($30.0K)

Contractor: Change Healthcare Operations, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2026-09-01

End Date: 2031-01-12

Contract Duration: 1,594 days

Daily Burn Rate: $19/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PHARMACY SWITCHING SERIVCES FOR WEWOKA INDIAN HEALTH CLINIC

Place of Performance

Location: WEWOKA, SEMINOLE County, OKLAHOMA, 74884

State: Oklahoma Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30,000 to CHANGE HEALTHCARE OPERATIONS, LLC for work described as: PHARMACY SWITCHING SERIVCES FOR WEWOKA INDIAN HEALTH CLINIC Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 5 years indicates a long-term need for these services. 3. The firm-fixed-price contract type helps manage cost certainty for the government. 4. The services are for the Wewoka Indian Health Clinic, highlighting a specific healthcare need. 5. The North American Industry Classification System (NAICS) code 511210 points to software publishing, suggesting a technology-centric solution. 6. The contract is a BPA Call, indicating it's a task order under a broader agreement.

Value Assessment

Rating: fair

The contract value of $30 million over approximately 5.3 years averages to about $5.66 million per year. Without specific benchmarks for pharmacy switching services for Indian Health Service clinics, it's difficult to definitively assess value for money. However, the firm-fixed-price structure provides cost predictability. Further analysis would require comparing this to similar contracts for comparable services within the IHS or other federal healthcare providers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically involves soliciting bids from all responsible prospective contractors. This method is intended to foster robust competition, potentially leading to better pricing and service offerings. The number of bidders is not specified, but the open competition suggests that multiple entities had the opportunity to propose solutions.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of offers, which can drive down costs and improve the quality of services received.

Public Impact

Patients of the Wewoka Indian Health Clinic will benefit from potentially improved pharmacy services and prescription management. The contract supports the delivery of essential pharmacy switching services, which are critical for efficient healthcare operations. The geographic impact is focused on the Wewoka, Oklahoma area, serving the specific needs of the local Indian Health Service clinic. The contract supports the operational infrastructure of the Indian Health Service, contributing to its mission of providing healthcare to federally recognized tribes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the switching services are highly integrated and difficult to change.
Dependence on a single vendor for critical pharmacy operations could pose a risk if the vendor experiences service disruptions.
The long-term nature of the contract may limit flexibility to adopt newer or more cost-effective technologies if they emerge.

Positive Signals

The use of full and open competition suggests a deliberate effort to secure the best value and service.
The firm-fixed-price contract type provides budget certainty and transfers some risk to the contractor.
The contract supports a specific healthcare need within the Indian Health Service, indicating targeted resource allocation.

Sector Analysis

The healthcare IT sector, particularly services related to pharmacy management and data exchange, is a critical component of modern healthcare delivery. This contract falls within the software publishers and IT services sub-sector, which is characterized by continuous innovation and evolving technological solutions. The market for pharmacy benefit management and switching services is competitive, with various companies offering solutions to streamline prescription processing and reduce costs. The total federal spending on IT services is substantial, and contracts like this represent a portion of that investment aimed at improving healthcare efficiency and patient care.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As it was awarded under full and open competition, it is possible that small businesses could have participated if they met the qualifications. However, without further details on the bidding process and any subcontracting plans, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Indian Health Service (IHS), a division of the Department of Health and Human Services (HHS). The IHS is responsible for ensuring that the contractor meets the terms and conditions of the contract, including service delivery and performance standards. The firm-fixed-price nature of the contract provides a degree of financial oversight. Transparency would be enhanced by public reporting of performance metrics and any associated audits or reviews conducted by the HHS Office of Inspector General.

Related Government Programs

Indian Health Service Pharmacy Operations
Healthcare IT Services
Pharmacy Benefit Management Systems
Electronic Health Records Integration
Federal Healthcare Contracts

Risk Flags

Potential for vendor lock-in
Dependence on critical IT infrastructure
Long-term contract duration may limit future flexibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30,000 to CHANGE HEALTHCARE OPERATIONS, LLC. PHARMACY SWITCHING SERIVCES FOR WEWOKA INDIAN HEALTH CLINIC

Who is the contractor on this award?

The obligated recipient is CHANGE HEALTHCARE OPERATIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $30,000.

What is the period of performance?

Start: 2026-09-01. End: 2031-01-12.

What is the track record of Change Healthcare Operations, LLC with the federal government, particularly within the Department of Health and Human Services?

Change Healthcare Operations, LLC, and its predecessors, have a significant history of contracting with various federal agencies, including HHS. They are a major player in healthcare technology and revenue cycle management. Their experience often involves providing solutions for claims processing, payment, and data analytics. While specific performance details for individual contracts are not always publicly detailed, their sustained presence suggests a capacity to meet federal requirements. A deeper dive into contract performance databases and any available CPARS (Contractor Performance Assessment Reporting System) reports would provide more granular insights into their past performance, including any issues or commendations received on similar healthcare IT contracts.

How does the annual cost of this contract compare to similar pharmacy switching services procured by the IHS or other federal healthcare entities?

The annual cost for this contract is approximately $5.66 million ($30 million / 1594 days * 365.25 days/year). Benchmarking this against similar contracts is challenging without access to a comprehensive database of IHS or other federal healthcare pharmacy switching service procurements. Factors influencing cost include the scope of services, the number of users or prescriptions processed, the specific technological capabilities required, and the geographic reach. Generally, larger clinics or systems with higher patient volumes and more complex needs would command higher costs. A comparative analysis would require identifying contracts with similar service descriptions, contract types (firm-fixed-price), and durations within comparable federal healthcare settings.

What are the primary risks associated with relying on a single vendor for pharmacy switching services, and what mitigation strategies are in place?

The primary risks of relying on a single vendor for pharmacy switching services include service disruptions due to technical failures, cyberattacks, or the vendor's financial instability. There's also a risk of vendor lock-in, making it difficult and costly to switch providers if performance degrades or better alternatives emerge. Mitigation strategies often include robust Service Level Agreements (SLAs) with defined performance metrics and penalties for non-compliance, contingency planning for service continuity, and regular performance reviews. The government may also maintain the right to terminate the contract under certain conditions and could explore options for data portability to facilitate a transition if necessary. The specific mitigation strategies within this contract would be detailed in the contract's terms and conditions.

What is the expected impact of these pharmacy switching services on the efficiency and cost-effectiveness of the Wewoka Indian Health Clinic's operations?

Pharmacy switching services are designed to streamline the process of adjudicating prescription claims, verifying insurance eligibility, and facilitating payments between pharmacies, patients, and payers. For the Wewoka Indian Health Clinic, this contract is expected to improve the efficiency of its pharmacy operations by automating these processes, reducing manual intervention, and potentially minimizing claim rejections. This can lead to faster prescription fulfillment, improved patient satisfaction, and reduced administrative overhead. By ensuring accurate and timely processing of claims, the services can also contribute to better financial management and potentially identify cost-saving opportunities through optimized drug purchasing or formulary management, thereby enhancing the overall cost-effectiveness of the clinic's services.

How has federal spending on pharmacy-related IT services, particularly within the IHS, evolved over the past five years?

Federal spending on pharmacy-related IT services, including those within the Indian Health Service (IHS), has generally seen an upward trend over the past five years, driven by the increasing digitization of healthcare and the need for integrated health IT systems. Agencies like HHS, which oversees the IHS, have prioritized investments in solutions that improve patient care, data management, and operational efficiency. This includes spending on electronic health records (EHRs), pharmacy management systems, data analytics, and interoperability solutions. While specific figures for IHS pharmacy IT services require detailed analysis of federal procurement data, the broader trend indicates a growing reliance on technology to manage and deliver healthcare services effectively, especially in areas like prescription management and claims processing.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Travelport Worldwide Limited

Address: 424 CHURCH ST STE 1400, NASHVILLE, TN, 37219

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

Financial Breakdown

Contract Ceiling: $30,000

Exercised Options: $30,000

Current Obligation: $30,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75H71126A00006

IDV Type: BPA

Timeline