CMS spent $28.8M on Medicare integrity audits, with Qlarant Integrity Solutions LLC managing the contract

Contract Overview

Contract Amount: $28,790,113 ($28.8M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2009-09-04

End Date: 2016-03-28

Contract Duration: 2,397 days

Daily Burn Rate: $12.0K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: MEDICARE INDEGRITY AUDIT CONTRACT

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $28.8 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: MEDICARE INDEGRITY AUDIT CONTRACT Key points: 1. The contract focused on administrative and management consulting services to enhance Medicare's integrity. 2. A significant portion of the spending was allocated to audit and investigative activities. 3. The contract duration spanned nearly 7 years, indicating a long-term need for these services. 4. The services provided were crucial for identifying and preventing improper payments within Medicare. 5. The competitive nature of the award suggests potential for cost savings and robust service delivery.

Value Assessment

Rating: good

The total award of $28.8 million over approximately 7 years for Medicare integrity audits appears reasonable given the critical nature of the services. Benchmarking against similar large-scale audit and integrity contracts is challenging without more specific service details, but the consistent funding suggests sustained value. The cost-plus-fixed-fee structure incentivizes the contractor to manage costs while ensuring a defined profit margin, which is typical for complex service contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple bidders likely vied for this work. The full and open competition suggests that the Centers for Medicare and Medicaid Services (CMS) sought the best value and pricing available in the market. The presence of multiple bidders generally leads to more competitive pricing and a wider range of innovative solutions.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it drives down costs and ensures that the government receives high-quality services at a fair price, maximizing the return on investment for public funds.

Public Impact

Beneficiaries of Medicare integrity audits include all taxpayers who fund the program and patients who rely on accurate and efficient healthcare services. The services delivered involved auditing, investigative activities, and data analysis to detect and prevent fraud, waste, and abuse within the Medicare program. The geographic impact is national, as Medicare operates across the United States. The contract supported a workforce of auditors, investigators, and administrative staff, contributing to employment in the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not closely monitored.
Scope creep could increase costs beyond initial estimates without proper change control.
Reliance on a single contractor for an extended period may limit flexibility.
Effectiveness of audits depends heavily on the quality of data provided and the sophistication of analytical tools used.

Positive Signals

Competitive award process likely ensured fair pricing and quality.
Long contract duration suggests successful performance and sustained need.
Focus on Medicare integrity directly addresses a critical government function.
The contract type (cost-plus-fixed-fee) provides a balance between contractor incentive and government oversight.

Sector Analysis

The federal government's spending on administrative management and general management consulting services, particularly for critical functions like healthcare program integrity, is substantial. This contract falls within a sector focused on professional services that support government operations. Comparable spending benchmarks would typically involve analyzing other large contracts for audit, investigation, and program integrity services across various federal agencies, often within the healthcare and financial sectors.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. However, given the nature and scale of this contract, it is possible that larger prime contractors may have utilized small businesses for specialized support services, though this cannot be confirmed without further details.

Oversight & Accountability

Oversight for this contract would have been managed by the Centers for Medicare and Medicaid Services (CMS). As a cost-plus-fixed-fee contract, CMS would have closely monitored the contractor's costs, performance, and adherence to the contract's scope. Regular reporting, audits, and performance reviews are standard oversight mechanisms for such agreements to ensure accountability and transparency.

Related Government Programs

Medicare Fraud Strike Force
Program Integrity Management
Healthcare Fraud Prevention Partnership
Centers for Medicare and Medicaid Services Audits

Risk Flags

Long contract duration may lead to potential for service stagnation.
Cost-plus contract type requires diligent oversight to manage costs effectively.
Effectiveness is dependent on data quality and analytical capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $28.8 million to QLARANT INTEGRITY SOLUTIONS LLC. MEDICARE INDEGRITY AUDIT CONTRACT

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 $28.8 million.

What is the period of performance?

Start: 2009-09-04. End: 2016-03-28.

What was the primary objective of the Medicare Integrity Audit Contract awarded to Qlarant Integrity Solutions LLC?

The primary objective of this contract was to enhance the integrity of the Medicare program by conducting audits, investigations, and data analysis to detect, prevent, and mitigate fraud, waste, and abuse. This involved reviewing provider claims, identifying improper payments, and recommending corrective actions to safeguard program funds and ensure the efficient delivery of healthcare services to beneficiaries. The contract aimed to protect the financial stability of Medicare and maintain public trust in the program.

How did the cost-plus-fixed-fee (CPFF) contract structure influence Qlarant Integrity Solutions LLC's performance?

The Cost-Plus-Fixed-Fee (CPFF) structure provided Qlarant Integrity Solutions LLC with reimbursement for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost of performance. However, it also requires robust government oversight to ensure that costs are reasonable and allocable to the contract. For Qlarant, this meant balancing efficient service delivery with diligent cost management to maximize their profit within the fixed fee.

What are the potential risks associated with a nearly 7-year contract for Medicare integrity audits?

A long-duration contract like this, spanning approximately 7 years (2397 days), carries several potential risks. These include the risk of contractor complacency or a decline in service quality over time if not actively managed. There's also the risk of technological or procedural obsolescence, where the contractor's methods might not keep pace with evolving fraud schemes or audit technologies. Furthermore, a prolonged engagement can reduce flexibility for the government to adapt to changing program needs or to bring in new approaches from different vendors. Finally, the government remains dependent on the contractor's expertise and performance for an extended period.

How does this contract contribute to the overall mission of the Centers for Medicare and Medicaid Services (CMS)?

This contract is directly aligned with CMS's core mission of protecting the health of Medicare beneficiaries and ensuring the efficient and effective administration of the program. By focusing on program integrity, the contract helps CMS combat fraud, waste, and abuse, which are critical threats to the financial sustainability of Medicare. Successful execution of audit and investigative functions safeguards taxpayer dollars and ensures that funds are used appropriately for patient care, thereby upholding CMS's responsibility to provide quality healthcare services.

Can the value of this contract be benchmarked against other federal integrity audit contracts?

Benchmarking the value of this $28.8 million Medicare Integrity Audit Contract requires careful consideration of several factors. While the total dollar amount and duration provide a scale, the specific scope of work, the complexity of the audits performed, the geographic reach, and the types of fraud targeted are crucial for a meaningful comparison. Contracts for similar integrity functions within other large federal programs (e.g., Medicaid, Social Security) or even within different branches of Medicare could serve as benchmarks. However, direct comparisons are often difficult due to variations in service requirements, performance metrics, and market conditions at the time of award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Qlarant Inc (UEI: 926745808)

Address: 9240 CENTERVILLE RD, EASTON, MD, 21601

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $28,790,113

Exercised Options: $28,790,113

Current Obligation: $28,790,113

Parent Contract

Parent Award PIID: HHSM500200800002I

IDV Type: IDC

Timeline