HHS awarded $14.8M for Medicare appeals services, with 6 bidders competing

Contract Overview

Contract Amount: $14,789,247 ($14.8M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-29

End Date: 2008-12-31

Contract Duration: 1,189 days

Daily Burn Rate: $12.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: TAS::75 0511::TAS MEDICARE 2ND LEVEL OF APPEALS

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $14.8 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: TAS::75 0511::TAS MEDICARE 2ND LEVEL OF APPEALS Key points: 1. The contract was awarded on a competitive basis, suggesting potential for good value. 2. The fixed-fee structure provides some cost control, but the 'cost plus' element warrants scrutiny. 3. The duration of the contract (over 3 years) indicates a significant, ongoing need for these services. 4. The services provided are critical to the functioning of the Medicare appeals process. 5. The contractor has a history of performing government contracts, which can be a positive indicator. 6. The contract's value is moderate within the context of large federal IT and administrative services.

Value Assessment

Rating: good

The contract's value of approximately $14.8 million over three years for Medicare appeals services appears reasonable given the complexity and criticality of the function. Benchmarking against similar administrative support contracts for large federal programs suggests that this pricing is within an expected range. The fixed-fee component, while subject to cost-plus adjustments, provides a degree of predictability. However, a detailed cost breakdown would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a competitive delivery order process, indicating that multiple vendors had the opportunity to bid. With six bidders participating, the level of competition appears robust. This suggests that the agency sought multiple proposals and evaluated them to determine the best value, which typically leads to more favorable pricing and service terms for the government compared to sole-source or limited competition awards.

Taxpayer Impact: The strong competition for this contract likely resulted in a more cost-effective outcome for taxpayers, as vendors competed to offer the best price and performance.

Public Impact

Beneficiaries of the Medicare program who are undergoing the second level of appeals. Ensures the fair and timely processing of Medicare appeals, upholding beneficiary rights. Services are primarily delivered within the United States, supporting federal administrative functions. The contract supports administrative roles, potentially impacting a specialized workforce in claims processing and appeals management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the 'cost plus' component of the contract.
Ensuring consistent service quality across the contract duration and potential changes in personnel.
Monitoring contractor performance to ensure adherence to strict timelines and regulatory requirements.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
The contractor has a history of performing similar government services.
The fixed-fee element provides a baseline for cost control.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically supporting healthcare administration. The federal government is a significant consumer of such services, particularly within agencies like HHS, to manage complex programs like Medicare. Comparable spending in this sector often involves large IT systems, data analytics, and program support, with values ranging from millions to billions depending on scope and duration.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a competitive delivery order, it's possible that small businesses could have participated if they were part of a larger prime contractor's team or if they were prime contractors on a relevant GSA Schedule or IDIQ vehicle. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS), a division of HHS. Mechanisms likely include regular performance reviews, contract management oversight, and potentially audits by the HHS Office of Inspector General (OIG) to ensure compliance with terms, cost controls, and service delivery standards. Transparency is facilitated through contract award databases and reporting requirements.

Related Government Programs

Medicare Appeals Process
Administrative Support Services
Healthcare Program Management
Federal Claims Processing
HHS Contracts

Risk Flags

Cost Plus contract type requires careful monitoring of expenditures.
Potential for scope creep if not clearly defined.
Contractor performance variability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $14.8 million to MAXIMUS FEDERAL SERVICES, INC.. TAS::75 0511::TAS MEDICARE 2ND LEVEL OF APPEALS

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL 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 $14.8 million.

What is the period of performance?

Start: 2005-09-29. End: 2008-12-31.

What is the track record of MAXIMUS FEDERAL SERVICES, INC. in performing similar government contracts, particularly within the healthcare sector?

MAXIMUS FEDERAL SERVICES, INC. has a substantial track record of performing government contracts, particularly within the healthcare and human services sectors. They are a well-established contractor for agencies like HHS, CMS, and state governments, often handling large-scale programs related to health insurance, Medicaid, Medicare, and child support enforcement. Their experience includes managing complex administrative processes, IT systems, and customer service operations. This specific contract for Medicare appeals aligns with their core competencies. While generally viewed as an experienced provider, performance can vary across individual contracts, and a review of past performance evaluations and any documented issues would provide a more granular understanding of their reliability for this specific type of service.

How does the awarded amount of $14.8 million compare to similar Medicare appeals or administrative support contracts?

The $14.8 million awarded for approximately three years of Medicare second-level appeals services appears to be within a reasonable range for such specialized administrative functions within the federal government. Large federal agencies like CMS often award contracts in the millions for program support. To provide a precise benchmark, one would need to compare it against contracts with similar scopes of work, durations, and complexity, considering factors like the number of appeals processed annually and the specific services required (e.g., data analysis, legal review, customer interaction). However, given the critical nature and regulatory oversight of Medicare, this figure does not immediately suggest overpricing without further detailed comparison.

What are the primary risks associated with this 'Cost Plus Fixed Fee' contract type for Medicare appeals services?

The 'Cost Plus Fixed Fee' (CPFF) contract type presents a mixed risk profile. The 'fixed fee' component provides the contractor with a predetermined profit margin, incentivizing them to complete the work efficiently. However, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred in performing the work. The primary risk here is that the contractor's costs could exceed initial estimates, potentially leading to higher overall spending than anticipated if cost controls are not robust. The government bears the risk of cost overruns, while the contractor is incentivized to control costs to maximize their fee relative to the fixed fee. Effective oversight is crucial to scrutinize allowable costs and prevent unnecessary expenditures.

What is the expected effectiveness of MAXIMUS FEDERAL SERVICES, INC. in managing the Medicare appeals process based on their contract?

Based on MAXIMUS FEDERAL SERVICES, INC.'s established presence and experience in managing large government health and human services programs, their effectiveness in managing the Medicare appeals process is likely to be high, provided adequate oversight and performance management. Their expertise typically includes navigating complex regulatory environments, managing large volumes of data and cases, and ensuring compliance. The contract's focus on the second level of appeals suggests a need for specialized knowledge in Medicare regulations and administrative law. Success will depend on their ability to maintain service quality, adhere to processing timelines, and adapt to any changes in Medicare policy or procedures throughout the contract period.

How has federal spending on administrative management and general management consulting services, particularly for healthcare, evolved over time?

Federal spending on administrative management and general management consulting services, especially within the healthcare sector, has seen a consistent increase over the past two decades. This trend is driven by the growing complexity of federal healthcare programs like Medicare and Medicaid, the need for specialized expertise in areas such as IT modernization, data analytics, regulatory compliance, and program efficiency. Agencies like HHS continually seek external support to manage these vast and intricate systems. Spending fluctuates based on legislative changes, program expansions or contractions, and the government's internal capacity. The push for value-based care, healthcare reform, and improved beneficiary services further fuels the demand for consulting and administrative support services.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: RFPQIC04001

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Inc (UEI: 082347477)

Address: 11419 SUNSET HILLS ROAD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $14,789,247

Exercised Options: $14,789,247

Current Obligation: $14,789,247

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200400007I

IDV Type: IDC

Timeline