HHS awarded $13.5M for Medicare appeals, with MAXIMUS FEDERAL SERVICES, INC. as the contractor

Contract Overview

Contract Amount: $13,545,429 ($13.5M)

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: $11.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

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 $13.5 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 as a competitive delivery order, suggesting a degree of market engagement. 2. The duration of the contract (over 3 years) indicates a significant, ongoing need for these services. 3. The fixed-fee pricing structure can provide cost certainty for the government, but requires careful scope management. 4. The services provided fall under administrative management consulting, a common area for federal contracting. 5. The contract's value, while substantial, needs to be benchmarked against similar appeals process contracts. 6. The absence of small business set-aside flags warrants review of subcontracting opportunities.

Value Assessment

Rating: fair

The contract value of $13.5 million over approximately three years for Medicare appeals services appears reasonable for the scope. Benchmarking against similar contracts for administrative support and appeals processing within HHS or other agencies would provide a clearer picture of value for money. The cost-plus-fixed-fee structure necessitates careful oversight to ensure efficient resource utilization and prevent cost overruns, though it offers some price predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had an opportunity to bid. The presence of 5 offers suggests a moderately competitive environment. While competitive, the specific details of the competition, such as the number of bidders and the evaluation criteria, are crucial to fully assess its effectiveness in driving down costs and ensuring the best value.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering price discovery and encouraging contractors to offer competitive terms. This approach helps ensure that federal funds are used efficiently.

Public Impact

Beneficiaries of Medicare who are appealing coverage or payment decisions. Ensures the integrity and efficiency of the Medicare appeals process. Services are likely delivered nationwide, impacting Medicare beneficiaries across the United States. Supports a workforce involved in administrative management and consulting services within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in cost-plus-fixed-fee contracts if not tightly managed.
Ensuring consistent quality of service delivery across a multi-year contract.
Dependence on a single contractor for a critical function like appeals processing.

Positive Signals

Awarded through a competitive process, indicating potential for good value.
Long-term contract suggests a stable and reliable service provider.
Fixed-fee component offers some cost predictability for the government.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, a broad category encompassing a wide range of support functions for government agencies. The market for these services is large and competitive, with numerous firms capable of providing such expertise. This specific contract addresses a critical operational need for CMS, focusing on the complex and regulated area of Medicare appeals.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While MAXIMUS FEDERAL SERVICES, INC. is a large business, further investigation into subcontracting plans would be necessary to determine the extent to which small businesses may participate in fulfilling this contract's requirements. The absence of a set-aside does not preclude small business involvement, but it means proactive subcontracting outreach is essential.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The fixed-fee nature of the contract requires diligent monitoring of performance against defined milestones and deliverables. Transparency would be enhanced through regular reporting requirements and potentially through public access to contract performance data, subject to confidentiality restrictions.

Related Government Programs

Medicare Administrative Contractor (MAC) services
Healthcare claims processing
Federal contract appeals processes
Administrative support services for federal agencies

Risk Flags

Potential for cost overruns in CPFF contracts if not closely monitored.
Contractor performance risk associated with large-scale administrative processing.
Dependency on a single contractor for a critical government function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.5 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 $13.5 million.

What is the period of performance?

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

What is the historical spending trend for Medicare appeals processing services by CMS?

Analyzing historical spending on Medicare appeals processing is crucial for understanding the long-term financial commitment and identifying any significant fluctuations or trends. While this specific contract represents $13.5 million over approximately three years, a broader analysis would involve examining CMS's total expenditure on appeals services over the past 5-10 years. This would include spending on similar contracts, in-house operations, and potentially other related support functions. Such a trend analysis can reveal whether spending is increasing, decreasing, or remaining stable, and whether this is driven by changes in appeal volume, regulatory requirements, or contractor pricing. It also helps in contextualizing the current contract's value within the agency's overall budget for this function and identifying potential areas for cost savings or efficiency improvements in future procurements.

How does the pricing structure (Cost Plus Fixed Fee) compare to other Medicare appeals contracts?

The Cost Plus Fixed Fee (CPFF) pricing structure for this $13.5 million Medicare appeals contract means the government reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is well-defined but there's some uncertainty in the cost estimation. To assess its value, CPFF contracts should be compared to similar contracts using different pricing models, such as Firm-Fixed-Price (FFP) or Time and Materials (T&M), if applicable to the scope. For Medicare appeals, FFP might be preferred if the volume and complexity are highly predictable, potentially offering greater cost certainty to the government. However, CPFF can be advantageous if it incentivizes the contractor to control costs while allowing for flexibility. Benchmarking the fixed fee percentage against industry standards for similar services and comparing the total contract cost to historical data for comparable appeals processing work is essential for evaluating its competitiveness and fairness.

What is MAXIMUS FEDERAL SERVICES, INC.'s track record with similar government contracts, particularly within HHS?

MAXIMUS FEDERAL SERVICES, INC. has a significant history of contracting with federal agencies, including extensive work with the Department of Health and Human Services (HHS) and its sub-agencies like the Centers for Medicare and Medicaid Services (CMS). Their portfolio often includes large-scale health and human services programs, such as eligibility determination, call center operations, and health information technology. Evaluating their track record for similar contracts involves reviewing past performance evaluations, any documented instances of contract disputes or awards, and their success in meeting performance metrics on previous agreements. Specifically for appeals processing, understanding their experience in managing high volumes, adhering to strict regulatory timelines, and maintaining data security and accuracy is critical. A review of their performance on prior CMS contracts, especially those involving complex administrative processes, would provide strong indicators of their capability and reliability for this current delivery order.

What are the key performance indicators (KPIs) for this contract, and how is performance measured?

While the provided data does not detail the specific Key Performance Indicators (KPIs) for this contract, typical metrics for Medicare appeals processing would likely include timeliness of decisions, accuracy rates, cost per appeal processed, beneficiary satisfaction (if applicable), and adherence to regulatory requirements. Performance measurement for a Cost Plus Fixed Fee contract involves rigorous oversight by the Contracting Officer's Representative (COR) and the contracting office. This usually entails regular progress reports from the contractor detailing work completed, costs incurred, and performance against established KPIs. Audits, quality reviews, and potentially site visits may also be employed. The fixed fee is typically earned upon successful completion of contract milestones and achievement of performance standards, with potential for incentive fees or penalties depending on the contract's specific terms and conditions.

What is the potential impact of this contract on the overall efficiency and fairness of the Medicare appeals system?

This contract plays a direct role in the operational efficiency and perceived fairness of the Medicare appeals system. By outsourcing a portion of the appeals processing to MAXIMUS FEDERAL SERVICES, INC., CMS aims to manage workload, potentially reduce backlogs, and ensure timely adjudication of beneficiary appeals. The efficiency of the contractor's operations, their adherence to procedural rules, and the quality of their decision-making directly impact beneficiaries' ability to resolve coverage disputes effectively. If the contractor performs well, it can lead to faster resolution times and a more streamlined experience for appellants. Conversely, any performance issues, such as delays or errors in processing, could negatively affect beneficiaries and potentially lead to increased litigation or further appeals. The fairness aspect hinges on the contractor's impartial application of regulations and policies in reviewing appeals.

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: 5

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: $13,545,429

Exercised Options: $13,545,429

Current Obligation: $13,545,429

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200400007I

IDV Type: IDC

Timeline