HHS awards $166M for Multi-Payor Claims Database to Optum, impacting healthcare data management

Contract Overview

Contract Amount: $16,636,802 ($16.6M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-09-14

End Date: 2013-09-15

Contract Duration: 1,097 days

Daily Burn Rate: $15.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ARRA::YES::ARRA TAS::75 1701::TAS RECOVERY - MULTI-PAYOR CLAIMS DATABASE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.6 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: ARRA::YES::ARRA TAS::75 1701::TAS RECOVERY - MULTI-PAYOR CLAIMS DATABASE Key points: 1. The contract value of $166.3M for a critical healthcare data system highlights significant investment in this sector. 2. Optum Public Sector Solutions, Inc. secured this award through full and open competition, indicating a competitive bidding process. 3. The contract duration of nearly three years suggests a substantial project with ongoing operational needs. 4. The 'Other Computer Related Services' NAICS code points to a focus on specialized IT services within healthcare.

Value Assessment

Rating: good

The $166.3M award for a multi-payor claims database appears reasonable given the project's scope and duration. Benchmarking against similar large-scale IT projects in healthcare would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors have the opportunity to bid.

Taxpayer Impact: The competitive nature of the award is beneficial for taxpayers, as it likely resulted in a more cost-effective solution for the government.

Public Impact

Improved accuracy and efficiency in processing healthcare claims. Enhanced data analytics capabilities for public health initiatives. Potential for cost savings in healthcare administration through better data management. Impact on patient data privacy and security protocols. Streamlined operations for healthcare providers interacting with the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration may lead to vendor lock-in.
Potential for scope creep in complex IT projects.
Dependence on a single vendor for critical data infrastructure.

Positive Signals

Awarded through full and open competition.
Firm Fixed Price contract type provides cost certainty.
Significant investment in a vital healthcare IT system.

Sector Analysis

This contract falls within the IT sector, specifically serving the healthcare industry. Spending benchmarks for similar large-scale IT projects in healthcare often range from tens to hundreds of millions of dollars, depending on complexity and duration.

Small Business Impact

The data indicates that this contract was not awarded to small businesses (ss: false, sb: false). Further analysis would be needed to determine if small business participation was incorporated through subcontracting.

Oversight & Accountability

The contract was awarded by the Centers for Medicare and Medicaid Services (CMS), a key agency within HHS. Oversight would involve monitoring project milestones, performance, and adherence to contract terms to ensure effective use of funds.

Related Government Programs

Other Computer Related Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Contract duration is substantial.
No small business participation indicated.
Reliance on a single vendor for critical IT infrastructure.
Complexity of integrating multi-payor data.
Potential for vendor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.6 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. ARRA::YES::ARRA TAS::75 1701::TAS RECOVERY - MULTI-PAYOR CLAIMS DATABASE

Who is the contractor on this award?

The obligated recipient is OPTUM PUBLIC SECTOR SOLUTIONS, 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 $16.6 million.

What is the period of performance?

Start: 2010-09-14. End: 2013-09-15.

What is the specific functionality of the Multi-Payor Claims Database and how does it improve upon existing systems?

The Multi-Payor Claims Database is designed to centralize and standardize claims data from various healthcare payers. Its primary function is to improve data accuracy, reduce administrative burdens, and enhance the ability to analyze healthcare trends and costs. This likely leads to more efficient processing, better fraud detection, and improved public health reporting compared to fragmented or legacy systems.

What are the key risks associated with a large, multi-year IT contract like this, and how are they being mitigated?

Key risks include potential cost overruns due to scope creep, technical challenges in integrating diverse data, and vendor performance issues. Mitigation strategies likely involve robust project management, clear performance metrics, phased delivery, and contingency planning. The firm fixed price structure also helps mitigate cost overrun risks for the government, shifting some of that burden to the contractor.

How does this investment in IT infrastructure contribute to the overall mission effectiveness of the Centers for Medicare and Medicaid Services?

This investment directly supports CMS's mission by providing a foundational IT system for managing and analyzing vast amounts of healthcare claims data. Effective claims processing and data analysis are crucial for program integrity, payment accuracy, identifying healthcare waste and abuse, and informing policy decisions. The database enhances CMS's ability to oversee Medicare and Medicaid programs efficiently and effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 800 KING FARM BLVD STE 500, ROCKVILLE, MD, 20850

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,636,802

Exercised Options: $16,636,802

Current Obligation: $16,636,802

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0027W

IDV Type: FSS

Timeline