Medicare fraud prevention site visits cost $27.7M over 9 years, awarded via full competition

Contract Overview

Contract Amount: $27,693,641 ($27.7M)

Contractor: Securitas Critical Infrastructure Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2011-12-19

End Date: 2021-03-23

Contract Duration: 3,382 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICARE PROVIDER/SUPPLIER SITE VISIT VERIFICATION FOR FRAUD PREVENTION

Place of Performance

Location: GREENBELT, PRINCE GEORGES County, MARYLAND, 20770

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.7 million to SECURITAS CRITICAL INFRASTRUCTURE SERVICES, INC. for work described as: MEDICARE PROVIDER/SUPPLIER SITE VISIT VERIFICATION FOR FRAUD PREVENTION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of over 9 years indicates a long-term need for these services. 3. Services provided are critical for fraud prevention within the Medicare program. 4. The firm-fixed-price contract type helps manage cost certainty for the government. 5. The contractor, Securitas, has a significant presence in security and facility services. 6. Awarded as a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or similar vehicle.

Value Assessment

Rating: good

The total award amount of $27.7 million over approximately 9 years averages to about $3 million per year. Benchmarking this against similar contracts for site visit verification and fraud prevention is challenging without more specific data on the scope and volume of visits. However, given the critical nature of fraud prevention for a program like Medicare, the investment appears reasonable if it yields significant returns in fraud reduction. The firm-fixed-price structure provides cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a healthy level of competition for this service. A competitive process generally leads to better pricing and service quality as contractors vie for the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures the government receives the best value for its investment in fraud prevention services.

Public Impact

Beneficiaries of this contract include Medicare beneficiaries who are protected from fraudulent billing practices. The services delivered are crucial for maintaining the integrity and financial stability of the Medicare program. The geographic impact is primarily within Maryland, where the contractor's facility is located, but the services support national Medicare operations. Workforce implications include employment opportunities for personnel conducting site visits and administrative support for Securitas Critical Infrastructure Services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to complacency or reduced innovation if not actively managed.
Reliance on a single contractor for an extended period might limit flexibility in adapting to new fraud detection methods.
Effectiveness of site visits in preventing fraud requires ongoing evaluation and clear performance metrics.

Positive Signals

Award through full and open competition suggests a competitive selection process.
Firm-fixed-price contract provides cost certainty for the government.
The service directly addresses a critical government need: fraud prevention in Medicare.

Sector Analysis

The healthcare services sector, particularly within government contracting, is highly regulated and focused on program integrity. This contract falls under consulting services related to human resources and administrative functions, specifically supporting the Centers for Medicare and Medicaid Services (CMS) in their fraud prevention efforts. The market for such services involves companies specializing in compliance, investigation, and site verification. Comparable spending benchmarks are difficult to establish without detailed service scope, but CMS annually spends billions on program integrity efforts.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses based on the provided details. The primary contractor, Securitas Critical Infrastructure Services, Inc., is a large corporation. Therefore, the direct impact on the small business ecosystem for this specific award is likely minimal, though large prime contractors often engage small businesses for various support roles not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Performance would be monitored against the terms of the delivery order, including the scope of site visits and reporting requirements. Transparency is generally maintained through contract award databases like FPDS. Inspector General oversight from HHS would also be relevant, particularly concerning fraud prevention and program integrity.

Related Government Programs

Medicare Fraud Strike Force
Program Integrity - CMS
Provider Enrollment and Oversight
Healthcare Fraud Prevention Partnership

Risk Flags

Long contract duration
Potential for performance variability
Effectiveness measurement challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.7 million to SECURITAS CRITICAL INFRASTRUCTURE SERVICES, INC.. MEDICARE PROVIDER/SUPPLIER SITE VISIT VERIFICATION FOR FRAUD PREVENTION

Who is the contractor on this award?

The obligated recipient is SECURITAS CRITICAL INFRASTRUCTURE 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 $27.7 million.

What is the period of performance?

Start: 2011-12-19. End: 2021-03-23.

What is the track record of Securitas Critical Infrastructure Services, Inc. with federal contracts, particularly in healthcare or fraud prevention?

Securitas Critical Infrastructure Services, Inc. has a substantial history of federal contracting across various agencies, primarily in security, facility management, and logistics. While their core business often involves physical security and site management, they have also been awarded contracts related to operational support and compliance verification. Specific experience directly in Medicare fraud prevention site visits may be less common than their broader security services, but their capacity to manage large-scale field operations and personnel is well-established. Reviewing their contract history reveals numerous awards, indicating a proven ability to manage government contracts, though the nature of this specific service requires specialized knowledge in healthcare regulations and fraud indicators.

How does the cost per year for this contract compare to similar fraud prevention or site verification services?

The average annual cost for this contract is approximately $3 million ($27.7 million / ~9 years). Benchmarking this figure precisely is difficult without detailed information on the number of site visits conducted, the complexity of each visit, and the specific geographic coverage. However, fraud prevention is a high-priority, resource-intensive activity for CMS. If these site visits effectively deter or detect significant fraud, the cost could represent a substantial return on investment by saving billions in potential losses. Compared to other large-scale government support contracts, the annual cost is moderate, but its effectiveness hinges on the quality and impact of the verification activities performed.

What are the primary risks associated with this type of contract and the services provided?

Key risks include the effectiveness of the site visits in actually preventing or detecting fraud, potential for contractor performance issues (e.g., missed visits, inaccurate reporting), and the possibility of data breaches or security lapses if sensitive provider information is handled. There's also a risk that the scope of work may not adequately adapt to evolving fraud schemes. Ensuring consistent quality across numerous site visits conducted by potentially diverse personnel is another challenge. The long duration also poses a risk of vendor lock-in or reduced incentive for continuous improvement if not managed proactively.

How effective have these site visits been in contributing to Medicare fraud prevention efforts?

The effectiveness of these site visits is not explicitly detailed in the provided data. However, CMS's continued investment in such activities suggests they are considered a valuable component of their broader program integrity strategy. Site visits can serve as a deterrent, verify provider compliance with enrollment requirements, and identify potential red flags for further investigation. The ultimate measure of effectiveness would be the reduction in fraudulent claims and payments attributable to these verification activities, which typically requires detailed analysis by CMS program evaluators and potentially the HHS Office of Inspector General.

What is the historical spending trend for Medicare provider site visit verification over the past decade?

Historical spending data for this specific contract shows a total award of $27.7 million from late 2011 to early 2021. To understand the broader trend, one would need to examine spending on similar contracts or task orders over the past decade. CMS has consistently allocated significant resources to program integrity, including provider oversight and site visits, recognizing the immense financial stakes involved in Medicare fraud. Spending in this area can fluctuate based on legislative priorities, identified fraud risks, and the availability of contracting vehicles. This contract represents a consistent, long-term investment in that area.

Were there any performance issues or disputes reported for this contract during its period of performance?

The provided summary data does not include information on performance issues, disputes, or contract modifications. Typically, such details would be available in more comprehensive contract databases or agency performance reports. Without this information, it's assumed the contract was performed satisfactorily to completion, given its duration and finalization. Further investigation into contract performance records would be necessary to ascertain any specific issues encountered during its execution.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Human Resources Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Securitas AB

Address: 13900 LINCOLN PARK DR STE 370, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $27,693,641

Exercised Options: $27,693,641

Current Obligation: $27,693,641

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS15F0059M

IDV Type: FSS

Timeline