Medicare FFS Improper Payment Rate: $206.7M Contract Awarded to EMPOWER AI, Inc

Contract Overview

Contract Amount: $206,694,861 ($206.7M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2016-08-17

End Date: 2026-08-15

Contract Duration: 3,650 days

Daily Burn Rate: $56.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF THE CERT PROGRAM CALCULATES BI-ANNUAL IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PROSPECTIVE PAYMENT SYSTEM (PPS); PART A EXCLUDING INPATIENT HOSPITAL PPS; PART B; AND DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS)]. THE CERT PROGRAM ENSURES A STATISTICALLY VALID RANDOM SAMPLE; THEREFORE, THE IMPROPER PAYMENT RATE CALCULATED FROM THIS SAMPLE IS CONSIDERED TO BE REFLECTIVE OF ALL OF CLAIMS PROCESSED BY MEDICARE FFS PROGRAM DURING THE REPORT PERIOD. CMS ALSO USES THE CERT PROGRAM TO PERFORM SPECIAL STUDIES AND SUPPLEMENTAL MEASUREMENTS TO DETERMINE THE IMPROPER PAYMENT RATES OF PARTICULAR CLAIM TYPES. CALCULATIONS OF THESE RATES FACILITATE CMS ABILITY TO TAKE APPROPRIATE CORRECTIVE ACTIONS TO REDUCE IMPROPER PAYMENTS.

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $206.7 million to EMPOWER AI, INC. for work described as: IGF::OT::IGF THE CERT PROGRAM CALCULATES BI-ANNUAL IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PROSPECTIV… Key points: 1. Contract focuses on calculating bi-annual improper payment rates for Medicare FFS. 2. EMPOWER AI, Inc. holds this contract, awarded under full and open competition. 3. The contract aims to ensure accurate payment rates reflective of all processed claims. 4. Potential risks include the accuracy of sampling methods and data analysis.

Value Assessment

Rating: good

The contract value of $206.7 million over 10 years suggests a significant investment in payment integrity. Benchmarking is difficult without specific service details, but the scale indicates a substantial program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, allowing for a broad range of potential bidders. This method is expected to drive competitive pricing and ensure the government receives the best value.

Taxpayer Impact: By identifying and reducing improper payments, this contract aims to protect taxpayer funds and ensure the integrity of the Medicare program.

Public Impact

Ensures accurate financial oversight of the Medicare program. Aims to reduce waste and fraud within federal healthcare spending. Supports the financial stability of Medicare for beneficiaries. Provides critical data for policy adjustments and program improvements. Impacts millions of Medicare beneficiaries and taxpayers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on statistical sampling for accuracy.
Potential for evolving healthcare fraud schemes.
Complexity of Medicare's vast claims data.

Positive Signals

Strong emphasis on payment integrity.
Utilizes a competitive bidding process.
Long-term contract duration allows for sustained focus.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically focused on healthcare program integrity. Spending in this area is critical for government efficiency and accountability.

Small Business Impact

The data indicates this contract was awarded through full and open competition, which typically favors larger prime contractors. There is no explicit information provided regarding small business participation or subcontracting goals.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. The CERT program's methodology is designed to provide statistically valid results, subject to ongoing review and validation.

Related Government Programs

Administrative Management and General Management Consulting Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for sampling error impacting rate accuracy.
Complexity of Medicare claims processing.
Need for continuous adaptation to new fraud schemes.
Dependence on accurate data from providers.
Ensuring the statistical validity of the sample over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $206.7 million to EMPOWER AI, INC.. IGF::OT::IGF THE CERT PROGRAM CALCULATES BI-ANNUAL IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PROSPECTIVE PAYMENT SYSTEM (PPS); PART A EXCLUDING INPATIENT HOSPITAL PPS; PART B; AND DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS)]. THE CERT PROGRAM ENSURES A STATISTICALLY VALID RANDOM SAMPLE; THERE

Who is the contractor on this award?

The obligated recipient is EMPOWER AI, 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 $206.7 million.

What is the period of performance?

Start: 2016-08-17. End: 2026-08-15.

How does the CERT program ensure the statistical validity of its random sample to accurately reflect overall improper payment rates?

The CERT program employs rigorous statistical methodologies to select a random sample of Medicare claims. This process includes defining the universe of claims, calculating sample sizes based on desired confidence levels and margins of error, and using random number generation to ensure unbiased selection. The results are then extrapolated to estimate the overall improper payment rate, with confidence intervals provided to indicate the precision of the estimate.

What are the primary risks associated with calculating improper payment rates, and how are they mitigated?

Key risks include sampling error, data integrity issues, and the evolving nature of improper payment schemes. Mitigation strategies involve using statistically sound sampling techniques, implementing robust data validation processes, conducting regular reviews of the methodology, and adapting the review criteria to address emerging trends in fraud and abuse.

How effectively does the CERT program contribute to reducing actual improper payments beyond just measuring them?

The CERT program's primary function is measurement and identification. While it doesn't directly reduce payments, the data it generates informs CMS policy, provider education, and targeted enforcement actions. By highlighting areas of high improper payments, it enables CMS to implement corrective measures and improve program controls, indirectly leading to payment reductions.

Industry Classification

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

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FCO00CORP0000C

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11730 PLAZA AMERICA DR, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $230,202,371

Exercised Options: $206,694,861

Current Obligation: $206,694,861

Actual Outlays: $99,694,657

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $7,718,343

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F263CA

IDV Type: FSS

Timeline