DoD awards $9.7M contract for health plan options in Ohio, with potential for significant future growth

Contract Overview

Contract Amount: $9,766,212 ($9.8M)

Contractor: Caresource Military & Veterans CO.

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2026-12-31

Contract Duration: 729 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Healthcare

Official Description: THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5 MA

Place of Performance

Location: DAYTON, MONTGOMERY County, OHIO, 45402

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $9.8 million to CARESOURCE MILITARY & VETERANS CO. for work described as: THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5 MA Key points: 1. Contract aims to provide beneficiaries with enrollment options beyond standard TRICARE. 2. Focus on local, regional, and national health plans suggests a strategic approach to healthcare access. 3. The contract's definitive nature with fixed-price redetermination indicates potential for cost adjustments. 4. Awarded to CareSource Military & Veterans Co., highlighting a specific focus on military and veteran populations. 5. The geographic designation of Ohio suggests a pilot or targeted rollout for this initiative. 6. The contract duration of 729 days allows for a substantial evaluation period.

Value Assessment

Rating: good

The contract value of $9.7 million for a two-year period appears reasonable for establishing and managing health plan options within a specific geographic area. Benchmarking against similar contracts for health insurance administration or managed care services would provide further context. The fixed-price redetermination structure allows for some flexibility while maintaining cost control, suggesting a balanced approach to value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is expected to drive favorable pricing and ensure the selection of a capable contractor. The number of bidders is not specified, but the full and open nature suggests a robust competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, maximizing the value of federal dollars.

Public Impact

Military and veteran beneficiaries in Ohio will gain expanded enrollment options for healthcare. The contract supports the delivery of health insurance and managed care services. The geographic impact is currently focused on Ohio, with potential for broader application. This initiative could influence the healthcare provider network and administrative support for military families.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if beneficiary needs or plan offerings expand beyond initial projections.
Dependence on the performance and network adequacy of the selected health plan(s).
Risk of beneficiary confusion with new enrollment options and plan structures.

Positive Signals

Clear objective to enhance beneficiary healthcare access and choice.
Use of a competitive bidding process to select the most suitable contractor.
Defined contract period allows for performance monitoring and evaluation.

Sector Analysis

This contract falls within the Direct Health and Medical Insurance Carriers sector, specifically focusing on managed care and health plan administration for a government-sponsored population. The market for health insurance carriers is large and highly competitive, with significant government spending in this area, particularly for military and veteran healthcare. This contract represents a specific initiative to diversify enrollment options within the existing Defense Health Agency framework.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. However, the nature of health plan administration often involves large-scale operations that may or may not lend themselves to significant small business participation directly, though they could be involved in supporting roles.

Oversight & Accountability

Oversight will likely be managed by the Defense Health Agency, with contract performance monitored against defined requirements and service level agreements. Transparency will be maintained through standard government contracting reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

TRICARE
Defense Health Agency Programs
Military Health System
Health Insurance Marketplace Programs

Risk Flags

Potential for cost overruns due to fixed-price redetermination.
Dependence on contractor's ability to establish and manage a robust provider network.
Risk of beneficiary dissatisfaction if new options are not well-understood or adequate.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.8 million to CARESOURCE MILITARY & VETERANS CO.. THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5 MA

Who is the contractor on this award?

The obligated recipient is CARESOURCE MILITARY & VETERANS CO..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $9.8 million.

What is the period of performance?

Start: 2025-01-01. End: 2026-12-31.

What is the specific performance history of CareSource Military & Veterans Co. with similar government contracts?

A thorough review of CareSource Military & Veterans Co.'s past performance is crucial. This would involve examining their track record with the Department of Defense, other federal agencies, or state Medicaid programs, particularly those involving managed care for specific populations. Key metrics to assess would include on-time delivery, quality of service, adherence to budget, and any past performance issues or disputes. Understanding their experience with military and veteran populations specifically would be a significant factor in evaluating their suitability for this contract.

How does the awarded price compare to market rates for similar health plan administration services?

Benchmarking the $9.7 million contract value against similar contracts for health plan administration, particularly those serving government beneficiaries or large employer groups, is essential. This comparison should consider the scope of services, geographic coverage, and the specific benefits offered. Factors such as administrative overhead, claims processing efficiency, and network management costs should be analyzed. Without direct comparable data, assessing the precise value-for-money is challenging, but the fixed-price redetermination clause suggests an effort to manage costs while allowing for adjustments based on actual experience.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential beneficiary confusion with new enrollment options, challenges in establishing adequate provider networks within Ohio, and the possibility of cost overruns if initial estimates for service utilization are inaccurate. Mitigation strategies likely involve robust beneficiary education campaigns, proactive engagement with healthcare providers to ensure network adequacy, and careful monitoring of utilization patterns under the fixed-price redetermination structure. The Defense Health Agency's oversight will be critical in identifying and addressing these risks throughout the contract period.

What is the expected impact of this contract on the overall effectiveness of healthcare delivery for beneficiaries in Ohio?

The contract aims to enhance the effectiveness of healthcare delivery by providing beneficiaries with more choices, potentially leading to better alignment of healthcare services with individual needs. Increased competition among health plans could drive service quality improvements and potentially reduce out-of-pocket costs or improve access to specialized care. The success will depend on the chosen health plans' ability to deliver comprehensive, coordinated care and integrate effectively with existing military healthcare resources.

How does current spending on this contract compare to historical spending on similar initiatives?

As this appears to be a new initiative focused on expanding enrollment options in a specific geographic area, direct historical spending comparisons may be limited. However, the $9.7 million for a two-year period can be contextualized by examining the Defense Health Agency's overall budget for managed care support and health plan administration. Analyzing trends in spending for similar pilot programs or expansions of healthcare access within the military health system would provide a broader perspective on the scale and investment strategy.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT940223R0001

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Address: 230 N MAIN ST, DAYTON, OH, 45402

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

Financial Breakdown

Contract Ceiling: $50,371,604

Exercised Options: $11,620,185

Current Obligation: $9,766,212

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline