DoD's $14.2M contract for medical coding services awarded to Decypher Health Services, Inc

Contract Overview

Contract Amount: $14,192,814 ($14.2M)

Contractor: Decypher Health Services, LLC

Awarding Agency: Department of Defense

Start Date: 2025-04-14

End Date: 2026-12-31

Contract Duration: 626 days

Daily Burn Rate: $22.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL CODER III - INPATIENT MEDICAL CODER AND MEDICAL CODER II - AMBULATORY MEDICAL CODER.

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78216

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $14.2 million to DECYPHER HEALTH SERVICES, LLC for work described as: MEDICAL CODER III - INPATIENT MEDICAL CODER AND MEDICAL CODER II - AMBULATORY MEDICAL CODER. Key points: 1. The contract value of $14.2 million over approximately two years suggests a significant need for specialized medical coding expertise within the Defense Health Agency. 2. The award was made under full and open competition, indicating a robust bidding process. 3. The fixed-price contract type aims to control costs and provide predictability for the government. 4. The duration of the contract (626 days) allows for sustained support in medical coding operations. 5. The North American Industry Classification System (NAICS) code 621111 points to a focus on physician office services, specifically coding. 6. The contract's geographic focus is Texas, where the contractor is based.

Value Assessment

Rating: good

The contract value of $14.2 million for approximately two years of medical coding services appears reasonable given the specialized nature of the work. Benchmarking against similar contracts for medical coding support within federal agencies would provide a more precise value-for-money assessment. However, the firm fixed-price structure suggests an effort to manage costs effectively. The number of bidders (9) also indicates a competitive market for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Nine bids were received, suggesting a healthy level of competition for this requirement. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently by driving down prices through market forces. The presence of multiple bidders increases the likelihood of obtaining high-quality services at a competitive rate.

Public Impact

Beneficiaries include military personnel and their families who rely on accurate medical record-keeping for their healthcare. The services delivered are critical for accurate medical billing, claims processing, and maintaining comprehensive health records. The geographic impact is primarily centered around the Defense Health Agency's operations, with a specific contractor base in Texas. The contract supports a specialized workforce of medical coders, contributing to employment in this field.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'medical coder' duties is not strictly adhered to.
Reliance on a single contractor for a critical function like medical coding could pose a risk if performance issues arise.
Ensuring consistent coding accuracy across different medical specialties and providers is a perpetual challenge.

Positive Signals

Award to a specific company (Decypher Health Services, LLC) suggests they met the technical and performance requirements.
The firm fixed-price contract type incentivizes the contractor to perform efficiently and within budget.
The use of full and open competition indicates a proactive approach to sourcing and cost management.

Sector Analysis

The medical coding services sector is a vital component of the healthcare industry, supporting administrative and financial operations. This contract falls within the broader healthcare support services market, which is characterized by a mix of large and small specialized firms. The federal government is a significant consumer of these services to manage the healthcare of its beneficiaries. Comparable spending benchmarks would involve analyzing other federal contracts for similar coding and medical record management services across agencies like the VA and HHS.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. The award to Decypher Health Services, LLC, suggests it is likely a larger entity or that small business participation was not a primary set-aside criterion for this particular procurement. Further analysis would be needed to determine if small businesses are involved in the supply chain or subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Health Agency's contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver services to specification. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Health Agency Medical Coding Services
Federal Healthcare IT Services
Medical Records Management Contracts
Physician Office Support Services

Risk Flags

Potential for coding errors impacting billing and compliance.
Contractor performance risk if service levels are not met.
Reliance on a single vendor for critical function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.2 million to DECYPHER HEALTH SERVICES, LLC. MEDICAL CODER III - INPATIENT MEDICAL CODER AND MEDICAL CODER II - AMBULATORY MEDICAL CODER.

Who is the contractor on this award?

The obligated recipient is DECYPHER HEALTH SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2025-04-14. End: 2026-12-31.

What is the track record of Decypher Health Services, LLC with federal contracts, particularly within the Department of Defense?

A review of federal procurement data indicates that Decypher Health Services, LLC has a history of receiving contracts from various federal agencies, including the Department of Defense. While specific details on past performance metrics for this contractor require deeper investigation into contract performance reports and past performance questionnaires, the award of this $14.2 million contract suggests a demonstrated capability to meet government requirements. Analyzing their award history, contract types, and any reported issues or commendations would provide a clearer picture of their reliability and expertise in delivering services to the federal government, especially within the healthcare sector.

How does the per-unit cost of medical coding services under this contract compare to industry benchmarks or similar federal contracts?

Determining the precise per-unit cost for medical coding services under this contract is challenging without specific line-item details on the number of codes or types of services rendered. The total contract value of $14.2 million over approximately 626 days (about 21 months) provides a broad cost indicator. To benchmark effectively, one would need to compare this against average costs per coded record or per hour of coder time from similar contracts awarded by the Defense Health Agency or other federal entities like the VA or CMS. Industry reports on medical coding service pricing can also offer a comparative perspective, though federal contracts often have unique pricing structures due to competition and regulatory requirements.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential inaccuracies in medical coding, which could lead to billing errors, compliance issues, and delayed payments. Another risk is contractor performance failure, where Decypher Health Services, LLC might not meet service level agreements. Dependence on a single vendor for a critical function also presents a risk. Mitigation strategies likely include robust quality assurance processes by the Defense Health Agency, clear performance metrics and deliverables outlined in the contract, and the firm fixed-price structure which incentivizes contractor performance. Regular performance reviews and defined remedies for non-performance are standard contractual safeguards.

How effective is the firm fixed-price contract type in ensuring value for money for these medical coding services?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and risks of cost overruns are manageable. For medical coding services, where the tasks are relatively standardized, an FFP contract incentivizes the contractor to operate efficiently and control costs to maximize profit. This shifts the cost risk to the contractor. The Defense Health Agency benefits from predictable costs, as the price is set upfront. However, the effectiveness hinges on the accuracy of the initial cost estimate and the clarity of the SOW; if the scope is underestimated or unforeseen complexities arise, the government might not achieve the best value if the contractor is unable to adapt without significant change orders.

What is the historical spending trend for medical coding services by the Department of Defense or the Defense Health Agency?

Analyzing historical spending trends for medical coding services by the Department of Defense (DoD) and specifically the Defense Health Agency (DHA) is crucial for context. While this specific contract is for $14.2 million, understanding the aggregate spending on similar services over the past 5-10 years would reveal patterns of demand, potential increases or decreases in contract values, and the prevalence of different contract types and competition levels. This historical data can help assess whether current spending is consistent with past investments, if there's evidence of cost escalation, and how the DHA has historically approached sourcing these essential support services.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › CERTIFIED MEDICAL SUPPORT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 200 CONCORD PLAZA DRIVE, SAN ANTONIO, TX, 78216

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

Financial Breakdown

Contract Ceiling: $44,267,312

Exercised Options: $14,192,814

Current Obligation: $14,192,814

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT001524D9001

IDV Type: IDC

Timeline