VA's $24M medical coding contract awarded to Healthcare Resolution Services, Inc. shows fair value with moderate competition

Contract Overview

Contract Amount: $24,011,143 ($24.0M)

Contractor: Healthcare Resolution Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2004-10-19

End Date: 2009-07-28

Contract Duration: 1,743 days

Daily Burn Rate: $13.8K/day

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL CODING

Place of Performance

Location: LAUREL, PRINCE GEORGES County, MARYLAND, 20707

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $24.0 million to HEALTHCARE RESOLUTION SERVICES, INC. for work described as: MEDICAL CODING Key points: 1. The contract's value appears reasonable when benchmarked against similar services, suggesting a fair price was negotiated. 2. Moderate competition was present, indicating a balance between attracting bidders and potentially limiting aggressive price reductions. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of nearly five years provides stability for essential medical coding services. 5. This contract falls within the administrative and management consulting services sector, supporting healthcare operations.

Value Assessment

Rating: fair

The contract's total value of approximately $24 million over its period of performance suggests a reasonable annual spend for medical coding services. Benchmarking against similar contracts for administrative and management consulting in the healthcare sector indicates that the pricing was likely within market norms. The fixed-price nature of the contract further supports a fair assessment, as it shifts cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded via a delivery order, suggesting it was likely competed among pre-qualified vendors or through a limited solicitation process. With seven bidders identified, there was a degree of competition, but it may not represent full and open competition. This level of competition can lead to a balance between vendor interest and potentially less downward pressure on pricing compared to a broader solicitation.

Taxpayer Impact: The limited competition means taxpayers may not have benefited from the absolute lowest possible price that could have been achieved through a wider bidding process.

Public Impact

Veterans Affairs (VA) benefits from accurate and efficient medical coding, crucial for proper billing and healthcare record management. Essential medical coding services are delivered, ensuring the integrity of patient data and administrative processes within the VA. The contract's impact is primarily within the federal healthcare administration sector, supporting the VA's operational efficiency. Workforce implications include the need for skilled medical coders, potentially sourced by the contractor, impacting the specialized healthcare administrative workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited price discovery due to less than full and open competition.
Reliance on a single contractor for a critical administrative function could pose a risk if performance falters.

Positive Signals

Fixed-price contract type limits the government's exposure to cost increases.
A defined period of performance provides predictability for service delivery.
Multiple bidders indicate some level of market interest and potential for vendor accountability.

Sector Analysis

This contract operates within the broader professional, scientific, and technical services sector, specifically focusing on administrative management and general management consulting. The market for medical coding services is substantial, driven by the complexity of healthcare regulations and billing requirements. The VA's spending in this area is consistent with the needs of large federal healthcare providers. Comparable spending benchmarks would typically be found within other large government health agencies or private healthcare systems requiring similar coding support.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, and the contractor, Healthcare Resolution Services, Inc., is not explicitly identified as a small business in this context. Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The focus appears to be on securing specialized services from established providers.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are embedded in the fixed-price contract terms, requiring the contractor to deliver services as specified. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics may not always be publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Electronic Health Record Modernization
Federal Healthcare IT Services
Medical Billing and Coding Services
Administrative Support Services Contracts

Risk Flags

Moderate competition may limit price optimization.
Contractor performance history requires further review for comprehensive risk assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $24.0 million to HEALTHCARE RESOLUTION SERVICES, INC.. MEDICAL CODING

Who is the contractor on this award?

The obligated recipient is HEALTHCARE RESOLUTION SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2004-10-19. End: 2009-07-28.

What is the track record of Healthcare Resolution Services, Inc. with federal contracts, particularly with the VA?

Healthcare Resolution Services, Inc. has a history of receiving federal contracts, primarily with the Department of Veterans Affairs. This specific contract, valued at over $24 million, represents a significant award. Analyzing their broader contract portfolio, including other awards and their performance history, would provide a more comprehensive understanding of their reliability and capability in delivering services. Past performance reviews and any documented issues or commendations associated with their previous federal engagements are crucial for assessing their suitability and risk profile for ongoing or future work.

How does the pricing of this contract compare to industry benchmarks for medical coding services?

The pricing for this $24 million medical coding contract with the VA appears to be within a fair range when compared to industry benchmarks. While specific per-unit costs are not detailed here, the overall contract value, spread over its performance period, suggests an annual expenditure that aligns with market rates for similar administrative and management consulting services in the healthcare sector. Factors such as the complexity of coding required, the volume of services, and the specific requirements outlined in the contract would influence the final price. Without direct access to detailed cost breakdowns or a comprehensive market analysis, a definitive statement on 'best value' is challenging, but the available information suggests reasonable value.

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

The primary risks associated with this contract include potential performance issues by the contractor, Healthcare Resolution Services, Inc., leading to inaccurate coding or delays, and the risk of vendor lock-in due to the specialized nature of the services. Mitigation strategies are in place, including the fixed-price contract type, which incentivizes the contractor to manage costs efficiently and deliver within scope. The Department of Veterans Affairs' oversight mechanisms, including contract management and performance monitoring, are crucial for identifying and addressing any performance deficiencies. The presence of multiple bidders, even in a limited competition, also provides some leverage for the VA.

How effective has this contract been in ensuring accurate medical coding for the VA?

Assessing the effectiveness of this contract in ensuring accurate medical coding requires access to performance metrics and quality assurance data that are not publicly available in this dataset. However, the contract's duration and continued funding suggest a level of satisfaction with the services provided. The VA relies heavily on accurate coding for billing, data analysis, and patient care management. The effectiveness would be measured by metrics such as coding accuracy rates, compliance with coding standards (e.g., ICD-10, CPT), timeliness of coding, and the reduction of claim denials attributable to coding errors. Without specific performance reports, effectiveness remains an assumption based on contract continuation.

What are the historical spending patterns for medical coding services by the VA?

Historical spending patterns for medical coding services by the VA indicate a consistent need for these specialized administrative functions. This $24 million contract represents a significant, multi-year investment. The VA, as a large healthcare provider, dedicates substantial resources to ensure accurate medical record-keeping and billing. Analyzing past contracts for similar services, including their values, durations, and awarded vendors, would reveal trends in spending, potential increases or decreases in demand, and the competitive landscape over time. This specific contract's value should be viewed within the context of the VA's overall budget allocation for administrative and healthcare support services.

Industry Classification

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

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

Contractor Details

Address: 14504 GREENVIEW DRIVE SUITE 102, LAUREL, MD, 20708

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $378,419,631

Exercised Options: $152,604,508

Current Obligation: $24,011,143

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS10F0416P

IDV Type: FSS

Timeline