VA awards $311M contract for physician services, highlighting potential for cost efficiencies in patient care

Contract Overview

Contract Amount: $310,995,411 ($311.0M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-10-01

End Date: 2016-09-30

Contract Duration: 365 days

Daily Burn Rate: $852.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). TASK ORDER TO FUND OPTION YEAR 2.

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $311.0 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). TASK ORDER TO FUND OPTION YEAR 2. Key points: 1. Contract value suggests significant investment in healthcare delivery for veterans. 2. Fixed-price incentive contract type aims to balance cost control with performance. 3. Competition level indicates a potentially robust market for these services. 4. Geographic focus on Arizona points to regional healthcare needs. 5. Contract duration of one year requires ongoing performance monitoring. 6. The specific NAICS code points to a focus on general physician services.

Value Assessment

Rating: good

The contract value of over $311 million for a single year of physician services is substantial. Benchmarking against similar contracts for large-scale healthcare delivery to veteran populations would be necessary for a precise value-for-money assessment. However, the fixed-price incentive structure suggests an attempt to align contractor performance with cost objectives, which can be a positive indicator if managed effectively. The award to a single contractor implies a significant scope of work, and the pricing will need to be scrutinized against market rates for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the process itself indicates a market where several entities could meet the requirements for providing physician services to the VA.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces, ensuring the government receives competitive pricing and a wider range of potential solutions.

Public Impact

Veterans in Arizona will benefit from access to physician services. The contract supports the delivery of essential healthcare services. The contract's geographic impact is concentrated within Arizona. This contract likely supports a significant healthcare workforce, including physicians and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not clearly defined.
Ensuring consistent quality of care across all services provided.
Managing the fixed-price incentive structure to avoid unintended cost overruns.

Positive Signals

Awarded through full and open competition, indicating market responsiveness.
Fixed-price incentive contract type can incentivize cost-effective performance.
Focus on a specific geographic region allows for tailored service delivery.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on physician services (NAICS 621111). The market for healthcare services, particularly for government entities like the VA, is substantial. This contract represents a significant portion of spending within this sub-sector for the Arizona region, aiming to meet the healthcare demands of a specific veteran population. Comparable spending benchmarks would involve analyzing other large-scale physician service contracts awarded by federal agencies or large healthcare systems.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not explicitly provided in the data. Given the large contract value and specialized nature of physician services, it is possible that subcontracting opportunities may exist for smaller, specialized medical practices or support services. However, without specific details on set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' program management and contracting offices. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, though detailed performance metrics and specific oversight activities may not always be publicly disclosed.

Related Government Programs

VA Community Care Network
TRICARE Provider Network
Federal Employee Health Benefits Program

Risk Flags

Contract Value
Contract Type
Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $311.0 million to TRIWEST HEALTHCARE ALLIANCE CORP. IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). TASK ORDER TO FUND OPTION YEAR 2.

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

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 $311.0 million.

What is the period of performance?

Start: 2015-10-01. End: 2016-09-30.

What is the historical spending pattern for physician services provided by TriWest Healthcare Alliance Corp to the VA?

Analyzing historical spending for TriWest Healthcare Alliance Corp with the Department of Veterans Affairs requires access to detailed contract databases beyond the provided data. However, the current award of $311,099,541.26 for a one-year period (Option Year 2) suggests a significant and ongoing relationship. To understand the full pattern, one would need to examine previous contract awards to TriWest for similar services, including their value, duration, and scope. This would reveal trends in spending, potential increases or decreases over time, and the consistency of the VA's reliance on this contractor for physician services in Arizona. Without this historical context, it's difficult to assess if this award represents a typical expenditure or a deviation.

How does the pricing structure of this fixed-price incentive contract compare to industry benchmarks for similar VA healthcare contracts?

The provided data indicates a 'FIXED PRICE INCENTIVE' (FPI) contract type. FPI contracts aim to establish a target cost and target profit, with mechanisms for adjusting profit based on actual costs. This structure incentivizes the contractor to control costs while meeting performance standards. To benchmark the pricing, one would need to compare the target cost, ceiling price, and incentive sharing ratios against similar FPI contracts awarded by the VA or other federal agencies for comparable physician services. Access to detailed pricing breakdowns and market research reports would be crucial. Without this granular data, a direct comparison is challenging, but the FPI structure itself suggests a deliberate effort to achieve cost efficiencies relative to a cost-plus contract.

What are the key performance indicators (KPIs) used to evaluate TriWest Healthcare Alliance Corp's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for a contract of this nature, typical KPIs would likely include metrics related to patient access to care (e.g., appointment wait times), quality of care (e.g., adherence to clinical guidelines, patient satisfaction scores), administrative efficiency (e.g., claims processing timeliness, billing accuracy), and potentially cost containment measures aligned with the incentive structure. The effectiveness of the fixed-price incentive would depend on how well these KPIs are defined, measured, and linked to the incentive provisions within the contract. A thorough review of the contract's Statement of Work (SOW) and Performance Work Statement (PWS) would be necessary to identify the specific KPIs.

What is the assessed risk level associated with this contract, and what mitigation strategies are in place?

The provided data does not explicitly state a risk level or detail mitigation strategies. However, general risks for a large healthcare services contract include performance failures, cost overruns (despite the FPI structure), cybersecurity breaches, and challenges in maintaining quality of care. Mitigation strategies would typically involve robust contract management by the VA, including regular performance reviews, audits, clear communication channels with the contractor, and contingency planning. The 'FIXED PRICE INCENTIVE' type itself is a risk mitigation tool aimed at cost control. The presence of an Inspector General's office also serves as a deterrent and oversight mechanism for potential fraud or mismanagement.

How does the geographic concentration in Arizona impact the overall strategy and effectiveness of this VA healthcare contract?

The contract's specific focus on Arizona (ST: AZ, SN: ARIZONA) indicates a targeted approach to meeting the healthcare needs of veterans within that state. This geographic concentration allows for potentially more efficient resource allocation and tailored service delivery, addressing the unique healthcare landscape and veteran population demographics of Arizona. It enables the VA and TriWest Healthcare Alliance Corp to develop specialized networks and partnerships within the state. The effectiveness hinges on understanding the specific healthcare demands, provider availability, and logistical challenges unique to Arizona. A broader, multi-state contract might face different complexities in terms of regional variations in healthcare infrastructure and patient needs.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 16010 N 28TH AVE, PHOENIX, AZ, 85053

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

Financial Breakdown

Contract Ceiling: $311,995,411

Exercised Options: $311,995,411

Current Obligation: $310,995,411

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline