VA's $87.7M PCCC contract for pre-2016 medical claims shows mixed value and limited competition

Contract Overview

Contract Amount: $87,702,840 ($87.7M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-03-10

End Date: 2017-09-30

Contract Duration: 569 days

Daily Burn Rate: $154.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). PC3 MEDICAL CLAIMS DATES OF SERVICE PRIOR TO 1/1/2016.

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $87.7 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). PC3 MEDICAL CLAIMS DATES OF SERVICE PRIOR TO 1/1/2016. Key points: 1. Value for money appears fair, with a significant portion of the contract value attributed to historical claims processing. 2. Competition dynamics were limited, suggesting potential for higher pricing than a more open market might yield. 3. Risk indicators are moderate, primarily related to the complexity of processing aged claims data. 4. Performance context is specific to processing past medical claims, not ongoing service delivery. 5. Sector positioning is within healthcare services, specifically medical claims administration for veterans. 6. The contract's focus on retrospective data processing limits direct comparison to current healthcare delivery contracts.

Value Assessment

Rating: fair

The contract value of $87.7 million for processing medical claims prior to 2016 suggests a substantial administrative undertaking. Benchmarking this against similar retrospective claims processing contracts is challenging due to the specific nature of the data and time period. The fixed-price incentive structure implies that cost savings were intended, but the overall value is tied to the efficiency of processing these aged claims. Without detailed cost breakdowns, a precise value-for-money assessment is difficult, but the scale indicates a significant investment in resolving historical financial obligations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the designation suggests a competitive process was initiated. Full and open competition is generally expected to drive better pricing and innovation by allowing a wide range of qualified contractors to participate. However, the nature of processing aged claims might have limited the pool of truly capable bidders.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for the services rendered. Full and open competition increases the likelihood that the government is not overpaying for the administrative task of processing these historical claims.

Public Impact

Veterans who had medical services prior to January 1, 2016, benefit from the accurate processing and resolution of their medical claims. The contract delivers essential administrative services for the Department of Veterans Affairs, ensuring financial obligations are met. The geographic impact is national, as it pertains to claims processed by the VA, though the contractor's operations are based in Arizona. Workforce implications are primarily within the contractor's organization, involving claims processors and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in processing aged claims due to data complexity.
Ensuring data integrity and security for historical patient information.
Managing the administrative overhead associated with a large volume of retrospective claims.

Positive Signals

Contract awarded through full and open competition, suggesting a robust selection process.
Fixed-price incentive contract type can incentivize cost efficiency.
Focus on resolving historical claims demonstrates commitment to financial accountability.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on administrative services related to medical claims processing. The market for healthcare claims administration is large and competitive, with many firms specializing in this area. However, contracts involving the processing of aged claims for government entities like the VA are more niche. Comparable spending benchmarks would typically involve other large-scale government healthcare claims processing contracts or large private insurer claims management contracts, though the specific historical data aspect makes direct comparison difficult.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly detailed in the provided data. As the contract was awarded under full and open competition, it is possible that small businesses were among the bidders or could have participated as subcontractors. However, without specific details, the direct impact on the small business ecosystem remains unclear. Larger contracts of this nature often involve significant subcontracting opportunities, but this cannot be confirmed from the given data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the fixed-price incentive contract type, which links payment to performance and cost targets. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Medical Care Programs
VA Claims Processing
Healthcare Claims Administration
Government Health Services Contracts

Risk Flags

Data integrity risks with aged claims
Potential for processing delays
Complexity of legacy data systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $87.7 million to TRIWEST HEALTHCARE ALLIANCE CORP. IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). PC3 MEDICAL CLAIMS DATES OF SERVICE PRIOR TO 1/1/2016.

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 $87.7 million.

What is the period of performance?

Start: 2016-03-10. End: 2017-09-30.

What was the contractor's track record with the VA prior to this contract?

TriWest Healthcare Alliance Corp has a significant history of contracting with the Department of Veterans Affairs, particularly in providing healthcare services to veterans in specific geographic regions. They have been involved in various network provider agreements and managed care support contracts. Their experience with the VA suggests familiarity with VA systems, policies, and the specific needs of the veteran population. However, the nature of this particular contract, focusing on retrospective claims processing rather than direct patient care or network management, might represent a different facet of their service offerings to the VA. Assessing their performance on this specific contract requires a review of delivery orders, performance reports, and any associated quality metrics.

How does the value of this contract compare to similar retrospective claims processing contracts?

Direct comparison of this $87.7 million contract for processing medical claims prior to 2016 to similar retrospective claims processing contracts is challenging due to the specificity of the data and the client (VA). Large-scale retrospective claims processing for government entities can be substantial, driven by the volume of historical data and the complexity of legacy systems. Contracts for ongoing claims processing for active populations are more common and might offer some benchmarks, but the 'prior to 2016' aspect makes this a distinct undertaking. The value is likely influenced by the number of claims, the age of the data, and the required data remediation or integration efforts. Without access to specific contract details for comparable services, it's difficult to definitively state if $87.7 million represents a high, low, or average value.

What are the primary risks associated with processing medical claims from before 2016?

The primary risks associated with processing medical claims from before 2016 include data integrity and accessibility issues, as older systems may be obsolete or data may be corrupted. There's also a risk of incomplete or inaccurate documentation, making it difficult to verify claims. Compliance risks are significant, as regulations and coding standards may have changed since the claims were incurred, requiring complex interpretation. Furthermore, the potential for fraud or duplicate claims increases with aged data. Operational risks involve the technical challenges of integrating legacy data into current systems and ensuring the security of sensitive historical patient information. Finally, there's a risk of delays and cost overruns if unforeseen data issues arise during processing.

How effective has TriWest Healthcare Alliance Corp been in fulfilling this contract's objectives?

Assessing the effectiveness of TriWest Healthcare Alliance Corp in fulfilling this specific contract requires access to performance metrics, delivery order completion rates, and any quality assurance reports from the Department of Veterans Affairs. The contract's objective is to process medical claims dated prior to January 1, 2016. Effectiveness would be measured by the accuracy, timeliness, and completeness of the claims processed, as well as adherence to budget and any incentive targets. Without direct performance data from the VA, it is not possible to provide a definitive assessment of their effectiveness on this particular contract. Past performance on other VA contracts may offer some indication, but this contract's unique focus on retrospective data processing warrants specific evaluation.

What are the historical spending patterns for similar VA claims processing contracts?

Historical spending patterns for similar VA claims processing contracts can vary significantly based on the scope, duration, and specific services required. Contracts focused on processing current claims for a large veteran population typically represent substantial annual expenditures, often in the hundreds of millions or even billions of dollars, reflecting ongoing healthcare delivery. Contracts for specific administrative tasks, like processing aged claims or managing particular benefit programs, might be smaller in scale or awarded for shorter durations. The VA has historically awarded numerous contracts for claims management and processing, both for healthcare and benefits, with spending fluctuating based on legislative changes, program expansions, and the overall demand for services. Analyzing specific historical spending requires detailed review of VA budget allocations and contract databases over time.

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: $87,702,840

Exercised Options: $87,702,840

Current Obligation: $87,702,840

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline