24MC-SA010_RFP_HCSP_Mergers_and_Acquisitions.pdf

Gavin Newsom, Governor State of California

Health and Human Services Agency

DEPARTMENT OF MANAGED HEALTH CARE

980 9th Street, Suite 500 Sacramento, CA 95814

Phone: 916-324-8176 | Fax: 916-255-5241 www.HealthHelp.ca.gov

April 18, 2024

REQUEST FOR PROPOSALS (RFP) - Secondary Health Care Service Plan Mergers and Acquisitions Impact Analysis

RFP No. 24MC-SA010

You are invited to review and respond to this Request for Proposals (RFP) entitled “Health Care Service Plan Mergers and Acquisitions Impact Analysis.” Potential Proposers are encouraged to download the solicitation package as well as any future addendums at https://caleprocure.ca.gov/. In submitting your proposal, you must comply with the instructions found herein. The deadline for submitting proposals is May 20, 2024, 4:00 p.m. Pacific Daylight Time (PDT).

The Department of Managed Health Care (DMHC) is soliciting proposals from qualified entities to provide consulting services to conduct an independent analysis of the impact of health care service plan merger and acquisition transactions on health plan subscribers and enrollees, the stability of the health care delivery system, and whether the transactions would substantially lessen competition in health care service plan products or create a monopoly in this state. The successful Proposer will be awarded contract terms up to two years that are anticipated to begin on September 15, 2024, and end on September 14, 2026. The DMHC reserves the right to extend the contract(s) for an additional one-year term at the same rates and maximum dollar amount per year as the original agreements. Contract extensions are subject to satisfactory performance, funding availability and approval by the Department of General Services (DGS).

The Small Business Preference and other preference programs apply to this solicitation. The Disabled Veteran Business Enterprise (DVBE) participation requirement has been waived;

however, the DVBE Incentive Program will apply for this solicitation.

Note that all agreements entered into with the State of California will include by reference General Terms and Conditions and Contractor Certification Clauses that may be viewed at:

https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources- List-Folder/Standard-Contract-Language. If you do not have Internet access, a hard copy can be provided by contacting the person listed below.

In the opinion of DMHC, this RFP is complete. However, if you have questions or need clarifying information, the contact person for this RFP is:

Joseph Chen DMHC Contract Analyst joseph.chen@DMHC.ca.gov

Please note that no verbal information given will be binding upon the State unless such information is issued in writing as an official addendum.

http://www.healthhelp.ca.gov/ https://caleprocure.ca.gov/ https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language mailto:joseph.chen@DMHC.ca.gov

TABLE OF CONTENTS

A. PURPOSE AND DESCRIPTION OF SERVICES

B. BACKGROUND

C. SCOPE OF WORK

D. ADMINISTRATIVE REQUIREMENTS

E. MINIMUM QUALIFICATIONS

F. PROPOSAL REQUIREMENTS AND INFORMATION

1. Key Action Dates

2. Submission of Questions from Proposers

3. General Requirements

4. References

5. Resumes

6. Work Plan

7. Work Sample

8. Financial Stability

9. Conflict of Interest

10. Cost Proposal Format and Requirements

11. Submission of Proposal

12. Disposition of Proposals

13. Evaluation Process and Criteria

14. Award and Protest

15. Agreement Execution and Performance

G. PREFERENCES PROGRAMS

H. DISABLED VETERAN BUISNESS ENTERPRISE (DVBE) INCENTIVE PROGRAM

I. NEWS RELEASES AND SOCIAL MEDIA

J. EXECUTIVE ORDER N-6-22 – RUSSIA SANCTIONS

K. ATTACHMENTS

L. SAMPLE AGREEMENT

Department of Managed Health Care Health Care Service Plan Mergers and Acquisitions Impact Analysis

RFP No. 24MC-SA010

A. PURPOSE AND DESCRIPTION OF SERVICES

The successful Proposer will conduct analyses, activities and communications regarding health plan mergers and acquisitions meeting the criteria outlined in California Health and Safety Code (HSC) Section 1399.65. The successful Proposer will also be responsible for developing reports based on findings from analyses. A detailed description of the services to be provided is included in Exhibit A - Scope of Work.

Award of the contract, if awarded, will be to the highest scored responsive proposal, referred to as the “Rank 1 Contractor.” In addition, under the resulting contract, the DMHC intends to establish a list of two qualified Contractors who will be ranked based on the highest scored responsive proposal, the Rank 1 Contractor, who will receive primary Contractor status, and the Proposer offering the second highest scored responsive proposal, the Rank 2 Contractor, who will receive secondary Contractor status. The Rank 2 Contractor will be used only if the Rank 1 Contractor is unable to fulfill the requested services as described in Exhibit A – Scope of Work, Section 7. The cost of any Agreement resulting from this RFP will be determined based on the information provided on Attachment 15, Cost Proposal. A specific payment amount or volume of work is not guaranteed for any Contractor under this

RFP.

The DMHC reserves the right to extend the Agreement up to an additional one year at the same rates and maximum dollar amount per year as the original Agreement and/or amend to increase funding for additional Health Care Service Plan Mergers and Acquisitions Impact Analysis services. All terms and conditions shall remain the same. All Agreement amendments are subject to satisfactory performance, funding availability, and approval from the DGS. Agreement amendments will not take effect until the Contractor has received a copy of the final contract document that has been signed by the DMHC Contract Manager or designee and approved by DGS if applicable.

B. BACKGROUND

There is in California state government, in the California Health and Human Services Agency, a DMHC that has charge of the execution of the laws of this state relating to health care service plans and the health care service plan business including, but not limited to, the laws directing the DMHC to ensure health care service plans provide enrollees with access to quality health care services, and to protect and promote the interests of enrollees (California HSC Section 1341(a)). The DMHC’s mission is to protect consumers’ health care rights and ensure a stable health care delivery system.

The chief officer of the DMHC is the DMHC Director (HSC Section 1341(b)). The DMHC Director is responsible for administering and enforcing the Knox-Keene Health Care Service Plan Act of 1975 (KKA) (HSC Code Sections 1340 & 1346). Assembly Bill 595 (2018) added Article 10.2, consisting of HSC Sections 1399.65 and 1399.66, to the KKA to govern mergers and acquisitions of health care service plans.

A health care service plan that intends to merge or consolidate with, or enter into an agreement resulting in its purchase, acquisition or control by any entity, including another health care service plan or a health insurer is required to give notice to, and secure prior approval from, the DMHC Director (HSC Section 1399.65 (a)(1)).

A health care service plan is required to file all the information necessary for the DMHC Director to approve, conditionally approve or disapprove the transaction or agreement including, but not limited to, a complete description of the proposed transaction or agreement, any modified exhibits for health care service plan licensure, any approvals by federal or other state agencies required for the transaction or agreement, and any supporting documentation required by the DMHC Director (HSC Section 1399.65 (a)(3)).

HSC Section 1399.65 includes additional requirements and considerations related to the DMHC Director’s assessment and approval of the competitive impact of proposed transactions. Several key provisions of HSC Section 1399.65 are summarized as follows:

a. HSC Section 1399.65(g)(1) distinguishes certain types of transactions or agreements as “major” if any of the following criteria are met:

i. Affects a significant number of enrollees;

ii. Involves a material amount of assets; or

iii. Adversely affects either the subscribers or enrollees or the stability of the health care delivery system because of the entity’s market position, including, but not limited to, the entity’s market exit from a market segment or the entity’s dominance of a market segment.

b. If the subject transaction or agreement is deemed “major,” the following provisions apply:

i. The DMHC Director must obtain an independent analysis to determine the impact of a major transaction or agreement on subscribers and enrollees, the stability of the health care delivery system, and other relevant provisions of the KKA (HSC Section 1399.65(a)(4)).

ii. Prior to approving, conditionally approving, or disapproving a major transaction or agreement, the DMHC must hold a public meeting on the proposed transaction or agreement and subsequently consider the testimony and comments received at the public meeting in making the determination to approve, conditionally approve, or disapprove the transaction or agreement (HSC Section 1399.65(c)).

iii. If the DMHC Director determines a health care service plan’s material amount of assets is subject to purchase, acquisition, or control, the DMHC Director must prepare a statement describing the proposed transaction or agreement and make it available to the public before the public meeting (HSC Section 1399.65(d)).

c. If the subject transaction or agreement is not deemed “major,” the following provisions apply:

i. The DMHC Director is not required to but may obtain an independent analysis (HSC Section 1399.65(a)(4)).

ii. The DMHC Director is not required to but may hold a public meeting on the proposed transaction or agreement (HSC Section 1399.65 (c)).

d. The DMHC Director has express authority to disapprove a transaction or agreement upon finding that the transaction or agreement would substantially lessen competition or create a monopoly in California, including, but not limited to, health coverage products for a specific line of business. In making this finding, the DMHC Director may obtain an opinion from a consultant with the expertise to assess the competitive impact of the transaction or agreement (HSC Section 1399.65(b)).

C. SCOPE OF WORK

Please refer to Exhibit A - Scope of Work for a detailed breakdown of the services, tasks and deliverables applicable to this RFP.

D. ADMINISTRATIVE REQUIREMENTS

The successful Proposer who is awarded an Agreement must fulfill the following Administrative Requirements prior to commencing work, and is responsible for any fees or expenses, including time, for completing these items:

1. Information Security, Integrity and Confidentiality Statement

Attachment I for Contractor Authorized Representative and Attachment II for project employees, agents or sub-contractors, which certify that the Contractor and the Contractor’s staff understand and agree to comply with the DMHC’s Information Security and Confidentiality Statement.

2. Annual Information Security Awareness and Privacy Training

California state policy requires that the DMHC must provide for the proper use and protection of its information assets and arrange for basic security and privacy awareness training (State Administrative Manual Sections 5305.1; 5320.1; 5320.2, Statewide Information Management Manual 5330-B) for new users and annually thereafter. Therefore, DMHC contractors (including subcontractors) who access state resources must complete the designated DMHC online annual Information Security Awareness and Privacy Training prior to accessing DMHC information assets and/or beginning work on a contract. The DMHC Information Security Officer will set up your training account. While the training course is free-of-charge, any expenses, including Contractor time, related to Information Security Awareness and Privacy Training will be the responsibility of the Contractor. Active contractors/subcontractors must provide a list of their employees’ names and email addresses annually to the DMHC Information Security Officer to administer training.

3. Statement of Economic Interests (Form 700)

The California Political Reform Act requires individuals holding positions designated within an agency’s conflict of interest code to file an annual Statement of Economic Interests (Form 700). The DMHC’s conflict of interest code designates “Consultants” among the positions that must file a Form 700. Your employees or independent contractors, working on the above-named contract, have been designated as such consultants and are required to file an original Form 700 with the DMHC. (See Government Code Sections 82019 and 87302.)

No Contractor shall participate in the making of, or in any way attempt to influence, a decision in which the Contractor knows, or has reason to know, that it has a financial interest. The Contractor shall notify the DMHC Contract Manager immediately in writing if the Contractor has a potential or actual conflict of interest relating to this Agreement.

The Contractor shall abide by the provisions of Government Code Sections 1090, 81000 et seq., 82000 et seq., 87100 et seq., and 87300 et seq., PCC Sections 10335 et seq. and 10410 et seq., California Code of Regulations, Title 2, Section 18700 et seq., and the DMHC Incompatible Activities Policy.

Each of the Contractor’s employees assigned to the DMHC project shall file a Statement of Economic Interests, Fair Political Practices Commission (FPPC) Form 700 within 30 days of commencing services under the Agreement, annually during the life of the Agreement, and within 30 days after the expiration of the Agreement.

The Contractor shall have a continuing duty to disclose fully and timely to the DMHC, in writing:

• All interests and activities that create an actual or potential conflict of interest in performance of the Agreement.

• Any material changes in the Contractor’s business structure and/or status.

This includes any changes in business form, such as a change from sole proprietorship or partnership into a corporation or vice versa; changes in company ownership; dissolution of the business; change of the name of the business; filing in bankruptcy; revocation of corporate status by the Secretary of State; and other material changes in the Contractor’s business status or structure that could affect the performance of the Contractor’s duties under the Agreement.

If the Contractor violates any disclosure duties, such action(s) by the Contractor shall render this Agreement void.

4. Ethics Certification

Government Code Sections 11146 through 11146.4 requires all officials, employees and contracted consultants designated to file a Form 700 to also complete an Ethics Certification when first assuming a designated position and then every odd numbered year thereafter. If consultants assumed their designated position during an even numbered year, they are required to complete the Ethics Certification two years in a row.

E. MINIMUM QUALIFICATIONS

The Proposer must complete Attachment 3, Minimum Qualifications Certification, certifying that the Proposer satisfies the minimum requirement listed below for each key project personnel. Failure to certify will result in the immediate rejection of the proposal.

• Minimum of a bachelor’s degree from an accredited college or university.

The Proposer shall provide copies of the bachelor’s degree in order to demonstrate that each of its key project personnel meet this requirement.

DESIRABLE QUALIFICATIONS

In addition to the minimum qualifications, the Proposer may also provide proof of the following desirable qualifications:

Master's degree, Doctorate degree, or equivalent certification from an accredited college or university.

F. PROPOSAL REQUIREMENTS AND INFORMATION

1. Key Action Dates

Activity Anticipated Action Date and Time (PDT)

RFP Available to Prospective Proposers April 18, 2024

Last Day to Submit Written Questions April 25, 2024, at 4:00 p.m. PDT

Answers to Questions Posted May 3, 2024

Proposal Submittal Deadline May 20, 2024, at 4:00 pm. PDT

Proposer Presentations and Interviews June 19, 2024 - June 25, 2024

Notice of Intent to Award June 28, 2024

Proposed Award Date July 5, 2024

Contract Term September 15, 2024 - September 14, 2026

Note: The DMHC may modify this RFP prior to the Proposal Submittal Deadline above through the issuance of a formal addendum posted at https://caleprocure.ca.gov/ and on http://www.dmhc.ca.gov. All dates after the Proposal Submittal Deadline are approximate and may be adjusted as conditions indicate, without an Addendum to this RFP.

2. Submission of Questions from Proposers All questions must be submitted in writing prior to 4:00 p.m. PDT on April 25, 2024, to Joseph Chen at Joseph.Chen@dmhc.ca.gov. The responses to all questions received will be posted on https://caleprocure.ca.gov/ under Health Care Service Plan Mergers and Acquisitions Impact Analysis RFP (24MC-SA010).

All addenda and questions will also be posted on https://caleprocure.ca.gov. Cal eProcure registration instructions are at: https://www.caleprocure.ca.gov/pages/index.aspx.

3. General Requirements

a) The Proposer must provide documentation (i.e. Certificate of Good Standing from the California Secretary of State) to substantiate that it is in good standing and qualified to conduct business in California.

b) The Proposer must not be an affiliate or a subsidiary of, nor in any way owned or controlled by, a health care service plan or a trade association of health care service plans. A board member, director, officer or employee of the Contractor shall not serve as a board member, director or employee of a health care service plan. A board member, director or officer of a health care service plan or a trade association of health care service plans shall not serve as a board member, director, officer or employee of the Proposer’s firm.

c) The Proposer must not be currently engaged in services with a health care service plan or a trade association of health care service plans in California or any activities that could appear to be a conflict of interest.

d) The Proposer must be available to participate in a separate presentation and interview during the same two-hour period within the timeframe listed under Section F, Item 1 – Key Action Dates. The presentations and interviews will be held online using Microsoft Teams Meeting.

4. References The Proposer is required to provide three references, on Attachment 12, Proposer References, for which the Proposer has provided similar services as described in Exhibit A - Scope of Work, within the last 10 years. The DMHC retains the right to conduct reference checks beyond those supplied by the Proposer. The DMHC must not be listed as a reference. Proposers must cite other entities with completed work for this requirement.

https://caleprocure.ca.gov/ http://www.dmhc.ca.gov/ mailto:Joseph.Chen@dmhc.ca.gov https://caleprocure.ca.gov/ https://caleprocure.ca.gov/ https://www.caleprocure.ca.gov/pages/index.aspx

5. Resumes

The Proposer shall provide resumes for key project personnel (either staff or consultants to the Contractor or subcontractor(s)). The resumes for all key project personnel should demonstrate their experience in fulfilling the requested services as identified in Section C, Scope of Work. Resumes should list the most recent experience first. Multiple companies may be listed to support the project personnel’s experience. All work to meet the required experience should be paid work performed in the past 10 years.

If, for any reason, the project personnel listed in the original proposal is unable to perform services during the term of the contract, the DMHC retains the right to approve, in advance, any changes to the personnel or terminate the Agreement.

6. Work Plan

The Proposer shall develop a narrative Work Plan, labeled as Attachment 13, Work Plan, outlining the Proposer’s ability to fulfill the requested services as identified in Exhibit A - Scope of Work.

The Work Plan must include the following information and/or materials to demonstrate the Proposer’s level of expertise, capacity, ability and knowledge to successfully conduct the work required by this RFP. The entire narrative is to be limited to 25 pages.

a. Proposers’ Knowledge, Expertise, Experience and Commitment

i. The Proposer shall provide a detailed description of its knowledge and experience regarding the following:

• Knowledge of healthcare operations in California and/or the United

States, including but not limited to, mergers and acquisitions of health care and health system entities.

• Knowledge of California and/or federal health care law.

• Knowledge of California and/or federal antitrust law.

• Demonstrated commitment to equity, diversity, and inclusion.

ii. Proposer shall provide a detailed description of its qualifications, skills, knowledge, and expertise related to:

a) The health care market.

b) With respect to health care merger and acquisition transactions, analysis of horizontal and vertical concerns.

c) Providing analysis of the impact of health care transactions, including mergers and acquisitions, on health plan subscribers and enrollees, the stability of the health care delivery system, and the competitive effect to the health care market.

iii. Proposer shall describe its current and past experience working with the health care industry, (e.g., HMOs, PPOs, health care systems, and medical groups), government, and non-profit health entities.

b. Project Description

i. A detailed plan estimating the number of individuals and different teams that will be responsible for performing the requested services mentioned in Exhibit A - Scope of Work, and any administrative functions such as collecting and submitting the necessary forms for each employee for statements of economic interest. Provide a description of the key project personnel and anticipated supporting personnel to be employed during contract performance by name, classification/title, and their qualifications to perform the work.

ii. If subcontractors are contemplated, identify those persons or firms, the portions of the work to be done by the subcontractors and how and why they were selected. Describe how subcontracted work will be controlled, monitored and evaluated.

iii. A detailed description of the techniques, approaches, methods and timeframes to be used in performing the services described in Section B, Exhibit A - Scope of Work. The description should specifically address the approach and method of the following:

• Reviewing and analyzing the competitive impact of health care transactions, including mergers and acquisitions, and analysis of horizontal and vertical concerns.

• Providing complex independent economic analysis and determining the impact of health care transactions, including mergers and acquisitions, on subscribers and enrollees and the stability of the health care delivery system.

• Evaluating supporting documentation for health care transactions, including mergers and acquisitions, reviewing findings, and determining the fair market value of the assets of an entity.

• Preparing detailed written report(s) documenting and describing complex economic analyses, activities and communications regarding health care transactions, including mergers and acquisitions.

• Assessing the fair market value of the assets of the California licensed health plan, providing testimony and recommendations, and defending findings during public meetings or hearings.

iv. Identification of any and all additional information and/or equipment (facilities, equipment, network connectivity, etc.) that it deems necessary to successfully complete all deliverables, activities, or services detailed within Exhibit A - Scope of Work.

v. A detailed description of any assistance the Proposer expects from the DMHC staff in performing the requested services.

7. Work Sample

A sample created for similar project(s) within the last 10 years to demonstrate the following:

a. The Proposer’s ability to review and analyze the competitive impact of health care transactions, including mergers and acquisitions.

b. The Proposer’s ability to provide complex independent economic analysis determining the impact of health care transactions, including mergers and acquisitions, on subscribers and enrollees and the stability of the health care delivery system.

c. The Proposer’s ability to evaluate supporting documentation for health care transactions, including mergers and acquisitions, review findings and determine the fair market value of the assets of an entity.

d. The Proposer’s approach in preparing detailed written report documenting and describing complex economic analyses, activities and communications regarding health care transactions, including mergers and acquisitions. The key personnel’s experience in preparing written reports documenting and describing complex economic analyses, providing testimony and recommendations and defending their findings during public meetings or hearings.

8. Financial Stability

A written statement on the financial and organizational stability of the Proposer. Include how long the Proposer has been in business, if the Proposer is nationwide or local, and the number of years the Proposer has performed services similar to the services mentioned in Exhibit A - Scope of Work. The statement of the financial stability should include any probable contingencies that may affect the Proposer’s financial and organizational stability.

9. Conflict of Interest

A detailed description of how the Proposer monitors for potential conflicts of interest that may preclude it from accepting work assignments from the DMHC. The description should include the criteria to determine a conflict of interest and the process for notifying the DMHC within 48 hours of identifying the conflict of interest. The Proposer must also include its policy and procedures for monitoring conflicts of interest. If the Proposer does not have a policy, it must provide an explanation of how it monitors potential conflicts of interest. The Proposer must disclose any potential conflicts of interest involving

Proposer, Proposer’s firm or employee(s) or a proposed subcontractor, including current or former employment, contracts or grants with any of the health care service plans licensed by the DMHC or any of their affiliates, and any involvement in the last 10 years (whether paid or unpaid) with a claim or lawsuit against the DMHC licensee, the DMHC or any of their officers, agents or employees. Also, advise if you have represented any DMHC licensee in the past 10 years. If so, describe the nature and scope of your representation/work.

10. Cost Proposal Format and Requirements

a. The Proposer must complete the Cost Proposal, Attachment 15, in the prescribed format with a detailed budget for the Proposer and subcontractor(s), if applicable.

Any deviation from the prescribed format, which in the opinion of the DMHC is material, may result in the rejection of the proposal. The proposed cost shall include all fees and expenses for providing the services described in this RFP. The successful organization shall only be compensated based on actual services performed at the rates submitted.

b. All pricing shall remain firm and constant during the entire Agreement term, including any extensions or amendments.

11. Submission of Proposal

a. Proposals should provide straightforward and concise descriptions of the Proposer’s ability to perform the requirements of this RFP. The proposal must be complete and accurate. Omissions, inaccuracies or misstatements may be cause for rejection of a proposal.

b. Proposals must be submitted for the performance of all the services described herein. Any deviation from the work specifications will not be considered and may cause a proposal to be rejected. A proposal may be rejected if it is conditional or incomplete, or if it contains any alterations of any form or other irregularities of any kind. The State may reject any or all proposals and may waive an immaterial deviation in a proposal. The State’s waiver of an immaterial deviation shall in no way modify the RFP document or excuse the Proposer from full compliance with all requirements if awarded the Agreement.

c. All proposals shall include the documents identified in Attachment 1, Required Document Checklist. Proposals not including the Attachments listed below shall be deemed non-responsive. A non-responsive proposal is one that does not meet the basic proposal requirements. All proposals must include the following Attachments:

i. Attachment 1, Required Document Checklist

ii. Attachment 2, Proposal/Proposer Certification Sheet

iii. Attachment 3, Minimum Qualifications Certification

iv. Attachment 4, Bidder Declaration Form

v. Attachment 5, DVBE Incentive Application Request (If Applicable)

vi. Attachment 6, Darfur Contracting Act Certification (If Applicable)

vii. Attachment 7, California Civil Rights Laws Certification

viii. Attachment 8, Contractor Certification Clauses

ix. Attachment 9, Iran Contracting Act

x. Attachment 10, Payee Data Record

xi. Attachment 11, Certificate of Good Standing

xii. Attachment 12, Proposer References

xiii. Attachment 13, Work Plan

xiv. Attachment 14, Resumes

xv. Attachment 15, Cost Proposal

d. An individual who is contractually authorized to bind the proposing organization shall sign Attachment 2, Proposal/Proposer Certification Sheet. The signature must indicate the title or position the individual holds in the proposing organization. An unsigned proposal may be rejected.

e. If the proposal is made under a fictitious name or business title, the actual legal name of the Proposer must be provided.

f. More than one proposal from an individual, firm, partnership, corporation, or association under the same or different names, will not be considered.

g. Joint proposals are not acceptable. A joint proposal is when two or more Proposers sign and submit a proposal together for requested services.

h. The proposal package should be prepared in the least expensive method (i.e., cover page with a staple in upper left-hand corner, no elaborate bindings, etc.).

i. All pages of the proposal shall have the following header and consecutive page numbering format in the upper right-hand corner:

(Proposer’s Legal Name)

RFP #24MC-SA010

j. The Proposer must submit one original hard copy of the proposal marked “ORIGINAL COPY,” with original signatures via mail or hand-delivered.

i. The Proposal box/envelope must list the Proposer’s legal name and address in the upper left-hand Section of the mailing label. The mailing label must include the RFP number, title and be marked “DO NOT OPEN” as shown in the following example and shall be mailed or hand-delivered to:

ii. All proposals must be received under sealed cover by the DMHC contact listed above by 4:00 p.m. PDT on May 20, 2024. Proposals received after this date and time will not be considered. Proposals not submitted under sealed cover and marked as indicated may be rejected.

iii. When hand-delivering a proposal, the Proposer should have the receptionist date/time stamp the envelope immediately upon delivery. Proposals date/time stamped after the due date and time will not be accepted.

k. The Proposer must also email an electronic version of the proposal in its entirety to:

Joseph.Chen@dmhc.ca.gov. All documents contained in the electronic submittal package must be signed by a person who is authorized to bind the proposing organization. The DMHC shall reach out to the Proposer to request an electronic version of the entire proposal if one has not been provided by the Proposal Submittal Deadline.

l. A Proposer may modify a proposal after submission by withdrawing its original proposal and resubmitting a new proposal prior to the proposal submission deadline as set forth in Section F, Proposal Requirements and Information, item 1, Key Action Dates. Proposal modifications offered in any other manner, oral or written, will not be considered.

m. A Proposer may withdraw its proposal by submitting a written withdrawal request to the DMHC, signed by the Proposer or an authorized agent for the Proposer. Once the DMHC has confirmed acceptance and approval of the withdrawal request, the Proposer may then submit a new proposal prior to the proposal submission deadline.

After the proposal submission deadline, proposals may not be withdrawn without cause.

n. The Proposers are cautioned to not rely on the DMHC during the evaluation to discover and report to the Proposer any defects and errors in the submitted documents. Proposers, before submitting their documents, should carefully review them for errors and adherence to the RFP requirements.

(Proposer’s Legal Name) (Proposer’s Address)

DO NOT OPEN

RFP #24MC-SA010

Health Care Service Plan Mergers and Acquisitions Impact Analysis Department of Managed Health Care

Attn: Joseph Chen 980 9th Street, Suite 500 Sacramento, CA 95814 mailto:Joseph.Chen@dmhc.ca.gov

o. The Proposer agrees that in submitting a proposal it authorizes the DMHC to verify any or all claimed information, proprietary or non-proprietary, by any reasonable means, including on-site inspection, and to verify any references named in its proposal.

p. Costs incurred for developing proposals and in anticipation of award of an Agreement are entirely the responsibility of the Proposer and shall not be charged to the State of California.

q. The DMHC reserves the right to reject all proposals and is not required to award an Agreement.

r. No oral understanding or agreement shall be binding on either party.

12. Disposition of Proposals

a. Upon proposal opening, all documents submitted in response to this RFP will become the property of the State of California and regarded as public records under the California Public Records Act (Government Code Section 2650, et. seq.) and subject to review by the public.

b. Proposal packages may be returned only at the Proposer’s expense, unless such expense is waived by the DMHC.

13. Evaluation Process and Criteria

a. At the time of proposal opening, each proposal will be checked for the presence or absence of the required information in conformance with the submission requirements of this RFP. A responsive proposal is one which meets or exceeds the requirements stated in this RFP.

b. Proposals that contain false or misleading statements or provide references that do not support an attribute or condition claimed by the Proposer, may be rejected.

c. Proposers claiming any of the proposal preferences shall submit the proper required certification documents and check next to the applicable Attachment number on Attachment 1, Required Document Checklist. Refer to the links in Section G, Preference Programs, in this RFP for information regarding these preference programs.

d. Evaluation Criteria are set as follows:

Stage 1: Minimum Qualifications

The proposals will be reviewed to ensure they meet the minimum qualifications as outlined in Section E. All proposals that meet the minimum qualifications will move to Stage 2, Proposal Evaluation.

Stage 2: Proposal Evaluation

2.1 Components Evaluation

a. All proposals passing the Minimum Qualifications Requirement will be evaluated and scored for their degree of responsiveness to each of the components mentioned below.

b. An overall maximum of 150 possible points may be achieved in this stage and an overall minimum of 105 points must be achieved to be considered a responsive proposal. (A responsive proposal is one that meets the requirements stated in this RFP).

c. Proposals will be reviewed, evaluated and scored by an authorized Evaluation Committee. Evaluation of proposals will be based on the criteria shown as follows for each component; each component will be scored according to the degree of responsiveness present in the proposal being evaluated. A component score will not exceed the possible points shown for that component.

Evaluation Criteria

Points will be awarded on a scale system with the maximum points identified in each category.

Maximum of 10 points possible for each rating criteria listed below:

• Clearly and thoroughly defines the requirement = 10 points

• Response is acceptable but does not completely address the requirement = 5 points

• Response does not meet the requirement = 0 points

Maximum Possible

Score

Desirable Qualifications:

The Proposer’s key project personnel possess a master’s degree, a doctorate degree, or an equivalent certification from an accredited college or university.

WORK PLAN EVALUATION

A. Proposer Qualifications The Proposer’s qualifications and previous experience within the last 10 years in the health care industry related to impact of complex health care transactions on enrollees, the health care industry, and competition within the health care market.

B. Project Personnel

The staff expertise and qualifications for those individuals who will be assigned to perform contract work for the DMHC.

• Response is acceptable but does not completely address the

Score

C. Project Description

Approach and method to review and analyze the competitive impact of health care transactions, including mergers and acquisitions, and analysis of horizontal and vertical concerns.

Approach and method to provide complex independent economic analysis determining the impact of health care transactions, including mergers and acquisitions, on subscribers and enrollees and the stability of the health care delivery system.

Approach and method to evaluate supporting documentation for health care transactions, including mergers and acquisitions, review findings, and determine the fair market value of the assets of an entity.

Approach and method to prepare detailed written report documenting and describing complex economic analyses, activities, and communications regarding health care transactions, including mergers and acquisitions.

Approach and method to assess the fair market value of the assets of the California licensed health plan, to provide testimony and recommendations and defend findings during public meetings or hearings.

D. Work Samples Review of the Proposer’s approach for reviewing the competitive impact of health care transactions, including mergers and acquisitions.

Review of the Proposer’s ability to provide complex independent economic analysis determining the impact of health care transactions, including mergers and acquisitions, on subscribers and enrollees and the stability of the health care delivery system.

• Response is acceptable but does not completely address the

Score

Review of the Proposer’s experience evaluating supporting documentation for health care transactions, including mergers and acquisitions, reviewing findings and determining the fair market value of the assets of an entity.

Review of the Proposer’s ability to prepare detailed written reports documenting and describing complex economic analyses, activities and communications regarding health care transactions, including mergers and acquisitions.

Review of the Proposer’s ability to assess the fair market value of the assets of the California licensed health plan, prepare written reports documenting and describing complex economic analyses, provide testimony and recommendations and defend its findings during public meetings or hearings.

E. Financial Stability

A written statement on the financial and organizational stability of the Proposer.

F. Conflict of Interest

The Proposer’s methodology for monitoring potential conflicts.

Total Possible Points: 150

2.2 Presentation and Interview Evaluations

This stage consists of evaluating the presentations and interviews of proposing firms who receive a minimum of 105 total points in Stage 2.1, Components Evaluation.

These proposing firms will receive the interview questions at least one week prior to the scheduled interview.

PRESENTATION EVALUATION COMPONENTS

10 points possible for each bulleted item below, 40 points total maximum:

• Proposer provided a thorough, thoughtful presentation and presented well = 10 points

• Proposer provided an acceptable presentation, but was not complete in detail = 5 points

• Proposer did not convey the level of experience and expertise required or presentation was vague or incomplete = 0 points

Maximum Possible

Score

Provided introduction and overview of the firm and team members. 10

Demonstrated strong understanding of the work and the firm’s role. 10 Communicated an easy-to-understand approach to performing the work. 10

Presentation style was clear, concise, and organized. 10

INTERVIEW EVALUATION COMPONENTS

10 points possible for each bulleted item below, 60 points total maximum:

• Proposer provided a thorough, thoughtful response and interviewed well = 10 points

• Proposer provided an acceptable interview response, but was not complete in detail = 5 points

• Proposer did not convey the level of experience and expertise required or interview response was vague or incomplete = 0 points

Demonstrated and clearly described in detail an understanding of the work and the firm’s role. 10

Conveyed a strong understanding of merger and acquisition transactions and the required complex independent impact analysis.

Referenced prior projects that are similar in nature to the proposal. 10 Demonstrated ability to adequately respond to the follow-up questions. 10

Provided examples of ability to work well in a team environment with executive leadership. 10

Interview style was clear, concise, and organized. 10

Total Possible Points: 100

2.3 Cost Calculation

The points for the Cost Proposal for each responsive Proposer shall first be adjusted before any of the preference programs for which they qualify and any DVBE incentive points. Refer to the links in Section G, Preference Programs, for information regarding preference programs and Section H, DVBE Incentive Program on how DVBE incentive points are calculated.

a. The proposal work plan offering the lowest total cost proposal shall receive the maximum 108 cost points.

b. Cost points for the remaining proposals shall be determined by applying the following formula:

Lowest Cost Proposal = Factor Other Cost Proposal

Factor x 108 (max. cost points) = Cost Points for Other Organization

Example:

Lowest Cost Proposal = $75,000 divided by the other proposal: $100,000 = 0.75

Result:

0.75 X 108 = 81 cost points awarded to other proposal

Final calculations shall result in numbers rounded to two decimal places.

Stage 3: Total Points Calculation

For all proposals meeting the Minimum Qualifications in Stage 1 and achieving a passing score in Stage 2.1, the DMHC will combine the proposing organization’s score earned in Stages 2.1 and 2.2 to the Proposer’s cost points calculated in Stage

2.3 and Preference and DVBE Incentive points as follows:

Awarded Total Points = Stage 2.1 Components Evaluation Score + Stage 2.2 Presentation and Interview Evaluation + Stage 2.3 Cost Calculation Score + Preference and DVBE Incentive Points

Awards, if made, will be to the highest scored responsive proposal. In the event of a precise tie, the winner shall be determined by a coin toss. Affected proposing organizations will be contacted to participate in the coin toss.

14. Award and Protest

a. Notice of the proposed award (letter of intent) shall be posted in the DMHC lobby at

980 9th Street, Suite 600, Sacramento, CA 95814 and at http://www.dmhc.ca.gov for five business days prior to award of the Agreement.

http://www.dmhc.ca.gov/

b. If any Proposer, prior to award of the Agreement, files a protest with the DMHC and the DGS, Office of Legal Services, 707 Third Street, 7th Floor, Suite 7-330, West Sacramento, CA 95605 (OLSProtests@dgs.ca.gov), on the grounds the protesting Proposer would have been awarded the Agreement had the DMHC evaluated and scored its proposal as described in the RFP, the Agreement shall not be awarded until either the protest has been withdrawn or the DGS has decided the matter. It is suggested any protest be sent by certified or registered mail.

c. Within five days after filing the initial protest, the protesting Proposer shall file with the DGS, Office of Legal Services and the DMHC a detailed statement specifying the grounds for the protest. The protest must be submitted to the address listed in Item b, above.

d. Upon resolution of any filed protest and the awarding of the Agreement, Contractor must complete and submit the Payee Data Record (STD. 204 Form) to determine if the Contractor is subject to state income tax withholding pursuant to the California Revenue and Taxation Code Sections 18662 and 26131. This form is available at http://www.documents.dgs.ca.gov/dgs/fmc/pdf/std204.pdf. No payment shall be made unless a completed STD. 204 has been returned to the DMHC.

e. Upon resolution of any filed protest and the awarding of an Agreement, the Contractor must sign and submit the Contractor Certification Clauses (CCC 04/2017) available at https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal- Services-Resources-List-Folder/Standard-Contract-Language.

15. Agreement Execution and Performance

a. Performance shall start on the express date set by the DMHC and the Contractor, after all approvals have been obtained and the Agreement is fully executed. Should the Contractor fail to commence work at the agreed upon time, the DMHC, upon five days written notice to the Contractor, reserves the right to terminate the Agreement.

b. The State’s General Terms and Conditions (GTC) are not negotiable. The DMHC does not accept alternate Agreement language from a Contractor. A proposal with such language will be considered a counter proposal and will be rejected. The GTC 04/2017 may be viewed at https://www.dgs.ca.gov/OLS/Resources/Page- Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract- Language. If you do not have internet access, a hard copy of the GTC can be provided by contacting the person identified within this solicitation.

c. All performance under the Agreement shall be completed on or before the termination date of the Agreement.

G. PREFERENCES PROGRAMS

The standard Agreement language for the preference programs applied to this RFP can be found at the Internet web sites listed below:

mailto:OLSProtests@dgs.ca.gov http://www.documents.dgs.ca.gov/dgs/fmc/pdf/std204.pdf https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language https://www.dgs.ca.gov/OLS/Resources/Page-Content/Office-of-Legal-Services-Resources-List-Folder/Standard-Contract-Language

1. Small Business Preference https://www.documents.dgs.ca.gov/dgs/fmc/pdf/std811.pdf

2. Non-Small Business Subcontractor Preference https://www.documents.dgs.ca.gov/dgs/fmc/gs/pd/gspd05-105.pdf

3. Target Area Contract Preference Act (TACPA) https://www.documents.dgs.ca.gov/dgs/fmc/pdf/std830.pdf

If applying for one of these preference programs, please be sure to complete and submit the required documents, which can be found at the above links.

H. DISABLED VETERAN BUISNESS ENTERPRISE (DVBE) INCENTIVE PROGRAM

The DVBE participation requirement has been waived; however, the DVBE Incentive Program will apply for this RFP.

Under California Code of Regulations (CCR) Title 2, Section 1896.99.100, the California DVBE Incentive provides responsive and responsible firms the opportunity to receive additional incentive calculations. The incentive is applied at the time of solicitation evaluation when a proposing firm selects a California-certified DVBE subcontractor to provide services or commodities in support of the overall contract effort. Application of the DVBE Incentive may place the proposing firm in line for contract award.

The DVBE Incentive is applied during the evaluation process and is only applied to responsive proposals from responsible organizations proposing the percentage(s) of DVBE participation for the incentive(s) specified in the solicitation.

The following are key elements of the DVBE Incentive Program:

1. The DVBE Incentive is applied during the evaluation process and is applied only to responsive proposals from responsible organizations proposing the percentage(s) of DVBE participation for the incentive(s) specified in the solicitation.

2. The DVBE Incentive participation is optional and at the discretion of the proposing organization.

3. When requesting the Incentive Application, proposing firms must complete and return Attachment 5, DVBE Incentive Application Request with their proposal at time of submission.

4. The Incentive is calculated by multiplying the solicitation’s total points possible by the level of DVBE participation (%) identified by the proposing firm. This amount is then added to the proposer’s total points to determine if they have the highest total score.

Computation is for evaluation purposes only and cannot be used to achieve any applicable minimum point requirements. (2 CCR 1896.99.100 (d)) https://www.documents.dgs.ca.gov/dgs/fmc/pdf/std811.pdf https://www.documents.dgs.ca.gov/dgs/fmc/gs/pd/gspd05-105.pdf https://www.documents.dgs.ca.gov/dgs/fmc/pdf/std830.pdf

5. Services or commodities provided by the DVBE organization MUST meet the definition of a “Commercially Useful Function” (CUF) as defined under Government Codes Section 14837(d)(4) and Military and Veterans Code Section 999(b)(5)(B). A DVBE firm not meeting CUF regulations will render the proposing organization ineligible for the DVBE Incentive application.

6. The DVBE Incentive application will be based on the Highest Total Score Method and follows the guidelines identified below:

a. The Incentives shall not exceed five percent, nor be less than…