A16_JOFOC_-_140D0422Q0616_-_Sole_Source_Justification_-_SAM_1.pdf

SOLE SOURCE JUSTIFICATION

SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL ITEMS

AUTHORITY: FAR 13.501(a), 41 U.S.C. 1901 Solicitation 140D0422Q0616

1. Identification of the agency and the contracting activity, and specific identification of the document as a “Sole Source Justification.”

This document is a Sole Source Justification for the Department of the Interior (DOI), Interior Business Center (IBC), Acquisition Services Directorate (AQD), Division II Branch II on behalf of the Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE).

2. Nature and/or description of the action being approved.

The proposed action is a new requirement to award a sole source purchase order to Merative US, L.P. (Merative) for Commercial Healthcare Claims Data (CHCD).

3. A description of supplies or services required to meet the agency’s needs (including the estimated value).

The objective of this acquisition is to acquire commercial healthcare claims data. This data is necessary to understand health care spending and utilization of health services, particularly as it relates to large employer-provided insurance and Medicaid managed care (Transformed Medicaid Statistical Information System (T-MSIS) currently does not have cost data). Access to such data, as well as technical assistance to analyze this data, is important to understand the service utilization and expenditures patterns surrounding issues of importance to the Secretary and the Department (e.g., to track the opioid epidemic, health care cost persistence, and the healthcare experiences of vulnerable populations).

4. An identification of the statutory authority permitting sole source acquisition.

This is an acquisition conducted under the authority of the Simplified Procedures for Certain Commercial Products and Commercial Services. The statutory authority permitting sole source acquisition is 41 U.S.C 1901 as implemented by FAR 13.501(a)(1)(ii).

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

ASPE requires private sector claims data to perform several analyses. These include the computation of the small group market benchmarks that ASPE provides to the Internal Revenue Service (IRS) each year as required by section 1421 of the Affordable Care Act of 2010 (ACA).

In addition, the Department relies on ASPE to provide prescription drug data including various price measures (total, patient liability, third party payment) and distributions (mean and various percentiles), and various measures of quantities (days, supply, units, claims) at the National Drug Code (NDC) level. For several years ASPE has reported hospital outpatient and physician administered drug data at the procedure code level which needs to be continued. Finally, ASPE requires data to calculate the actuarial value of each plan each year for the plan the enrollee is in.

In order to accomplish these tasks, data must meet the following criteria:

1. One must be able to identify a unique enrollee across all claims submitted by different data contributors.

2. One must be able to identify an enrollee even though that enrollee had no claims filed during the year.

3. Claims must be representative of all insurers, all plans, and employers across the United

States.

4. Claims must contain payment information.

5. Claims must have been validated by a significant number of researchers to ensure their validity to answer research questions.

Merative (formerly IBM Watson Health) is the sole developer and distributor of the copyrighted MarketScan database with private sector claims data, which the Government concluded is the only such claims database that meets these criteria. According to the University of California San Francisco’s review of databases containing claims for payment the following databases are available in the United States: Medicare claims, MarketScan, Optum Insights and all payer claims databases (APCD). This conforms to ASPE’s search for vendors and vendor presentations to ASPE conducted over the past five years. In the APCD space, ASPE has reviewed information from the Health Care Cost Institute. In addition, ASPE has recent experience with a new data vendor, Inovalon. In each instance, these sources of data fail to meet the criteria necessary for ASPE to conduct its work. The APCD databases do not allow the user to identify an enrollee if the enrollee had no claims filed during the year. The Medicare claims are not representative of all insurers, plans and employers. The Inovalon databases do not contain payment information in the majority of cases. The Optum database covers only one insurer (United Healthcare), and therefore is not representative of all insurers, plans, and employers across the United States. The APCD claims databases do not cover all states, and are therefore not representative. Finally, only Optum, Medicare and MarketScan claims have significant research work conducted with them as evidenced by a search on PubMed. Since MarketScan is the only product that meets all of the criteria, including complete payment information, the Government concluded Merative is the sole vendor capable of meeting ASPE’s requirements.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by FAR Subpart 5.2 and, if not, which exception under FAR 5.202 applies.

A Notice of Intent to Sole Source was posted to the System for Award Management (SAM) on June 28, 2022 with responses due July 5, 2022. No responses were received.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

The contracting officer anticipates that the price will be fair and reasonable based on the prior acquisition history and available commercial pricing data. A final determination of price reasonableness will be made prior to contract award.

8. A description of the market research conducted (see Part 10) and the results or a statement of the reason market research was not conducted.

In addition to the Notice of Intent, Market research included an analysis of previous procurement history for these services and prior market research conducted by ASPE. ASPE has consulted with various vendors on an ongoing basis, as the need for claims data with various characteristics for other research purposes is continuous. ASPE has also consulted academic literature to review potential claims sources. Additionally, ASPE received independent market research conducted by Mathematica, Inc. on commercial claims data.

The Government’s market research indicates that the MarketScan Commercial, Health Risk Assessment, and Benefit Design Database with private sector claims data is the only such claims database that meets this requirement. As a result, the Government concluded that Merative is the only source that is capable of providing these services.

9. Any other facts supporting the use of other than full and open competition, such as:

The ASPE program has performed a thorough review of all other commercial healthcare claims databases available in the United States and has concluded that there is no other source that meets the Government’s requirement.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

No responses to the Notice of Intent to Sole Source were received.

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

The Government will continue to review the capabilities of the available commercial healthcare claims databases throughout performance of this order. In the event that additional databases are established that meet the Government’s requirement, this acquisition may be suited for competition in the future.