Attachment U- Incentive Disincentive Plan East 02.docx

COMMUNITY CARE NETWORK (CCN) NEXT GENERATION

MEDICAL NETWORK - EAST

INCENTIVE / DISINCENTIVE PLAN (IDP)

Contract Number:

To Be Determined

Contractor:

To Be Determined

Senior Contracting Officer:

Jessica Portillo

Review Board Chairperson:

Andrew Palmer

CCN NG/CM Director

Approved:

To Be Determined Fee Determining Official:

Associate Director for Acquisitions

Table of Contents

1.0 Introduction

2.0 Organizational Structure

3.0 Roles and Responsibilities

4.0 Incentive Evaluation

5.0 Evaluation Process

6.0 Incentive Evaluation Methodology

7.0 Changes and/or Modifications to Incentive/Disincentive Plan

Attachments 1 PWS Attachment C - Performance Requirement Summary (PRS)

INCENTIVE/DISINCENTIVE PLAN

INTRODUCTION

The purpose of this document is to outline overall strategy and organizational structure, define roles and responsibilities, establish procedures, and identify criteria and methodology for applying the identified performance-based incentives / disincentives under the Community Care Network (CCN) Next Generation (NG) Medical Network – East contract. The contract is for a network of licensed health care providers and practitioners for medical, surgical, complementary and integrative, durable medical equipment (DME), and pharmacy services. This Incentive/Disincentive Plan is not incorporated into the contract but is a tool used by VA to ensure consistent and objective evaluation for the application of incentives and disincentives.

A detailed definition of the metrics, how each is computed, and the full range of incentives/disincentives are defined in the Performance Requirement Summary (PRS) and this Incentive/Disincentive Plan.

The Contractor is not eligible for an incentive unless the Contractor achieves the minimum Acceptable Quality Level (AQL) or higher for all performance requirements listed within the PRS during the evaluation period related to each Incentive/Disincentive Factor (IDF). Disincentives will apply regardless of the Contractor’s performance of any other requirements in the PRS. The monetary incentives/disincentives apply to IDF 1 and IDF 2.

Incentives/disincentives will be applied based on the performance threshold achieved, as identified in the PRS. For each IDF identified, an incentive or disincentive will be calculated based on the scheduled Frequency of Calculation related to each IDF as defined in Table 1. The incentive/disincentive is structured around achieving Full Healthcare Delivery (HCD), defined as healthcare delivery of all CCN Next Generation Medical Network – East services at all sites or locations within the region; therefore, the first month eligible for incentives/disincentives for IDF 1 and IDF 2, is the first month assessed after Full HCD has been achieved. The first evaluation for incentives/disincentives will occur at least once within one (1) year of achieving full HCD and subsequent evaluations will occur semi-annually thereafter.

Table 1: CCN IDFs

IDF Eligibility Start

IDF 1

Quality VA-Provided Ticketing Tool - Adverse Credit Reporting (ACR) (Tier 3) Ticket Volumes

Contractor Use of VA Ticketing Tool

Upon achieving Full HCD Monthly

At least once within one (1) year of achieving full HCD and Semi-annually thereafter

IDF 2

Quality Value-Based Purchasing Network Coverage

Value-Based Care

Upon achieving Full HCD Monthly

At least once within one (1) year of achieving full HCD and Semi-annually thereafter

· Frequency of Calculation refers to the Evaluation Period for which Incentives and Disincentives will be calculated, e.g., month to month, quarter to quarter, etc. The Evaluation Period resets after the Calculation period ends. For example, if monthly Frequency of Calculation for the month is January 1 to January 31. The IDF Calculation period resets on February 1.

· Monthly is defined as occurring once a month in a given 12-month period.

· Quarterly is defined as once every quarter of a given time period. Each fiscal year is separated into three-month sections equaling a total of four quarters in a 12-month period.

· These quarters occur between the time period of the beginning of October to the end of September.

· Semi-annually is defined as occurring twice a fiscal year between the beginning of October to end of September.

1.1. The primary objective of an incentive is to motivate the Contractor to provide services that exceed the contracts requirements and focus Contractor's efforts in desired areas.

1.2. The primary objective of a disincentive is to motivate the Contractor to provide services that meet the minimum contract requirements and focus Contractor's efforts in desired areas.

1.3. The Contractor’s performance will be assessed based on the requirements of the Performance Work Statement (PWS) and the PRS. Incentive or disincentive payments will be calculated using the methodology defined in this Incentive/Disincentive Plan. The Contractor will be eligible to receive an incentive or subject to a disincentive. The Incentive/Disincentive Plan rewards the Contractor for increased levels of performance when performance measures identified in Section 6.0 have been met and provides for a disincentive when the performance measures are not met, where applicable. The incentive is applied through a formula which identifies a maximum allowable incentive. The specific process for determining Contractor’s performance and corresponding incentive/disincentive is set forth in sections of this plan, the PRS, and the Quality Assurance Surveillance Plan (QASP).

ORGANIZATIONAL STRUCTURE

2.1 The Review Board (RB) consists of the RB Chairperson, RB Advisory Members, RB Recorder, and Performance Monitors. At a minimum, the Incentive/Disincentive Review Board (RB) will be made up of a senior representative from Contracts Management CM, the Contracting Officer’s Representatives (COR), a representative from the Office of General Counsel, the Fee Determining Official (FDO), and Contracting Officer (CO). CM reserves the right to nominate additional members as appropriate.

2.2 Additional advisors will be included, as needed, from the Office of Finance, Integrated Veteran Care, and the Office of the Assistant Deputy Under Secretary for Operations and Management.

ROLES AND RESPONSIBILITIES

3.1. Fee Determining Official (FDO). The FDO (at least one level above the CO) shall:

3.1.1. Appoint the Review Board Chairperson, no later than (NLT) 30 days after contract award.

3.1.2. Approve the Incentive/Disincentive Plan.

3.1.3. Approve changes to the Incentive/Disincentive Plan, and/or associated Incentive criteria or methodology of determining amount(s) of Incentive.

3.1.4. Make the final decision on whether an incentive or disincentive applies and if so, the amount.

3.2. Contracting Officer (CO). The CO shall:

3.2.1. Appoint the Review Board.

3.2.2. Participate in the RB and ensure performance calculations are followed in accordance with the contract and Incentive/Disincentive Plan.

3.2.3. Act as the liaison between the Contractor and Government personnel.

3.2.4. Provide feedback to the Contractor on a regular basis in the areas of performance criteria and ensure the Contractor has the current version of the Incentive/Disincentive Plan.

3.2.5. Prepare FDO Incentive determination letter to be provided to the Contractor.

3.2.6. Ensure the decision is fully documented in the contract file.

3.2.7. Execute changes to the contract that make changes to the Incentive/Disincentive Plan and the methodology in which any Incentive is determined and distributed.

3.3. Review Board (RB) Chairperson. The RB Chairperson shall:

3.3.1. Manage all activities of the RB.

3.3.2. Appoint a Review Board Recorder.

3.3.3. Recommend Incentive/Disincentive Plan changes to the FDO.

3.3.4. Present the RB's written evaluation and recommendation to the FDO and CO.

3.4. Advisory Review Board Members. RB Advisory Members are selected as appropriate to provide customer input and subject matter expertise to other RB members. Advisory Members may include but are not limited to individuals from: Office of Finance, Integrated Veteran Care, and the Office of the Assistant Deputy Under Secretary for Operations and Management.

3.5. Review Board Members. The RB Members shall:

3.5.1. Review performance reports.

3.5.2. Participate in the RB meetings and briefings upon request of the RB Chairperson.

3.5.3. Review performance assessments and prepare a written evaluation and recommendation.

3.5.4. Recommend changes to the Incentive/Disincentive Plan.

3.5.5. Maintain written records of Contractor’s performance.

3.6. Review Board Recorder. The Review Board Recorder shall:

3.6.1. Assist RB Chairperson and COR (also referred to as the Performance Monitor) with administrative activities associated with the RB process.

3.6.2. Notify RB members of when required briefings will be and manage the calendar scheduling those meetings.

3.6.3. Record and distribute minutes of the RB meetings.

3.6.4. Maintain the official Incentive files to include internal procedures and other documentation having a bearing on the FDO's decision.

3.6.5. Document and maintain RB activities in official files.

3.6.6. Perform other duties as assigned by the RB Chairperson, or CO including notification and scheduling of any advisory personnel that may be needed by the RB.

3.7. Contracting Officer’s Representative (COR) (Performance Monitor): The COR shall:

3.7.1. Understand and be familiar with the contract requirements, PRS, Incentive/Disincentive Plan, and QASP.

3.7.2. Maintain and update the Incentive/Disincentive Plan as approved by the FDO.

3.7.3. Provide incentive/disincentive overview and training for team members when needed.

3.7.4. Understand and monitor Contractor’s performance levels and the performance requirements necessary to achieve each level of performance in accordance with the QASP and this Incentive/Disincentive Plan.

3.7.5. Maintain written records of Contractor's performance, “performance report” which includes a complete listing of all performance objectives, the required performance threshold, and the Contractor’s results for the performance objectives on a monthly, quarterly or semi-annual basis.

3.7.6. Conduct assessments of contract requirements and the PRS, consistent with the QASP and this Incentive/Disincentive Plan.

3.7.7. Be prepared to brief the RB on the complete performance assessment.

3.7.8. Recommend changes to the Incentive/Disincentive Plan, e.g., incentive pool reallocations, etc.

3.7.9. Responsible for certifying invoices for incentive payments.

3.8. Office of General Counsel (OGC). OGC shall:

3.8.1. Provide general governance advice.

3.8.2. Ensure legal and regulatory compliance.

3.8.3. Advise on legal risks and actions that may create legal liabilities.

3.8.4. Review incentive/disincentive documentation, to include evaluation documentation/decisions, proposed changes to incentive/disincentives, and proposed changes to this Incentive/Disincentive Plan.

3.8.5. Represent the organization in disputes related to the application incentives/disincentive under this contract.

INCENTIVE EVALUATION

4.1. Incentives are calculated monthly as specified in the attached PRS. The Review Board convenes prior to application of the incentive or disincentive for all months within the evaluation period to confirm the results of performance and the accuracy of the calculations.

4.2. The incentives are objective and require continuous monitoring, by the Performance Monitor, of performance thresholds associated with incentives. Continuous evaluation of performance will serve to advise the Contractor of trends indicating the likelihood of receiving incentives or disincentives during the evaluation periods.

4.3. All evaluation periods will include calculations of the factors defined in this Incentive/Disincentive Plan. The purpose of the performance evaluations is to jointly assess Contractor’s performance during the period, identify strengths and improvements that occurred during the period, and recommend an appropriate incentive to be paid or subtracted from the Contractor, if justified.

4.4. For each evaluation period, the Performance Monitor will prepare the appropriate performance and evaluation reports, documenting the Contractor’s performance and corresponding incentive rating recommendation in accordance with the performance assessment methodology set forth in the PRS and QASP.

4.5. Performance assessment results and supporting rationale will be reviewed, integrated, and compiled by the RB Chairperson, who will then develop and forward an overall recommendation to the FDO for use in determining incentive(s).

4.6. The Contractor will receive the results of these recommendations along with necessary supporting material.

EVALUATION PROCESS

The RB will meet at least once within one (1) year of the Contractor achieving full HCD and semi-annually thereafter to review and finalize its recommendation for incentives and/or disincentives for submission to the FDO for final approval. The review cadence is as follows:

· Initial Review

· RB Session – To Be Determined

· FDO Final Decision – NLT 60 days after RB Session convenes

· Semi-annual Review 1

· RB Session

· FDO Final Decision – NLT 60 days after RB Session convenes

· Semi-annual Review 2

· RB Session

· FDO Final Decision – NLT 60 days after RB Session convenes NLT 60 days prior to each Review Board Session, the Performance Monitor will confirm, with the FDO, the identities of the RB Chairperson and RB Members. NLT 45 days prior to each Review, the RB Chairperson, in coordination with the RB, will establish a schedule, assigning dates for planned activities associated with each required evaluation process step.

NLT 15 days prior to each RB Session, the Performance Monitors will submit performance assessments of each performance objective in Section 6.0 for each month included in the evaluation period to the RB Chairperson along with a Consolidated Evaluation Report, prepared by the Performance Monitor. The Consolidated Evaluation Report will include:

· An overview of the Contractor’s calculated performance for each PO eligible for incentive/disincentive

· Confirmation that the Contractor has not failed to meet the minimum AQL for any PO in identified in the PRS

· A recommendation, for each eligible PO, of “no incentive”, “incentive”, or “disincentive” (with associated payment/credit amounts) for each month included in the assessment

· The net amount owed to the Contractor (incentive) or owed by the Contractor (disincentive) for each PO for the entire evaluation period.

The RB Chairperson will provide the Consolidated Evaluation Report to the RB NLT 5 days prior to each RB Session.

The Review Board Recorder will record RB discussions and deliberations in detailed minutes. These minutes, when combined with the briefings, will provide a clear and concise record of the events leading to the RB recommendation. The minutes and briefings comprise the official file which provides the necessary support to substantiate the incentive/disincentive decision.

The RB Chairperson will submit the RB’s recommendation, via RB Memo(s), to the CO NLT 5 days after the RB convenes.

The CO will submit the assessments to the Contractor NLT 15 days after the Review Board has convened. The Contractor must submit its concurrence or any relevant disputes to the CO within five days of receipt of the assessment and recommendation.

The CO will submit the Contractor’s concurrence or all relevant dispute information to the FDO NLT 40 days after the RB convenes.

The FDO makes the final determination and awards the appropriate incentive/disincentive NLT 60 days after the RB Session convenes. The FDO through the CO will notify the Contractor in writing of the incentive earned or disincentive applied and will provide an evaluation of the Contractor's performance in accordance with Section 6.0.

The CO may discuss with the Contractor the decision of the FDO.

The Contractor shall submit electronic copies of the Incentive invoice(s) to the CO /COR in the Tungsten Network and in accordance with the guidance provided in Section B of the contract and FAR 52.212-4(g). Disincentive fees shall be billed to the Contractor (via Credit Memo).

INCENTIVE EVALUATION METHODOLOGY

Objective assessments will be used to evaluate Contractor’s overall performance and the specific incentivized performance objectives along with the corresponding incentive during each evaluation period. The incentive criteria have been structured to achieve the performance-based objectives listed in paragraph 1.0.

The determination of the incentive/disincentive is based on the individual logic of each IDF, as prescribed in the PRS and this Incentive/Disincentive Plan.

4.

5.

6.

6.1.

6.2.

· The first month IDF 1 and IDF 2 are eligible for incentives/disincentives is the first month assessed after Full HCD has been achieved.

· The first evaluation for incentives/disincentives will occur at least once within one (1) year of achieving full HCD and subsequent evaluations will occur semi-annually thereafter.

· The Contractor’s performance of PO 2.7 (IDF 1) and PO 5.1 (IDF 2), are calculated in accordance with the PRS and the steps outlined in the QASP Appendix A. Each month in the evaluation period is assessed separately to determine the degree to which the performance thresholds established in the PRS were met or not met.

6.2.1. IDF 1 (PO2.7) - VA-Provided Ticketing Tool - Adverse Credit Reporting (ACR) (Tier 3) Ticket For each month that the Contractor’s performance is determined, based on the calculations outlined in the QASP Appendix A, to meet the following thresholds, incentives/disincentives will apply accordingly:

· 0 - 50 ACR Tickets = + 0.25 % of the Monthly Administrative Services (CLIN X008 AA and AB)

· 51 - 90 ACR Tickets = No Incentive / Disincentive

· 91- 100 ACR Tickets = - 0.25% of the Monthly Administrative Services (CLIN X008 AA/AB)

· 101- 110 ACR Tickets = - 0.50% of the Monthly Administrative Services (CLIN X008 AA/AB)

· 111- 120 ACR Tickets = - 0.75% of the Monthly Administrative Services (CLIN X008 AA/AB)

· > 120 ACR Tickets = - 1% of the Monthly Administrative Services (CLIN X008 AA/AB) Incentive/disincentive payments/credits will be applied semi-annually in accordance with the above criteria and calculated using the monthly Administrative Services fees (reference Table 2 for Maximum Allowable Incentive) for the applicable period of performance being assessed.

6.2.2. IDF 2 (PO5.1) - Value-Based Purchasing Network Coverage For each month that the Contractor’s performance is determined, based on the calculations outlined in the QASP Appendix A, to meet the following thresholds, incentives/disincentives will apply accordingly:

LAN Category 2

· Contract Year (CY) 1 N/A

· CY2 ≥ 15% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 10% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY3 ≥ 20% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 15% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY4 ≥ 30% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 25% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY5 ≥ 35% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 30% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB) LAN Category 3

· CY1 N/A

· CY2 ≥ 10% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 5% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY3 ≥ 15% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 10% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY4 ≥ 20% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 15% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB)

· CY5 ≥ 25% = + 2% of the Monthly Administrative Services (CLIN X008 AA/AB) < 20% = - 2% of the Monthly Administrative Services (CLIN X008 AA/AB) Incentive/disincentive payments/credits will be applied semi-annually in accordance with the above criteria and calculated using the monthly Administrative Services fees (reference Table 2 for Maximum Allowable Incentive) for the applicable period of performance being assessed.

The incentives and disincentives are calculated according to the PRS and QASP. Each factor is calculated based on their specific frequency requirement of monthly, quarterly or semi-annually.

The incentive price ceilings for each IDF are the maximum incentives that can be earned. The following table reflects the annual incentive ceilings for CCN Next Generation Medical Network - East.

Table 2: CCN Maximum Allowable Incentive/Disincentive

Maximum Annual Disincentive

$1,033,675.84 (-1%) ($4,134,703.35)

$8,269,406.70 (-2%) ($8,269,406.70)

CCN NG Estimated Annual Maximum Incentive/ Disincentive Values *Actual amounts to be entered upon contract award

6.5. Performance Objectives will be evaluated utilizing the QASP, there is no subjective judgment utilized in determining the incentive or disincentive. The Contractor’s actual performance in each period will be compared to the specific performance measures set forth in the PWS document and PRS.

CHANGES AND/OR MODIFICATIONS TO INCENTIVE/DISINCENTIVE PLAN

0. VA may make changes and updates to this Incentive/Disincentive Plan, such that the changes made do not conflict with the PRS and do not affect the ability of the Contractor to be eligible for incentives/disincentives or otherwise impact their ability to meet or exceed the thresholds outlined in the PRS. Changes to this Incentive/Disincentive Plan must be aligned with the PRS. If the proposed changes to this Incentive/Disincentive Plan will require a change to the PRS, changes to the PRS will be made in accordance with PWS Section 2.5.1, Performance Surveillance and Assessment and the corresponding contract modification for those PRS changes must be fully executed prior to finalization of the related proposed changes to this Incentive/Disincentive Plan.

0.1. Either the Government or (Contractor) may propose changes to PRS and established incentives/disincentives must be submitted to the Contracting Officer and should be made in time to allow for review, comment, and modification of the contract, if appropriate. The Incentive/Disincentive Plan will be reviewed and updated as necessary to account for approved updates to the PRS.

0.2. Method for Making Changes: Proposed changes to this Incentive/Disincentive Plan will be submitted to the CO for review and concurrence. Once concurrence is received by the CO, the Performance Monitor (COR) will present recommended changes to the Incentive/Disincentive Plan to the RB for review and concurrence. The proposed changes will be submitted to the FDO for approval. The FDO will review and approve all changes to the Incentive/Disincentive Plan before any changes take effect. The CO will execute any modifications as appropriate.