ESBD_File_352749_HHS0013981 - RFP.pdf

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Version 2.10

Revision Date 9/12/2023

Cecile E. Young, Executive Commissioner

Request for Proposals (RFP) for

Actuarial Services for Medicaid Managed Care and CHIP

RFP No. HHS0013981

Date of Release: March 12, 2024

Responses Due: April 11, 2024 at 10:30 a.m. Central Time

See Section 3.1 for Schedule of Events

NIGP Class/Item Codes:

946-00 Financial Services

946-12 Actuarial Services

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Table of Contents Article I. Executive Summary, Definitions, and Authority

1.1 Executive Summary

1.2 Definitions

1.3 Authority

Article II. Scope of Work

2.1 Statement of Work

2.1.1 Background

2.1.2 Laws, Rules, and Regulations

2.1.3 Principal Actuary Requirements

2.1.4 General Requirements and Specifications

2.1.5 Contractor Roles and Responsibilities

2.1.6 Agency Roles and Responsibilities

2.1.7 Deliverables

2.1.8 Performance Measures and Liquidated Damages

2.1.9 Deliverable Acceptance Process

2.1.9.1 General

2.1.9.2 Submission and Review Process for Deliverables

2.1.9.3 Deliverable Acceptance Criteria

2.1.10 Turnover Services

2.1.11 Payment Method and Frequency

2.2 Contract Award, Term, and Historical Compensation

2.2.1 Contract Award and Execution

2.2.2 Contract Term

2.2.3 Historical Compensation

2.3 Data Use Agreement and Security Privacy Inquiry

2.4 No Guarantee of Volume, Usage, or Compensation

2.5 Governmental Entities

Article III. Administrative Information

3.1 Schedule of Events

3.2 Ambiguity, Conflict, or Discrepancy

3.3 Inquiries

3.3.1 Sole Point of Contact

3.3.2 Prohibited Communication

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3.3.3 Exception to Sole Point of Contact

3.3.4 Solicitation Questions

3.4 Pre-proposal Conference

3.4.1 Attendance

3.4.2 Pre-proposal Conference Logistical Information

3.4.3 Questions at Pre-Proposal Conference

3.5 Solicitation Response Composition

3.5.1 General Information

3.5.2 Page Limit and Supporting Documentation

3.5.3 Discrepancies

3.5.4 Exceptions

3.5.5 Assumptions

3.5.6 Binding Offer

3.6 Solicitation Response Submission and Delivery

3.6.1 Deadline

3.6.2 Submission Option

3.6.3 Submission Checklist

3.6.4 Labeling and Delivery for USB Submission and Other Materials

3.6.5 Modifications and Withdrawals

Article IV. Solicitation Response Evaluation and Award Process

4.1 Conformance with State Law

4.2 Best Value Determination

4.2.1 Selection Methodology

4.2.2 Minimum Qualifications

4.2.3 Initial Compliance Screening

4.2.4 Written Solicitation Response Evaluation

4.2.5 Written Response Evaluation Criteria

4.2.6 Best and Final Offer (BAFO)

4.2.7 Final Written Response Score

4.2.8 Summary of Best Value Determination

4.3 Questions or Requests for Clarification

Article V. Narrative Proposal

5.1 Narrative Proposal

5.1.1 Executive Summary

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5.1.2 Experience and Qualifications

5.1.2.1 Key Staffing Profiles

5.1.2.2 Staff Experience

5.1.3 Project Work Plan

Article VI. Required Respondent Information

6.1 Company Information

6.1.1 Company Narrative

6.1.2 Company Profile

6.2 Franchise Tax – Right to Transact Business in Texas

6.3 References

6.4 Major Subcontractor Information

6.5 Affirmations and Certifications

6.6 Other Reports

6.6.1 Dun and Bradstreet Reports

6.6.2 Financial Statements and Financial Solvency

6.6.3 Alternate Report

6.7 Corporate Guarantee

6.8 HUB Subcontracting Plan

6.9 Secretary of State Certification

Article VII. Cost Proposal

7.1 Cost Proposal

Article VIII. General Terms and Conditions

8.1 General Conditions

8.1.1 Changes, Modifications, and Cancellation

8.1.2 Offer Period

8.1.3 Costs Incurred

8.1.4 Contract Responsibility

8.1.5 Public Information Act - Respondent Requirements Regarding Disclosure

8.1.6 Respondent Waiver – Intellectual Property

8.1.7 Standards of Conduct for Vendors

8.1.8 Disclosure of Interested Parties

8.2 Insurance

8.2.1 Required Coverage

8.2.2 Alternative Insurability

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8.3 Protest

Article IX. List of Exhibits

ARTICLE I. EXECUTIVE SUMMARY, DEFINITIONS, AND AUTHORITY

1.1 EXECUTIVE SUMMARY

The Texas Health and Human Services Commission (HHSC), through and on behalf of the HHSC

Actuarial Analysis Department, seeks a qualified Contractor with the expertise, financial resources, and experience to provide comprehensive actuarial Services in support of the Texas

Medicaid Managed Care (MC) and Children’s Health Insurance Program Managed Care (CHIP) which includes STAR, STAR Health, STAR Kids, STAR+Plus, Dual Demo, CHIP, CHIP Dental, and Medicaid Dental programs. The Contractor will also provide actuarial analysis in support of managed care delivery systems, and HHSC’s supplemental payment program funding methodologies.

The resulting Contract, if any, will enable HHSC to fulfill its duties to the State of Texas and the federal Centers for Medicare and Medicaid Services (CMS) in developing actuarially sound practices and principles to develop Managed Care Organizations (MCOs) capitation rates on an annual basis in accordance with CMS guidelines and the specifications contained in this request for proposals (RFP).

Managed Care rates are delivered through actuarial reports which provide certification that (1) the rates were developed using the CMS approved rating methodology and assumptions, and (2) that the rates meet actuarial soundness in accordance with 42 CFR § 438.4.

The capitation rate development process is managed by the HHSC Actuarial Analysis Department.

HHSC and the Contractor will apply generally accepted actuarial methods and follow CMS-approved processes to develop and document rates in compliance with federal rules, establish baseline costs, define rate cells, project future costs, make appropriate adjustments, estimate non-benefit costs, and address special Contract provisions.

HHSC PCS will administer the procurement process for this Solicitation, which includes RFP publication, handling of communications from vendors, as well as managing the receipt of

Solicitation Responses for review and evaluation.

To be considered for award, a Respondent must execute Exhibit A, HHS Solicitation

Affirmations, Version 2.4 and provide all other required information and documentation as set forth in this Solicitation.

https://www.ecfr.gov/current/title-42/section-438.4

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Information regarding HHSC and its programs is available online and can currently be accessed at https://hhs.texas.gov.

1.2 DEFINITIONS

Refer to Exhibit B, Health and Human Services (HHS) Uniform Terms and Conditions

(UTCs) – Vendor, Version 3.4, Exhibit C, Health and Human Services (HHS) Additional

Provisions, Version 1.0, and Exhibit D, Data Use Agreement (DUA), Version 8.5 for additional definitions.

As used in this Solicitation, unless a different definition is specified or the context clearly indicates otherwise, the following terms and conditions have the meanings assigned below:

“Addendum” means a written clarification or revision to this Solicitation issued by HHSC PCS and posted to the ESBD.

“Advancement Criteria” means the published criteria for Respondent to advance to the next phase of evaluation if multiple evaluation methods are utilized.

“Award Consideration (AC) Documents” means documents Respondent must submit as part of the Solicitation Response to be considered for negotiations or award.

“Business Day” or “Working Day” is Monday-Friday, other than a national or State holiday as defined by Texas Government Code Sections 662.003(a)(b). Use of the term "day," rather than

“Working Day” shall mean a Calendar Day.

“Calendar Day” refers to every day on the calendar, i.e. all 365 days of the year (366 if it is a leap year).

“CMS” means the Centers for Medicare & Medicaid Services, which is the federal agency responsible for administering Medicare and overseeing state administration of Medicaid.

“Competitive Range” has the same meaning as the definition under Title 1 of the Texas

Administrative Code Part 15, Chapter 391, Subchapter A, Rule §391.107(3).

“Contract Term” means the period of time beginning with the commencement date or Effective

Date of a Contract and ending when the Contract expires in accordance with its terms, or when it has been terminated.

“DFPS” means the Department of Family and Protective Services.

“DSHS” means the Department of State Health Services.

https://hhs.texas.gov/ https://statutes.capitol.texas.gov/Docs/GV/htm/GV.662.htm https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=1&pt=15&ch=391&rl=107

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“Effective Date” has the same meaning as the definition in Exhibit B, Health and Human

Services (HHS) Uniform Terms and Conditions – Vendor, Version 3.4.

“ESBD” means the Electronic State Business Daily, the electronic marketplace where State of

Texas bid opportunities over $25,000 are posted. The ESBD may currently be accessed at https://www.txsmartbuy.com/esbd.

“Final Written Response Score” refers to the final scoring of the written response as documented in the Solicitation.

“HHSC” means the Health and Human Services Commission.

“HHSC PCS” means Procurement and Contracting Services (PCS), a division of HHSC.

“HUB” means Historically Underutilized Business, as defined by Chapter 2161 of the Texas

Government Code.

“HUB Subcontracting Plan” or “HSP” means written documentation regarding the use of subcontractors, which is required to be submitted with all responses to State agency contracts with an expected value of $100,000 or more where the State agency has determined subcontracting opportunities are probable. The HSP subsequently becomes a provision of the awarded Contract and must be monitored for compliance by the State agency during the term of the Contract.

“Managed Care or MC” is a service delivery model where the Health and Human Services

Commission (HHSC) contracts with Managed Care Organizations (MCOs) to provide Medicaid and Children’s Health Insurance Program (CHIP) services to clients. Overall care of clients under managed care is coordinated by the MCOs to improve quality and control costs. In Texas, 97 percent of Medicaid clients are enrolled in managed care— where they select a health plan available in their service area and a primary care provider that coordinates their care.

“Principal Actuary” means a member of the American Academy of Actuaries, a fellow in the

Society of Actuaries with expertise and knowledge of CMS regulations applicable to Medicaid and CHIP capitation rates and meets the American Academy of Actuaries qualification standards for rendering opinions on Medicaid and CHIP managed care capitation rates.

“Respondent” means the individual or entity responding to this Solicitation.

“Solicitation” means this RFP including all exhibits, attachments, forms, and Addenda, if any.

“Solicitation Consideration (SC) Documents” means documents that must be submitted by

Respondent with the Solicitation Response in order to be considered for evaluation and cannot be resubmitted or have errors remedied after the submission due date and time in the Schedule of

Events has passed.

https://www.txsmartbuy.com/esbd

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“State” means the State of Texas and its instrumentalities, including HHSC and any other State agency, its officers, employees, or authorized agents.

“VPTS” means Vendor Performance Tracking System, as defined under Section 2262.055 of the

Texas Government Code and Title 34 of the Texas Administrative Code Part 1, Chapter 20, Subchapter B, Division 2, Rule §20.115 and Subchapter F, Division 2, Rule §20.509.

1.3 AUTHORITY

HHSC is soliciting the Services stated in this Solicitation under of the authority of Texas

Government Code 2155.144(b-1)(2).

ARTICLE II. SCOPE OF WORK

2.1 STATEMENT OF WORK

HHSC seeks to contract with a qualified entity that can provide actuarial related expertise to certify actuarial soundness of MCO capitation rates, and that has demonstrated experience in, and knowledge of, the Medicaid managed care programs. These rates are to be developed on an annual basis. Services will be rendered in accordance with an annual rate development timeline. This timeline will be delivered to the Contractor prior to the start of each State Fiscal Year and will include the specific tasks and due dates required.

2.1.1 Background

On May 6, 2016, CMS published the Medicaid and Children's Health Insurance Program (CHIP)

Programs. CHIP is a managed care program that provides primary and preventive health care to low-income, uninsured children through age 18 with household incomes up to 201 percent of the federal poverty level (FPL) who do not qualify for Medicaid. The CHIP program expanded to provide benefits for unborn children of pregnant women on January 1, 2007, under the program name CHIP Perinate. CHIP Perinate services include prenatal visits, prescription prenatal vitamins, labor and delivery, and postpartum care. CHIP Perinate members are exempt from the

90 Calendar Days waiting period and all cost-sharing for the duration of their coverage period.

Medicaid and CHIP programs are delivered under Managed Care and is regulated by final rule

(hereinafter referred to as “the 2016 final rule”) eCFR: 42 CFR Part 438 -- Managed Care that modernized the Medicaid and CHIP managed care regulations to reflect changes in the use of managed care delivery systems.

The 2016 final rule aligned many of the rules governing Medicaid and CHIP managed care with those of other major sources of coverage; implemented applicable statutory provisions;

strengthened actuarial soundness of payment provisions to promote the accountability of managed care program rates; strengthened efforts to reform delivery systems that serve Medicaid and CHIP https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2262.htm#2262.055 https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=20&rl=115 https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=20&rl=509 https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2155.htm#2155.144 https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2155.htm#2155.144 https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438?toc=1

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The Texas Medicaid and CHIP programs operate statewide with services delivered through

Managed Care Organizations (MCOs) under contract with HHSC.

Every State Fiscal Year Texas Medicaid, CHIP, and MCO capitation payment rates are reviewed and approved by CMS.

MC capitation rates are developed using the CMS approved rating methodology. A qualified actuary must attest that the capitation rates are actuarially sound and an actuary report must be submitted to CMS certifying this. MC capitation rates are typically established prospectively and remain in effect for the duration of the State Fiscal Year, unless a change occurs mid-year which affects the published rates. The same rules apply to any mid-year rate changes.

HHSC will work with Contractor to determine which risk mitigation tools to use including, but not limited to, underwriting gain assumptions, limits on profit, performance incentives, withholds, and directed payments, in ascertaining how much risk to shift to MCOs. HHSC and Contractor will apply actuarial judgment to advance policy goals of efficiency, access, quality, and value and provide the agency with recommendations, as necessary.

2.1.2 Laws, Rules, and Regulations

Contractor must follow and comply with 42 CFR § 438.4, the current General Appropriations Act, Article II as well as all other regulations referenced herein, at all times.

2.1.3 Principal Actuary Requirements

a. Contractor must always have a minimum of three (3) Principal Actuaries on staff.

b. All Principal Actuaries must be:

1. Members of the American Academy of Actuaries (MAAA) that meet the American

Academy of Actuaries qualification standards for rendering actuarial opinions; and

2. Fellows in the Society of Actuaries (SOA).

c. All Principal Actuaries must maintain expertise and knowledge of CMS regulations applicable to Medicaid and CHIP capitation rates.

d. Contractor must notify HHSC of any changes to Principal Actuaries within three (3)

Business Days.

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e. Contractor shall assign the following actuary levels based on years of experience setting

Medicaid or CHIP managed care capitation rates:

1. Senior Actuary - must possess at least 15 years of experience setting Medicaid or

CHIP managed care capitation rates.

2. Actuary - must possess at least 10 years of experience setting Medicaid or CHIP managed care capitation rates.

3. Associate Actuary - must possess at least 5 years of experience setting Medicaid or

CHIP managed care capitation rates.

f. Contractor must provide HHSC with the list of Principal Actuaries on staff, that includes names, email addresses, and phone numbers, within ten (10) Calendar Days of awarded

Contract execution.

g. Contractor must provide HHSC with an updated list of any changes to Principal Actuaries on staff, that includes names, email addresses, and phone numbers, within ten (10)

Calendar Days from any changes to Principal Actuaries on staff for HHSC approval.

2.1.4 General Requirements and Specifications

Contractor is required to certify the actuarial soundness of the capitation rates. These rates are to be developed on an annual basis and as required by CMS.

Contractor must:

a. Develop actuarial reports as required by CMS and certify that rates meet all CMS requirements for actuarial soundness;

b. Assist HHSC in developing managed care rates for MCOs by coordinating with MCOs to accumulate and gather necessary information to develop rates;

c. Perform a comparison of the various sources of claims data received from MCOs to check for completeness, accuracy, and consistency;

d. Participate in regulatory proceedings regarding all rate development activities conducted under the jurisdiction of HHSC, including any requiring on-site representation;

e. Assist in representing HHSC in a wide range of forums that include, but are not limited to, presenting to health care panels, public hearings, working groups, data analytic work groups, statutorily appointed boards and committees, and task forces; and

f. Assist HHSC in any additional special projects assigned by HHSC and/or the Texas

Legislature.

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2.1.5 Contractor Roles and Responsibilities

Contractor must provide Principal Actuaries to perform the following tasks:

a. Serve as the certifying actuary to develop annual MC rates, compile findings into actuarial reports, review MCO comments on rates, adjust the capitation rates when appropriate, and provide rates certification in compliance with federal, CMS, and State guidelines.

b. Provide actuarial opinions and fiscal impact analysis of changes to proposed programs and/or provider rates upon HHSC’s request.

c. Provide actuarial expertise and data analysis support to HHSC that includes, but is not limited to, the provision of:

1. Approximately 4,000 hours of actuarial services per year;

2. Actuarial expertise and assistance in annual rate development;

3. Trend analysis and projections in development of MC rates;

4. Expertise related to base period and experience period selection and considerations;

5. Preferred drug list change impacts;

6. Training and assistance to HHSC actuarial staff in rate development;

7. Performing periodic special actuarial projects as assigned by HHSC; and

8. Participate in meetings with HHSC staff, contractors, legislative committees, and

CMS representatives as needed. Meetings may be face-to-face or virtual and may be scheduled on short notice.

d. Provide complete explanations of all calculations and provide all formulas to HHSC, and stakeholders when requested.

1. Contractor will provide technical support, calculations, and assistance with all necessary actuarial tasks including rate setting for the continuation of the Medicaid

CHIP program for State Fiscal Year (FY) 2025 (transition period), FY 2026, and an optional 3-year continuation thereafter.

2. Contractor will provide rate setting for other services, including, but not limited to, waiver service rates, directed payment programs, and the Children with Special

Health Care Needs (CSHCN) Services Program.

e. Provide effective meeting presentations on rate analyses performed as requested by HHSC.

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1. Meetings may be held with executive leadership to present proposed capitation rates and any actuarially sound options for consideration.

2. Meetings may be held to present capitation rates to the contracted MCOs.

3. Following the meetings, Contractor will respond to MCOs questions regarding the rates, the capitation rate development process, and assumptions.

f. Provide support and actuarial expertise to the Texas Legislature.

1. Upon HHSC’s request, Contractor will have one actuary on call, seven days a week, (this includes skeleton crew State holidays), available in person, as required by

HHSC, within one (1) hour of HHSC request, to discuss and testify on actuarial matters and work on pressing legislative issues, as needed, when the Texas

Legislature is in session. Virtual option may be available with HHSC approval on case-by-case basis.

2. Contractor must complete requests for work on legislative fiscal notes within the timeframe negotiated with HHSC and the Texas Legislature.

g. Support and respond to inquiries from HHSC, CMS, and stakeholders regarding the capitation rate development and the related contract with the MCOs. Contractor will work with HHSC to provide written responses to CMS.

h. Contractor will ensure that one (1) Principal Actuary will be available Monday through

Friday, 9 a.m. to 5 p.m. Central Standard Time (CST) (this includes skeleton crew State holidays), who is able to respond in person within (2) hours of HHSC request in Austin, Texas. The specific location will be provided with the request. Virtual option may be available with HHSC approval on case-by-case basis.

i. Contractor will provide support and expertise for specialty areas and ad hoc projects.

1. If needed, Contractor will provide a Subcontract with a qualified actuary for actuarial expertise in specialty areas within the timeframe set by HHSC. Examples may include analysis of other states’ Medicaid MC and Medicare Advantage Plan rate setting.

2. Contractor will assist the Department of State Health Services (DSHS) in monitoring the financial performance of the Children with Special Health Care

Needs (CSHCN) program, the human immunodeficiency virus (HIV) medications program, and the tuberculosis (TB) medications program.

j. Contractor must adhere to all applicable Actuarial Standards of Practice (ASOPs), as provided by the Actuarial Standards Board (ASB), in the provision of all Deliverables.

https://comptroller.texas.gov/about/holidays.php https://comptroller.texas.gov/about/holidays.php https://comptroller.texas.gov/about/holidays.php https://www.actuarialstandardsboard.org/standards-of-practice/

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k. Contractor must comply with all Project plans, timelines, schedules, and milestones required by HHSC.

h. Contractor must ensure timeliness, completeness, and accuracy of required reports.

2.1.6 Agency Roles and Responsibilities

a. HHSC will provide Contractor with an annual timeline prior to the start of each State Fiscal

Year. The timeline will include tasks to be accomplished, the due dates of each task, and list the key HHSC point of contact and the backup contact for each task.

b. HHSC will provide necessary data to perform data analysis, rate setting, and other functions and the provided data will include, but not be limited to, Medicaid recipient eligibility, Medicaid provider enrollment, service utilization, encounter and claim data, and financial statistical reports.

c. HHSC will provide administrative support in coordinating with MCOs in the gathering of necessary data and reports. HHSC will organize meetings, update distribution lists, coordinate responses to data requests, and distribute preliminary and final rates to MCOs once available. HHSC will communicate annual rates to the Executive Commissioner (EC), Legislative Budget Board (LBB), State Auditor’s Office (SAO), Office of the Governor

(OOG), and CMS.

d. HHSC will provide anticipated and updated scheduling of any, and all, requests for on-site representation needed to assist HHSC under the terms of the Contract.

e. HHSC will review reports and other documentation submitted by Contractor.

f. HHSC will provide support in scheduling various meetings with MCOs through the rate development process.

g. HHSC will provide policy clarification and updates related to Medicaid programs and agency rules and regulations.

h. HHSC will provide clarification regarding HHSC operations, directives, policies, and

Contract provisions.

i. HHSC will collect and provide historical data, reports, and other information needed by

Contractor to meet the requirements of the Contract.

j. HHSC will monitor the Contractor’s performance of Contract requirements and

Deliverables and compliance with Contract terms and conditions.

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2.1.7 Deliverables

The primary Deliverable is the actuarial certification report that must accompany all Medicaid and

CHIP capitation rate revisions. HHSC may require additional ad hoc reports to be generated in addition to or to supplement the actuarial report. Such reports must be created and completed by the deadline as directed by HHSC.

a. Annual and Mid-Year Rate Development:

1. Contractor must develop and submit to HHSC written actuarial rate certifications no later than 45 Calendar Days prior to the effective date of the corresponding MCO contract.

2. Contractor must provide final proposed capitation rates for submission and review no later than 45 Calendar Days prior to effective date of the corresponding MCO contract, in accordance with the current General Appropriations Act, Article II which requires

HHSC actuarial rate certifications to include, at a minimum:

i. An analysis of the MCO’s historical rates, including identifying, researching, and addressing any trends, projections, and estimates;

ii. A statement of actuarial opinion and certification of rates; and

iii. Miscellaneous analysis, adjustments, amendments, or tasks within the scope of the

Contractor’s expertise to respond to requests by HHSC.

b. Annual Rate Certification: Contractor must provide annual rate certifications no later than 45 Calendar Days prior to the effective date of the capitation rates that include STAR, STAR Health, STAR Kids, STAR+PLUS, CHIP, CHIP Dental, Medicaid Dental, and Dual

Demo.

1. Contractor must assist HHSC with certification of annual managed care capitation rates and provide actuarial rate certifications.

2. Actuarial rate certifications must include certification to their actuarial soundness.

3. Other required services may be requested on an as needed basis, including, but not limited to, those related to legislative requirements for HHSC to change its rates.

c. MCO Trends and Analysis: Contractor must provide, as required by HHSC, consultation and analysis that meets the standards of the Deliverable.

d. Legislative and Regulatory Representation: Contractor must participate (through on-site representation), as required by HHSC, in regulatory proceedings regarding rate

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Revision Date 9/12/2023 development activities conducted under the jurisdiction of HHSC. In doing so, Contractor must coordinate with HHSC in a pre-presentation briefing to review any topics needing to be addressed.

e. Special Projects: Contractor must assist, as required by HHSC, with any additional special projects assigned by HHSC leadership, the State Auditor’s Office (SAO), Office of the

Governor (OOG), the Chief Financial Officer (CFO), or the Texas Legislative Budget

Board (LBB).

2.1.8 Performance Measures and Liquidated Damages

The Services required are essential to the ongoing operations of HHSC. The failure to timely deliver those Services or to meet reasonable quality expectations will result in financial and other damage to HHSC. HHSC will monitor the performance of all Services and Deliverables.

All Services and Deliverables must be provided at an acceptable quality level and in a manner consistent with acceptable industry standard, custom, and practice.

Contractor will be held to the performance measures and liquidated damages listed below. If the

Contractor fails to complete the Work by the required due date or fails to achieve any of the

Contract milestones, Contractor agrees to pay HHSC the dollar amount(s) listed below in liquidated damages as a fair and reasonable estimate of HHSC’s damages and not intended as a penalty.

Deliverable A – Annual and Mid-Year Rate Development Representation

Tasks Performance Measures & Due

Date Liquidated Damage

Contractor must assist

HHSC on rate development and actuarial matters, in a wide range of forums that include, but are not limited to, healthcare panels, public hearings, working groups, data analytics working groups, statutorily appointed boards, and task forces.

Annual and mid-year rate development must be performed in accordance with

CMS guidelines and must meet requirements for completeness, accuracy, and consistency.

See deadline in Section 2.1.7

Deliverables.

Failure to complete this

Deliverable in accordance with the provisions of the

Contract may result in a

$1,000 fee per each

Business Day the Services are not submitted timely.

If the information is received timely, but is inaccurate or incomplete, the

State may assess a $500 per each Business Day until accurate or complete information is received.

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In addition to or in lieu of the fee, Contractor may be required to provide and implement a corrective action plan.

Deliverable B – Annual Rates Certification

Tasks Performance Measures & Due

Date Liquidated Damage

Each year, Contractor must assist

HHSC with development of the annual managed care capitation rates and provide actuarial certification rates which include certification to their actuarial soundness. Other required services may be requested on an as needed basis (e.g. legislative requirement for HHSC to change its rates).

Annual rate-certifications must be delivered in accordance with

CMS Guidelines and must meet requirements for completeness, accuracy, and consistency.

See deadline in Section 2.1.7

Deliverables.

Failure to complete this

Deliverable in accordance with the provisions of the

Contract may result in a

$1,000 fee for each Business

Day the Services are not submitted timely.

If the information is received timely, but is inaccurate or incomplete, the

State may assess a $500 per each Business Day until accurate or complete information is received.

In addition to or in lieu of the fee, Contractor may be required to provide and implement a corrective action plan.

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Deliverable C –MCO Trends and Analysis

Tasks Performance Measures & Due

Date Liquidated Damage

Contractor must examine MCO reports, data, and trends to assure that rate changes are justified and fairly apportioned and ensure that policies clearly and accurately reflect the coverage provided.

Trends and analysis will be performed as required by

HHSC.

All trends and analysis must be performed in accordance with

Contract and CMS guidelines.

Failure to complete this

Deliverable in accordance with the provisions of the

Contract may result in a

$1,500 fee for each occurrence in which the

Contractor does not meet this request.

required to provide and implement a corrective action plan.

Deliverable D –Legislative and Regulatory Representation

Tasks Performance Measures & Due

Date Liquidated Damage

Contractor must participate in regulatory proceedings regarding rate development activities conducted under the jurisdiction of

HHSC and the Department of

Actuarial Services. As part of the preparation for the Contractor’s participation in legislative and regulatory proceedings, Contractor must coordinate a pre-presentation briefing with HHSC to review any topics that may need to be addressed. (Contractor must provide on-site representation, as required).

Contractor must respond to legislative requests in person, or virtually with HHSC approval on case-by-case basis, within one (1) hour of the request.

Failure to complete this

Deliverable in accordance with the provisions of the

Contract may result in a monetary fee assessment.

required to provide and implement a corrective action plan.

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Deliverable E – Special Projects

Tasks Performance Measures & Due

Date Liquidated Damage

Contractor must assist the HHSC

Actuarial Analysis Department in any additional special projects assigned by HHSC leadership, the

State Auditor’s Office (SAO), Office of the Governor (OOG), the

Chief Financial Officer (CFO), or the Texas Legislative Board (LBB).

Contractor must complete special projects by the applicable deadline provided by

HHSC.

Failure to complete this

Deliverable in accordance with the provisions of the

Contract may result in a monetary fee assessment. In addition to or in lieu of the assessment, Contractor may be required to provide and implement a corrective action plan.

2.1.9 Deliverable Acceptance Process

2.1.9.1 General

HHSC will conduct a review of each Deliverable to determine whether it conforms to the requirements set forth in the Contract and, as applicable, Article II, Scope of Work.

2.1.9.2 Submission and Review Process for Deliverables

Before delivery, the Contractor must review each Deliverable for accuracy, completeness, and appropriate content. The Contractor shall provide each Deliverable via email to the HHSC contract manager on or before the deadline specified in Section 2.1.7 Deliverables.

HHSC shall notify the Contractor in writing via email of approval or rejection of the Deliverable.

If the Deliverable is rejected, HHSC’s notice will specify the reason(s) for rejection. The

Contractor shall correct the Deliverable and resubmit the Deliverable by the deadline provided by

HHSC for HHSC review.

Upon receipt of the corrected and resubmitted Deliverable, HHSC shall review the corrected

Deliverable to confirm that the identified deficiencies have been corrected and brought into compliance with specifications and that the corrections have not directly or indirectly caused other deficiencies. HHSC shall have the option to continue the Deliverable review process until the written Deliverable is brought into compliance with the Contract specifications.

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2.1.9.3 Deliverable Acceptance Criteria

Each Deliverable must meet all the requirements set forth in the Contract and, as applicable, Article

II, Scope of Work. HHSC, at its sole discretion, will make a determination whether Deliverable(s) met all the requirements.

HHSC shall notify the Contractor in writing via email of approval or rejection of the Deliverable.

If the Deliverable is rejected, HHSC shall identify the specific inadequacies and/or failures in

Deliverable. The Contractor shall have (2) two Business Days, or as otherwise agreed in writing by HHSC, to address or correct specific inadequacies and/or failures in Deliverable.

2.1.10 Turnover Services

Turnover is defined as those activities required to transition Contract operations to HHSC or a subsequent contractor upon termination, cancellation, or expiration of the Contract.

Contractor will complete the following turnover services:

a. Three (3) months from the Effective Date of Contract, Contractor must develop and submit a turnover plan covering the transition of the Contract Deliverables/requirements to HHSC for approval.

b. The turnover plan must be supplied in the manner and format required by HHSC and must contain comprehensive information detailing the proposed schedule, activities, operational support, and resource requirements associated with the turnover tasks outlined below.

HHSC reserves the right to have Contractor submit an updated turnover plan one (1) month prior to the end of the initial term of the Contract or as deemed necessary by HHSC to ensure that the Turnover plan is current. HHSC reserves the right to require additional information or modify the turnover schedule, as necessary.

c. As part of the turnover plan, Contractor must provide HHSC with copies of all relevant data and documentation related to the Contract.

d. Contractor will provide HHSC or its designee(s), with all updated documentation/records that are not included in the turnover plan or that require additional details beyond the turnover plan within fifteen (15) Business Days of the request.

e. Contractor will not reduce operational staffing levels during the turnover period without prior HHSC approval.

f. Contractor will complete the following post-turnover services:

1. Contractor may be required to provide the turnover services of a Principal Actuary to assist in answering questions from the Office of the Actuary (OACT) regarding

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Revision Date 9/12/2023 applicable rate certifications provided by Contractor to ensure accurate representation of information. The Principal Actuary provided must be the

Principal Actuary responsible for the rate certification in question or have access to the information necessary. HHSC may, but is not obligated to, provide working space, and assign work to be done on a partial or full-time basis to support post-turnover activity.

2.1.11 Payment Method and Frequency

a. Payment Method

1. All Services will be compensated at the applicable hourly rate stated in Exhibit J, Cost

Proposal. The Contractor’s compensation must not exceed $1,900,000 annually.

2. Contractor must notify HHSC in writing when the aggregate fees and expenses reach

$1,500,000 in any (1) one State Fiscal Year term.

3. Only if imperative, a written Amendment to the Contract would be required to authorize an increase to the Contract’s annual maximum compensation.

b. Payment Frequency

1. HHSC will pay Contractor on a monthly basis pursuant to the timely receipt of an invoice for payment detailing hours and work performed in the month.

2. Contractor must invoice HHSC monthly, by no later than the 15th of the month following the month in which the Services were provided. Contractor may not submit invoices more than once every thirty (30) Calendar Days, except for the final invoice.

c. Invoicing Format

Within thirty (30) Calendar Days of service provision, each statement for fees and costs must be submitted in a format that includes, at a minimum, the following information:

1. Contract name and number;

2. Invoice number for the particular bill;

3. Contractor name and taxpayer identification number;

4. HHSC Actuarial Analysis Department and the HHSC contract manager assigned to the

Contract;

5. Inclusive dates of the month covered by the invoices;

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6. Itemization of the date(s) and hours billed, and a detailed description of the Services rendered, with sufficient detail to enable HHSC to evaluate the Services rendered and costs;

7. First and last name of person(s) who performed the Services for each day during which

Contractor performed Work, and the applicable hourly rate (i.e., the hourly rate for the

Contract year);

8. The total amount of the current bill only; and

9. Any other information as may be requested by HHSC.

2.2 CONTRACT AWARD, TERM, AND HISTORICAL COMPENSATION

2.2.1 Contract Award and Execution

HHSC intends to award one Contract as a result of this Solicitation. Any award is contingent upon approval of the HHSC Executive Commissioner or their designee.

If, for any reason, a final Contract cannot be executed with a Respondent selected for award within ten (10) Calendar Days of HHSC’s determination to seek to contract with that Respondent, HHSC may negotiate a Contract with the next highest-scoring Respondent or may withdraw, modify, or partially award this Solicitation.

2.2.2 Contract Term

The initial term of any Contract resulting from this Solicitation will be two (2) years. HHSC, at its sole option, may extend any Contract awarded pursuant to this Solicitation for up to three (3), one

(1) year optional renewals.

Notwithstanding the limitation in the preceding paragraph and with at thirty (30) Calendar Days’ advance written notice to Contractor, at the end of the initial term or any extension period, HHSC, at its sole discretion, may extend the Contract as necessary to ensure continuity of service, for purposes of transition, or as otherwise determined by HHSC, to serve the best interest of the State for up to twelve (12) months, in one-month intervals, at the then-current contract rate or rates (if applicable) as modified during the Contract Term.

2.2.3 Historical Compensation

Historical compensation under Contracts with similar scope and size to this Solicitation ranged from approximately $1.5 Million to $1.7 Million per State Fiscal Year. Notwithstanding this

Section 2.2.3 (Historical Compensation), HHSC reserves the right to adjust any projected amount based on State funding during the Contract Term.

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2.3 DATA USE AGREEMENT AND SECURITY PRIVACY INQUIRY

By entering into a Contract with HHSC as a result of this Solicitation, Respondent agrees to be bound by the terms of the Data Use Agreement (DUA), Version 8.5, attached as Exhibit D.

Respondents must complete and return with their Solicitation Response Exhibit D-1, Attachment

2 to the DUA, Security and Privacy Inquiry (SPI), Version 2.1.

2.4 NO GUARANTEE OF VOLUME, USAGE, OR COMPENSATION

HHSC makes no guarantee of volume, usage, or total compensation to be paid to any Respondent under any awarded Contract, if any, resulting from this Solicitation. Any awarded Contract is subject to appropriations and the continuing availability of funds.

HHSC reserves the right to cancel, make partial award, or decline to award a Contract under this

Solicitation at any time at its sole discretion.

2.5 GOVERNMENTAL ENTITIES

If Respondent is responding to this Solicitation in its capacity as a governmental entity, certain terms and conditions found in this Solicitation, including all exhibits and attachments, may not be applicable. Furthermore, to the extent permitted by law, if a Solicitation Response is received from a governmental entity, HHSC reserves the right to enter into an interagency or interlocal agreement with the governmental entity.

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ARTICLE III. ADMINISTRATIVE INFORMATION

3.1 SCHEDULE OF EVENTS

EVENT DATE/TIME

Solicitation Posting Date to ESBD (Date of Release) March 12, 2024

Pre-proposal Conference

Attendance is Optional

March 19, 2024 at 1:30 p.m.

Central Time

Deadline for Submitting Questions or Requests for

Clarification

March 20, 2024 at 5:00 p.m.

Central Time

Tentative Date Responses to Questions or Requests for

Clarification Posted on ESBD

March 27, 2024

Deadline for Courtesy HSP Review March 28, 2024 at 2:00 p.m.

Central Time

Deadline for Submission of Solicitation Responses

[NOTE: Responses must be RECEIVED by HHSC by the deadline.]

April 11, 2024 at 10:30 a.m.

Central Time

Evaluation Period April/May 2024

Anticipated Notice of Award August 2024

Anticipated Contract Start Date August 2024

Respondents must submit their Solicitation Responses to HHSC in accordance with the due date and time indicated in this Schedule of Events or as changed via an Addendum posted to the ESBD.

NOTE: All dates are tentative and HHSC reserves the right to modify these dates at any time. At the sole discretion of HHSC, events listed in the Schedule of Events are subject to scheduling changes and cancellation. Scheduling changes or cancellation determinations made by HHSC prior to the Deadline for Submission of Solicitation Responses will be posted as an Addendum on the

ESBD. If after the Deadline for Submission of Solicitation Responses, there are delays that significantly impact the anticipated award date, HHSC, at its sole discretion, may post updates regarding the anticipated award date in the Procurement Forecast located on the HHS Procurement

Opportunities web page. Each Respondent is responsible for checking the ESBD and Procurement

Forecast for updates.

By submitting a Solicitation Response, Respondent represents and warrants that any individual submitting the Solicitation Response and any related documents on behalf of the Respondent is https://apps.hhs.texas.gov/procurement-calendar/procurement-forecast.pdf https://www.hhs.texas.gov/business/contracting-hhs/procurement-opportunities https://www.hhs.texas.gov/business/contracting-hhs/procurement-opportunities https://apps.hhs.texas.gov/procurement-calendar/procurement-forecast.pdf https://apps.hhs.texas.gov/procurement-calendar/procurement-forecast.pdf

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Revision Date 9/12/2023 authorized to do so and to bind the Respondent under any Contract that may result from this

Solicitation.

3.2 AMBIGUITY, CONFLICT, OR DISCREPANCY

Respondent must notify the Sole Point of Contact (Section 3.3.1) of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error in the Solicitation in the manner and by the deadline described in Section 3.3.4 (Solicitation Questions).

Respondent submits a Solicitation Response at its own risk.

If Respondent fails to properly and timely notify the Sole Point of Contact (Section 3.3.1) of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error in the

Solicitation, Respondent, whether awarded a Contract or not:

a. Waives any claim of error or ambiguity in the Solicitation and any resulting Contract;

b. Must not contest the interpretation by HHSC of such provision(s); and

c. Is not entitled to additional compensation, relief, or time by reason of ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error or its later correction.

3.3 INQUIRIES

3.3.1 Sole Point of Contact

All requests, questions, or other communication about this Solicitation shall be made in writing to

HHSC PCS, addressed to the person listed below (Sole Point of Contact). Additionally, a phone number is provided for purposes such as instructing a potential Respondent through an IT system or website referenced in this Solicitation. Communications via telephone are not binding.

The Sole Point of Contact will authorize a secondary Sole Point of Contact in the event of their absence and, in such an event, will include the contact information for the secondary Sole Point of

Contact in their automatic reply out-of-office e-mail message. Respondents seeking to contact the

Sole Point of Contact should do so via e-mail in order to receive updated contact information.

Name Jennifer Fidler, CTCD

Title PCS Purchaser

Address Procurement and Contracting Services Building

1100 W 49th St. MC: 2020

Austin, TX 78756

Phone 512-406-2591

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Email Jennifer.Fidler@hhs.texas.gov

See also, Section 3.3.3 (Exception to Sole Point of Contact) below.

3.3.2 Prohibited Communication

Except as provided in Section 3.3.1 (Sole Point of Contact) and Section 3.3.3 (Exception to Sole

Point of Contact), potential Respondents and Respondents are prohibited from any communication with HHSC regarding the Solicitation. HHSC, its representative(s), and partners will not answer any questions or otherwise discuss the contents of this Solicitation with any potential Respondent or its representative(s). Attempts to ask questions by phone or in person will not be allowed or recognized as valid. Respondent shall rely only on written statements issued by or through HHSC designated staff as provided by Section 3.3 (Inquiries). This restriction does not preclude discussions between affected parties for the purposes of conducting business unrelated to this Solicitation. Failure to comply with these restrictions may result in disqualification of Respondent's Solicitation Response.

3.3.3 Exception to Sole Point of Contact

Exceptions to Section 3.3.1 (Sole Point of Contact) are as follows:

a. Respondents with questions relating to the HUB Subcontracting Plan are permitted to direct those questions to the HUB coordinator at Cheryl.Bradley@hhs.texas.gov.

b. Where it is expressly directed by the Sole Point of Contact that another designated HHSC representative may speak to the Respondent, such as during Contract negotiations.

Respondents are required to ensure that communications have been authorized by the Sole

Point of Contact before engaging in such communication. Failure to comply with this requirement may result in the disqualification of a Respondent’s Solicitation Response.

3.3.4 Solicitation Questions

HHSC will allow written questions and requests for clarification regarding this Solicitation.

Questions must be submitted by e-mail to the Sole Point of Contact (Section 3.3.1) by the deadline established in Section 3.1 (Schedule of Events). Responses to questions or other written requests for clarification will be consolidated and posted to the ESBD and will not be provided individually to requestors.

HHSC reserves the right to amend answers previously posted, prior to the Deadline for Submission of Solicitation Responses (Section…