HBS B54110 Sole Source Change Order Justification Form Klein 9.16.26.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 6

Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Bureau of Professional and Ancillary Services

Need Identified Date: Nov 1, 2025 Supply/Service Need By Date: Nov 1, 2026

Project Title: Non-Emergency Transportation Services Prior Approval Program (NETSPAP) / Administrator for fee-for-service

Vendor: First Transit, Inc.

Provide a description of the supplies or services required:

The Illinois Department of Healthcare and Family Services (HFS) is seeking to amend the current contract with First Transit, Inc. who provides Non- Emergency Transportation Services Approval Program (NETSPAP) for HFS Medical Assistance Program customers to become compliant with CFR: 42 CFR 440.170. CFR was updated in October 2024 to include "any other medical care or remedial care recognized under State law and specified by the Secretary, including transportation and related services for Medicaid beneficiaries.

Value: Estimated Value of Initial Term, this Change Order or Amendment: 36,536,076

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: One-Time Amendment or Change Order

Section II - Proposed Term

One-Time Purchase Term Contract

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Compatibility of Equipment, Accessories, Replacement Parts or Service

Are there secondary justification(s) for this sole source? Yes No

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Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 05/28/2021 05/27/2026 13,948,132.8 RFP 2021-22-002 RFP

2 3/8/2022 5/27/2026 78,000,000 Amendment 1- Carve out funds 2021-22-002-2 Amendment

3 09/01/2022 05/27/2026 0 Amendment 2-Add Fiduciary Fund language 2021-22-002-3 Amendment

4 07/28/2025 07/27/2026 0 Amendment 3 Cloud Storage 2021-22-002-4 Renewal

5 05/01/2026 04/30/2031 111,000,000 Renewal 2021-22-002-6 Amendment

6 Amendment

7 Amendment

8 RFP

9 IFB

If more than 10, or if other comments, explain:

Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

The Illinois Department of Healthcare and Family Services (HFS) is seeking to amend the contract with First Transit, Inc. who administers the Non-Emergency Transportation Services Approval Program (NETSPAP) for Medical Assistance Program customers to become compliant with eCFR: 42 CFR 440.170 which accounts for any other medical care or remedial care such as “Long Distance Transportation” to provide non-emergency transports. The Vendor shall use the fiduciary account to purchase transportation services, lodging, meals, and escort costs from entities providing a NET service level other than those in accordance with 89 Ill. Adm. Code 140.490(a)(1-6), State Plan Amendments, 42 CRF 440.170, and Long Distance Non-Emergency Department Policy with Prior Approval of the Department.

Medical transportation is a critical service that assists Medicaid customers with accessing Medicaid services and thus has a direct impact on health outcomes. If the contract is not amended, HFS will be unable to meet federal mandates of providing prior approval for Medical Assistance Program customers transportation services. Failure to amend the contract may also result in customers being unable to access medically necessary and potentially lifesaving services.

2. Provide a list and describe in detail the specifications required to satisfy the need:

HFS is seeking to amend the Contract section #13 fiduciary account to account for any other medical care or remedial care such as “Long Distance Transportation” to provide non-emergency transports. The Vendor shall use the fiduciary account to purchase transportation services, lodging, meals, and escort costs from entities providing a NET service level other than those in accordance with 89 Ill. Adm. Code 140.490(a)(1-6), State Plan Amendments, 42 CRF 440.170, and Long Distance Non-Emergency Department Policy with Prior Approval of the Department. With the addition of the “Long Distance Transportation“, additional funds need to be added to the section 4.1.2 fiduciary account reimbursement. HFS is seeking an additional $36,536,076 (estimated $11,460,420 for lodging, $6,022,836 for meals, and $19,052,820 for mileage) for the remainder of the contract. Fiduciary Account Reimbursement will be in accordance with Contract section 13.8 reimbursement.

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Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

No access to long-distance non-emergency medical transportation would create major access barriers for Medicaid enrollees, disproportionately affecting low-income and rural communities. The State could face federal enforcement actions for failure to meet minimum standards, jeopardizing the health and safety infrastructure for thousands of Illinoisans.

First Transit is the current vendor and has the established infrastructure, integrated systems, and operational compatibility required to administer the NETSPAP program without disruption by adding these additional services required to become compliant with federal requirements.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

First Transit maintains the system integrations and workflows required for these services and the statewide transportation provider network. These connections support all necessary prior-authorization, trip-validation, customer-support, and provider-relations functions and are critical for continuity of service, including these additional services required to become compliant with federal requirement.

First Transit is the current vendor administering the Non-Emergency Transportation Services Approval Program. The addition of Long- Distance Transportation to meet federal requirement was not foreseeable. The amendment is fully germane to the existing contract and does not introduce new scope.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

5a. If no, why weren't alternatives evaluated?

Alternatives were not evaluated because this contract was competitively awarded through a Request for Proposal (RFP) process, and the need is germane to the existing contract and was unforeseen at the time of the original bid. The scope, funding, and intent of the original procurement have not changed. While alternative approaches such as a separate procurement or re-issuance of an RFP could theoretically be considered, pursuing those options would delay federally required authorization timelines and risk interruption of critical services.

The contract includes a fiduciary account to purchase transportation services from entities providing a NET service level other than those provided in with 89 Ill. Adm. Code 140.490(a)(1-6) with prior approval of the Department. The Federal Centers for Medicaid and Chip Services (CMS) approved the addition of any other medical care or remedial care. Additional funds are required to be compliant with eCFR: 42 CFR 440.170 to add the other medical care or remedial care.

No other vendor has the established infrastructure, system compatibility, or provider connectivity needed to assume these responsibilities without causing service interruption. Transitioning to another Vendor would require rebuilding system interfaces, reconfiguring prior-approval and trip-validation workflows, and onboarding the statewide transportation provider network, all of which cannot be completed without disrupting federally required services. Prior authorization decisions must be completed within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests.

6. Are there resellers or distributors?

Yes No N/A

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Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

HFS is seeking an additional $36,536,076 (estimated $11,460,420 for lodging, $6,022,836 for meals, and $19,052,820 for mileage). The increase in the fiduciary funds is based on the estimated the number of users came from fee-for-service claims and MCO encounters in the HFS Enterprise Data Warehouse, which is sourced from our Medicaid Management Information System (MMIS). These are claims submitted by vendors (providers) and paid by HFS or its contracted Managed Care Organizations. HFS assumed utilization based on historical data for users who had an inpatient hospital stay where the residents address and the providers address were at least 150 miles apart including all provider types and out of state providers. HFS assumed payment for one parent/guardian for children, or on companion per adult, for every covered day of the stay. State travel reimbursement rates for lodging and mileage for automobile travel, as well as allowances for meals, shall be set at the maximum rates established by the federal government for travel expenses, subsistence expenses, and mileage allowances under 5 U.S.C. 5701 through 5711.

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

If the contract (2021-22-002) is not amended, HFS will continue to be out of compliance with Public Act 102-0661, 42 CFR 440.170, and the Illinois State Plan Amendment (SPA) 25-008. Failure to amend the contract may also result in customers not being unable to access long distance transportation to provide medically necessary and potentially lifesaving services.

10. Is there any additional information you would like to add to justify this sole source?

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Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date Sep 15, 2026

Printed Name Jose Jimenez E-mail Address jose.jimenez@illinois.gov

Phone Number 217-524-7112

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address Monique.N.Wantland@illinois.gov

Phone Number 217-557-5777 Date Sep 15, 2026

Printed Name Monique Wantland

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217.993.1719 Date Sep 16, 2026

Printed Name Jennifer Klein E-mail Address jennifer.klein@illinois.gov

Version 7.01 Page 6 of 6

Bulletin Reference Number 27-478HFS-MEDPR-B-54110

Requesting Agency/University Illinois Department of Healthcare and Family Services

Sole Source Justification Form - Part II Section I - General Information

Project Title Non-Emergency Transportation Services Prior Approval Program (NETSPAP) / Administrator for fee-for-service

Vendor First Transit, Inc.

Initial Date of Procurement Bulletin Posting Sep 16, 2026

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone 217.622.1857

Printed Name Ellen H. Daley Date

CPO E-mail ellen.h.daley@illinois.gov

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229 ellen.h.daley@illinois.gov

Medical transportation is a critical service that assists Medicaid customers with accessing Medicaid services and thus has a direct impact on health outcomes. If the contract is not amended, HFS will be unable to meet federal mandates of providing prior approval for Medical Assistance Program customers transportation services. Failure to amend the contract may also result in customers being unable to access medically necessary and potentially lifesaving services.

First Transit is the current vendor and has the established infrastructure, integrated systems, and operational compatibility required to administer the NETSPAP program without disruption by adding these additional services required to become compliant with federal requirements.

Q4Answer: First Transit maintains the system integrations and workflows required for these services and the statewide transportation provider network. These connections support all necessary prior-authorization, trip-validation, customer-support, and provider-relations functions and are critical for continuity of service, including these additional services required to become compliant with federal requirement.

First Transit is the current vendor administering the Non-Emergency Transportation Services Approval Program. The addition of Long-Distance Transportation to meet federal requirement was not foreseeable. The amendment is fully germane to the existing contract and does not introduce new scope.

The contract includes a fiduciary account to purchase transportation services from entities providing a NET service level other than those provided in with 89 Ill. Adm. Code 140.490(a)(1-6) with prior approval of the Department. The Federal Centers for Medicaid and Chip Services (CMS) approved the addition of any other medical care or remedial care. Additional funds are required to be compliant with eCFR: 42 CFR 440.170 to add the other medical care or remedial care.

No other vendor has the established infrastructure, system compatibility, or provider connectivity needed to assume these responsibilities without causing service interruption. Transitioning to another Vendor would require rebuilding system interfaces, reconfiguring prior-approval and trip-validation workflows, and onboarding the statewide transportation provider network, all of which cannot be completed without disrupting federally required services. Prior authorization decisions must be completed within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests.