HICBA Extension JA_to post.pdf

VA-21-00002845

JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Department of Veterans Affairs (VA)

Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, NJ 07724

2. Description of Action: The proposed action is a modification to extend the period of performance of Firm-Fixed-Price (FFP) Contract VA118-15-C-0767 Health Information Coding Billing & Auditing (HICBA) awarded to Nuance Communications, Inc.

(“Nuance”), 1 Wayside Rd. Burlington, MA 01803 on October 1, 2015 for a total amount of $377,693,874.89, for continued software licensing and maintenance and technical support for Veterans Health Administration’s (VHA) HICBA Encoder and VistA Integration, Revenue, and Reporting (VIRR) software solution which provides functionality for coding, revenue workflows, and reporting.

3. Description of the Supplies or Services: The current HICBA services and support provided by Nuance expires on September 30, 2020. The purpose of this modification is to extend the period of performance of Option Period 4 for three months to provide for continued software licensing and maintenance and technical support for VHA’s HICBA Encoder and VIRR software solution until new contracts for an Encoder product and VIRR solution are awarded by VA. This Justification and Approval includes an option for an additional six month extension for transition activities, which will only be exercised if the need arises. HICBA business management falls within the VHA Office of Health Informatics, Health Information Government, Health Information Management (HIM) Program Office. The HICBA software solution provides VHA with enterprise capabilities for health record coding and revenue cycle operations such as accounts receivable and billing. The HICBA solution also provides for the management of HIM and Revenue Operations business workflows and reporting from various management perspectives in HIM and Revenue Operations. The current HICBA solution is a comprehensive solution comprised of two components that interface with each other: An Encoder software product and a VIRR software solution.

Nuance, under contract VA118-15-C-0767, provides the HICBA software solution inclusive of the Encoder product and VIRR solution that HIM coding, HIM management, and Revenue Operations staff use daily, enterprise-wide. VHA Office of the Assistant Deputy Under Secretary for Health Informatics/10A7 and the VHA Office of the Assistant Under Secretary for Health for Operations (AUSHO)/10N Handbook 1901.07:

Health Information Management and Health Records (March 2015) and the VHA Health Information Management Clinical Program Guide V1.7 (December 2019) mandate the use of standard, national HICBA Encoder and VIRR software products to perform the coding and revenue cycle operations for VA. This is in support of meeting the mandates of the of AUSHO/10N memorandums to VISN and Medical Center Directors in response to Government Accountability Office (GAO) and the Office of Management and Budget (OMB) findings and recommendations: ‘Coding Backlog Reduction and

VistA VIRR software solution, VA-21-00002845

Monitoring (VAIQ #7843437)’ (November 2017) and ‘Monitoring Accuracy of Provider Coding and Clinical Coding and Productivity (VAIQ #7688833‘ (May 2016). The VIRR solution also includes billing tools currently used by all Consolidated Patient Account Centers (CPAC) billing and accounts receivable staff and management personnel.

The Nuance HICBA Encoder product and VIRR solution provide real-time integration with VistA for inpatient coding, outpatient coding, compliance, and reporting by interfacing with VistA packages including Global Coding, Lexicon Utility, Text Integration Utilities, Patient Care Encounters , Patient Treatment File , Diagnosis Related Groups , Consolidated Patient Record System , Admissions Discharges and Transfers , Absent Sick In Hospital , Scheduling, Surgery, Event Capture, Accounts Receivable , Integrated Billing , Claims Tracking, and Fee Basis. The Encoder product and VIRR solution also provide HIM with the current business rules that are applied to all inpatient discharges and billable encounters.

The HICBA Encoder product and VIRR solution are used for coding 100 percent of VHA inpatient stays, surgical cases, and billable outpatient and inpatient encounters. This Encoder software product ensures coding accuracy using industry standard capabilities to ensure data accuracy for these purposes.

Reporting functionality provided by VIRR from the coded data is a key requirement to analyze diagnostic and procedural code use frequency across the enterprise, manage coder productivity, and analyze Encoder summary reporting. This includes the functionality required to meet the coding backlog and accuracy monitoring mandates by the VHA AUSHO, OMB, and GAO.

4. Statutory Authority: The statutory authority permitting other than full and open competition is 41 U.S.C. 3304(a)(1) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1 entitled, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Rationale Supporting Use of Authority Cited Above: The proposed source for this action is Nuance Communications, Inc. One Wayside Road, Burlington, MA 01803.

Nuance currently provides its comprehensive enterprise solution to the Government under contract VA118-15-C-0767. The existing enterprise HICBA solution is comprised of two components which interface with each other: the HICBA Encoder product and a HICBA VIRR software solution. VA is in the process of replacing its legacy VistA with the Cerner Millennium Electronic Health Record solution. However, due to the COVID- 19 pandemic and the VA response effort to it, the Cerner deployment has been continuously re-worked and delayed, therefore VA’s initial acquisition approach for HICBA needed to be adjusted to accommodate this uncertainty. Due to this uncertainty and coupled with the information obtained from the Request For Information (RFI) responses received in June, 2020, it was determined by the various VA stakeholders that the initial acquisition approach for a HICBA solution was not viable and would no longer be in the best interest of the Government. A decision to split the existing comprehensive solution into separate HICBA Encoder software product and HICBA VIRR software solution contracts was made, a strategy aimed at maximizing potential competition.

VA is in the process of preparing an acquisition package for the award of follow-on HICBA Encoder contract and due to its complexity the VIRR acquisition strategy is still being determined. VA estimates that it will take approximately three months to solicit the Encoder requirements, evaluate responses, and award a new contract. This three month extension is necessary to ensure that the existing comprehensive HICBA software solution remains operational while new contract(s) are put in place.

Additionally, a six month option is included to permit for any necessary transition period for potential integration, development, or training required as a result of the award of new contracts.

Although VA intends to award separate Encoder and VIRR contracts, VA requires use and sustainment of the existing Nuance Enterprise HICBA Encoder and VIRR solution until the new contracts are in place. Without continuing the current HICBA Encoder and VIRR solution, there will be Agency delinquencies and inaccuracies in entering crucial clinical and administrative data into the above-mentioned VistA packages (which in turn feed the VA Equitable Resource Allocation algorithms which are used to distribute Congress’ funding allocations for VA medical centers, as well as third-party insurance claims) as HIM coding, management, and revenue operations staff and management will require remedial training on how to manually enter these codes into VistA and will also have to research using outdated methods that are currently not accepted by standard industry practice, such as paper coding books, and costly online resources.

Without the HICBA solution all coding and billing done by the Agency would have to be completed manually using a paper process; thus adding significant delays and having a direct, negative impact on third party revenue generation.

Every inpatient discharge and billable encounter would have to be manually evaluated for each current business rules to be applied. Many facilities no longer have code books so patient workload capture for providers would be halted until the paper books are purchased and obtained. Acquiring paper code books and other required references and business workflow tools to accomplish these operations by the more than 3,000 daily users of these applications would significantly impede critical VA operations in support of clinical care and administrative functions. Purchasing timeframes would present weeks to months of delays and implementing antiquated paper and manual processes for completing these functions would add additional weeks to months. Additionally, exponentially more Full Time Employee Equivalent would be required to perform these manual processes, with hiring timeframes in the weeks to months. Funding these changes at the local levels would also require significant shifts in medical center spending, taking resources away from provision of care for Veterans.

Veterans would face extreme delays and unacceptable difficulties obtaining any required pre-authorization for care from third-party insurance due to new manual procedures that are not accepted by the industry.

In addition to delinquent timelines, VA would also experience unacceptable risks of inaccurate data capture in HIM coding and inaccurate billing in revenue operations. The HICBA solution provides mechanisms that are industry standard to perform “edit checks” in HIM coding and “claim scrubbing” in accounts receivable and billing to prevent erroneous coding of clinical information and billing inaccurate claims to third-party insurance. Failing to provide these industry-standard safeguards would be regarded as waste, fraud, and/or abuse in consideration of Government ethics, compliance, and business integrity. Coding and billing errors that are not caught by time-consuming and resource-intensive manual procedures would result in VA’s depending on erroneous clinical data for provision of care to Veterans, erroneous documentation of physician workload, inaccurate reporting of quality measures, and inaccurate reporting to Congress for allocation of VA’s funding to medical centers.

In addition, Revenue Operations has projected $3.211 billion dollars for Fiscal Year (FY) 20 in revenue from third-party claims. This would be severely compromised for FY21 if the current HICBA solution does not remain continuously functional while the follow on contracts are awarded. Medical center directors depend on this funding for an estimated 10-20% of their annual operating and capital improvement budgets. It is critical that HIM coding and revenue operations personnel have the tools necessary to continue VHA business and keep revenue flowing to VHA. A disruption in continuity of health care services caused by administrative failures, such as a failure to support industry revenue cycles, endangers Veterans’ lives. Access to the Nuance HICBA Encoder and VIRR software solution is necessary for VHA employees to carry out their duties in support of VHA’s mission.

Facilities, Veterans Integrated Service Networks (VISNs), and the Enterprise require functionality for coding, revenue and integration with VistA from the VA’s HICBA software solutions and reporting from these functionalities.

A standard and national HICBA Encoder product and VIRR solution is essential, and their use is mandated by VHA leadership mentioned in paragraph 3 for the estimated 2,500-3,500 revenue cycle users (coders, billers, utilization review, compliance, etc.) at all of the 141 stations and 7 CPACs to have one standard product in support of the revenue collections mentioned above. Nuance is the only vendor capable of immediately meeting the short term requirement to maintain the existing VA HICBA Encoder product and VIRR software solution at the 141 VA medical centers and 7 CPACs using VistA. No other solution(s) can provide continuity of the functionality required without a break in performance.

For the reasons noted above, only Nuance is capable of meeting the Agency’s immediate, short term requirements to provide continued functionalities for health record coding and revenue operations during this extension. Without continued access, maintenance and technical support to the Nuance HICBA solution, HIM users in VA medical centers will not be able to code inpatient and outpatient health care encounters and revenue operations users in VA medical centers and CPACS will not be able to process claims for billing to third party insurance, compromising a portion agency collections (projected $3.21B for fiscal year 2020). Additionally, VHA would not be compliant with mandates to use an Encoder software product and would have no ability for standardized agency-wide reporting from the HICBA functionalities and compromised accuracy for coding and revenue, workload capture, and physician querying for clinical documentation improvement. Most importantly, without maintaining the current Nuance HICBA software solution, delays or lapses in medical treatment to Veterans requiring care may occur due to lack of payment and billing information. As such, Veteran health and safety will be at risk if Veterans ability to obtain medical care is compromised.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in the market research section of this document. This effort did not yield any additional sources that can meet the Government’s immediate requirements. There is no competition anticipated for this acquisition. Additionally, the proposed action will be synopsized on the Contracting Opportunities Page in accordance with FAR

5.201. Any proposals that are received shall be evaluated.

7. Actions to Increase Competition: In an effort to maximize competition, VA decided to separate the Encoder and VIRR aspects into two separate contracts moving forward. A competitive procurement for an Encoder product is anticipated to be solicited in the first quarter of Fiscal Year 2021. The Agency is still refining its acquisition strategy for a VIRR solution. As these solutions are highly complex and have been impacted by the unanticipated Electronic Health Record Modernization delays, it is now anticipated that they will both be finalized in the first quarter of Fiscal Year 2021.

8. Market Research: Market research was conducted during the 3rd quarter of FY20 by issuing two RFIs, one for an Encoder product and one for a VIRR solution, on Contracting Opportunities. VA received four responses to the VIRR RFI and three responses to the Encoder RFI. All the RFI responses were assessed, and after shifting acquisition strategies, the Government determined that there are multiple capable vendors who can meet the Encoder product requirements. However, only Nuance is capable of meeting the immediate need to sustain the existing comprehensive HICBA solution while new contracts for the Encoder and VIRR are being worked. No vendor, other than Nuance would be able to provide an immediate functioning solution in the timeframe required to prevent a break in support.

Therefore, the Government’s technical experts have concluded that no other source can meet VA's needs for a HICBA software solution without a break in support which would have the unacceptable negative impacts and risks to VA operations and Veteran services as detailed in Section 5. Nuance is currently the only vendor that can provide the suite of applications due to the timeframe required to implement a new solution.

Based on these market research efforts, the Government’s technical experts have determined that only Nuance can meet all of VA’s needs.

9. Other Facts: N/A