JA_EDI_36C10G22D0023_Final.pdf

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement, Acquisition and Logistics Strategic Acquisition Center (SAC) Spotsylvania Ave, STE 400 Fredericksburg, VA 22408

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

The proposed action is to modify the Healthcare Clearinghouse (HCCH) Electronic Data Interchange (EDI) Indefinite Delivery Indefinite Quantity (IDIQ) contract 36C10G22D0023 (contractor Change Healthcare (CHC) Holdings, LLC.) to increase the ceiling value to secure critical contract performance in light of the ongoing Court of Federal Claims (CoFC) protest of the follow-on contract (36C10G23D0017, awarded March 31, 2023).

3. A description of the supplies or services required to meet the agency’s needs

(including the estimated value):

The VHA Office of Integrated Veteran Care (IVC) is a business line within Veterans Health Administration (VHA) and is led by the Assistant Deputy Under Secretary for Health (ADUSH) for Community Care who reports directly to the Deputy Under Secretary for Health. The Office of IVC administers various programs that work together to provide care to Veterans through community providers when VA cannot provide the care needed. Community care is based on specific eligibility requirements, availability of VA care, and the needs and circumstances of individual Veterans. The use of EDI transactions is mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Administrative Simplification Act and the Paperwork Reduction Act. The Department has been working diligently for over a decade to ensure that processing of healthcare claims and associated medical documentation electronically is successfully accomplished.

The HCCH EDI contract is mandatory in order for IVC to process healthcare claims in compliance with federal regulations. The EDI contract involves the mandated and complicated transfer of data into HIPAA compliant, industry standard, X12 healthcare information, which is chartered by the American National Standard Institute (ANSI) which develops and maintains EDI standards. The ability to process these claims in a timely and efficient manner represents IVC’s fundamental business function and is directly linked to Veteran access to care. The HCCH provides connectivity for incoming and outgoing EDI transactions for services to support the payment for services provided by community providers to Veterans and Veteran Families.

The HCCH EDI contract provides interfaces to both external and internal systems to facilitate the reimbursement processes. The HCCH serves as a third-party administrator (TPA) between VHA IVC and over one million medical and dental providers nationwide, including Puerto Rico, Guam, the Northern Mariana Islands, American Samoa, and US Virgin Islands. Over the last 12 months, due to the mandate to move to electronic healthcare claims processing and substantial increase to overall healthcare transactions, there has been an increased need for these services. Since VA was mandated to transition to EDI transactions, VA IVC has processed over one billion claims.

The proposed modification under this justification will allow VA community care providers to continue submitting transactions to the HCCH for electronic processing of healthcare claims until performance begins under the new competitive follow-on contract.

Estimated value $11.7M.

4. An identification of the statutory authority permitting other than full and open competition:

The statutory authority permitting other than full and open competition is 41 U.S.C.

§ 3304(a)(1) as implemented by the FAR Subpart 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements.

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

The Veterans Health Administration (VHA), Office of Integrated Veteran Care (IVC) manages the HCCH EDI contract with CHC, for the HCCH EDI transaction services to ensure timely and accurate claims processing. At the current rate of performance, the current IDIQ ceiling value of $40M is projected to be met on or about March 15, 2024; however, performance at the task order level on this contract must be assured through the protest as well as the implementation of the follow-on contract once the Stop Work Order (SWO) is lifted. The anticipated relevant timeline is as follows:

End of Protest (anticipated): 12/31/2023 Implementation Period of Follow-On Contract (anticipated): 1/1/2024-6/30/2024 Period of Performance Assurance for Additional Protest Delays: 7/1/2024-9/30/2024

The incumbent contractor, CHC, is the only vendor that can provide these critical services at this time. No other vendor can be operational, before contract expiration, to provide services without a 6-month implementation period. It would be impossible for a new vendor to ramp up and attain operational connectivity with VA systems. CHC is immediately capable of meeting the contractual language. CHC has the required capabilities and facilities to deliver the necessary services to support electronic data interchange services for claims processing without interruption or degradation of the quality of care. Utilizing Government personnel is not feasible; the VA workforce is not sufficient to address the requirements, the contractor’s systems are not available to the Government workforce, and VA does not have the in-house expertise to accomplish this requirement. If this action is not approved, there will be a break in service which will jeopardize Veterans’ healthcare in the community, impacting their safety, and adversely impact other IVC missions as well as other areas of VA and the public.

The work performed by the incumbent contractor is essential to accomplishing VA’s mission of delivering healthcare services. The CHC contract is the only contractual vehicle from which to execute a Task Order for immediate performance necessary to process claims for Veterans’ care from providers in the community. Claims processing for Veterans’ care in the community would suffer significantly.

In addition, VHA must process healthcare claims within 30 days of receipt of a proper claim according to the Prompt Payment Act, 5 CFR part 1315 - Prompt Payment. If community providers are not compensated for services in a timely manner, Veterans may be turned away for care and Veterans being placed in collections as providers attempt to receive payment from them rather than waiting for VA to process claims.

The use of this proposed non-competitive action via contract modification to the existing HCCH EDI IDIQ contract is the only way to continue providing care for Veterans in the community.

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

The required services are critical and needed to continue without interruption, efforts to obtain further competition is not feasible nor applicable to the nature of this action.

Efforts to obtain competition for the follow-on contract action have been accomplished;

however, those efforts are currently subject to a stay of performance due to protest.

Corrective action is being taken on the competitive award and, when resolved, the protest is anticipated to be dismissed with performance permitted on the new contract award.

The notice will be publicized in accordance with subpart 5.2.

7. Determination of Anticipated Fair and Reasonable Cost

The Contracting Officer hereby has made the determination that the anticipated cost to the Government will be fair and reasonable. This determination is based upon the application of the existing contract prices are applicable to the proposed contract modification, and these prices have already been determined to be fair and reasonable.

8. Description of the Market Research

Market research was completed IAW FAR Part 10 for the competitively awarded follow-on contract (36C10G23D0017, awarded March 31, 2023). Market research indicated that four (4) contractors could provide the EDI services required in the Performance Work Statement (PWS). Additionally, four (4) proposals were received in response to Solicitation 36C10G23R0004 for the follow-on contract. This competitively awarded contract was then protested, placing uninterrupted services in jeopardy, and necessitating this Justification & Approval to assure continued performance until the protest is resolved. This prior market research as well as thorough evaluation of interested offerors made further market research unnecessary as the number and capabilities of potential offerors are well known.

9. Other Supporting Facts

None

10. A Listing of Sources Expressing Interest

Four sources expressing interest in the requirement include: Availity LLC, Change Healthcare LLC, PNT Data Corp and SSI Claimsnet LLC.

11. Efforts to Remove or Overcome Barriers to Competition

Efforts to remove and overcome barriers to competition are underway pending resolution of protest to award the follow-on competitive contract action (36C10G23D0017, awarded March 31, 2023).

12. Contracting Officer Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Terri Duenas Contracting Officer, Division Chief AS-5C Strategic Acquisition Center

Technical or Requirements Certification

In my role as responsible technical or requirements official, I hereby certify that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government’s minimum needs or schedule requirements or other rationale for other than full and open competition) and which form a basis for this justification are complete and accurate.

Savannah H. Connally Deputy Director, Contract Management Business Operations (16EO1) Office of Integrated Veteran Care

Approval

In my role as Advocate for Competition for the procuring activity, based on the forgoing justification, I hereby approve an $11.7M increase of the ceiling value from $40M to $51.7M for the HCCH EDI IDIQ contract 36C10G22D0023, via contract modification, in accordance with FAR 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Adam M. Spacht Procuring Activity Advocate for Competition Strategic Acquisition Center