JandA_36C79119D0007_VA Claims_HCASigned.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 VA Claims Processing and Customer Services Indefinite Delivery Indefinite Quantity (IDIQ) contract 36C79119D0007 (contractor Signature Choice, LLC) to increase the ceiling value to secure performance for the remaining four months of the final period of performance. At time of award, the ceiling value of this IDIQ contract was established at $500M. With this modification, the value would be increased by $50M, from $500M to $550M.

At the current rate of performance, the ceiling value of $500M is projected to be met on or about January 1, 2024, which is four months prior to the end of the final period of performance (May 8, 2023 – May 7, 2024). The value increase recommended by this Justification and Approval (J&A) will authorize the current IDIQ contract to increase the ceiling value of the contract, enabling contractor performance to continue through its final performance period through May 7, 2024.

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

(including the estimated value):

The Veterans Health Administration (VHA), Office of Integrated Veteran Care (OIVC), manages the Claims Processing contract with the contractor Signature Choice, LLC, to provide information regarding eligibility, authorization information, claims processing clarification and billing instructions to community providers. This contract is a crucial, complex, and unique information technology (IT) function of medical claims processing and directly impacts Veterans’ access to healthcare.

The Office of IVC administers programs to adjudicate healthcare claims for medical services performed by community-based providers in support of Veterans and family members of 100% service-related disabled Veterans. The Office of IVC leverages the VA Claims Processing incumbent contractor Signature Choice, LLC to process claims and operate a customer service call center for billing and eligibility-related inquiries; the contractor also maintains a separate call center specifically for emergent care notifications that operates 24 hours a day, 7 days per week.

The Government would be seriously injured without continuity of services from this contract. The work performed by the incumbent contractor is essential to accomplishing VA’s mission of delivering healthcare services. Should the ceiling value not be increased, VA would lack a contractual vehicle to process claims for Veterans’ care from providers in the community. VA cannot afford to alienate community providers who serve a key role in Veterans’ healthcare needs. Claims Processing for Veterans’ care in the community would suffer significantly. The use of this proposed non-competitive action via contract modification to the existing Claims Processing IDIQ contract poses the least risk to the provision of care for Veterans in the community.

Estimated Value: $50M

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 contractor, Signature Choice, LLC, has demonstrated the requisite expertise, management, responsiveness, and experienced personnel critical to providing seamless, uninterrupted service of current delivery of Claims Processing and Customer Services.

Since the contract award in March 2019, Signature Choice, LLC has processed 51.9 million Veteran and family member claims, 6.5 million customer service calls, and 7.8 million emergent notifications. Signature Choice, LLC serves as a Managed Service Organization (MSO) for IVC to process Veteran Family Member Program (VFMP) claims within their contractor-owned automated claims system, ClaimsXM (CXM). To date, Signature has processed over 20.5 million claims in the CXM system.

The incumbent contractor, Signature Choice LLC, is the only vendor that can provide services at this time. Utilizing Government personnel is not feasible; the VA workforce is not sufficient to address the requirements, contractor 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, the result would be a significant break in services and serious jeopardy to Veterans’ healthcare in the community, impacting their safety, as well as to healthcare providers, which would adversely impact other IVC missions as well as other areas of VA and the public.

VA’s current need for continued performance from the incumbent Signature Choice LLC is for the following reasons:

a. The services performed are essential to accomplishing VA’s mission of delivering healthcare services to our nation’s approximately nine (9) million Veterans and six (6) hundred thousand family beneficiaries currently receiving care through VA’s healthcare system via community-based providers. 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, VA risks Veterans being 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.

b. The current contractor is immediately capable of meeting the contractual language.

The current contractor has the required capabilities and facilities to deliver the necessary services to support claims processing and customer service without interruption or degradation of the quality of care.

c. VA staffing levels are insufficient to maintain the current workload without contractor assistance. VA is reliant upon the contractor’s ClaimsXM system for processing claims. There is no alternative processing system immediately available if contract performance ends prior to the scheduled final period of performance.

d. Inbound customer service call volume has increased more than expected. Higher call volumes require VA to utilize contractor resources for surge support which increased the burn rate of funds. At the current burn rate, the task order is expected to be exhausted at the end of this calendar year, approximately four months early.

Approval of the ceiling value increase will enable the incumbent contractor Signature Choice LLC to continue performance and VA to avoid disruption of VA’s Claims Processing and Customer Services and resulting catastrophic impact to the Department’s ability to provide and support world-class patient care in the community to our nation’s Veterans.

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 effort to award a fully competitive action is underway with the OIVC-led Integrated Project Team (IPT) for the follow-on procurement. Additionally, market research is ongoing, including Requests for Information (RFI) and an Industry Day to solicit as many interested sources as possible. It is anticipated that there are multiple vendors both interested in and capable of providing the required services. To date, five sources have been identified (refer to paragraph 10 below), and additional sources are anticipated to be discovered through the ongoing market research process.

Additionally, the follow-on procurement, once awarded, will include an initial phase for onboarding the selected contractor over a 12- to 18-month implementation period, as a new vendor requires onboarding to attain operational connectivity between that vendor and VA systems. At this time, no other sources are capable of providing these services.

Notice of this J&A will be publicized in accordance with FAR 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

As noted above, market research for the follow-on acquisition for this VA Claims Processing requirement is underway to maximize competition. The VHA OIVC Program Manager has implemented an IPT with all stakeholders. An initial Request for Information (RFI) was issued on 4/25/2023 with five (5) respondents that are identified below (refer to paragraph 10). An Industry Day and a subsequent RFI is also planned, in addition to the searches being conducted throughout multiple contractor venues. Based upon the market research effort, maximum competition is both planned and anticipated.

9. Other Supporting Facts

None.

10. A Listing of Sources Expressing Interest

To date, a total of five (5) sources expressed interest in the follow-on requirement as a result of the first RFI conducted; these include: Client Network Services LLC (CNSI), Optumserve Health Services Inc, PGBA LLC, SaviLinx LLC and Signature Choice LLC. Additional sources interested in this acquisition are also anticipated as a result of ongoing market research.

11. Efforts to Remove or Overcome Barriers to Competition

No barriers to competition are anticipated. Market research indicates that multiple vendors are interested in this requirement and will be sought in the solicitation for the follow-on requirement.

12. Technical and Requirements Certification:

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

William Brown Program Analyst, Quality Monitoring (QM) QSV Assurance, Integrated External Networks Office of Integrated Veteran Care (OIVC)

13. Contracting Officer Certification:

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

Terri Duenas Contracting Officer Strategic Acquisition Center

Approval

In my role as Head of the Contracting Activity, based on the forgoing justification, I hereby approve the increase of the ceiling value from $500M to $550M for the IDIQ contract 36C79119D0007, 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.

Christopher D. Parker Associate Executive Director, Strategic Acquisition Center and Head of Contracting Activity