Justification for an Exception to Fair Opportunity_CRJ Model_redacted.pdf

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

Acquisition Title: Comprehensive Care for Joint Replacement (CJR) Payment Reconciliation

Agency: Centers for Medicare & Medicaid Services (CMS)

Center for Medicare & Medicaid Innovation (CMMI)

Acquisition Year: FY2026

Author: Heather Robertson, Contracting Officer

1. Description of Action:

A. Nature ☐ New Requirement ☐ Follow-On Order ☒ Modification of Existing Purchase Order / Contract Number

B. Order Against:

Research, Measurement, Assessment, Design and Analysis 2 (RMADA2) IDIQ Contract # 75FCMC19D0091 / Task Order# 75FCMC22F0002

C. Contract Type ☐ Firm-Fixed Price ☐ Time and Materials ☒ Cost Plus Fixed Fee (CPFF) ☐ Term ☒ Completion

☐ Cost Plus Award Fee (CPAF) ☐ Other:

D. Projected Cost / Price of contract (Base & All Options): $9,100,206

E. The total estimated value of the proposed sole source action (for modifications only): $156,693

F. Funding Source(s): 3021

G. Basis for Approval (Far 6.303-1(d))

☒ Individual Basis

☐ Class Basis

2. Description of Supplies or Services:

This task order is for support to operationalize the complex payment reconciliation methodology of the mandatory CJR model, as detailed in the Federal Register/vol.80, No.

226 issued November 24, 2015; Federal Register/Vol.82, No. 1 issued Tuesday January 3, 2017; Federal Register/Vol.82, No. 230 issued Friday December 1, 2017 and Federal Register/Vol.86, No. 83, issued May 3, 2021. This task order provides for the following services as part of the annual payment reconciliation process: 1) pulling all episode-related Medicare claims from the most recent performance year, 2) coordinating with a separate contractor to calculate a composite quality score for each participant, 3) calculating the final quality-adjusted target price for each participant, 4) calculating total performance period spending for each participant, 5) comparing the amounts to determine whether the participant is entitled to a reconciliation payment or owes a repayment to CMS, and 6) creating and delivering to participants a detailed reconciliation report. Additional services provided throughout the year include the provision of monthly data feeds to participant hospitals, technical assistance for participants, and ad hoc episode analyses.

This task order was awarded to Mathematica, Inc for a total of four years with the following base year and option periods of performance:

Base Year: 03/21/2022 – 03/20/2023 Option Year 1: 03/21/2023 – 03/20/2024 Option Year 2: 03/21/2024 – 03/20/2025 Option Year 3: 03/21/2025 – 03/20/2026

CMS seeks to modify Contract 75FCMC19D0091/Task Order75FCMC22F0002 to add one, three-month option period to support CMMI’s continuation of reconciliation processing, appeals support and model close out for the CRJ Payment Reconciliation model. This option period will have a period of performance of March 31, 2026 through June 30, 2026.

FAR 52.217-8, Option to Extend Services, provides the Government the option to extend contract performance for up to an additional six months at the rates specified in the contract. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. Because the option price was not evaluated at the time of award, a justification for an exception to fair opportunity is required to exercise the option, along with the determination required by FAR 17.204- 1(b).

3. Authority and Rationale:

The Contracting Officer shall give every awardee a fair opportunity to be considered for a delivery/task order exceeding $3,500 unless one of the following statutory exceptions applies. FAR 16.507-6. Mark the applicable exception:

☐ The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays [FAR 16.507-6(b)(1)];

☒ Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized [FAR 16.507-6(b)(2)];

The incumbent contractor, Mathematica, is the only capable source of providing the required services for this modification due to their unique institutional knowledge, specialized expertise, and exclusive access to critical systems developed since the CJR model's inception. Mathematica has developed unique and specialized complex processes specifically tailored to the CJR payment reconciliation process, including highly specialized, contractor-developed methodologies for calculating target prices across four Medicare Severity Diagnosis-Related Groups (MS-DRG) clinical episode groups (469, 470, 521, and 522), integrating hospital-level composite quality scores, and applying episode-level risk adjustments. These processes have been subject to rigorous quality control and continuous process improvements over the course of the model's eight performance years.

Given that the current performance year reconciliation was delayed due to late delivery of updated standardization payment data – a circumstance outside the contractor’s control -and given substantial work has already been completed, with reconciliation reports issued to approximately 325 participating hospitals, transitioning to a new contractor would require recreating these specialized processes from scratch. This would result in significant duplication of costs and unacceptable delays, further extending an appeals window that has already been postponed. Additionally, a new contractor would need to develop and test entirely new processes to perform the payment reconciliation work, presenting significant risk of major deliverable delays or errors and jeopardizing beneficiary and hospital rights to timely appeals resolution.

The continuity provided by Mathematica ensures seamless completion of the reconciliation and appeals processes without disruption to established workflows, data integrity, or quality standards that have been refined over multiple performance years. Given the operational risks and delays that would be associated with transitioning to a new contractor, as well as the unique and highly specialized services provided by Mathematica through their proven expertise and established processes, it is in the best interest of the government to allow Mathematica to continue this work.

☐ The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order [FAR 16.507-6(b)(3)]; or

☐ It is necessary to place the order to satisfy a minimum guarantee [FAR 16.507-6(b)(4)].

☐ A statute expressly authorizes or requires that the purchase be made from a specified source. FAR 16.507-6(b)(5)].

4. Provide a statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made:

This modification represents a limited, three-month option period to complete appeal-related activities due to delayed data availability beyond the contractor's control. Since the CJR Payment Reconciliation task order will be concluded after this final three-month period, and no subsequent acquisition for these specific CJR payment reconciliation services is required at this time, the agency will take note of the factors that led to the reconciliation delay to inform improved data delivery timelines and contingency planning for other alternative payment models in the future.

5. State any other facts supporting the justification: N/A

In summary, the addition of a three-month option period to this task order provides the most practical, efficient and cost-effective approach to support CMMI’s continuation of reconciliation processing, appeals support and model close out for the CRJ Payment Reconciliation model.

The signatures below are not applicable based on the $156,693 value.

3. CMS Competition Advocate Approval I have reviewed this Exception to Fair Opportunity and find that it adequately supports other than full and open competition.

N/A Name / Date

4. Head of Contracting Activity (HCA) Approval I hereby confirm that the circumstances described above apply and approve this Justification for Exception to Fair Opportunity.

N/A HCA Name / Date

5. Office of Small and Disadvantaged Business Utilization

N/A

6. OGC Legal Review

7. HHS Competition Advocate Approval

8. Senior Procurement Executive (SPE) Approval

Based on the foregoing justification, I hereby confirm the circumstances described above apply and approve the Justification for Exceptions to Fair Opportunity.

SPE Name / Date