Part_C_QIC_fair_opportunity_document_-_FBO.docx

Justification for an Exception to Fair Opportunity Pursuant to FAR 16.505(b)(2)(i)(c)

1. Identification of the Agency and the Contracting Activity

Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS)

Contracting Officer’s Representative: Beverly Sgroi (410) 786-7638 Center for Medicare (CM)

Contracting Officer: Mark Smolenski (410) 786-0175 Office of Acquisition and Grants Management (OAGM)

2. Nature and/or Description of Action Being Approved

This justification for an Exception to Fair Opportunity supports a logical follow-on task order award to MAXIMUS Federal Services (Maximus) on a sole-source basis to provide adjudication services in support of the coverage determinations, reconsiderations, and appeals requirements set forth at section 1852(g) of the Social Security Act (the Act), as amended by Title II of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173).

More specifically, Maximus will act as the Part C “Qualified Independent Contractor” (QIC), responsible for conducting reconsiderations of adverse organization determinations and adverse reconsiderations made by Medicare Advantage (MA) Organizations. Organization determinations and reconsiderations include the amount of cost sharing, if any, that the enrollee is required to pay. The Part C QIC is also responsible for conducting reconsiderations of adverse PACE Organization determinations and for performing various administrative tasks (e.g., data analysis, reporting) in support of the reconsideration process.

The original task order (HHSM-500-2004-00007I/HHSM-500-T0006) was competed amongst CMS’ Qualified Independent Contractor (QIC) Indefinite Delivery Indefinite Quantity (IDIQ) contract holders and awarded to Maximus in May 2011.

The period of performance for the original task order is July 1, 2011 through June 30, 2015 (inclusive of option periods), with a total value of $57,664,439.

The period of performance for the proposed logical follow-on task order will be July 1, 2015 through June 30, 2017 (inclusive of one option period), with an estimated value of $23,556,500 total for both periods.

3. Description of the Supplies or Services Required to Meet the Agency's Needs (including the estimated value)

Under this logical follow-on task order, Maximus’s primary responsibility shall be to adjudicate standard and expedited reconsiderations in an accurate, efficient, timely, and consistent manner.

The MA regulations provide an enrollee’s right to a reconsideration of an adverse organization determination made by a Part C plan; this is the first level of appeal. When the Part C plan’s reconsideration continues to uphold its adverse organization determination, the plan must forward the issues remaining in dispute to the Part C QIC reconsideration; this is the second level of appeal. The Part C QIC shall conduct its reconsideration as expeditiously as the enrollee’s health condition requires, but the timeframes generally shall not exceed the timeframes that apply to Part C plan reconsiderations. For example, reconsiderations received from Part C plans are to be processed within the following timeframes:

The Part C QIC shall complete a minimum of 95% of its reconsiderations within the specified timeframes. Excluded from this standard will be cases where the QIC requires policy clarification from CMS in order to proceed with a reconsideration determination.

The Part C QIC’s responsibilities also include administrative tasks associated with the adjudication of Part C reconsiderations. The outcomes of this TO shall include:

· Issuing an acknowledgement letter to appellants for standard service and payment reconsideration requests;

· Timely and accurate adjudication of standard and expedited reconsiderations of Part C plans’ adverse organization determinations and adverse reconsiderations (including determinations related to applicable cost sharing) which include cases forwarded by Part C plans due to failure to meet adjudication timeframes, using protocols that will be established by the Part C QIC;

· Effective monitoring of Part C plans’ compliance with effectuation requirements;

· Case management, development, and documentation to produce a complete administrative record for second level appeals;

· Collection and transmission of information regarding the receipt and disposition of standard and expedited reconsiderations via the Medicare Appeals System (MAS);

· Participation and coordination with other entities in the Medicare appeals process including: CMS and its contractors; Part C plans; the Office of Medicare Hearings and Appeals (OMHA); and the Medicare Appeals Council (MAC);

· Referrals of quality of care concerns and suspected fraud and abuse concerns in accordance with procedures prescribed by CMS;

· Case file handling and storage; and

· Administrative services necessary to support the Part C appeals process, including data analyses and reporting.

The Part C QIC’s jurisdiction will be national. The estimated annual workload for Part C reconsideration and reopening decisions is 55,000 cases per year, of which approximately 10% may be anticipated to be expedited appeals. Actual workload may fluctuate given the possibility of changes in Part C enrollments and appeal program requirements.

4. Identification of the Exception to Fair Opportunity and the Supporting Rationale

FAR 16.505(b)(2)(i)(C) allows for a task order to be issued on a sole-source basis under an IDIQ contract 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. The existing Part C QIC task order was competed amongst all the QIC IDIQ holders. Additionally, the scope of work for the proposed logical follow-on is identical to the existing Part C QIC task order scope of work. The purpose of the existing Part C QIC task order scope of work is to adjudicate standard and expedited reconsiderations of adverse organization determinations and adverse reconsiderations made by Medicare Advantage (MA) Organizations. The scope of work for the proposed logical follow-on is nearly identical.

The following paragraphs detail how issuing this logical follow-on task order is in the government’s best interest in terms of economy and efficiency.

Cost Savings to the Government

Transitioning the entire Part C reconsideration workload in the event the incumbent was not awarded the contract following a re-competition via the acquisition process would involve a number of expensive and time consuming activities, including transferring case files and reconsideration requests from one contractor operation to another, and educating the beneficiary, health plan, and provider communities about the change in contractors. To support these activities, CMS would have to exercise optional task 18 at an estimated cost of $247,140.00. In addition, the government would need to pay the incoming contractor transition-in costs estimated to be between $600,000 and $900,000, based on the historical data.

Exercising a LFO for this jurisdiction benefits the government by saving both the time and money associated with transitioning this workload.

Part C Program Stability and Continuity

If CMS was to transition the work under the Part C task order from one contractor to another, it may pose a significant and unnecessary risk for disruption to the continuity and efficient operation of the Medicare Part C program and the administrative appeals process.

The chart below depicts overall reconsideration receipts in recent calendar years.

*The reduction in Part C reconsideration volume is primarily due to a change implemented in Jan. 2014 in the processing procedures related to appeal dismissals. Effective Jan. 2014, Medicare Advantage organizations were responsible for dismissing invalid reconsideration requests rather than automatically forwarding such reconsideration cases to the Part C QIC for review and disposition.

During the extremely high volume years of 2012 and 2013, Maximus maintained a completion timeliness rate of 99%.

Overall, the Part C program has been successfully maintained, but changing the reconsideration contractor at this time may compromise the current success as a new contractor gets its operations established and learns the Part C reconsideration workload.

Benefit to Stakeholders

A LFO also benefits Medicare beneficiaries, Part C health plans, and providers. Transitioning appeals contractors can often lead to confusion for beneficiaries, as well as the health plan and provider communities. For example, health plans have to change their decision notices and forms, and beneficiaries must acquaint themselves with the new contractor and associated contact information. CMS takes steps to minimize this confusion by issuing memoranda and modifying relevant beneficiary materials/publications, but these activities require an expenditure of time, resources and effort that would be saved if a LFO is granted.

Staff Resources

Another benefit of allowing the LFO is that it will save scarce staff resources, which are necessary to re-compete this task order. Significant amounts of staff time are devoted to developing the request for proposal, reviewing proposals, answering questions posed by the bidders, and evaluating and scoring business and technical proposals. This time can be saved by allowing an extension in the re-competition of the Part C QIC task order and granting the LFO request.

Therefore, in accordance with FAR 16.504(b)(2)(iii), a logical follow-on for this effort is in the best interest of the Government based on the economies and efficiencies that will be realized. Additionally, as stated previously, all QIC IDIQ contract holders were given a fair opportunity to be considered for the original task order.

5. A Determination by the Ordering Activity Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable

The QIC IDIQ was awarded in 2004. CMS has generated a strong base of knowledge in regard to fair and reasonable pricing under the IDIQ based upon the experience with this type of work. The proposal submitted by Maximus will be evaluated against both the pricing that was determined to be fair and reasonable under the existing Part C Task Order and the Government Cost Estimate the program staff will produce. The evaluation of the proposal against those items will enable CMS to make a fair and reasonable determination of the contractor’s price.

Taking into account the information provided in the paragraph above, the Contracting Officer has determined that the anticipated cost to the Government on the Part C logical follow-on task order will be fair and reasonable.

6. Any Other Facts Supporting the Justification

N/A. Please see Sections 3 and 4 above.

7. Actions the Agency May Take to Remove or Overcome Any Barriers that led to the Exception to Fair Opportunity

In planning for the continuation of this work after this two (2) year contract period, CMS intends to compete this requirement under the CMS QIC IDIQ. The planning for this competition will start in FY 2016. CMS intends to release a request for proposal at some point of during the fourth quarter of FY 2016 with award to most likely occur during the second quarter of FY 2017.