J A_for_FBO_posting.docx

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

“Source Selection Information – see FAR 2.101 and 3.104”

1. Identification of the agency and contracting activity.

a. Federal agency and contracting activity. HHS. Centers for Medicare & Medicaid Services (CMS).

b. Sponsoring organization. Center for Medicare (CM) / Medicare Enrollment & Appeals Group (MEAG) / Division of Appeals Operations (DAO).

c. Contracting Officer’s Representative (COR) information:

· COR: Kathleen McCracken

· Mailing address:

7500 Security Boulevard Mailstop C2-12-16 Baltimore, MD 21244-1850

· E-mail address: Kathleen.McCracken@cms.hhs.gov

· Telephone number: 410-786-7487

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

This justification for an Exception to Fair Opportunity supports a logical follow-on task order award to C2C Solutions, Inc. (C2C) on a sole-source basis to provide additional activities to the current 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, C2C will conduct formal discussions on a limited number of claims received under the existing Durable Medical Equipment (DME) “Qualified Independent Contractor” (QIC) task order. These discussions shall provide appellants an opportunity to discuss their claim with the QICs before a reconsideration decision is made on their claim. Additionally, this will provide an opportunity for the QIC to educate the appellant with regards to payment policy requirements.

This task order will implement a demonstration project to conduct formal discussions with providers and/or suppliers seeking Medicare fee-for-service (FFS) appeals.

Under the authority in section 402(b) to waive provisions that “relate” to payment, CMS will waive section 1869(c)(3)(C)(i) and (ii) of the Social Security Act, which requires QIC reconsiderations be conducted and concluded by the QIC not later than 60-days after a request is timely filed and affords appellants the right to escalate their appeal if the 60-day timeframe is not met.

Under this demonstration, CMS is interested in determining whether further engagement between providers/suppliers and the QICs will improve understanding of the cause of the claim denials, and over time, result in more proper claims submission.

In addition to the above, the QIC will also work to identify related claims that have previously been adjudicated by the QIC unfavorably that may result in a favorable determination upon reopening based on the information obtained in or after the discussion process. The QIC will conduct reopenings, as defined in the SOW, on claims it determines would yield a favorable outcome.

The original DME task order (HHSM-500-2004-00005I/HHSM-500-T0002) was competed amongst CMS’ Qualified Independent Contractor (QIC) Indefinite Delivery Indefinite Quantity (IDIQ) contract holders and awarded to C2C in May 2011.

This demonstration is a priority mandated by the Secretary’s office in order to support OMHA in the reducing their current backlog of appeals pending at their level.

3. Description of the supplies or services required to meet the agency’s needs (including the estimated value).

a. Project title. Durable Medical Equipment Workload- Medicare Appeals Demonstration to Conduct Formal Discussions with Providers and Suppliers

b. Project description:

Under this logical follow-on task order, C2C’s primary responsibility shall be to conduct formal discussions on reconsiderations received under the DME task order (HHSM-500-2004-00005I/HHSM-500-T0002), include additional information or documentation received through this process in the administrative appeals case file, and conduct data analysis and other activities for the Medicare Administrative Contractors (MACs) to improve provider billing through focused education.

The QIC shall also initiate and conduct reopenings on similar claims that based upon the outcome/additional information obtained via the discussions will now likely yield a favorable outcome to the provider/supplier.

The existing DME QIC workload includes, at a minimum, processing reconsideration requests in accordance with 42 CFR Part 405 for durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), prosthetics and orthotics (P & O), parenteral and enteral nutrition (PEN), and supplies.

The purpose of this task order is to have the QIC discuss appeals cases with providers/suppliers, and to determine whether further engagement between providers/suppliers and the QIC improves the understanding of the causes for claim denials. This, over time, will result in more proper claim submissions. The desired outcomes of this task order include:

· Identifying cases/claims that are appropriate for the discussions process;

· Notifying the appellant regarding the plan to conduct the formal discussion;

· Recording and uploading the discussions in the Medicare Appeals System (MAS);

· Considering information obtained as part of, or as a result of, the discussion in the reconsideration process;

· Collecting and transmitting information regarding the discussion process and the effectiveness of the demonstration in improving provider/supplier understanding of the causes for claim denials, and over time, resulting in more proper claims submission;

· Participating and coordinating with other entities in the Medicare appeals chain, including CMS, the Administrative QIC (AdQIC), other QICs, DME MACs, the Office of Medicare Hearings and Appeals (OMHA), and the Medicare Appeals Council located at the Departmental Appeals Board (DAB), as needed to support this demonstration and to determine its effectiveness; and,

· Identifying other related claims that could potentially yield a favorable outcome to the provider, and if applicable, reopen these claims.

· Requirement type.

Research & development (R&D) R & D support services Support services (non-R&D) Supplies/equipment Information technology (IT) Construction Architect-engineer (A & E) services Design-build Other (specify): Professional, administrative, and management support services

· Type of action.

New requirement Follow-on Other (specify): ______________________

· Proposed contract/order type.

Firm-fixed-price Other fixed-price (specify, e.g., fixed-price award-fee, fixed-price incentive-fee): fixed-price award-fee Cost-plus-fixed-fee Other cost reimbursement (specify, e.g., cost-plus-award-fee, cost-plus-incentive-fee): ___________ Time and materials Indefinite delivery (specify whether indefinite quantity, definite quantity, or requirements): ___________ Other (specify): ___________ Completion Form Term form

· Acquisition identification number. 150931

c. Total estimated dollar value and performance/delivery period.

The total estimated value of this acquisition is $24,136,487 over a 2.25 year period of performance. The proposed period of performance for the resulting contract is a 15 month Base Year (3 month transition plus 12 month operational period) and One (1) 12-month Optional Renewal Year.

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 DME QIC task order was competed amongst all the QIC IDIQ contract holders and all awardees were given a fair opportunity to be considered for the original order.

Additionally, the scope of work for the proposed logical follow-on is similar to the existing DME QIC task order scope of work. The purpose of the existing Part DME QIC task order scope of work is to process reconsideration requests in accordance with 42 CFR Part 405 for durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), prosthetics and orthotics (P & O), parenteral and enteral nutrition (PEN), and supplies. The scope of work for this proposed logical follow-on task order increases the level of effort in the administrative appeals process to support the reconsiderations process already occurring under the current DME QIC task order scope of work. The activities under this LFO will support and enhance the activities conducted by the DME QIC to improve the administrative appeals process.

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 Implementing this workload via a competitive acquisition process would involve a number of expensive and time consuming activities. In addition, competing this task would increase programmatic costs associated with additional coordination and communication between the existing DME QIC, DME MACs, and the new “discussions QIC.” Under a competitive award, the discussions demonstration may require transferring of reconsiderations data and case file information between two QICs in order to complete the reconsideration process performed by the DME QIC (i.e., the “discussions QIC” would need to provide the DME QIC with the audio recording and any additional documentation received as part of the discussions process in order to ensure adequate and appropriate use of the information received via the discussions process). This also creates the potential for confusion and misinterpretation of the information obtained via the discussion with the appellant. In addition, the DME QIC and “discussions QIC” would need to coordinate regarding the timing of the discussion, submission of additional documentation deadlines, and how quickly the information is loaded into MAS for use by the DME QIC in adjudicating the case.

DAO believes this would create a significant cost and effort for the DME QIC, the “discussions QIC,” and potentially the DME MACs. While difficult to estimate/quantify the cost of these new activities and coordination efforts, CMS would have to modify the DME QIC contract and potentially 2 DME MAC contracts to provide requirements and funding to support coordination and information flow with the “discussions QIC” at an estimated cost of $1,560,000 - $1,950,000 (approximately $8-10/claim to coordinate the discussions and reopenings).

Exercising an LFO for this demonstration benefits the government by saving both the administrative time associated with competing this workload and the additional money that would be necessary to support additional communications between the “discussions QIC,” the DME QIC, and potentially the DME MACs. This also minimizes the risk for misinterpretation of the information obtained via the discussions process either orally or in writing, improving the potential success rate for this demonstration.

Benefit to Stakeholders An LFO also benefits Medicare providers/suppliers. Specifically, by not utilizing the LFO, there is a potential for confusion within the provider/supplier communities regarding who is adjudicating the claim versus who is conducting the appeals discussion and/or related reopenings. That is, unless an LFO is awarded, the reconsiderations would be filed with the DME QIC but the discussion itself would be conducted by a different entity. Utilizing the LFO, allows this demonstration to occur seamlessly and efficiently, as the same entity will be conducting both the discussion and the reconsideration. In addition, further confusion could occur if a new entity is reopening related claims.

Therefore, in accordance with FAR 16.505(b)(2)(i)(C), 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. The proposal submitted by C2C will be evaluated against the pricing that was determined to be fair and reasonable under the existing DME QIC task order, the Independent Government Cost Estimate the program staff will produce, and the award fee plan also developed by the program staff. 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 of the DME QIC 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 Upon expiration of the demonstration under this task order, CMS intends to compete any resulting work under the QIC IDIQ.