Part A East LFO - JEFO - Redacted.pdf

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

Acquisition Title: Part A East Qualified Independent Contractor (QIC)-Requirement 26xxxx (tbd) Agency: Health and Human Services (HHS)/Centers for Medicare & Medicaid Services (CMS) Acquisition Year: 2026 Author:

1. Description of Action:

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

B. Order Against Qualified Independent Contractor. Multiple Award IDIQ Contract, HHSM-500-2004-00005I, C2C Innovative Solutions, Inc. (C2C)

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): $55,366,573.68

E. The total estimated value of the proposed sole source action (for modifications only): n/a F. Funding Source (s):

CMS seeks consideration to award a three (3) year logical-follow on (LFO) task order from January 1, 2026 – December 31, 2028 (Base Period + 2 Renewal Periods) in the Part A East QIC jurisdiction. Award of a LFO task order is requested after consideration of the following:

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 current Part A East QIC task order (HHSM-500-2004-00005I /

75FCMC21F0003) was competed amongst all the QIC IDIQ contract holders.

Part A East QIC task order (HHSM-500-2004-00005I / 75FCMC21F0003):

The task order was awarded to C2C in September 2021. To date, a total of approximately $43.73M has been obligated across three periods of performance with one period remaining (Renewal Year 3) as denoted below. The period of performance of HHSM-500- 2004-00005I / 75FCMC21F0003 was/is:

Transition-In Period: September 30, 2021 – December 31, 2021 Base Operational Period: January 1, 2022 – December 31, 2022 Renewal Year 1: January 1, 2023 – December 31, 2023 Renewal Year 2: January 1, 2024 – December 31, 2024 Renewal Year 3: January 1, 2025 – December 31, 2025 Optional Transition Out: January 1, 2026 – April 30, 2026

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

Individual Basis

Class Basis

2. Description of Supplies or Services:

The estimated value of the proposed action is: $55,366,573.68

The purpose of the proposed logical follow-on Part A East QIC task order is to provide adjudication services in support of the of the Medicare, Medicaid, and Children’s Health Insurance Program Benefits Improvement and Protection Act of 2000 (BIPA), Public Law 106-554, Subtitle C - Changes in Medicare Coverage and Appeals Process, Section 521 Revisions to Medicare Appeals Process. More specifically, the contractor shall act as a QIC responsible for conducting reconsiderations of initial Medicare claims determinations in the jurisdiction. The QIC shall be responsible for all reconsiderations requested as a result of Medicare Administrative Contractors (MACs) redeterminations of Medicare Part A and Part B of A claims. This workload includes processing reconsideration requests for, at a minimum, hospital inpatient, home health, skilled nursing home, hospice, and other Part A services and claims. It also includes institutional claims which are paid from the Part B Trust Fund (sometimes referred to as “Part B of A”). The QIC shall also be responsible for the expedited reconsideration workload comprised of, at a minimum, service termination and hospital discharge reviews performed by Quality Improvement Organizations (QIOs). It shall be noted that the QIC is also responsible for reconsiderations based on “initial determinations” regarding Medicare Secondary Payer (MSP) recovery claims against beneficiaries or providers/suppliers. Such recovery claims against beneficiaries routinely include both Part A & Part B claims.

The requirement number is 26xxxx (tbd).

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 16.505(b)(2). 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 16.505(b)(2)(i)(A)];

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 [FAR16.505(b)(2)(i)(B)];

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 16.505(b)(2)(i)(C)]; or

Part A East QIC task order (HHSM-500-2004-00005I / 75FCMC21F0003):

The activities under the proposed LFO task order are essentially the same as the above listed Part A East QIC task order scope of work. As described in Section 2 above, the proposed logical follow-on Part A East QIC task order is to conduct reconsiderations of initial Medicare claims determinations in the jurisdiction. The QIC shall be responsible for all reconsiderations requested as a result of Medicare Administrative Contractors (MACs) redeterminations of Medicare Part A and Part B of A claims in the respective Part A East QIC jurisdiction and also to support a small number of expedited reconsiderations in accordance with 1869(c)(3)(c)(iii) of the Act and 42 Code of Federal Regulations

405.1200 through 405.1208. The Part A East QIC jurisdiction includes standard and expedited reconsiderations related to the following covered states: Colorado, New Mexico, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Alabama, Georgia, Florida, Tennessee, South Carolina, North Carolina, Virginia, West Virginia, Puerto Rico, Virgin Islands, Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, Connecticut, New Jersey, New York, Delaware, Maryland, Pennsylvania, Washington DC.

It is noted that C2C’s past performance on Task Order HHSM-500-2004-0005I / 75FCMC21F0003 has been of high quality.

Additional Justification for LFO:

In March 2020 the Federal District Court for the District of Connecticut issued an order in Alexander v.

Azar. The Order directed the Secretary of the Department of Health and Human Services to create additional appeals processes for a defined class of people with Medicare who were initially admitted as hospital inpatients but were subsequently reclassified by the hospital as outpatients receiving observation services and meet other conditions specified in the order. As a result of the Order, on December 27, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule which includes provisions to establish a temporary retrospective appeal processes for certain people with Medicare who are initially admitted as hospital inpatients but are subsequently reclassified by the hospital as outpatients receiving observation services during their hospital stay and meet the eligibility criteria. See Appeal Rights for Certain Changes in Patient Status-CMS-4204-P 0F[1]. CMS issued the related final rule on October 11, 2024 1F1. Under this process, Medicare beneficiaries will have 365 calendar days from the implementation date of the final rule to gather any related documentation and submit a timely eligibility request. The implementation date is January 1, 2025.

1 Federal Register: Medicare Program: Appeal Rights for Certain Changes in Patient Status

This Court Order and the ensuing temporary retrospective review process created under the Rule directly impacts the Administrative Qualified Independent Contractor (AdQIC) contract and the two Part A QIC (East & West) contracts. The AdQIC will be tasked to serve as the clearinghouse contractor for initially receiving and reviewing beneficiary requests to determine eligibility for this appeal process (i.e., the Eligibility Contractor), and the Part A QICs will be responsible for conducting any subsequent second level appeals adjudication submitted by beneficiaries as part of this court-ordered process.

During 2024, CMS modified the respective Part A QIC contracts to incorporate the new statement of work (SOW) requirements related to this temporary retrospective review process. Given the complexity of this new mandated appeals process, established in this Court Order, that involves beneficiary appellants and potentially significantly aged claims and related medical records/documentation (2009-present), CMS believes a Logical Follow On (LFO) is needed to ensure the continuity of operations and the most successful implementation and operations related to this temporary retrospective review process. Under this particular Justification and Approval document, CMS seeks approval for an LFO in the Part A East QIC jurisdiction to ensure the continuity of operations and preserve ease of this appeals process for beneficiaries potentially pursuing the temporary retrospective review process in this QIC jurisdiction. Absent approval of the requested LFO, the Agency risks having a transition of this workload (should the incumbent QIC not be awarded the new contract solicited) which would yield the need to clarify for beneficiaries’ the change (including updates to the filing address for submission of related appeals and/or supporting documentation etc.), during this limited retrospective appeal process period. This would create the potential for unnecessary beneficiary confusion in what is already a new and somewhat complex process with high stakeholder visibility, including the Court, and stakeholder interest. In addition, a transition during this period would also require new coordination points and relationships between the new QIC awardee for this jurisdiction and existing CMS contractors supporting this effort (i.e., the Eligibility Contractor, the Medicare Administrative Contractors (MACs), the Office of Medicare Hearings and Appeals, etc.).

Again, potentially impacting a seamless operationalization of this mandated activity during the temporary appeal process. Further, significant resources within the Medicare Enrollment and Appeals Group are and will be utilized to support a successful implementation and operationalization of the Court mandated activities yielding a limited pool of staff to support conducting a new solicitation in this QIC jurisdiction and any potential transition activities that could follow. As such, CMS recommends this LFO be awarded to C2C as it is in the best interest of both CMS and the continued success of the QIC program and its compliance with ongoing statutory and regulatory processes and the implementation and oversight of this new Court-ordered temporary retrospective appeal process specific to Part A claims.

It is necessary to place the order to satisfy a minimum guarantee [FAR 16.505(b)(2)(i)(D)].

A statute expressly authorizes or requires that the purchase be made from a specified source. [FAR 16.505(b)(2)(i)(E)].

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:

The period of performance for this effort is limited to 36 months, including a base year and two (2) renewal periods. Any future needs to continue services related to the Part A East QIC jurisdiction, beyond this LFO, will be procured through competitive means.

5. State any other facts supporting the justification:

C2C has been successfully performing in the Part A East QIC jurisdiction since February 2017 (initial competitively awarded contract HHSM-500-2004-00005I/HHSM-500-T0008 through February 28, 2022) and last competitive award, HHSM-500-2004-0005I / 75FCMC21F0003 (September 30, 2021 through December 31, 2025). It is expected that they will continue to provide CMS with a high-quality product in support of this important statutorily mandated program and further to successfully support CMS in the implementation of this Court mandated temporary retrospective review process.