Recovery Audit Contract (RAC) RFP OCMP 26-25113 (2027).pdf

Medicaid Hospital Claims Audit Contractor

(Recovery Audits Contract (RAC)

Solicitation #: OCMP-26-25113

RFP Document

RFP for Maryland Department of Health Page 1 of 115

STATE OF MARYLAND

MARYLAND DEPARTMENT OF HEALTH (MDH)

REQUEST FOR PROPOSALS (RFP)

MEDICAID HOSPITAL CLAIMS AUDIT CONTRACTOR

RECOVERY AUDIT CONTRACT (RAC)

RFP NUMBER OCMP-26-25113/BPM058679

ISSUE DATE: OCTOBER 2, 2026

A Prospective Offeror that has received this document from a source other than eMarylandMarketplace

Advantage (eMMA) https://procurement.maryland.gov should register on eMMA https://emma.maryland.gov/

NOTICE TO OFFERORS

SMALL BUSINESS RESERVE PROCUREMENT

This is a Small Business Reserve Procurement for which the award will be limited to certified small businesses. Only businesses that meet the statutory requirements set forth in State Finance and

Procurement Article, §§14-501—14-505, Annotated Code of Maryland, and that are certified by the

Governor’s Office of Small, Minority & Women Business Affairs (GOSBA) Small Business Reserve

Program are eligible for award of a contract. Before awarding a contract under a procurement designated as a small business reserve procurement, the Procurement Officer shall verify that the apparent awardee is certified by the GOSBA as a small business through eMMA. However, if small businesses do not show interest in this solicitation, the Procurement Officer has the right to remove the SBR designation via an

Amendment on eMMA.

https://procurement.maryland.gov/ https://emma.maryland.gov/ https://gomdsmallbiz.maryland.gov/Pages/sbr-program.aspx https://gomdsmallbiz.maryland.gov/Pages/sbr-program.aspx https://gomdsmallbiz.maryland.gov/Pages/sbr-program.aspx https://gomdsmallbiz.maryland.gov/Pages/sbr-program.aspx

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NOTICE TO OFFERORS

MINORITY BUSINESS ENTERPRISES ARE ENCOURAGED TO RESPOND TO THIS SOLICITATION.

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STATE OF MARYLAND

MARYLAND DEPARTMENT OF HEALTH (MDH)

KEY INFORMATION SUMMARY SHEET

Request for

Proposals

Services - Medicaid Hospital Claims Audit Contractor (RAC)

Solicitation

Number:

OCMP-26-25113

RFP Issue Date: October 2, 2026

RFP Issuing Office: Maryland Department of Health (MDH or the "Department")

Procurement

Officer:

Richard McCray

201 W. Preston Street, Baltimore MD 21201

Email:

Phone Number:

richard.mccray1@maryland.gov

443-721-8703

Proposals are to be sent to:

Submit on emma.maryland.gov under Solicitation Number OCMP-26-

25113 To submit a proposal, offerors must first register on emma.maryland.gov.

We recommend registering in advance to become acquainted with the site.

No Proposal Notice

Feedback Form

If you are not submitting a proposal for this solicitation, submit

Attachment 1 with your reasons why.

Pre-Proposal

Conference:

Wednesday, October 14, 2026 at 2 p.m. Local Time, at

Google Meet joining info

Video call link: https://meet.google.com/euk-ecaa-azi

See Section 4.3 for additional details.

See Attachment 2 to RSVP by Monday, October 12, 2026 to Attend

Scheduled Site

Visit

N/A

Questions Due Date and Time:

Wednesday, November 4, 2026 at 2 p.m. Local Time mailto:richard.mccray1@maryland.gov http://emma.maryland.gov/ https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/07/Attachment-1.-No-Bid_Proposal-Notice_Vendor-Feedback-Form-1-1.docx https://meet.google.com/euk-ecaa-azi https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/11/Attachment-2.-Pre-Bid_-Pre-Proposal-Conference-Response-Form-v2.pdf

RFP for Maryland Department of Health Page 4 of 115

Proposal Due (Closing)

Date and Time:

Friday, November 20, 2026 at 2 p.m. Local Time

Offerors are reminded that a completed Feedback Form is requested if a proposal decision is made (see Attachment 1 - No Proposal

Notice/Vendor Feedback Form).

MBE Subcontracting

Goal:

An overall Minority Business Enterprise (MBE) subcontract participation goal of 14% percent of the total contract dollar amount, including all renewal option terms, if any, has been established for this procurement.

Refer to Exhibit 1 for information on how goal setting was determined.

Also, refer to Appendix 4 for information about the MBE program and goals.

VSBE Subcontracting

Goal:

This solicitation includes a Veteran-owned Small Business Enterprise

(VSBE) participation Goal of 2%

Refer to Exhibit 1 for information on how goal setting was determined.

Also, refer to Appendix 5 for information about the VSBE program and goals.

Procurement Method: A Contract will be awarded in accordance with the Competitive Sealed

Proposals method under COMAR 21.05.03.

Multiple or Alternate

Proposals:

Multiple or alternate Proposals will not be accepted.

Contract Type: Indefinite Quantity with Fixed Prices (Fixed Recovery Percentages of

10%) as defined in COMAR 21.06.03.06 (A)(2)

Contract Duration and

Expected Start Date:

The Contract Term will have three (3) base years beginning August 1, 2027, and (2) two one (1) year option periods as described in Section

2.3.13.2.

Primary Place of

Performance:

Contractor’s location.

SBR Designation: Yes

Federal Funding: Yes (See Section 3.9) https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/07/Attachment-1.-No-Bid_Proposal-Notice_Vendor-Feedback-Form-1-1.docx https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/07/Attachment-1.-No-Bid_Proposal-Notice_Vendor-Feedback-Form-1-1.docx https://docs.google.com/document/d/10sM6vwsb4elWvnXzLT08fFwMWqmdQ7Co/edit https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/07/Appendix-4.-MBE-Participation-Goal.dotx https://docs.google.com/document/d/10sM6vwsb4elWvnXzLT08fFwMWqmdQ7Co/edit https://procurement.maryland.gov/wp-content/uploads/sites/12/2024/07/Appendix-5.-VSBE-Participation-Goal.dotx

RFP for Maryland Department of Health Page 5 of 115

Capitalized Words, Terms, and

Abbreviations

Word, terms, acronyms, Initialisms, that are defined or described in RFP

Appendix 1 are capitalized throughout the RFP to indicate that their specific meaning within the context of the RFP and resulting Contract can be ascertained in RFP Appendix 1 Abbreviations and Definitions.

Sometimes, a word that appears in the RFP can have both a general, generic meaning that can be ascertained from a standard dictionary, as well as a specific meaning as found in RFP Appendix 1 Abbreviations and Definitions. In such instances, whenever such a word is used in the sense in which it is defined in RFP Appendix 1 Abbreviations and

Definitions, it will generally be capitalized. Conversely, when such a word is used in the general sense, it will not be capitalized. The meaning of capitalized terms used throughout the RFP may also be indicated by context.

RFP for Maryland Department of Health Page 6 of 115

TABLE OF CONTENTS – RFP

1 Minimum Qualifications 9

1.1 Offeror Minimum Qualifications 9

2 Contractor Requirements: Scope of Work 11

2.1 Summary Statement 11

2.2 Background and Purpose 11

2.3 Contractor Responsibilities and Tasks 13

2.4 Experience and Personnel 40

2.5 Substitution of Personnel 41

2.6 Supplemental Category of Work Requirements and Responsibilities 44

3 Standard Terms and Conditions 46

3.1 Contract Initiation Requirements 46

3.2 End of Contract Transition 48

3.3 Invoicing 49

3.4 Liquidated Damages 51

3.5 Problem Escalation Procedure 55

3.6 Work Orders 56

3.8 Prompt Payment Policy 57

3.9 Federal Funding Acknowledgement 57

3.10 Conflict of Interest Affidavit and Disclosure 57

3.11 Non-Disclosure Agreement 58

3.12 Maryland Healthy Working Families Act Requirements 58

3.13 The State of Maryland’s Commitment to Purchasing Environmentally Preferred Products and

Services (EPPs) 58

3.14 Insurance Requirements 58

3.15 Non-Compete Clause Prohibition 61

3.16 Corrective Action Plan (CAP) 61

3.17 Nonvisual Access Compliance 62

4 Proposal Submission Information and Instructions 64

4.1 eMaryland Marketplace Advantage (eMMA) 64

4.2 Electronic Means 64

4.3 Pre-Proposal Conference 64

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4.4 Questions 65

4.5 Proposal Due (Closing) Date and Time 65

4.6 Economy of Preparation 65

4.7 Public Information Act Notice 65

4.8 Oral Presentation 66

4.9 Duration of Proposals 66

4.10 Revisions to the RFP 66

4.11 Cancellations 66

4.12 Incurred Expenses 67

4.13 Protest/Disputes 67

4.14 Offeror Responsibilities 67

4.15 Acceptance of Terms and Conditions 68

4.16 Compliance with Laws/Arrearages 68

4.17 Verification of Registration and Tax Payment 68

4.18 False Statements 68

5 Proposal Submission Information and Instructions 70

5.1 Two Part Submission 70

5.2 Proposal Delivery and Packaging 70

5.3 Volume I - Technical Proposal 71

5.4 Volume II – Financial Proposal 91

6 Evaluation and Selection Process 92

6.1 Evaluation Committee 92

6.2 Technical Proposal Evaluation Criteria 92

6.3 Financial Proposal Evaluation Criteria 92

6.4 Reciprocal Preference 92

6.5 Selection Procedures 93

6.6 Documents Required upon Notice of Recommendation for Contract Award RFP Attachments

(Table B) 94

7 RFP Appendices and Exhibits 96

7.1 Appendices (Table C) 96

7.2 Exhibits (Table D) 97

8 Exhibit 2 Contract 98

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1 Minimum Qualifications

1.1 Offeror Minimum Qualifications

The Offeror must document in its Proposal that it satisfies the following Minimum Qualifications:

1.1.1 The Offeror:

A. Shall have at least three (3) years of experience providing hospital claims and payments auditing in accordance with the payment rules and conditions of the public or private customer(s) (e.g., Medicare or Medicaid Programs, state-subsidized health plans, private medical insurance companies, union or private firm self-administered health plans) for which the audits were conducted. Such experience must have been obtained within five (5) years prior to the submission of a Proposal.

B. Must not be on the federal List of Excluded Individuals or Entities (LEIE) or on the federal

System for Award Management (SAM) exclusion list. The Offeror must provide a letter of self-certification with its Proposal that it is not on the LEIE or SAM exclusion lists.

(Links to the LEIE and SAM lists are as follows:

https://oig.hhs.gov/exclusions/exclusions_list.asp and https://www.sam.gov/SAM/. (If the

SAM link creates problems, copy the link, and manually insert it into the address bar.)).

C. Must not have any current contractual relationship with or provide any type of services, paid or unpaid, for any hospital that may be audited under the Contract, nor have had any such relationship within three (3) years prior to the date of its Proposal submission.

D. Must attest either that it has no non-compete agreements with any of its employees other than a person functioning as its Project Manager as described in Sections 2.4.4 and

5.3.2.Table A, Tab F, item 6 of this RFP or that if it has any such non-compete agreements that it will not enforce them to prevent any such Non-Project Manager employees from working for any entity that may provide recovery audit-type services for the Department for a period of three (3) years after the expiration of this Contract, including the duration of any renewal option or Contract extension.

1.2 Required Documentation

Required documentation for satisfaction of Section 1.1 Minimum Requirements. Each

Documentation item below corresponds to the Section 1.1 requirement with the same letter (e.g.

1.2 A pertains to 1.1.A, etc.)

A. The Offeror shall provide with its Proposal proof of meeting this requirement, under

Section 5.3.2 Table A (Tab E) the specific customers and engagements that it offers as proof of satisfying this minimum experience requirement.

B. The Offeror must provide a letter of self-certification with its Proposal that it is not on the

LEIE or SAM exclusion lists.

C. The Offeror must provide a letter of attestation with its Proposal that it does not have any current contractual relationship with or provides any type of services, paid or unpaid, for any hospital that may be audited under the Contract, nor has it had any such relationship within 3 years prior to the date of its Proposal submission.

https://oig.hhs.gov/exclusions/ https://oig.hhs.gov/exclusions/ https://sam.gov/entity-information/resources/exclusion-types https://oig.hhs.gov/exclusions/exclusions_list.asp https://www.sam.gov/SAM/

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D. The Offeror must provide a letter attesting, as applicable, that it either has no non-compete agreement with any of its employees that is not the Project Manager, or if it has any such non-compete agreement that it will not seek to enforce it/them to prevent any such Non-Project Manager employee from working for any entity that may provide recovery audit-type services for the Department for a period of (3) three years after the expiration of this Contract, including the duration of any renewal option or Contract extension.

1.3 Use of Attachment L: For each reference provided to evidence satisfaction of the requirements of this RFP Section 1, a separate Attachment L. – Reference Checks - must be provided per reference. The reference must focus on the Contractor’s experience providing hospital claims and payments auditing in accordance with the rules and conditions of the customer for which it performed the audits. Attachment L must also be used for any reference the Offeror wishes to provide in excess of those required in RFP Section 1 to demonstrate its overall qualifications and capability.

1.4 Use of Attachment I: Attachment I. Reference Checks must be submitted in response to RFP

Section 5.3.2, Table A, TAB E.)

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

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2 Contractor Requirements: Scope of Work

2.1 Summary Statement

2.1.1 This Request for Proposals (RFP) is issued to procure the services, as specified in this Section 2, from a contract between the selected offeror(s) and the State of

Maryland (“State”). The Maryland Department of Health (MDH or the

"Department") is issuing this RFP in order to assist in its mission to reduce

Medicaid Improper Payments through the efficient identification of Overpayments, Underpayments, and actions to prevent future Improper Payments for the three (3) hospital provider types identified in Section 2.2.1, Table 2.1. This RFP includes the following tasks:

A. Identifying Medicaid claims that contain Underpayments or Overpayments for which payment was made under Title XIX and XXI of the Social Security Act;

B. Supporting the Department in preventing future Improper Payments by making recommendations in an Improper Payments prevention plan;

C. Providing support to the Department in the hearing process, should any Provider appeal an Underpayment or Overpayment detected by the Contractor; and

D. Providing support to the Department in responding to any external audits such as

State or federal oversight agencies involving hospitals. (See Exhibit 2, Sample

Contract Section 24.).

2.1.2 It is the State’s intention to obtain goods and services, as specified in this RFP, from a contract between the selected Offeror and the State.

2.1.3 There will be a single award from the procurement to result from this RFP. See

RFP Section 6.5 Selection Procedures for more Contract award information.

2.1.4 A Contract award does not ensure the Contractor will receive all or any State business under the Contract.

2.1.5 An Offeror, either directly or through its subcontractor(s), must be able to provide all goods and services and meet all of the requirements requested in this solicitation and the successful Offeror (the Contractor) shall remain responsible for Contract performance regardless of subcontractor participation in the work.

2.2 Background and Purpose

2.2.1.1 The State of Maryland, acting through the Department, is soliciting proposals from

Offerors with demonstrated experience and expertise performing Audit (See Appendix

1 Abbreviations and Definitions) services to detect improper Medicaid payments. The identification of Underpayments and Overpayments will occur for claims paid under the

Maryland Medicaid Fee-For-Service (FFS) for services for which payment is made under Title XIX and Title XXI of the Social Security Act. Overpayments are made to

Medicaid Providers (See Appendix 1 Abbreviations and Definitions) arising from inappropriate claims and, where indicated, the Contractor for the hospital claims Audit

RFP for Maryland Department of Health Page 12 of 115 shall make referrals to the Contract Monitor for potential fraud and will recommend preventive and educational measures to the appropriate parties. The Contractor must be able to perform data mining of Medicaid claim information. Table 2.1 describes the different Provider types and information.

2.2.1.2 The Department has a current recovery Audits contractor that is working on hospital audits for Medicaid payments made prior to the 2025 calendar year. The years to be covered by Audits under this Contract are listed in Table 2.2 in Section 2.3.3. The Audit period accounts for the completion of the timely filing period – twelve months from the date of service - outlined by law.

2.2.1.3 Table 2.1, below, provides claim and Provider information for Medicaid hospital payments for the 2024 Calendar Year.

A. The Provider information is relatively static from year to year - it is unusual either for a new hospital to be authorized or for a hospital to cease operating or cease accepting Medicaid payments - and for the most part should be accurate for the duration of this Contract.

B. It is believed the claim information is representative of the number and value of claims that will occur during each calendar audit year.

C. MDH has identified overpayments of about $30 million dollars annually on roughly

3% of all claims paid. Of these, the largest areas for overpayments are bundling errors, lack of supporting documentation, and duplication of charges. The highest cost areas tend to be labor and delivery, operating room charges, pharmacy and some of the respiratory and ancillary support charges. While the current Contract also includes the identification of Underpayments, over the prior 3 years no

Underpayments have been identified. The selected Contractor will be eligible for the same contingency fee as Overpayments for identifying Underpayments, as illustrated in the Price Form (Attachment B)."

Table 2.1 Claim and Provider Information

The three (3) following hospital Provider types (General In-State, General Out-of-State, and In-State

Psychiatric) are to be audited under this Contract.

Provider Types

Number of

Providers

Calendar Year

Total Amount Paid

Calendar Year 2024

Total Number of Claims Paid

Calendar Year 2024

General

Hospitals

In-State 107 $1,014,609,083* 335,411

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Out-of-State 642 $176,140,833* 38,162

In-State

Psychiatric

$116,849,627*

132,963

*All dollar amounts and values are illustrative and do not reflect actual amounts that may be paid for claims in any future year.

2.2.2 Mission and Goals

2.2.2.1 Mission

A. The Contractor’s mission is to reduce Improper Payments through the efficient detection and collection of Overpayments, the identification of Underpayments, the reporting of suspected fraudulent and/or criminal activities, and the recommendation of actions that will prevent future Improper Payments.

B. The Contractor shall receive compensation on a contingency fee basis, primarily based on a percentage of the dollars recovered as Provider Overpayments by the

Department as quoted in its Financial Proposal. While the Contractor will also receive payment for uncovering Provider Underpayments by the Department, as per its quoted Financial Proposal rate, historically there are far fewer instances of discovered Provider Underpayments than Overpayments and this Contract aspect historically is relatively negligible.

2.2.2.2 Goals

As stated in Section 2.2.1.2, the Department has a current RAC contract for the Audit of hospital claims for years prior to 2025. The Department’s goal via this Contract is to achieve the goals of completing existing hospital Audits in progress and then remain up to date in its hospital Audit responsibilities. This goal is reflected by Table

2.2 in Section 2.3.3. To accomplish this, as described in Section 2.3.12.B, this

Contract may start while the current contract is still being performed; however, the

Audit periods each Contractor is responsible for managing do not overlap. Also see sections 2.3.1.13 and 5.3.2., Table A, Tab F, item 5.

2.2.3 State Staff and Roles

In addition to the Procurement Officer and Contract Monitor, the State will provide additional support staff, as needed.

2.2.4 Other State Responsibilities

The State is responsible for providing required information, data, documentation, and test data to facilitate the Contractor’s performance of the work and will provide such additional assistance and services as is specifically set forth.

2.3 Contractor Responsibilities and Tasks

2.3.1 General Requirements

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2.3.1.1 Data Mining

The Contractor must be able to perform data mining of Medicaid claim information. Medicaid claims information will be exchanged electronically in a secure format between the Department and the Contractor.

2.3.1.2 Algorithms Samplings and Claim Reviews

The Contractor is expected to apply complex algorithms, based on the Medicaid claims detail provided by the Department and have the ability to prepare valid sampling methodologies, and perform Automated and Complex Reviews on designated claim types of the Medicaid Program.

2.3.1.3 Hospital Audit Frequency

A. Two-Year Audit Cycle

The Contractor must Audit all hospitals at least once every two years, regardless of the sampling methodology.

B. Out-of-schedule (extra or special) Audits (Also see section 2.3.3.)

1. At the direction of the Contract Monitor, the Contractor can be directed to perform Audits more frequently than every two years, or on a schedule other than may have previously been approved. (Different than as per the Notice of

Approval of the final Audit Schedule described in 2.3.1.12.)

2. Circumstances that may prompt such extra or accelerated Audits may be the addition of new services, suspicion of fraud, and high rates of recovery.

C. Right to limit scope of Out-of-schedule Audits

As per the directions from the Contract Monitor, any such “extra” or “Special” out-of-schedule Audit may be limited in scope to one or a few aspects, rather than a complete Audit.

D. Submission of Out-of-schedule Audit Work Plan

If there is an out-of-schedule Audit assignment from the Contract Monitor, the

Contractor must submit its plan for conducting this Audit to the Contract

Monitor within 15 days after the date of assignment, with the objective of completing the Audit within 60 days after the date of commencement, unless a longer period is approved by the Contract Monitor.

E. See Section 3.4.2.2.1 for Liquidated Damages (LD) associated with the failure of the Contractor to abide with the requirements of this section

2.3.1.4 Opportunities for Contesting Preliminary Findings

The Contractor must notify the Medicaid Providers of the Overpayment discovered and review any support documentation that is subsequently submitted by the

Provider within allowable timeframes, that may negate the Overpayment and have a process in place for any disagreements. (See Sections 2.3.6.2.C 2 and 2.3.8) Also see section 5.3.2, Table A, Tab F, item 13.

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2.3.1.5 Contract Findings Notification

The Contractor must send the information to the Contract Monitor upon the final determination of an Overpayment for verification of recovery and be responsible for identifying Underpayments in all areas defined by the Department.

2.3.1.6 Provider Portal

A. The Contractor must create and maintain a web-based Provider portal to track and support Audit activity and a hospital claims audit database for Provider types such as general in-state, out-of-state and in-state psychiatric hospitals. (See

Section 2.3.11).

B. See section 5.3.2, Table A, Tab F, item 16 where Offerors are requested to describe their experience with portals and similar remote data transfer platforms.

C. Also see Section 3.4.2.2.2 for LDs associated with the failure of the Contractor to abide with the requirements of this section.

2.3.1.7 Compensation Overview

The Contractor shall receive compensation on a contingency fee basis, based on a percentage of the dollars recovered as an Overpayment or paid as an Underpayment by the Department as outlined in response to Attachment B (the Financial Proposal) and Section 3.3.

2.3.1.8 Meetings, Agendas, and Minutes

2.3.1.8.1 Meetings

A. Scheduled Meetings

The Contractor shall participate in monthly meetings with the Contract

Monitor and other appropriate Department personnel and participate in quarterly combined meetings with the Office of the Inspector General for

Health to provide updates in program progress and address outstanding issues. The schedule for meetings will be established during the Start-up process, as described in Section 3.1.

B. Unscheduled Meetings

1. The Contractor must participate in emergency meetings with at least three (3) hours’ notice, typically by conference call, but at the direction of the Contract Monitor, may be held in person at the State Office

Building, 201 W. Preston Street Baltimore, Maryland. Emergency meetings may only be called during Normal State Business Hours on

Business Days.

2. The typical purpose of unscheduled emergency meetings will be to discuss issues that:

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a. Arise unexpectedly that the Contract Monitor deems of sufficient importance that they cannot wait until the next scheduled meeting to discuss.

b. May have been mentioned or discussed to a limited degree in a scheduled meeting or weekly call but the Contract Monitor now determines that it is necessary to have a more detailed discussion, likely with additional State attendees and it is not appropriate to wait to include this additional discussion until the next scheduled meeting or weekly call.

c. May be to discuss what the Contract Monitor determines to be serious deficiencies in Contractor performance that the Contract

Monitor determines cannot wait until a scheduled meeting to discuss and/or that requires the exclusive focus of a special meeting. For example, such meetings may be called if the

Contract Monitor determines it is necessary to require a

Corrective Action Plan (CAP) (see Section 3.15) to redress some aspect of Contractor non-performance or if the Contract

Monitor determines the Contractor is not making satisfactory progress in implementing an existing CAP.

2.3.1.8.2 Agendas

The Contractor must prepare an agenda prior to each scheduled meeting and if provided with sufficient notification of the nature and purpose of the meeting by the Department, also for unscheduled meetings. For scheduled meetings, a draft agenda must be provided to the Contract Monitor at least one (1) Business

Day prior to the meeting. For unscheduled meetings, the agenda must be provided to the Contract Monitor at least one (1) hour prior to the meeting. The

Contractor must make any changes in the draft agenda directed by the Contract

Monitor and have the revised/corrected agenda ready for distribution at the meeting.

2.3.1.8.3 Minutes

A. The Contractor must prepare draft minutes following each meeting, both scheduled and unscheduled, and send them to the Contract Monitor for approval.

1. The Contractor must distribute a draft of these minutes to the Contract

Monitor within five (5) Business Days for regular meetings and three

(3) Business Days of emergency meetings.

2. Within two (2) Business Days of receipt of the draft minutes, the

Contract Monitor will either approve the minutes in writing or will identify required changes.

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3. Any required changes must be made by the Contractor within two (2) additional Business Days.

B. The final Contract Monitor approved version of the minutes must be distributed by the Contractor within two (2) Business Days to the Contract Monitor and other designated Department personnel, designated Contractor personnel, and any other attendees at each meeting.

2.3.1.9 Weekly Calls

A. The Contractor’s Project Manager and Quality Improvement Manager (See

Section 2.4.2 for descriptions) must have weekly calls with the Contract

Monitor to discuss any revisions to the work plan, hospital Audit project updates, problems occurring with the recovery work, and other items of importance for discussion.

B. The Contract Monitor, at his or her discretion, may decrease the frequency of calls based on Contractor performance.

C. The schedule of days and times for such calls will be established during the Start-up Period. (Start-up is described in Section 3.1.) However, the Contract Monitor may alter the times or days of the weekly calls upon written notice to the

Contractor with at least one (1) Business Days’ notice and taking due consideration of the Contractor’s ability to reasonably accommodate such change.

2.3.1.10 Reporting Special Circumstances

2.3.1.10.1 If in the course of performing work under this Contract the Contractor discovers any circumstance concerning improper, unallowable, or unusual costs, or has any recommendations that it believes should be communicated to the

Department prior to when it normally would do so:

A. If not considered urgent in nature, the information should be included in the next Weekly Call as per item 2.3.1.9.

B. If considered urgent in nature, the information should be provided as promptly as feasible in a Special Report (See Appendix 1 Abbreviations and Definitions and 2.3.1.10.2.).

C. If not initially considered urgent in nature by the Contractor and brought up in a Weekly Call but the Contract Monitor directs the Contractor to provide a Special Report on the issue(s), the Contractor shall as promptly as feasible provide a Special Report in accordance with section 2.3.1.10.2.

2.3.1.10.2 A Special Report should detail the Contractor’s findings, as described in

2.3.1.10.1, to include what it perceives as the danger or severe negative consequence of allowing this circumstance to continue, and any timeframe by which some action should occur to prevent or mitigate serious negative consequences.

2.3.1.11 Work Plans and Audit Schedule

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2.3.1.11.1 Work Plans

A. The Contractor shall submit a work plan to the Contract Monitor by the 15th

Business Day after Contract Commencement.

1. This initial work plan must include an estimated Audit begin date based on time after the Contract Commencement date. (See Section 2.3.12.2)

2. Thereafter, a revised work plan must be submitted to the Contract Monitor no more than forty (40) and no less than thirty (30) days prior to the start of each subsequent Contract Year before review work for that year may begin.

B. For any work plan, initial or annual, the following procedure must be followed:

1. Within five (5) Business Days of receiving any comments on the proposed work plan from the Contract Monitor, the Contractor must make appropriate changes to the work plan and resubmit it to the Contract Monitor.

2. Upon resubmission of the work plan incorporating the Contract Monitors comments, the Contract Monitor will either advise of further needed revisions or provide a formal Notice of Approval of the final work plan. If further revision of the work plan is required, upon acceptance, the Contract

Monitor will issue a notice of approval indicating this is the final approved work plan for the first year of the Contract.

3. This same procedure will be followed for the work plan to be submitted for each subsequent Contract Year.

C. The work plan must include the Contractor’s proposed means of outreach to notify Provider communities of the hospital Audit’s purpose and activities. The work plan must identify the Contractor’s Project Manager and Quality

Improvement Manager, who as per section 2.3.1.9 will be required to have calls with the Contract Monitor either weekly or less frequently as directed by the

Contract Monitor to discuss any revisions to the work plan, hospital Audit project update, problems occurring with the recovery work, and other items of importance for discussion.

D. See Section 3.4.2.2.3 for Liquidated Damages (LD) associated with the failure of the Contractor to abide with the requirements of this section.

2.3.1.11.2 Audit Schedule (See Appendix 1 Abbreviations and Definitions)

A. The Contractor shall provide to the Department an Audit schedule with a work plan for all of the provider types, as well as an accompanying narrative description of the selection process, and justification for inclusion and exclusion.

The schedule shall include the following:

1. Provider type; and

2. Number of Audits scheduled to be performed for each year of service.

B. The Contractor may expand the time frame of dates and Provider types with the approval of the Department.

RFP for Maryland Department of Health Page 19 of 115

C. Once the Audit schedule is approved for a given year, any changes with justification therein must be approved by the Contract Monitor before implementation.

2.3.1.12 Objective Accomplishment Deliverable

Within 30 calendar days after the Contract Monitor’s issuance of a Notice of

Approval of the final accepted work plan the Contractor shall provide, as a deliverable, a detailed description outlining how the objectives listed in Section

2.2.2.2 will be accomplished. Also see Section 5.3.2,Table A, Tab F, item 5.

2.3.1.13 General Contract Time Frames

Except for the last year of a Contract (as separately described in item I below) or unless specifically otherwise stated elsewhere in the RFP, Contract activities with the following time frames shall be defined and due as stated below.

The Contractor shall provide:

A. Weekly Reports - due on the Wednesday following each normal calendar week.

B. Monthly Reports - due no later than 15 Calendar Days after the end of each normal calendar month.

C. Quarterly Reports - The initial period may be less than an actual three (3)-month period but, thereafter, shall conform to the three (3)-month calendar as follows:

1. July 1 through September 30

2. October 1 through December 31

3. January 1 through March 31

4. April 1 through June 30

Reports are due the 15th of the month following the close of the quarter.

D. Annually - Each full twelve (12 ) month period of the Contract starting with the NTP Date. Annual activities or items shall be due no later than 30

Calendar Days after the end of each 12-month period of the Contract.

E. State Fiscal Year (FY) - The twelve (12) month period beginning on July 1 of one (1) calendar year and running until June 30 of the next calendar year.

F. Business Day Adjustment - If any of the above due dates falls on other than a

Business Day, it shall be due on the next Business Day thereafter.

G. Last Year of Contract Adjustment - In the last year of the Contract, unless specifically otherwise stated elsewhere in the RFP, each of the above listed time frames shall automatically be shortened so that the required activity or item is produced or provided prior to the last day of the Contract.

RFP for Maryland Department of Health Page 20 of 115

2.3.2 Contract Administration

2.3.2.1 The Contractor shall be responsible for ensuring that all assigned Audit staff are familiar with the applicable State and federal laws and regulations governing the

Maryland Medicaid Fee-For-Service (FFS) Hospital Program identified in the

Maryland Secretary of State’s Division of State Documents website at COMAR

10.07.01; COMAR 10.09.92; and COMAR 10.09.93 for the Provider type Audits performed.

2.3.2.2 The Contractor shall also be responsible for the following duties;

A. Detecting patterns of Improper Payments and abuse by specific Providers using algorithms.

B. Making referrals of suspected fraud, waste or abuse to the Contract Monitor, and to the Office of the Inspector General for Health. (See Sections 2.3.3.6 C and 2.3.1.10.B)

C. Conducting Department-approved Audits of Providers.

D. Handling Provider submission of additional documentation, e.g., medical records. (See Section 2.3.6.2.1.c)

E. Tracking any changes to the findings of Improper Payments based on submission of additional documentation from Providers. (See Section 2.3.6.2.B)

F. Sending Overpayment letters and providing necessary witness testimony at resulting appeal proceedings (the Contractor shall work in consultation with the

Department staff). See Section 2.3.5.

G. Compiling and updating a database of Provider-approved addresses and points of contact.

H. Maintaining all Audit work papers (paper and electronic) and disposing of information in accordance with the Department’s approved records retention plan. (Per Section 2.3.3.10, five (5) years after the end of the Contract.)

I. Providing and maintaining hardware and software to import claims from the

Maryland Medicaid Management Information System (MMIS) (See Appendix

1 Abbreviations and Definitions) in accordance with applicable privacy and security standards, as well as using data-mining analysis software.

2.3.3 Identification of Improper Payments

The Contractor shall Audit the following hospital provider types: General: In-State and Out-of-State, and In-state Psychiatric. See Table 2.2 below for Provider types under review.

Table 2.2: Minimum Number of Audits to be performed by hospital Provider type and Contract

Year

(* See Appendix 1 Abbreviations and Definitions of Contract Year which includes a reference to what constitutes Contract Year One) https://dsd.maryland.gov/Pages/COMARSearch.aspx#Default=%7B%22k%22%3A%22%22%2C%22r%22%3A%5B%7B%22n%22%3A%22dsdFullTitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233130202d204d6172796c616e64204465706172746d656e74206f66204865616c7468%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullSubtitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233037202d20484f53504954414c5320%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullChapterName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233031202d2041637574652047656e6572616c20486f73706974616c7320616e64205370656369616c20486f73706974616c73%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%5D%2C%22l%22%3A1033%7D https://dsd.maryland.gov/Pages/COMARSearch.aspx#Default=%7B%22k%22%3A%22%22%2C%22r%22%3A%5B%7B%22n%22%3A%22dsdFullTitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233130202d204d6172796c616e64204465706172746d656e74206f66204865616c7468%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullSubtitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233037202d20484f53504954414c5320%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullChapterName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233031202d2041637574652047656e6572616c20486f73706974616c7320616e64205370656369616c20486f73706974616c73%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%5D%2C%22l%22%3A1033%7D https://dsd.maryland.gov/Pages/COMARSearch.aspx#Default=%7B%22k%22%3A%22%22%2C%22r%22%3A%5B%7B%22n%22%3A%22dsdFullTitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233130202d204d6172796c616e64204465706172746d656e74206f66204865616c7468%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullSubtitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233039202d204d45444943414c20434152452050524f4752414d53%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullChapterName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233932202d20416375746520486f73706974616c73%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%5D%2C%22l%22%3A1033%7D https://dsd.maryland.gov/Pages/COMARSearch.aspx#Default=%7B%22k%22%3A%22%22%2C%22r%22%3A%5B%7B%22n%22%3A%22dsdFullTitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233130202d204d6172796c616e64204465706172746d656e74206f66204865616c7468%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullSubtitleName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233039202d204d45444943414c20434152452050524f4752414d53%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%2C%7B%22n%22%3A%22dsdFullChapterName%22%2C%22t%22%3A%5B%22%5C%22%C7%82%C7%82737472696e673b233933202d204368726f6e696320486f73706974616c73%5C%22%22%5D%2C%22o%22%3A%22and%22%2C%22k%22%3Afalse%2C%22m%22%3Anull%7D%5D%2C%22l%22%3A1033%7D

RFP for Maryland Department of Health Page 21 of 115

Provider

Types

Contract Year*, Audit Period(s), and Number of Provider Types to be Audited

Contract Year 1*

July 1, 2027-

June 30, 2028

Audit Period

Dates of Service

CY 2026

Contract Year 2

July 1, 2028-

June 30, 2029

CY 2026 – 2027

Contract Year 3

June 1, 2029-

June 30, 2030

CY 2027 - 2028

Option Year 1

July 1, 2030 –

June 30, 2031

Date of Service

CY 2028 - 2029

Option Year 2

July 1, 2031 -

June 30, 2032

Date of Service

CY 2030

General

In-State 15 15 15 15 15

Out-of-State 6 6 6 6 6

In-State

Psychiatric

1 1 1 1 1

Totals 22 22 22 22 22

2.3.3.1 Within thirty (30) Business Days of receiving the Notice of Approval as described in Sections

2.3.1.11.1.B.2 and 2.3.1.12, the Contractor must cooperatively work with the Contract Monitor to identify the hospital Providers to be audited.

2.3.3.2 The Contractor is to submit, in a format acceptable to the Contract Monitor, a detailed overview with supporting documentation to justify the Audit. Selection of Providers for Audit shall be based on information gathered either from the Department or Contractor data, and a review of MMIS claims data.

A. The Department reserves the right to direct the Contractor to Audit a Provider not previously identified by the Contractor. The Contract Monitor shall approve all Audits on a case-by-case basis prior to the Contractor starting the Audit process. The Contingency Fee (see Appendix 1

Abbreviations and Definitions) may not be paid until all aspects of the requirement are fulfilled and then approved by the Department. (See Section 3.3.).

2.3.3.3 The Department reserves the right to limit the period available for the Contractor to review by region, by claim type, by Provider type, or by any other reason where the Department believes it is in the best interest of the Maryland Medical Assistance Program to limit claim review. This notice will be made in writing to the Contractor (paper or electronic) and will be effective immediately.

(See Section 2.3.1.3.)

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2.3.3.4 The Contractor shall not request more than 150 medical records from a Provider in any one (1) request, nor shall the Contractor request more than 500 medical records from any Provider in any 6-month period. (See Section 3.4.2.2.4 for Liquidated Damages (LD) associated with the failure of the Contractor to abide with the requirements of this section).

2.3.3.5 Claims Identification Guidelines

The Contractor shall:

A. Identify Providers that have received payments from the State in error, because of suspected fraud, duplicate payments or benefits, Overpayments, or payments made for services not ordered or otherwise performed, or are otherwise ineligible under the law, rules, terms, or conditions of the

Maryland Medicaid program.

B. Ensure that processes are developed to minimize Provider burden to the greatest extent possible when identifying Improper Payments. This may include, but is not limited to, ensuring Audit parameters are refined to select only those claims with the greatest probability of Improper

Payments.

C. NOT order medical records from the Providers being audited on a random, unscientific basis, with little or no effort to both attempt to minimize the burden on the hospital Providers and maximize the potential for identifying Overpayments. Instead, the Contractor shall utilize data analysis techniques to identify those claims most likely to contain Overpayments. (See 5.3.2, Table A, TAB

F, Item 23).

2.3.3.6 The Contractor may receive referrals from the Medical Assistance Program or other contracting entities with the Department and, upon approval from the Contract Monitor, may perform Provider-specific reviews.

2.3.3.7 Excluded Improper Payments

2.3.3.7.1 The Contractor shall NOT attempt to identify Improper Payments arising from any of the following:

A. Services provided under a program other than the Maryland Medical Assistance Program.

B. Claims more than eight (8) years past the claim paid date. The Contractor shall take no further action on any Improper Payments inadvertently identified eight (8) years past the claim paid date.

C. Claims of Providers under investigation

Any Overpayment or Underpayment for those Providers known to be under investigation by law enforcement, including the Office of the Attorney General’s Medicaid Fraud

Control Unit, the Office of the Inspector General for Health, the Department of Justice, the

Federal Bureau of Investigation, or any other law enforcement entity that might be investigating Improper Payments.

D. Claims previously reviewed, subjected to Audit, or subjected to third party liability (TPL) recovery.

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1. Any Overpayment or Underpayment for Providers whose claims have been subjected to a formal Audit by the Department or any administrative or law enforcement agency.

2. Any Overpayment or Underpayment for claims that have been recovered from a third party through the TPL contractor. TPL recoveries are when the Department has a contract with a vendor for the specific purpose of identifying TPL situations and potential recovery of monies for claims that were paid by Medicaid but that should have been paid by a third party.

2.3.3.7.2 See section 5.3.2, Table A, Tab F, item 24 for Proposal response guidance concerning section 2.3.3.7.

2.3.3.7.3 See Section 3.4.2.2.5 for Liquidated Damages (LD) associated with the failure of the

Contractor to abide with the requirements of this section.

2.3.3.8 Evidence

Under current Maryland law, the Contractor shall NOT use Extrapolation (See Appendix 1

Abbreviations and Definitions) for its findings. If federal or State legislation or regulation is enacted to permit Extrapolation, the Contractor may utilize Extrapolation. The Contractor shall have supporting evidence of a Medicaid Overpayment for every claim that it identifies. See Section 3.4.2.2.6 for

Liquidated Damages (LD) associated with the failure of the Contractor to abide with the requirements of this section.

The Contractor shall use one of two (2) ways to determine an Improper Payment in a targeted review process: Automated Review or Complex Review. The Contractor shall determine which review process to use based upon the criteria stated in Sections 2.3.4.7 A.1 and B.1 below:

A. Automated Review occurs when a Contractor makes a claim determination at the system level without a human review of the medical record or supporting documentation.

1. Automated Reviews are applied in scenarios where Improper Payments can be identified clearly and unambiguously. In these cases, the Improper Payments can be determined from claim data elements, well-established policy, and rules. The Contractor must obtain approval from the

Contract Monitor for determining that no more complex review of documentation is required to validate that an Improper Payments exists.

2. The Contractor will make determinations based upon coding determinations defined in the international classification of diseases (ICD -9, or 10, HCPCS CPT or CPT Assistant. (See

Appendix 1 Abbreviations and Definitions for the meaning of these acronyms.).

B. Complex Review occurs when a Contractor makes a claim determination using human review of medical records, vendor records, and other supporting documentation.

1. The Contractor may use Complex Review when the criteria of Automated Reviews are NOT met.

2. The Contractor shall flag the case for further review and determination of what further information may be required to validate that an Improper Payments exists. Records or documentation may be requested from the Provider or other appropriate party and then a review

RFP for Maryland Department of Health Page 24 of 115 to validate the Improper Payments determination will be performed. On-Site (See Section 7.1, Table C Appendix 1 for definition) auditing and reviewing may also be required.

3. Copies of the medical records must be maintained to support any adverse determinations.

2.3.3.9 Preventing Duplication of Effort

2.3.3.9.1 In order to minimize the impact on the Provider community, it is critical that the Contractor avoids situations where it and another entity are working on the same claim.

2.3.3.9.2 The Contractor shall not begin an Audit without the consent of the Contract Monitor. Before the Contractor may begin an Audit, the Contractor and Department shall make every effort to ensure the Audit will not interfere with the review by another agency or law enforcement agency.

2.3.3.9.3 The Department shall provide a monthly electronically secure list of these Audit targets to the

Medicaid Fraud Control Unit (MFCU) for review and request the MFCU share the list with their federal counterparts and coordinate recovery audit efforts of their hospital Audit with other auditing entities. The MFCU has 30 days to review the list and indicate to the

Department if any Audits should not proceed. The Department will also review the list with any federal contractors conducting audits of State Medicaid providers.

2.3.3.9.4 See Section 3.4.2.2.7 for a Liquidated Damage associated with violating this prohibition.

2.3.3.10 Obtain and Storing Records for Reviews

A. The Contractor shall request, obtain, store, and share imaged medical records and supplemental information.

1. The Contractor shall maintain a document management system and store medical records associated with an Overpayment for the duration of the Contract plus…