SOWREVISED962007.pdf

Federal Bureau of Prisons Medical Claims Adjudication

Statement of Work

REVISED SEPTEMBER 6, 2007

Objective The primary objective of medical claims adjudication, for healthcare service providers/contractors (healthcare providers) paid under Medicare-based rate structures, is to ensure compliance with the National Correct Coding Initiative edits; for fee schedule healthcare providers, the objective is to ensure compliance with the applicable negotiated fee schedule. In both cases, key considerations include avoidance of duplicate claims payments and ensuring the Bureau of Prisons (BOP) complies with the requirements of the Prompt Payment Act and Statements of Federal Financial Accounting Standards (SFFAS).

Background The BOP currently provides healthcare to more than 195,000 inmates in more than 100 prisons (institutions) geographically dispersed throughout the contiguous United States, Hawaii, and Puerto Rico. For the purpose of contract award, all federal inmates are considered to have a single benefit plan and are members of this plan. Inmate entitlement and access to healthcare benefits is applied universally throughout the BOP system. There are no accumulators or capitation in the BOP healthcare system. Inmates do not pay premiums, co-payments (for the purpose of contract award), or deductibles.

Medical services rendered to all federal inmates are governed by Federal law, BOP policies and procedures, and Joint Commission and American Corrections Association (ACA) standards. Primary care is provided by BOP staff physicians and mid-level practitioners. In addition, each institution within the BOP solicits comprehensive medical contracts, which include facility and physician services, based on the prevailing: 1) Operating Federal Medicare rates for the applicable area for inpatient facility services; 2) Medicare fee schedule amounts for the area for outpatient facility services; and 3) Medicare fee schedule amounts for the area for physician services. Healthcare providers are allowed to propose a discount from or premium to those Medicare benchmarks, which are then negotiated by the BOP.

The BOP has been successful in awarding a majority of comprehensive medical contracts based on these structured Medicare rates. However, there are locations where the BOP has been unsuccessful in awarding contracts based on Medicare rates.

In those cases, contracts are typically awarded at a percentage off billed charges or fee schedule. In summary, each institution has separate and unique contract(s) with healthcare providers in their area. Therefore, the “network of healthcare providers” will be those healthcare providers with current BOP contracts.

These contracts will each have formally negotiated and specifically documented contract payment rates.

The BOP is the sole payor for all healthcare services rendered to BOP inmates. Currently, medical claims are manually adjudicated by the institutions. In Fiscal Year 2006, an estimated 150,000 claims were processed for hospitalizations, treatments, and consultations nationwide. The number of claims processed each year may vary based on healthcare services provided during the year. Furthermore, claim forms are specified by the individual medical services contract, but vary depending on the age of each contract. All claim forms are currently submitted on paper via U.S. Postal Service mail or other express delivery service;

however, most healthcare providers are capable of electronic billing via ANSI 837 format as this is the industry standard.

For the purpose of contract award, a claim for contracted healthcare services reimbursed using the Medicare model is defined as either: a current paper version of the UB04 or CMS- 1500; or alternatively, electronic claims that conform to Medicare and HIPAA electronic billing standards (reference http://www.cms.hhs.gov/ElectronicBillingEDITrans/01_overview.asp) from a contracted hospital, physician's office, or other healthcare provider. A claim for all other contracted healthcare services (not using Medicare reimbursement model) is defined per the terms of the individual contracts.

Requirements

1. Compliance. The adjudication contractor (contractor) shall ensure medical claims are adjudicated in accordance with current National Correct Coding Initiative edits and/or negotiated fee schedules, as applicable to underlying contracts. The contractor shall also incorporate internal and systemic controls in the adjudication process to preclude duplicate payments and ensure that the BOP complies with the requirements of the Prompt Payment Act and the Statements of Federal Financial Accounting Standards (SFFAS). The contractor shall designate a compliance officer for their organization in regard to the Health Insurance Portability and Accountability Act (HIPAA). Information regarding the background and training of the compliance officer as well as general information regarding organization compliance plan shall be included with the contractor’s proposal. The contractor shall be expected to have extensive knowledge of and remain in compliance with HIPAA.

2. Minimum System Features. The system used by the contractor to adjudicate claims shall be an automated system and have the capability, at a minimum, to generate Explanation of Benefits (EOBs) which indicate the correct payment amount for each claim based upon the contracted rates, identify large case management opportunities, integrate Utilization Review decision documentation, automatically “pend” claims for medical records review (for certain DRGs), and evaluate potential invoice (claim) error patterns across all healthcare providers (e.g., CMS PEPPER system). A preauthorization process shall also be incorporated into the system (see 3.).

3. Preauthorization. The contractor shall describe how they will integrate a preauthorization process into their claims adjudication system. With the exception of the standard outpatient surgical package (i.e. preoperative anesthesia assessment, procedure, and post-operative follow-up), blanket or continuing preauthorizations will not be given. The contractor shall include specific details on how preauthorizations would be delivered, entered into their system, and tracked. Each episode of care for contracted specialty physician, outpatient, and inpatient hospital services shall be preauthorized by the institutions.

A. The BOP shall provide the following data elements commonly found on the UB04 upon initiation of preauthorization process:

i. Provider name and address. It shall be the responsibility of the contractor to keep a list of provider tax I.D. numbers to match with incoming claims.

ii. Inmate Federal register number. This will serve as insured’s identification number.

iii. Inmate first and last name.

iv. Patient’s relationship to insured shall always be self.

v. Inmate address (institution at date of service).

vi. Inmate date of birth.

vii. Expected date of service.

iix. Payer (name of specific BOP institution). Payer address shall be the same as the inmate’s address.

B. The institution shall provide a general description of requested medical service (i.e., consultation request to a specific healthcare provider for treatment of a given diagnosis).

C. Type of service (i.e. inpatient versus outpatient consultation or surgery) shall be correctly inferred by the contractor from description provided by institution.

D. Based on preauthorization information, the contractor shall provide, within 24 hours of receiving a preauthorization, a good faith estimate of the expected costs of the service. For example, for inpatient admissions, the contractor shall provide estimated DRG and expected reimbursement rate for that DRG; for outpatient services, the contractor shall provide estimated evaluation and management costs associated with consultation to speciality provider and typical outpatient procedure costs for a given category/group of procedures. Cost estimates shall include all anticipated ancillary bills outside main facility billing (i.e. physician and laboratory/pathology in addition to surgical facility/hospital billing). The contractor shall continually refine their cost estimating process to provide increasing accuracy of estimates.

4. Payment Schedules. Inmates are frequently transferred between institutions and, therefore, may have claims paid under different payment schedules. The schedule applied to the claim adjudicated shall correspond to the inmate’s location on the date of service (which would also be the institution giving preauthorization for services). Healthcare providers utilizing fee schedules will supply a copy of the current and all subsequent schedules to the contractor. The format of the schedule would vary (i.e., varying database formats, paper tables) but would contain all necessary information to adjudicate claims. For contracts based on Medicare rates, the CMS prospective payment system will be used to calculate reimbursement. The code sets used by healthcare providers shall be the ICD-9-CM, CPT, and HCPCs codes for the year in which the episode of care was given.

5. Invoicing of Medical Services (Claims). Electronic invoicing (EDI) of claims between the healthcare providers and the contractor will be required. Claims are to be itemized and provide the detail necessary to facilitate the adjudication of the claims. The contractor shall provide the BOP with a copy (can be electronic) of the original claim and an EOB in order for the BOP to process payments.

6. Payment of Medical Services. The contractor shall not make payments for medical services rendered to BOP inmates on behalf of the BOP. Final decisions about payments will be made by the institutions.

7. Prompt Payment Considerations. Upon receipt of an invoice (claim) from a healthcare provider, the contractor shall date stamp the claim as received to begin the prompt payment period.

If the contractor receives an improper claim from the healthcare provider, the contractor shall notify the healthcare provider within seven (7) days after receipt of the improper claim. Upon receipt of a proper claim, the contractor shall adjudicate and forward the claim to the BOP institution making payment, along with a written record of any contact with the healthcare provider and the EOB, within three (3) working days.

8. Technical and Interoperability Requirements. The proposed system must meet the following technical requirements. A product that meets these requirements will permit the BOP to effectively manage and support the system with a minimum of information systems staff and ensure that all data maintained in the system is properly safeguarded. To satisfy this requirement, the system must:

A. Support a centralized architecture with a centralized database which is intranet accessible. Be capable of running any necessary database on a single back-end server using relational database technology. The preferred database for enterprise-wide applications is IBM’s DB/2.

B. If application servers are necessary, then the system must be capable of supporting distributed application servers if performance requires them.

C. Allow BOP Central Office Information Systems staff to manage and maintain, if necessary, the system from our Washington, D.C. offices.

D. Function and provide adequate response times across two to five megabit/second wide area network connections that are part of the Department of Justice’s JUTNET network. Each institution has a 10/100 megabit/second Ethernet network. The Central Office runs a 10/100/1000 megabit/second Ethernet network in its computer room.

E. Use the TCP/IP transport protocol.

F. If separate web or other support server hardware is necessary, then the operating system the contractor uses must be Windows Server 2003.

G. Use web browser software compatible with the Windows XP operating system. The BOP’s standard is Microsoft’s Internet Explorer 6.0 with Service Pack 2 installed.

H. Require a minimal client workstation hardware configuration that is sufficient to run Internet Explorer. Current BOP personal computers are Intel CPUs running at 2GHz or better. They are configured with at least 512 Mb of memory.

I. Must be able to interoperate with other BOP information systems such as our email system GroupWise and network file server system from Novell, and our Electronic Medical and Pharmacy systems.

J. The Contractor must be able to support any and all hardware and software installation that is necessary for the BOP to connect to and use the new system.

9. Security Requirements. The proposed system must meet the following security requirements:

A. Provide security safeguards that are consistent with Health Insurance Portability & Accountability Act

(HIPAA).

B. Allow any stored data to be encrypted both in the database and while it is being transported on the local and wide area networks.

C. Use role and policy based user authentication and verification. User access must be able to be restricted by userid as well as the staff member’s location.

D. Provide audit trails for all record activity. Tools must be available to support the analysis of these audit trails.

E. Allow all security functions to be performed by facility, regional office and Central Office staff for their respective levels of responsibility.

10. Data. The contractor shall describe how the BOP will have access to the data collected during the adjudication process and include any costs of providing this service. However, as a condition of a contract, the contractor agrees that the BOP owns all data generated by the medical claims adjudication process and that the BOP will have access to the data. The contractor shall ensure all data files and formats will be sequential flat files containing ASCII character data to ensure compatibility with other BOP data systems for data standardization and integration between these data systems. The contractor shall also provide technical documentation regarding all data files and formats, as well as provide updated documentation as changes occur. The contractor further agrees to work with the BOP to develop an inmate demographic extract from the BOP’s inmate management system.

11. Special Security and Clearance Requirements. All contractor personnel shall have personnel security clearances commensurate with the highest level of information processed by the system(s) they use. The provisions of Department of Justice Order DOJ 2640.2E, Bureau of Prisons’ Computer Security Program Statement 1237.12, and the Bureau of Prisons' Human Resource Management Manual 3000.02D shall be followed in determining contractor security clearance levels and activities.

Contractor and subcontractor personnel working in computer system design, development and support, or maintenance positions shall have security investigations commensurate with the highest level of information processed by the system. The positions assumed by the contractor and subcontractor personnel may be categorized as one of the following:

1. Critical Sensitive;

2. Non-Critical Sensitive; and

3. IT-Related Services - Non sensitive Data Access

Each contractor employee with access to BOP-Information Technology (IT) equipment shall have security investigations commensurate with the highest level of information processed by the system. The Human Resources Manager or Personnel Security Officer shall determine the level of security clearance required.

A critical-sensitive position will be required to have a full-field background investigation (BI), and a non-critical sensitive position will be required to have a limited background investigation (LBI), as defined in the Human Resources Management Manual. For those contractors who will not have access to sensitive data, appropriate security checks will be completed commensurate with Bureau security regulations.

NOTE: The BOP may permit other Government security clearances to be substituted for the above background investigation, if determined by the BOP to be equal, current, and provided the contractor submits adequate documentation to support the BOP’s determination.

In addition to the aforementioned background investigations, the BOP security requirements include, but are not necessarily limited to the following (NOTE: Requirements listed below are based on the level of security required):

• National Crime Information Center (NCIC)

• National Agency Check with Inquiries (NACI)

• Law Enforcement Agency Checks

• National Law Enforcement Telecommunication (NLETS) checks

• Credit Checks

• Finger Print Check (FD-258)

• Completed OF-306, Declaration of Federal Employment and

Appropriate Resume and Optional Application

• Completed Contractor Pre-employment form

• Release of Information

• Urinalysis

• Employment Vouchering over the last five years

NOTE: If a urinalysis test is required, the test will be administered at the closest BOP facility where the work is to be performed. If the test is positive for drug usage, the individual(s) assigned to perform the work shall be excluded and the contractor shall provide acceptable replacement personnel subject to the same security requirements.

Access to IT sensitive information will be based on the completion of successful background investigations and security clearances, to include the receipt of a National Agency Check with Inquiries (NACI) case number. Once a decision has been rendered by the Personnel Security Officer that contract personnel are suitable for access to the appropriate IT system, notification will be made in writing to the technical point of contact and the respective contracting officer. The contracting officer will then issue a Notice to Proceed and the contractor and subcontractor will then have the authority to commence contract performance.

A. DOJ Order 2640.2E - The Department of Justice does not permit the use of Non-U.S. citizens in the performance of this contract or commitment for any position that involves access to or development of any DOJ IT system, unless a waiver has been granted by the Department of Justice Chief Information Officer. By signing the contract document or beginning performance, the contractor agrees to this restriction.

B. Confidentiality and Non-Disclosure - The Contractor shall agree: all deliverables and associated working papers and other material which have been generated by the Contractor in the performance of this contract are the property of the U.S. Government.

C. The Contracting Officer’s Technical Representative (COTR) or his authorized designee shall be the sole authorized official to release verbally or in writing, any change in dates, the draft deliverables, the final deliverables or any other written or printed materials pertaining to this project. The Contractor shall release no information. Any request for information relating to this contract presented to the Contractor must be submitted to the COTR or his designee for response.

D. Computer Room Requirements - The Contractor shall agree that any Contractor-owned facility housing Bureau sensitive information shall meet the requirements for Department of Justice computer rooms as laid out in Bureau of Prisons’ program statement, Information Security, P1237.13.

12. Surveillance. The contractor shall describe their surveillance programs for detection of deliberate fraud and abuse (i.e. billing for services not likely to have been furnished as billed, misrepresenting the diagnosis to justify payment, deliberate unbundling).

13. Customer Service. The contractor shall describe their customer support service program for institutions with questions about specific EOBs as well as for healthcare providers regarding incorrect claims. Customer support must be provided during normal business hours (Monday through Friday, 7:30 am Atlantic Time to 4:00 pm Hawaii-Aleutian Time) for all institutions. All queries must be responded to within 24-hours.

14. Quality Assurance. As a condition of a contract, the contractor agrees to be subject to unannounced and recurring quality assurance reviews by the BOP and/or its representatives.

15. Billing of Adjudication Services. The contractor shall bill each BOP institution separately for adjudication services rendered based on the actual number of claims processed by the contractor for each institution. Billings shall be done on a monthly or quarterly basis. If the contractor is a Government agency, the contractor shall not submit billings through the Intra-governmental Payment and Collection (IPAC) system during the last three days of the month.

16. Period of Performance. In accordance with the Federal Acquisition Regulation, the contract term will be for one 24-month base period and three 12-month option periods as follows:

Base Period: Date of Award through 24 months Option Period One: 25 months through 36 months Option Period Two: 37 months through 48 months Option Period Three: 49 months through 60 months

17. Implementation and Training. The contractor shall describe how it would implement its services and train BOP staff in the use of the bill adjudication system based on the following implementation schedule:

Base Period (Date of Award - 24 months): Federal Correctional Complex, Butner, North Carolina (Mid Atlantic Region). Estimated annual number of claims: 8,000 per 12 month period

Option Period One (25 months - 36 months): FCC Butner plus remainder of BOP institutions in the Mid-Atlantic Region, and all institutions in the Northeast and Southeast Regions.

Estimated annual number of claims: 88,000 per 12 month period

Option Period Two (37 months - 48 months): All Option Period One institutions plus all institutions in the North-Central, South-Central, and Western Regions. Estimated annual number of claims: 151,700 per 12 month period

Option Period Three (49 months - 60 months): All BOP institutions. Estimated annual number of claims: 151,700 per 12 month period

A current listing of BOP institutions can be found at the BOP website: www.bop.gov.

18. Pricing. For the 24 month base period, the contractor shall provide a firm fixed per claim price, inclusive of any and all training and one-time start-up costs. For the three 12 month option periods, the contractor shall provide a firm fixed per claim price for medical adjudication services and training costs.

19. Exclusions. Healthcare providers currently providing health care services to the BOP under contract, purchase order, or other service agreement, whether directly and/or indirectly (as a third-party intermediary) are precluded from participating in this solicitation/contract.

http://www.bop.gov