Sources Sought Notice FY25 - 250300.pdf

SSN 250300

Health Insurance and Medicare Part C and Part D Medical Loss Ratio (MLR)

Examinations

Health Insurance and Medicare Part C and Part D Medical Loss Ratio (MLR) Examinations

THIS IS NOT A FORMAL REQUEST FOR QUOTE (RFQ) AND DOES NOT

COMMIT THE CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS)

TO AWARD A CONTRACT NOW OR IN THE FUTURE

This is a SOURCES SOUGHT NOTICE (Notice) to determine the availability of small businesses on the GSA Professional Services Schedule 541211 Auditing Services and 541611 Management and Financial Consulting, Acquisition and Grants Management Support, and Business Program and Project Management Services (e.g., 8(a), service-disabled veteran owned small business, HUBZone small business, small disadvantaged business, veteran-owned small business, and women-owned small business) that have the capability to assist CMS in the continued development and implementation of processes and procedures to evaluate compliance with the Medical Loss Ratio (MLR) requirements by issuers subject to 45 CFR Part 158. The activities include training and education regarding MLR requirements and best practices for ensuring compliance with those requirements and conducting examinations of the data in MLR reports. Therefore, CMS’ Center for Consumer Information and Insurance Oversight (CCIIO) and Center for Medicare (CM) seek to find a qualified and experienced financial and regulatory examination contractor who will provide a full range of statistical, analytical, audit, and professional business services that are performed in accordance with CCIIO and CM provided instructions, handbooks, guidance, and procedures and in conjunction with the NAIC Financial Examiner’s Handbook and Generally Accepted Auditing Standards (GAAS), as promulgated by the American Institute of Certified Public Accountants (AICPA).

A. General Background

The Centers for Medicare & Medicaid Services (“CMS”) is directly responsible for enforcing federal statutes and regulations with respect to Medical Loss Ratio (MLR) requirements for health insurance issuers (“issuers”) as well as Medicare Advantage (“Part C”) Organizations and Part D Plan Sponsors. MLR requirements are intended to ensure that these entities spend a substantial portion of revenues on health care and quality improvement for their enrollees – whether in private insurance plans or Medicare Part C and Part D plans – rather than on administrative costs and profits.

MLR for Commercial Health Insurance Issuers

The Patient Protection and Affordable Care Act, Pub. L. 111-148, was enacted on March 23, 2010, and the Health Care and Education Reconciliation Act, Pub. L. 111-152, was enacted on March 30, 2010. We refer to these two statutes collectively as the Affordable Care Act (ACA). Section 2718 of the Public Health Service Act (“PHS Act”), as added by section 1001(5) of the Affordable Care Act, and amended by section 10101(f), established the MLR requirements for health insurance issuers. Section 2718 of the PHS Act includes two provisions designed to achieve the objective of “bringing down the cost of health care coverage.” The first provision seeks to increase transparency and accountability by requiring that issuers publicly report major categories of spending of policyholder premium dollars: clinical services provided to enrollees, activities that improve health care quality, and non-claims costs. The second provision establishes minimum MLR standards for issuers (generally, 80 percent in the individual and small group markets, and 85 percent in the large group market), which are intended to help ensure policyholders receive value for their premium dollars. Issuers must provide rebates to enrollees when their spending for the benefit of policy holders on reimbursement for clinical services and quality improvement activities, in relation to the premiums charged, is less than the MLR standards established by the statute. The rebate provisions of section 2718 are designed not just to provide value to policyholders, but also to create incentives for issuers to become more efficient in their operations. Section 2718 also contains provisions which allow for modifications to the standards under certain circumstances. Lastly, section 2718 directed the National Association of Insurance Commissioners (NAIC), subject to certification by the Secretary of the Department of Health & Human Services (Secretary), to establish definitions and methodologies for MLR and rebate reporting and calculation requirements no later than December 31, 2010.

CCIIO has incorporated recommendations and published guidance with regards to MLR.

The NAIC made its recommendations to the Secretary on October 27, 2010. An interim final regulation (IFR) to implement section 2718(a) through (d) of the PHS Act was issued in December 2010 and became effective January 1, 2011 (75 FR 74864). The December 2010 IFR codified the MLR requirements at 45 CFR Part 158 and adopted and certified the NAIC’s recommendations in full. The December 2010 IFR was subsequently amended multiple times and consequently those amendments (76 FR

76573, 76 FR 76595, 77 FR 28790, 79 FR 13743, 79 FR 30339, 80 FR 10749, 81 FR

12203) became effective in various years. (The IFR, as amended by the subsequent Final Rules, will be referred to as “the regulations.”) 45 CFR Part 158 has six subparts:

• Subpart A of the regulations implements the requirements for issuers to report the data that is used to determine the MLR.

• Subpart B of the regulations addresses the requirements for an issuer to provide an annual rebate to enrollees if the issuer’s MLR fails to meet minimum requirements: generally, 80 percent in the individual and small group markets and 85 percent in the large group market.

• Subpart C of the regulations establishes a process and provides criteria for the Secretary to determine whether application of the 80 percent MLR standard in the individual market in a state may destabilize that individual market.

• Subparts D-F of the regulations address enforcement of the reporting and rebate requirements of section 2718(a) and (b).

For more information regarding CCIIO’s MLR regulations, see:

http://cciio.cms.gov/resources/regulations/index.html#mlr.

http://cciio.cms.gov/resources/regulations/index.html#mlr

MLR in the Medicare Part C and Part D Programs

Section 1103 of Title I, Subpart B of the Health Care and Education Reconciliation Act, amends section 1857(e) of the Social Security Act (the Act) to add new MLR requirements to Medicare Part C and Part D. The MLR is expressed as a percentage, generally representing the percentage of revenue used for patient care rather than for such other items as administrative expenses or profit. Because section 1860D-12(b)(3)(D) of the Act incorporates by reference the requirements of section 1857(e), these MLR requirements also apply to the Part D program. The implementing regulations are at 42 CFR Part 422, Subpart X and 42 CFR Part 423, Subpart X.

For contract years 2014 and later, Medicare Advantage Organizations, Cost Plans, and Part D Sponsors are required to submit an MLR Report to the Medicare Plan Payment Group (MPPG) in the Center for Medicare (CM) for each contract and are subject to financial and other penalties for failure to meet the statutorily required 85 percent minimum MLR for each contract. The Act imposes several levels of sanctions for failure to meet the 85 percent minimum MLR requirement, including remittance of funds to CMS, a prohibition on enrolling new members, and, ultimately, contract termination.

For more information regarding CM’s MLR regulations and guidance for the Part C and Part D programs, see: https://www.cms.gov/Medicare/Medicare-Advantage/Plan- Payment/MedicalLossRatio.html.

B. Project Requirements

This is a CMS mission critical requirement and supports one of the primary goals of the Agency - better care and lower costs. Beneficiaries should receive high quality, coordinated, effective, efficient care and, as a result, health care costs may be reduced.

Important knowledge requirements include, but are not limited to: strategic planning and project management expertise; sophisticated knowledge of MLR regulations, premium and claims data; ability to validate, test, analyze, review, document, and/or manipulate issuers’ MLR data, including all the data elements reported on the MLR Annual Reporting Form, and any other forms developed and utilized by CCIIO and CM to collect MLR-related data.

C. Capability Statement Requirements

CMS requests that the respondent specifically address the requirements listed below; and provide enough information for CMS to make an informed determination of their capability to perform the work as identified below. Please remember that the potential offeror or prime contractor must be able to perform at least 50% of the labor associated with this effort. Please provide a list of contract references that your organization has had (if applicable) and your role on the contract (prime contractor or subcontractor). If you https://www.cms.gov/Medicare/Medicare-Advantage/Plan-Payment/MedicalLossRatio.html https://www.cms.gov/Medicare/Medicare-Advantage/Plan-Payment/MedicalLossRatio.html were a subcontractor on a particular contract, please clarify the work that you did on that contract.

Please describe your capabilities and detailed experience performing similar activities as those described below. Your responses should demonstrate:

1. Extensive knowledge of Section 2718 of the PHS Act, as well as other federal and state laws, regulations and guidance necessary to perform this work;

2. Experience and knowledge of how to conduct financial and regulatory reviews and examination procedures that are consistent with established industry guidelines applicable to those reviews;

3. Experience with and knowledge of how to perform research on the healthcare and insurance industry and state and federal regulations and guidance;

4. Extensive knowledge of the TeamMate™ system and ability to demonstrate use of the system;

5. Experience with and knowledge of risk-based and random selection of health insurance issuers for financial and regulatory examinations;

6. Extensive knowledge of how to review, analyze, and examine reported revenue and expense items to determine whether they meet the applicable definitions in regulations, guidance, and form instructions;

7. Experience with reviewing, analyzing and examining expenses relevant to MLR reporting at both the holding company level and issuer level to determine whether allocation of expenses is reasonable;

8. Ability to examine the accuracy of calculations on the MLR filings and the timeliness and accuracy of rebate payments; to analyze and determine the potential magnitude of examination findings on MLR rebates; to create and maintain documentation related to examinations; and, to undertake other data or policy analysis as requested;

9. Experience with developing training programs and materials, including preparing and participating in webinars and conference calls; and

10. Experience with managing and transmitting large volumes of data, including personally identifiable information.

11. Accept assignments on short notice as well as have a track record of managing multiple project deadlines and completing deliverables on time;

12. Provide technical assistance and training to internal and external stakeholders;

13. Produce progress and summary reports with analysis of trends;

14. Prepare agendas, facilitate status calls, and record minutes;

15. Demonstrate a track record of effective project management including: managing and staying within budgets; quality assurance for deliverables; and effective communication and customer relations;

16. Employ examiners and analysts with appropriate insurance regulatory education, experience, and certifications;

17. Employ or have access to a statistician with appropriate education and experience, who understands the fundamentals of health insurance policies and data.

D. Instructions for Submitting Responses to CMS

Please submit your responses by 11:00am EST on October 29, 2024, to Natalie Jones at Natalie.Jones@cms.hhs.gov and Kelly Housein at Kelly.Housein@cms.hhs.gov in the following format:

• Microsoft Word (or PDF) document with page size 8.5 by 11 inches, with a minimum of 1" margins.

• Times New Roman Font Size 12, with no less than single-spacing between lines.

• Submissions shall not exceed 10 pages. Cover Page is not included in the total page count.

Cover Page

Offerors shall include the following business information on the Cover Page:

a) FEIN/SSN number, title, and date of issuance

b) Unique Entity ID (UEI)

c) Company Name

d) Company Address

e) Company Point of Contact, Phone and Email address

f) Current GSA Schedules appropriate to this Sources Sought Notice

g) Type of company under NAICS: 541611 – Administrative Management and

General Management Consulting Services (Size Standard: $15 million) and type of company under NAICS: 541211 – Offices of Certified Public Accountants (Size Standard: $20.5 million). Additional information on NAICS codes can be found at www.sba.gov.

Confidentiality

All transmitted information marked proprietary shall be treated as such. Therefore, businesses should identify any proprietary information in their responses. Proprietary materials will be neither distributed nor discussed with any other organization.

Information submitted in response to this Notice will be used at the discretion of the Government. Further, the information submitted will remain confidential insofar as permitted by law, including the Freedom of Information and Privacy Acts.

Disclaimer and Important Notes

This Notice does not obligate the Government to award a contract or otherwise pay for the information provided in response. Respondents are advised that the Government is under no obligation to acknowledge receipt of the information received or provide feedback to respondents with respect to any information submitted.

Teaming Arrangements mailto:Natalie.Jones@cms.hhs.gov mailto:Kelly.Housein@cms.hhs.gov

Firms seeking to respond to this Notice as a team or to rely on subcontractors to perform any portion of the work must include the above-requested information and certifications for each entity on the proposed team or each proposed subcontractor. Responses must clearly indicate the nature of the teaming arrangement.

The contractor and any subcontractors must not have any relationships or arrangements through business operations or its employees that could be considered as possibly lessening the company’s objectivity concerning any aspect of the proposed tasks. If such relationships or arrangements exist, contractors or subcontractors shall be required, during the procurement process (if one occurs), to identify potential conflicts of interest and discuss how the conflicts will be addressed and mitigated.