Utilization Management JA (REDACTED).pdf

Control Number VA-22-00007951

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Department of Veterans Affairs (VA)

Office of Procurement, Acquisition, and Logistics Technology Acquisition Center

23 Christopher Way Eatontown, NJ 07724

2. Description of Action: The proposed action is for a sole source, Firm-Fixed Price (FFP) contract with Change Healthcare Technologies LLC, 5995 Windward Parkway

Alpharetta, GA, 30005-4184 a large business concern. The procurement includes the renewal of Utilization Management Criteria software licenses, maintenance support, training, and helpdesk services of evidence-based Utilization Management (UM) Criteria to support UM processes for Veterans Health Administration (VHA) facilities nationwide. The period of performance will include a 12-month base period with four (4) one-year option periods. Until the last VHA facility migrates to the new Electronic Health Record (EHR) solution, the ability to modify the National Utilization Management Integration (NUMI) application to accept the any other utilization review product is time and cost prohibitive as detailed in Section 5 of this justification.

Additionally, VA’s technical requirements are not expected to change within the next six to eight years until migration to EHR is forecasted to be complete. Therefore, VA requires renewal of brand name Change Healthcare software licenses, maintenance support, training and helpdesk services. Once VA has fully implemented the new EHR solution, compatibility with NUMI will no longer be required, and multiple products can potentially be used to meet VA's requirements.

3. Description of Supplies or Services: This procurement is for software licenses and maintenance of evidenced-based UM Criteria that interfaces with the existing VHA NUMI application and the New VHA Electronic Health Record (EHRM). The Contractor shall provide an enterprise-wide (the enterprise currently consists of over

1,000 users), unlimited use, Licensing Agreement for all VHA users to access and use evidence-based clinical appropriateness criteria and associated tools.

Specifically, this procurement includes renewal of licensing for use of brand name Change Healthcare InterQual Review Manager, Interrater Reliability (IRR) suite, InterQual View, InterQual Mobile, InterQual Anonymous, and InterQual Connect Medical Review Services. Licensing will include both clinical and technical support for NUMI and the EHR integration, as well as end-user training and helpdesk support. The Contractor shall include unlimited Government use of the criteria in electronic format as part of the license agreement. Included in the license agreement, the Contractor shall provide all maintenance support such as application/software updates, patches and upgrades, report generation, and clinical and technical helpdesk response and resolution. Updates to the electronic version of the criteria or associated applications including clinical revisions, technical enhancements, system patches, and version upgrades shall be included in the license agreement.

Utilization Management Review Criteria Control Number VA-22-00007951

NUMI is a web-based application that automates utilization review assessment and outcomes, and is mandated for use via VHA Directive 1117. NUMI standardizes UM review methodology and documentation at the facility level and creates a national VHA utilization information database. The UM product must include criteria that are clinically rich, evidence-based, and updated at least annually. Currently, the Change Healthcare InterQual (IQ) Criteria, Care Enhance Review Manager Enterprise (CermE; also called Review Manager), and the InterQual Connect are the only products that are compatible with the NUMI application and the EHRM. The Change Healthcare products are the only products that meet all requirements and are fully integrated into NUMI, EHRM, Emergency Department Integration Software (EDIS), and Bed Management Solution (BMS) to provide access to the InterQual standardized clinical appropriateness criteria and algorithms. Specifically, within EHRM, InterQual Connect is the review product used. In NUMI, InterQual CermE is the review product used. Additionally, the IQ product is updated quarterly to reflect current medical evidence for care and treatment, ensuring Veterans are receiving the best care for their condition. Within the NUMI application, CermE accommodates these quarterly updates. Review Manager is used to determine whether patient admissions and hospital days meet clinical appropriateness criteria for acute care and provides interactive medical necessity management workflow software to reduce variation in clinical decision-making. The IRR suite is a web-based “testing” application that measures how well and how consistently InterQual® Criteria are applied and supports the regulatory and accreditation requirements while demonstrating consistency and competency of clinician decision-making. Criteria updates will be no less than once per year. The total estimated value of the proposed action is $6,985,457.49 inclusive of all option periods and one optional task which is for migration to the public cloud.

4. Statutory Authority: The statutory authority permitting other than full and open competition is 41 U.S.C.3304(a)(1) as implemented by the Federal Acquisition

Regulation (FAR) Subpart 6.302-1 entitled, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements."

5. Rationale Supporting Use of Authority Cited Above: VHA mandates the NUMI web-based application for use via VHA Directive 1117, dated October 8, 2020. The government-owned, NUMI application standardizes clinical appropriateness review of patient care at over 150 VHA facilities across the nation by integrating the evidence-based clinical criteria into the application. Change Healthcare’s proprietary InterQual

Clinical Decision Support Criteria is the UM criteria used in the NUMI application.

Specifically, NUMI was built around the Change Healthcare (formerly McKesson) InterQual product and the associated review and evaluation applications. Change Healthcare products have been fully integrated into NUMI and the new EHR and are currently the only products that are interoperable and compatible with the NUMI application, according to market research findings and Government NUMI technical experts.

The use of any alternative brand products would require the NUMI application’s middle tier business logic layer, criteria user interface, primary data entry screen, and all embedded reports to be modified. In addition, warehousing databases, cubes (multidimensional databases that allow complex business intelligence analysis), and all reports that are currently used to inform real-time business processes as well as long-term strategic planning would need to be completely redesigned. This would be a large-scale duplicative effort. Specifically, millions of lines of code revisions, testing, and installation of code changes into the NUMI application would be required to implement an alternate criteria product. Extensive code revisions, testing, and installation of code changes into the application would be required to implement any alternate criteria product. Further, the new EHRM is in sustainment and would require recoding for implementation of a new product to the extent of, but not limited to HTTPS uses response codes to represent the status of the response. With this recoding effort, there would be a significant risk that Veterans would not receive the necessary evidenced based medical care identified since modifying NUMI to accept other than InterQual criteria will require extensive funding, an estimated 18 months of design effort, and time to implement and fully train all staff. Based on historic data and previous acquisition history, the duplicative cost to modify NUMI to integrate another review product, integrate a new product into new EHRM solution, rebuild reports that have been built in the current EHRM solution that replicate NUMI reports for standardization, and provide extensive upfront user training for a new product is estimated to cost approximately $5.2 million. These duplicative costs would not be recovered through competition.

Furthermore, if a source other than Change Healthcare was utilized, VA would have two options, both of which would result in harm to VA. The first option would be to completely shut down the current environment, to take the NUMI application offline to work through the development effort outlined above. This would be necessary because the extensive code revisions required could not be accomplished while the NUMI application was operational. This would result in a complete stoppage of critical VA programs that provide necessary services to Veterans. A total stoppage of these services would be catastrophic to Veterans’ livelihood, patient care and wellbeing.

Additionally, this would leave VA out of compliance with VHA Directive 1117 which is infeasible. The only other option would be for VA to build out a completely new environment inclusive of a secondary NUMI application and completely migrate archived data to a new solution. In this scenario, VA would have to continue to pay for the Change Healthcare licenses and maintenance while the estimated 18-month development effort is completed. This additional duplicative effort is estimated to cost VA a minimum of approximately $750,000.00. This would be necessary to run the current solution in tandem until the migration to the new solution is completed. This estimate of additional duplicative costs is based on historical information for maintenance of the current NUMI application and environment hosting costs.

The NUMI system is dependent on Change Healthcare InterQual CermE application to obtain evidence-based criteria for completing UM reviews. While CermE does provide important information used by NUMI, the current architecture’s built-in dependence on CermE makes NUMI susceptible to a single point of failure and creates dependence, eliminating VA’s ability to choose another vendor’s evidence-based criteria tool. NUMI's criteria interface is so rigid that even a minor update in criteria structure can make

CermE incompatible with NUMI, thereby preventing VHA UM staff from performing their most basic function: applying evidence-based criteria to assess appropriateness of care. The ability to integrate other clinical appropriateness criteria into the NUMI application cannot occur without major technical revisions and programming code changes detailed above.

Moreover, no other brand name maintenance support, training, and helpdesk services can meet the Government’s requirements. The required support, training, and helpdesk services must be compatible with the software VA requires. Only Change Healthcare Technologies has the rights to perform the maintenance support and offer helpdesk services and training for its software. Any source must have access to the proprietary rights to ensure all the maintenance support provided is properly conf igured to the infrastructure. Without access to the proprietary rights, another source would not be able to push through source code updates. Therefore, only Change Healthcare Technologies can access to the proprietary source code necessary to support utilization management processes for VHA facilities nationwide.

As detailed in section 8 below, Change Healthcare is the only vendor that meets the required functions and features and interoperability for VHA. Failure to renew the required InterQual brand software will prevent the ability of a UM review process of

Veteran inpatient care for appropriateness. This will negatively impact Veteran care and access, which will lead to inefficiencies of care. NUMI is part of a suite of VHA applications that are designed to optimize patient flow: NUMI, EDIS, and BMS. Because UM transcends bed management and emergency department operations, VHA requires NUMI to be fully interoperable with BMS and EDIS. Examples of interoperability: 1) bed managers must see UM review outcome data on various BMS screens and reports to manage patient flow; and 2) emergency department staff should be able to request and retrieve the results of a pre-admission screening reviews from within EDIS to determine optimal care location.

Without the full integration of the criteria product into NUMI, UM data will not be available to identify opportunities to improve quality of care and increase efficient use of resources. Facility leadership will not receive actionable reports for reducing delays and barriers to care. The result will be that quality outcomes, timely access to care, and patient satisfaction will decrease. Due to inefficient utilization of resources, fewer beds will be available for inpatient care; more patients will be sent outside VA at much greater cost. Exposure to the health care environment when not medically necessary carries risks to Veterans (e.g., infection, falls, medical errors). Effective UM will prevent unneeded admissions and unneeded days of continued stay, thereby reducing risk. Decreasing inappropriate use of inpatient care (VA and non- VA) frees up medical care dollars for needed care in different settings (telemedicine, post-acute care, home care and even "hospital at home" where patients recover after surgery rather than in the hospital. Hospitals would have to rely on hard copies or static versions of the criteria that will result in a loss of standardization and automation of the UM review process, an estimated twice as long to complete a review (30 minutes versus 15 minutes), require additional staffing, targeted communications to relay quality issues, and decreased bed availability for Veterans.

This will bring the UM review process of Veteran inpatient care for appropriateness to a halt, severely negatively impact patient wellbeing, and increase costs due to the ensuing inefficiencies of care.

6. Efforts to Obtain Competition: Market Research was conducted, details of which are in the section 8 of this document. This effort did not yield any additional sources that can meet the Government’s requirements. There is no competition anticipated for this acquisition. In accordance with FAR 6.302-1(c)(1)(ii)(c) and 5.102(a)(6) this justification shall be posted with the solicitation. Additionally, the proposed action will be synopsized on the Contracting Opportunities Page in accordance with FAR 5.201. Any proposals that are received shall be evaluated.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

8. Market Research: Web-based Market Research was performed by UM Program

Office experts in August 2021 to identify all clinically appropriate criteria available in the marketplace. Although several products exist, only two are evidence-based solutions.

The first product is InterQual® (Care Enhance® Review Manager Enterprise (also call Review Manager), and the InterQual Connect), which is currently in use and owned by

Change Healthcare. The only other evidence-based solution is the MCG product, formerly known as the Milliman Care Guidelines, owned by Hearst Health Network.

After researching the MCG product, the technical experts determined that it could not meet all the Government's requirements without the extensive software development effort as detailed in Section 5 of this justification. Specifically, MCG cannot meet the interoperability requirements to interface with NUMI, EDIS, BMS, and EHRM.

Additionally, a Request for Information (RFI) was posted to SAM.gov from October 19 through October 26, 2021. VA received one response, from Change Healthcare, who proposed the InterQual® product currently in use in VHA. Subsequent to the RFI closing date of October 26th, MCG provided an RFI response (January 14, 2022) The

UM Program Office experts reviewed the RFI responses and determined that the response from Change Healthcare met all the Government’s technical requirements.

The RFI response from MCG did not meet all the Government’s technical requirements and MCG was notified via email on February 10, 2022; MCG did not reply to this notification. Specifically, non-FEDRamp certified Software as a Service solutions like the one described in MCG’s response do not meet VA’s requirements. Additionally, the required extensive code revisions, training, testing, and installation of code changes to the NUMI application that would be required to implement the MCG solution are detailed in Section 5 of this justification. This presents unacceptable risk to the VA program, which has to operate without interruption in the medical center environment. Lastly, on February 15, 2022, an email was received from HealthHelp in regards to the RFI. On February 16, 2022, the Government responded to HealthHelp and extended the company an opportunity to respond to the RFI, which had closed on October 26, 2021, by February 22, 2022. HealthHelp responded on February 18, 2022, stating a response would be given by February 22, 2022. In response to a request for additional time to submit its response, VA granted an extended submission deadline of February 24, 2022, but no written response to the RFI has been submitted to date by HealthHelp for the VA technical team to review.

Based on this market research, the Government's technical experts have determined that Change Healthcare is the only source that can meet the

Government's requirements. While there are known SDVOSB resellers of Change Healthcare’s InterQual® product it is not possible that this effort can be set aside as it would not be possible for these vendors to meet the requirement of performing 50% of the required effort.

9. Other Facts: Not Applicable.

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Kathleen Michel Date: March 17, 2022

KATHLEEN A.

MICHEL

Digitally s igned by

KATHLEEN A. MICHEL

1137503

Clinical Director for Utilization Management Signature: 1137503 Da te : 2 0 2 2 .0 3 .1 7 1 0 :4 5 :3 8

-04'00'

11. Fair and Reasonable Cost Determination: l hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable based on price analysis techniques set forth in FAR 15.404-1 including comparison of proposed prices with historical pricing data and comparison with the

Independent Government Cost Estimate.

Debra G. Clayton Date: 3/17/2022 Debra Clayton

Digitally signed by Debra Clayton

296083

Procuring Contracting Officer Signature: 296083 Date: 2022.03.17 11:11:18 -04'00'

12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Debra G. Clayton Date: 3/17/2022

Debra Clayton

Digitally signed by Debra Clayton

296083

Procuring Contracting Officer Signature: 296083 Date: 2022.03.17 11:11:36 -04'00'

Approval

In my role as procuring activity Advocate for Competition, based on the foregoing justification, I hereby approve the acquisition of Utilization Management Criteria Software Licenses, maintenance support, training, and helpdesk services, on another than full and open competition basis pursuant to the statutory authority cited in Section 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Date:

Digitally signed by PHILIP

PHILIP WECKESSER WECKESSER

Signature:

Date: 2022.03.17 14:49:47 -04' 00_' Philip Weckesser Advocate for Competition Technology Acquisition Center

Office of Procurement, Acquisition, and Logistics

3/17/2022