Analysis of Plan Benchmark Data for Purposes of Assessing Insurers’ Medical Loss Ratios and Rate Review Submissions

Solicitation Number: OS41606

Agency: Department of Health and Human Services                                            

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OS41606

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Combined Synopsis/Solicitation

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Added: Jul 22, 2010 12:57 pm

Office: Program Support Center
Location: Division of Acquisition Management

Opportunity History
(i) This is a combined synopsis/solicitation for commercial items prepared in accordance with the format in Subpart 12.6, as supplemented with additional information included in this notice. This announcement constitutes the only solicitation; proposals are being requested and a written solicitation will not be issued.

(ii) The solicitation number is OS41606. The solicitation is issued as a Request for Quote (RFQ)

(iii) This solicitation and incorporated provisions and clauses are those in effect through Federal Acquisition Circular 2005-38.

(iv) The corresponding NAICS code is 541618 and the small business size standard is $7.0 million.

(v) List of contract line item number(s) and items, quantities and units of measure – Not applicable.

(vi) Description of Requirements –

A. Background

Sections 2718 – Section 2718 of the Patient Protection and Affordable Care Act requires all issuers offering group or individual health insurance to submit a report to the Secretary detailing for the policy year certain ratios and percentages that address how plan premium dollars are expended. The Secretary is required to then make the information available to the public through a DHHS website.

Beginning no later than January 1, 2011, health insurance issuers are required to provide a rebate to each enrollee who received coverage with respect to a plan year if the issuer’s MLR does not exceed a certain threshold.

Section 2974 – Section 2974 of the PHS Act requires the Secretary, in conjunction with the States, to establish a process for the annual review, beginning with the 2010 plan year, of unreasonable premium increases in coverage for health care. Additionally, insurers are required to submit to the Secretary and States a justification for the unreasonable increase in rates prior to the implementation of the increase, and to post this information on their websites. The Secretary is also required to ensure public disclosure of the increases and their justification. Section 2974 also directs the Secretary to carry out a program to award grants to states to carry out the annual review of unreasonable increases in premiums.

B. Purpose

The Government is seeking information that will allow OCIIO to:

(1) Benchmark an insurer’s administrative costs as reported to us as part of the calculated Medical Loss Ratio with the administrative costs of the rest of the industry.

(2) Review the components of an insurer’s administrative costs as compared to the industry for the purposes of assessing the insurer’s Medical Loss Ratio.

(3) Assess an insurer’s estimated increase in administrative costs relative to industry trends.

These activities are required in order to effectively implement sections 2718 and 2794 of the Public Health Service Act.

C. Data Description

The data source should contain the administrative cost data, such as: sales and marketing; commissions, claims adjudication, medical management, quality assurance and other similar costs, rate setting and underwriting costs, and other administrative costs information for a national sample of plans.

D. Characteristics of Data

In order to conduct the activities described above, OCIIO is seeking a data source meeting the following criteria:

• Comprehensive set of administrative costs metrics. We will need the data set to provide a complete picture of insurers’ administrative costs, both financial and operational, in order to conduct certain aspects of our Medical Loss Ratio and Rate Review audits.

• Granularity. In order to compare insurers against each other in a systematic way we will need to see detailed information about their administrative expenses.

• Broken out by peer group. As we will be reviewing information from a range of kinds of insurers, we will need to be able to benchmark their administrative costs data with their peers; therefore we need the data source to break out administrative costs and trends by peer group.

• Broadly accepted and quality controlled. Due to the visibility of OCIIO’s analyses, the data should be recognized as credible.

• Available in electronic format to facilitate analyses. We expect to receive Medical Loss Ratio and Rate Review data from insurers as part of our audit activities under Sections 2718 and 2794 in electronic file formats and it would therefore be important to get these data electronically in order to facilitate benchmarking analyses.

(vii) All services are to be provided by August 30, 2010

(viii) The provision at FAR 52.212-1, Instructions to Offerors – Commercial Items, applies to this acquisition.

(ix) The provision at FAR 52.212-2, Evaluation – Commercial Items, applies to this acquisition. The Government will award a contract resulting from this synopsis/solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price and other factors considered.

(x) Offerors are to include a completed copy of the provision at FAR 52.212-3, Offeror Representations and Certifications – Commercial Items, with its offer or acknowledge its listing in Online Representations and Certifications Application (ORCA).

(xi) The clause at FAR 52.212-4, Contract Terms and Conditions – Commercial Items, applies to this acquisition.

(xii) The clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders-Commercial Items (JULY 2010), applies to this acquisition. The Contracting Officer has indicated the following clauses listed in paragraph (b) as applicable and are hereby incorporated by reference: (a)(1) 52.222-50, Combating Trafficking in Persons (Feb 2009) (Applies to all contracts); (10) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2) and (3)); (19) 52.222-3, Convict Labor (June 2003) (E.O. 11755); (20) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (Aug 2009) (E.O. 13126); (21) 52.222-21, Prohibition of Segregated Facilities (Feb 1999); (22) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246); (23) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Sept 2006), (24) 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998) (29 U.S.C. 793); (25) 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212); (26) 52.222-54, Employment Eligibility Verification (Jan 2009). (Executive Order 12989). (Not applicable to the acquisition of commercially available off-the-shelf items or certain other types of commercial items as prescribed in 22.1803.); (28) 52.223-15, Energy Efficiency in Energy-Consuming Products (Dec 2007) (42 U.S.C. 8259b); (29)(i) 52.223-16, IEEE 1680 Standard for the Environmental Assessment of Personal Computer Products (Dec 2007) (E.O. 13423).; (38) 52.232-33, Payment by Electronic Funds Transfer-Central Contractor Registration (Oct 2003) (31 U.S.C. 3332); (41) 52.239-1, Privacy or Security Safeguards (Aug 1996) (5 U.S.C. 552a).

(xiii) Sole Source justification:

This acquisition is conducted under the authority of 41 U.S.C 253(c)(1) as set forth in FAR 6.302-1(c), only one responsible source and no other supplies or services will satisfy agency requirements. The US Department of Health and Human Services, Program Support Center, on behalf of the Office of Consumer Information and Insurance Oversight (OCIIO) intends to award a purchase order to Sherlock Company,1364 Welsh Road, North Wales, PA 19454.

The Sherlock Company has collected insurer plan data for over a decade. Their database contains the data elements that we will need to conduct our analyses of insurer Medical Loss Ratio and rate change justifications that are submitted to us under sections 2718 and 2974 of the ACA. Their sample includes approximately 60 plans representing a substantial number of insured Americans. Their data may allow for trends analyses, since their survey is conducted yearly and their participant group remains fairly stable.

Sherlock’s database contains the data elements necessary for OCIIO’s analyses. In addition, the organization conducts data quality assurance activities.

(xiv) DPAS – N/A

(xv) Quotes are due on Friday, July 30, 2010 @ 2:00 pm, EST, electronically to the Contract Specialist at bettie.hartley@psc.hhs.gov.

(xvi) Contact Ms. Bettie Hartley, Contract Specialist, at bettie.hartley@psc.hhs.gov regarding the solicitation.

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Parklawn Building Room 5-101
5600 Fishers Lane
Rockville, Maryland 20857

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Washington, DC

United States

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Bettie Hartley
Phone: 301-443-7848
Fax: 301-443-2761

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