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Establish a DHA TRICARE Claims Review Services (TCRS) Contract

Solicitation Number: DHA-RFI-14-TCRS
Agency: Other Defense Agencies
Office: Defense Health Agency
Location: Contract Operations Division - Aurora
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Sources Sought
Added: Nov 13, 2013 3:47 pm
The Department of Defense (DOD) Defense Health Agency (DHA), formerly TRICARE Management Activity (TMA), seeks information about methods DHA may use to improve its health care claims processing compliance reviews to identify and report improper payments made by DHA TRICARE purchased care contractors to civilian healthcare providers and/or TRICARE beneficiaries. This process is conducted in compliance with TRICARE Regulation which charges TRICARE purchased care contractors with the responsibility of providing timely and accurate processing of all healthcare claims. The processing is also performed to meet requirements of Public Law 107-300 - Improper Payment Information Act (IPIA) of 2002, and amended in Public Law 111-204 as the Improper Payment Elimination and Recovery Act (IPERA) of 2010, which stipulate in general that agencies are required to examine the risk of improper payments in all programs and activities by identifying and reporting improper payments to the Office of Budget and Management (OMB) for publication in the DOD Annual Financial Report (AFR), and to the DHA, Uniformed Services, and TRICARE Regional/Program Offices (TRO) to assess contract claims processing performance.

To accomplish its goals, the DHA intends to expand the TCRS requirements to include supporting the DHA by validating results of DHA Improper Payment Program-initiated focused studies which result from contract claims processing compliance reviews; healthcare data analysis and/or mining; the implementation of a new health benefit; or at the request of other DHA entities. The ultimate goal is to develop contract requirements that achieve the maximum impact and value for our taxpayers. In particular, the DHA seeks comments regarding which approaches it should consider to assess various aspects of identifying improper payments and/or developing requirements for focused studies. The intent of the RFI is to gather information from industry about commercial best practices, benchmarks or other methods which DHA may use for upcoming contract requirements. The information will not be utilized for any purpose other than for market research in determining DHA's acquisition strategy and contract requirements, and to achieve its overall objectives under the Program. Specific requirements and additional detailed information about the Program are below:

BACKGROUND: TRICARE is a DOD healthcare program which serves active duty and retired military personnel, other uniformed service personnel, and their family members. DHA is accountable for the management and operation of the TRICARE health benefits program, which provides medical, dental and pharmacy care through the Military Health System (MHS) to over 9.6 million beneficiaries worldwide in DOD Military Treatment Facilities (MTFs) and is augmented with private sector services obtained through Managed Care Support Contracts (MCSCs), TRICARE Dual Eligible Fiscal Intermediary Contract (TDEFIC), TRICARE Overseas Program (TOP), TRICARE Pharmacy (TPharm) Program and Active Duty Dental Program (ADDP) contracts.
DHA currently has a contract in place to assist in validating that its contractors are performing healthcare reimbursement determinations and healthcare claims processing services in accordance with TRICARE directives and/or specific contract requirements. The DHA TCRS contract provides an independent, impartial review of the reimbursement determinations and healthcare claims processing services provided by the MCSCs, TDEFIC, TOP, TPharm and ADDP contractors. Compliance reviews utilized by the TCRS contractor to determine whether payment, or, as specified, coding and payment, was accomplished in accordance with TRICARE regulation or contract provisions, are not governed by Government Auditing Standards and are not conducted in accordance with the Generally Accepted Auditing Standards better known as the Yellow Book.

The TCRS contractor performs claims processing compliance reviews on a quarterly, semi-annual or annual basis depending on the DHA purchased care contractor's contract requirements. Quarterly compliance reviews are conducted on the MCSCs, TDEFIC, and TOP contracts, while compliance reviews are conducted semi-annually on the TPharm and ADDP contracts. Separate annual health care cost (AHCC) reviews are performed on each MCSC. These reviews are performed to support the accuracy of Target Health Care Costs and to identify unallowable underwritten health care costs under the terms of the MCSCs.

The TCRS contractor develops a process to validate the accuracy of claims payment based on claims processing documentation provided by the DHA TRICARE purchased care contractors. DHA provides statistically valid samples of TRICARE purchased care data records in the form of a list of TRICARE Encounter Data (TED) Internal Control Numbers (ICNs) listings to both the TCRS and DHA TRICARE purchased care contractors to initiate the compliance review process. The DHA TRICARE purchased care contractors have approximately 45 calendar days from the date of receiving the TED ICN listing to compile claims processing documentation which substantiates the adjudication and reimbursement of the healthcare claim being reviewed. Documentation includes, but is not limited to, the following:
• Legible copies of healthcare claim forms (i.e. CMS 1500, UB 04, DD2642, etc.);
• Claim-related correspondence when attached to a claim or related to the adjudication action (i.e., status inquiries, written and/or telephone development records);
• Other claim-related documentation such as medical reports, medical review records, coding sheets, referral and authorization forms (if applicable);
• Referrals for civilian medical care (SF Forms 513 or 2161);
• Other health insurance and third party liability documents;
• Screen shots of the TRICARE purchased care contractor's claims processing system;
• Discounted rate agreements, negotiated rate(s), per diem rate(s), state prevailing fee (s) or fee schedule(s);
• Pricing information (i.e. Diagnosis Related Groups (DRGs), Outpatient Prospective Payment System (OPPS), Skilled Nursing Facility (SNF) perspective payment system (PPS);
• Copy of Explanation of Benefits (EOB) for selected claim; and
• Other such documents to support the actions taken on the claim.
Based on provided documentation, the TCRS contractor re-adjudicates the claim in accordance with TRICARE regulations and reimbursement requirements to detect errors in claims payment and or TED payment record coding. Errors are detected by comparing the payment and coding actions as indicated on the TED Audit Detail Record (TADR) provided by the DHA, to the documentation provided by the TRICARE purchased care contractor. The TADR is the primary tool used during the compliance review, and is facsimile of the TED payment record as reported by the DHA TRICARE purchased care contractors. The TADR contains claims processing, patient and or sponsor, healthcare provider, admission and or discharge, procedure and diagnostic code and healthcare utilization information. Each TED data field reported on the TADR is found in Chapter 2 of the TRICARE Systems Manual. The TCRS contractor uses the TADR to record the rationale used to either assess payment or coding errors, or to approve the adjudication process of the claim being reviewed.

TRICARE purchased care contractors are given two rebuttal opportunities to provide additional supporting documentation or provide substantive information supporting the adjudication actions. The TCRS contractor and DHA TRICARE purchased care contractors have specified timelines to complete each phase and aspect (i.e., initial, rebuttal, and 2nd rebuttal) of the compliance review process. For this reason, compliance reviews can take between 6 and 8 months to finalize.
The TCRS contractor ensures that all TRICARE regulation, letters of instructions, or DHA TRICARE purchased care contract modification requirements in effect at the time the claim was processed into the DHA TRICARE purchased care contractors' system, are met. TRICARE manuals are available at
The TCRS contractor manages the receipt and storage of all claims documentation to enable the quick retrieval of claims documentation throughout the entire compliance review cycle. The TCRS contractor securely stores and protects the claims processing documentation containing Protected Health Information (PHI) and Personally Identifiable Information (PII) until such time as the DHA instructs the TCRS contractor to destroy documentation for claims with no assessed payments or TED record coding errors.
The TCRS contractor maintains up-to-date hardware and/or software which enables auditors to group and price inpatient hospital claims processed under the TRICARE DRGs reimbursement methodology; to accurately adjudicate claims subject to reimbursement under the SNF perspective payment system (PPS); to accurately group and price outpatient hospital claims processed under the TRICARE Outpatient Prospective Payment System (OPPS); verify the accurate coding of claims using claims auditing software (ClaimCheck or equivalent); access the TRICARE web-based Provider Reimbursement Rates and Restrictions to verify the appropriate reimbursement rates (i.e., Ambulatory Surgery, Anesthesia, CHAMPUS Maximum Allowable Charge (CMAC), DRG, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), Mental Health and OPPS), or any TRICARE reimbursement restrictions applicable to the claim under review.
The TCRS contractor ensures staff has the appropriate DHA security clearance allowing the access and utilization of Government-controlled databases (i.e. General Inquiry DEERS (GIQD) web-based application to the Defense Enrollment Eligibility Reporting System (DEERS) and DEERS Catastrophic Cap and Deductible, PEPR Care Detailed Information System (PCDIS) and TED Audit (TA) Application) to verify the eligibility of patients; to verify the accurate reporting of provider information and correct reimbursement of hospital claims eligible for reimbursement under the DRG reimbursement methodology, and to document DHA purchased care contractors' payment or coding errors.
The TCRS contractor ensures that experienced Medical Review Staff at the Registered Nurse (RN) or Physician Assistant (PA) levels are available as needed to review claims involving questionable TRICARE purchased care claims decisions on appropriateness of care issues. The TCRS contractor also ensures that translation services are available to accurately review claims submitted by the TOP contractor for overseas claims.
The TCRS contractor reviews and analyzes special claims processing, benefit issues, contractor compliance with new payment methodologies or recent benefit changes, and brings issues identified to the attention of the DHA. To ensure that compliance reviews are being conducted in accordance with DHS TRICARE regulations and TRICARE purchased care contract requirements, the TCRS contractor conducts internal quality assurance audits to identify incorrect error determinations and omission by auditors; inconsistencies amount auditors; and any problems with audit procedures, guidelines, or operational and policy directive that adversely affect the accuracy and consistency of the compliance reviews.
DHA requests RFI responses in the form of a white paper in Microsoft Word (Times New Roman, 12-point font). Please submit responses in the following format:
Section I. Company name, mailing address; and the name, phone number, fax number, and email of the designated point of contact.
Section II. The name and contact information for the business or other organization whose views are represented in the paper if that contact information is different from that provided in Section I.
Section III (NO MORE THAN 15 PAGES). Please provide responses to each of the questions listed below.

Respondents should review the Background information above prior to answering the questions. Respondents are asked to draw their responses from objective, empirical, and actionable evidence and to cite this evidence within their responses. DHA is particularly interested in the findings of research in the areas of medical, pharmacy and dental claims auditing, coordination of benefits in relation to other health insurance and hospital or physician balance billing, patient eligibility and other health insurance coverage, requirements for professional credentialing needed to effectively perform compliance reviews, methods for analyzing and evaluating healthcare data or what the most effective sampling approach that can be used to identify improper payments. While some of the goals of the improper payment oversight program are directed by statute, the overall goal of the program is to ensure that the DHA is accurately and effectively identifying potential or actual improper payments. DHA may use responses in designing the future direction of the DHA Improper Payment Program.
DHA asks that each respondent address each of the following questions as it pertains to utilizing a single contractor to provide technical, analytical, and professional healthcare support to meet all claims processing compliance reviews performed on all DHA TRICARE purchased care contracts:
1. Given the Background information provided above, what do you believe is the best approach to evaluate contractor compliance with TRICARE regulations and contract requirements and payment accuracy that would deliver maximum program value to the tax payer? In particular, the DHA seeks comments regarding approaches it should consider to assess various aspects of identifying improper payments and/or developing requirements for focused studies.
2. What advantages would the program expect to realize by adopting the approach you described in your response to Question 1?
3. How would utilization of the approach in your response to Question 1 allow the DHA to develop a robust compliance review process ensuring an improved process for identifying and reporting improper payments?
4. What are some important factors for DHA to consider if it were to adopt your recommended approach (including any alternative approaches you suggest in your response) in organizing its improper payment oversight program in this way? What else should DHA think about as it makes its decision?
5. What is the best approach for receiving, managing and storing claims documentation that is cost effective to both the external claims review contractor as well as the TRICARE purchased care contractors?
a. What is the most efficient and cost effective method for handling a significant quantity of claims documentation?
b. What are the advantages and disadvantages of this method?
6. What data analysis tools/reports would be most useful to identify improper payments?
a. Which data mining model building technique (decision trees, neural networks, etc.) would be best to uncover trends and problematic areas in a healthcare claims processing system?
7. Which aspect of healthcare claims is most common in causing an improper payment (i.e., diagnosis code, procedure code, provider type, manual claims intervention, etc.)?
8. Other than random sampling, what is an efficient way of identifying improper payments (i.e., stratification by type of care, provider type, etc.)?
9. What resources are available to verify if a TRICARE beneficiary has access and is currently covered by other health insurance?
10. Would medical episode groupers provide insight into the potential of improper payments?
The following questions are related to factors affecting acquisition planning and competition:
11. Considering solicitation characteristics such as contract type, options, etc., what specific solicitation characteristics would encourage your organization to submit a bid proposal in response to a solicitation for these services? Why?
a. What solicitation characteristics would discourage or prevent your organization from submitting a bid proposal?
12. What solicitation characteristics would attract small business participation?
a. What solicitation characteristics would discourage/prevent small business participation?
13. Would your organization provide most services in-house? If yes, which services would be performed in-house?
a. What services would your company be most likely to outsource? Why?
14. How are these services typically priced? For example, which services are typically fixed price, which are typically cost reimbursed? For fixed price what is the unit of measure? For example hourly labor rates? Price per claim reviewed?
a. For cost-reimbursed contracts what are the major cost drivers?
15. What are the major risk factors associated with these services?
16. Based on the DOD Implementation Directive for Better Buying Power, Obtaining Greater Efficiency and Productivity in Defense Spending, knowledge-based contracts should be limited to a total of 3 years to increase competition.
a. Based on your company's experience, what is the typical length (years) of this type of contract?
b. How would a 3-year limit on the length of the contract affect competition? What factors would promote competition for this type of service?
17. What are the biggest challenges and frustrations facing your industry? What is the cost impact of these challenges?
18. What incentives are typical for these services?
19. Are there benchmarks/standards or industry "best practices" that your company uses to assess the quality of claims processing and claims payment services provided? If yes, please describe them.
20. DHA is considering the NAICS codes below for this requirement. Which does your company recommend and why? Is there a NAICS code not listed that is more suitable? Why?
a. 541611, Administrative Management and General Management Consulting Services (Medical office management consulting services or consultants)
b. 813920, Professional Organizations (Peer review boards, professional standards review boards, professional standards review committees)
c. Other:

THIS IS AN RFI ONLY. This RFI is issued solely for market research. It does not constitute a Request for Proposal. Interested firms shall not send proposals in response to this Notice nor shall they contact any other individuals about this Notice or the requirement. Any information provided to DHA is strictly voluntary and given with no expectation of compensation and is clearly provided at no cost to the Government. A solicitation will not be issued at this time, and this Notice shall not be construed as a commitment by the Government to issue a solicitation nor does it restrict the Government to a particular acquisition approach. The Government may issue a formal solicitation on the Federal Business Opportunities ( website at a future date. If the Government issues a solicitation, the Government will conduct any source selection in accordance with the Federal Acquisition Regulation (FAR), as supplemented. Any future information on this acquisition (statement of work, specifications, solicitation, etc.) will be posted on It is the responsibility of the prospective offeror to review this site regularly for updates and/or changes. DHA will not respond to questions about the policy issues raised in this RFI.

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