Texas Health and Human Services Commission HHSC

1
Texas Health and Human Services Commission (HHSC)

• Medicaid Fraud and Abuse Detection System (MFADS)
• Request for Proposals 529-07-0164
• Vendor Conference November 17, 2008

2

• Welcome
• Introductions
• Katherine Smith, Enterprise Contract and
  Procurement Services (ECPS)
• Carlos Balderas, HUB Coordinator, Administrative
  Services Development (ASD)
• David Brown, Assistant General Counsel
• Larry Fisher, Senior Financial Analyst, HHS
  System Budget and Fiscal Policy
• Genie DeKneef, Director, Technology Analysis,
  Development Support, Office of Inspector
  General (OIG)
• Housekeeping Items

3
HHSC Procurement Roles

• ECPS- Responsible for procurement activity
• HUB- Responsible for HUB activity
• Program- Responsible for project scope,
  requirements, performance, results, contract
  management/monitoring
• Legal- Questions/answers and legal activity

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Vendor Conference Overview

• Procurement Activities
• HUB Items
• RFP Overview
• Questions Submittal
• Break
• Preliminary Responses to Questions
• Closing Comments

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• Procurement Activities
• Questions Answers
• Sole Contact, Katherine Smith, ECPS
• Procurement Schedule
• Solicitation Access
• http//www.hhsc.state.tx.us/about_hhsc/BusOpp/BO_h
  ome.shtml
• Submission Requirements
• Solicitation Changes
• Screening Evaluation
• Award Information

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HUB Subcontracting Plan(HSP) Requirements
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Agenda Topics

• RFP Section 4.0 Historically Underutilized
  Business
• Participation Requirements
• HUB Subcontracting Plan for the RFP is required
• Self Performance HSP
• HSP Prime Contractor Progress Assessment Report

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RFP Section 4.0 - Historically Underutilized
Business Participation Requirements

• HUB Participation Goals
• Potential Subcontracting Opportunities
• Vendor Intends to Subcontract
• Minority or Women Trade Organizations
• Self Performance
• HSP Changes After Contract Award
• Reporting and Compliance with the HSP

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If HSP is inadequate, response will be rejected
HSP Information Page
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HUB GOALS
Special reminders and instructions
Company Information
HSP Information Page
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HSP Information Page
Subcontracting Declaration
Enter subcontracting opportunities
If more than 20 subcontracting opportunities,
click the link provided to continue adding
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One page for each area subcontracted (listed on
page 1)
HSP Information Page
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List Line and Subcontracting Opportunity
HSP Information Page
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HSP Information Page
Protégé performing the work
Skip to Sections 8 and 10
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HSP Information Page
Professional Services Category
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HSP Information Page
Good Faith Efforts to find/include Texas
Certified HUB Vendors
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HSP Information Page
Contact HUB Trade Organization
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HSP Information Page
Written Notification Requirements
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HSP Information Page
List 3 HUBs Contacted for this
Subcontracting Opportunity
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HSP Information Page
List Subs Selected (HUBs Non-HUBs) for this
Subcontracting Opportunity
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HSP Information Page
Reason why HUB was not selected for this
Subcontracting Opportunity
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Self Performance Explanation
Signature Affirms that True and Correct
Information is Provided
HSP Information Page
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HSP Prime Contractor Progress Assessment Report
ATTACHMENT E

• Required with
• ALL Pay Requests

• List ALL Sub payments
• (HUBs Non-HUBs)

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HSP ASSISTANCE FROM TPASS
HUB Subcontracting Plan (HSP) Forms Step-by-step
instructions and an audio on How to Complete an
HSP is located on the Comptroller of Public
Accounts (CPA) Texas
Procurement and Support Services (TPASS) website
at http//www.cpa.state.tx.us/procurement/prog/
hub/hub-forms/ HUB Subcontracting Plan
Instructional Video Play Windows Media Version
(7.7 MB download) Play Quicktime (mp4) version
(24 MB download) Play Macromedia Flash version
(10.8 MB download) Read Video Transcript (.rtf
file) (160 K download)
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Administrative Services Development HUB Program
Office

• Robert L. Hall, C.P.M.
• Director of Administrative Services
  Development
• - [phone]
• - robert.hall_at_hhsc.state.tx.us
• Carlos A. Balderas
• ASD HUB Administrator
• - [phone]
• - carlos.balderas_at_hhsc.state.tx.us
• Sherice Williams-Patty
• ASD HUB Administrator
• - [phone]
• - sherice.williams-patty_at_hhsc.state.tx.us
• Segundo Sanchez
• ASD Procurement/HUB Team Lead
• - [phone]
• - segundo.sanchez_at_hhsc.state.tx.us

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Medicaid Fraud and Abuse Detection System (MFADS)

• RFP Overview
• Background
• Mission
• Scope of Work
• Performance Goals
• Performance Measures
• Compensation

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Medicaid Fraud and Abuse Detection System (MFADS)

• Procurement Schedule
• RFP Release Date
  October 31, 2008
• Vendor Conference
  November 17, 2008
• Vendor Questions Due
  December 1, 2008
• Letter of Intent Due
  December 1, 2008
• HHSC Posts Responses to Vendor Questions
  December 12, 2008
• Proposals Due
  December 29, 2008
• Respondent Demonstrations/Oral Presentations
  February 12, 2009
• Tentative Award Announcement
  March 16, 2009
• Begin Transition to new MFADS Solution
  May 1, 2009
• Implementation of new MFADS Solution
  September 1, 2009

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Background

• Since 1991, the Texas Health and Human Services
  Commission (HHSC) has overseen and coordinated
  the planning and delivery of health and human
  service programs in Texas. HHSC is established
  in accordance with Texas Government Code Chapter
  531, and is responsible for the oversight of all
  Texas Health and Human Service agencies (HHS
  agencies). HHSCs chief executive officer is
  Albert Hawkins, Executive Commissioner of Health
  and Human Services.

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Background

• This RFP is issued pursuant to Section 531.106 of
  the Texas Government Code. This section requires
  that HHSC use learning or neural network
  technology to identify and deter fraud in the
  Medicaid program and to contract with a private
  or public entity to develop and implement the
  technology.
• The current contract will terminate on August 31,
  2009.

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Mission

• The mission of HHSC in this procurement is to
  improve the early detection of fraud, abuse, and
  waste in the Texas Medicaid program and reduce
  financial loss to the State of Texas. HHSC will
  accomplish this mission by contracting with a
  vendor that is innovative, responsive to the
  needs of HHSC, the Medicaid program, and
  taxpayers, and responsible for discrete,
  measurable results. The contracted vendor will
  develop, implement, operate, maintain and support
  an automated information system that employs
  neural network or learning technology.

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Scope of Work

• The Health and Human Services Commission
  (HHSC) Office of Inspector General (OIG) is
  mandated as addressed in Government Code 531.106
  to identify and deter fraud, waste and abuse in
  the Medicaid program. Currently the MFADS and
  the Surveillance Utilization Review Subsystem
  (SURS) are two distinct systems. HHSC seeks a
  highly advanced single solution to meet the
  requirements and objectives of both these
  systems. Requirements for the SURS are addressed
  in the State Medicaid Manual Chapter 11 section
  11335. The solution must meet and/or exceed all
  federal standards and contain, or exceed all
  functional capabilities required by CMS for
  certification as a SURS. The federal checklist
  for the SUR certification requirements can be
  found at the CMS certification checklists. The
  single solution must be designed, at a minimum,
  to do these critical functions
• Identify and deter suspected fraud, waste and
  abuse across all recipient and provider types,
  claims, programs and payment systems
• Utilize monthly Medicaid data extracts from a
  variety of sources, to produce and monitor data
  driven analyses and patterns of suspect behavior
• Generalize from the previous learning experiences
  and use this experience to identify new fraud,
  abuse, or waste schemes as they appear
• Produce user- friendly reports/tools that
  increase efficiencies and maximize results
• Provide continuously improved detection
  capabilities
• Be flexible to changing state and federal
  requirements necessary for maintenance of the
  integrity and performance of the system.

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Scope of Work

• The vendor will present a strategy that includes
  the following
• Features and detection tools and methods that
  cover all provider types, claims, and payment
  systems
• Detection tools that increase detection by
  increasing the frequency and rate of
  identification of suspects
• Detection tools that greatly reduce the amount of
  manual, pre-investigative research and analysis
  currently required
• Detection tools that increase provider and
  recipient awareness and education of program
  regulations and requirements and
• Detection tools that assist HHSC-OIG in the
  implementation of necessary policy, procedural,
  and claims payment/processing changes that are
  identified as the result of analyzing the data.

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Scope of Work

• The vendors solution must also include
• Targeted Queries (conversion of existing TQs and
  development of new TQs)
• Online Inquiry Requirements
• Output Requirements/Ad hoc reports
• Record Retention
• Federal Certification
• Case Management component
• Hospital Utilization Review and Nursing Facility
  Utilization Review components
• Limited Program/Recipient Utilization Control
  component
• System Operations

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Performance Goals

• HHSC will monitor the performance of the contract
  issued under this
• RFP. All services and deliverables under the
  contract shall be provided
• at an acceptable quality level and in a manner
  consistent with
• acceptable industry standards, custom, and
  practice. Failure to
• produce deliverables in such a manner could
  result in remedies as
• outlined in Section 2.3

35
Financial Approach

• The State has chosen to utilize a FIXED PRICE
  APPROACH to the administrative services included
  in the Medicaid Fraud and Abuse Detection System
  Request for Proposal (MFADS RFP).
• The objective of the Financial Approach is to
  describe the financial components that will
  enable the State to achieve the Mission
  Objectives described in Section 1.5 of the RFP.

36
Financial Approach

• Allowable and non-allowable direct and indirect
  costs, wherever applicable to any payments to the
  successful Vendor, will be governed by the
  principles set forth in the following regulations
  and documents (as they may be amended during the
  term of the contract)
• Title 48 CFR, Chapter 1, Part 31,
  Contract Cost Principles and Procedures.
• Title 48 CFR, Chapter 1, Part 30,
  Cost Accounting Standards
  Administration.
• Title 48 CFR Chapter 99Cost Accounting
  Standards.

37
Financial Approach

• In addition to costs that are unallowable
  pursuant to the above accounting principles, the
  State has deemed some of the allowable costs to
  be specifically unallowable for the contract
  resulting from this RFP. The list of additional
  unallowable costs is included in Section 2.4.2.2
  of the RFP.

38
Financial Approach

• The Vendor must maintain an accounting system
  that provides an audit trail containing
  sufficient financial documentation to allow for
  the reconciliation of billings, reports, and
  financial statements with all general ledger
  accounts and specific business functional areas
  within the applicable components.

39
Financial Approach

• The awarded Vendor must provide authorized
  governmental representatives of HHSC and the
  federal government full access to all financial
  and accounting records related to the performance
  of the resulting contract, including all
  requested subcontractor financial and accounting
  records.

40
Financial Approach

• The Vendor must provide quarterly financial
  statements, including an income statement,
  depicting the Vendors operation under the
  resulting contract no later than the twentieth
  calendar day following the end of the previous
  state fiscal year quarterly period.
• Transition costs to meet the requirements of the
  RFP will be paid on a fixed fee basis.

41
Financial Approach

• Operational costs to meet the requirements of the
  RFP will also be paid on a fixed fee basis. The
  Operational fixed fees will be subject to the
  Retrospective Cost Settlement provisions
  documented in Section 2.4.7.3 of the RFP.
• Operational and/or Transition costs in excess of
  the final fixed price amount(s) included in the
  contract resulting from this RFP will not be paid
  by the State.

42
Financial Approach

• Separate Fixed administrative fees will be
  proposed for each 12 month operational period
  of a resulting contract (and any applicable
  operational period less than 12 months).
• All fees will be paid to the Vendor
  retrospectively.

43
Financial Approach

• Actual expenditures for Pass-Through Items made
  on the States behalf will be paid without
  allocation of any indirect charges (general
  administrative expenses, overhead, etc.) or any
  administrative service fee (profit).
• A complete listing of expenditures designated as
  Pass-Through Items are documents at Section
  2.4.7.2 of the RFP.

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Financial Approach

• Administrative fees paid to the Vendor during
  each Operational Contract Year will consist of
• (i) the Fixed Administrative Fees
• (ii) the Variable Administrative Fees
• (iii) the Administrative Fees for the
  Additional Periodic Activities and
• (iv) the Administrative Fees for the
  Additional Recurring Activities.
• The sum of the four Fee components will be
  referred to as the Fee Ceiling.

45
Financial Approach

• The total maximum cost of the Services and
  Deliverables supplied by the Vendor to HHSC
  during each Operational Contract Year will not
  exceed the lesser of
• (a) the Vendors Fees (Fee Ceiling) or
• (b) the sum of the Allowable Costs incurred by
  the Vendor plus the allowable administrative
  service fee during the subject Operational
  Contract Year.

46
Financial Approach

• On a quarterly basis, the state and the Vendor
  will reconcile the amounts disbursed to the
  Vendor with the Vendors allowable costs plus the
  allowable administrative service fee.
• Additional details related to the Retrospective
  Cost Settlement provision included in the RFP are
  located in Section 2.4.7.3.

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Pricing Overview

• Forms substantially similar to those described in
  the RFP must provide the component costs of the
  Firm Fixed Prices quoted for providing the
  services and deliverables set forth in the MFADS
  RFP.
• Attachment A, Appendix A-1 contains Transitional
  Pricing Schedules,
• Attachment A, Appendix A-2 contains Operational
  Pricing Schedules, and
• Attachment A, Appendix A-3 contains the formal
  Price Summary Sheets.

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Pricing Overview

• The prospective Vendor must structure its pricing
  quotation to allow HHSC a method to map the
  proposed costs for the cost proposal submitted
  back to the Vendors Detailed Work Plan for the
  initial term of the Contract.
• The Vendor must provide separate Transitional
  Costs through the proposed transition period.
• The Vendor must provide the required projected
  monthly costs for the entire operations period.
• The pricing quotations for each specific
  component must agree with the Firm Fixed Prices
  proposed by the Vendor.

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Pricing Overview

• Transition Pricing Schedules
• The prospective Vendors transitional cost
  proposal sheets must include the Key Milestones
  the Vendor must accomplish during the
  Transitional period (Appendix A-1). Key
  Milestones are listed in Section 3.17.3.3 of the
  RFP.

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Pricing Overview

• The prospective Vendors operational cost
  proposal sheets must be delineated by the primary
  business functional areas (functional area) for
  the Operational period(s) (Attachment A, Appendix
  A-2) also listed in Section 3.17.3.3 of the RFP.

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Pricing Overview

• Instructions for completing each schedule are
  included in the RFP.
• Summary forms should be supported by the detailed
  information contained on monthly schedules.
• Amounts shown on the monthly schedules must agree
  with the cumulative amounts shown on the summary
  forms.

52
Pricing Overview

• In addition to paper copies of the Vendors Cost
  Proposal and Price Summary sheets, Vendors must
  submit electronic versions in an MS Excel format.
  
• Any electronic version of the pricing forms must
  contain any and all formulas used to calculate
  pricing information contained on the forms and
  include any and all links to other worksheets /
  forms included in the Vendors Cost Proposal.

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Pricing Overview

• Price Summary Sheet 1 shows the fixed
  administrative fees for the transitional period
  by Key Milestone. The total fixed fees by Key
  Milestone on this sheet must be consistent with
  the detailed Transitional Pricing Schedules in
  Appendix A-1.

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Pricing Overview

• Price Summary Sheet 2 shows the fixed
  administrative fees for each operational period.
  The total fixed fees for each 12 month
  operational period (or portion thereof) must be
  consistent with the more detailed Operational
  Pricing Schedules in Appendix A-2.

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Pricing Overview

• Price Summary Sheet 3 shows the all-inclusive
  hourly labor rates and the proposed fixed annual
  inflator used to show costs associated with
  additional non-recurring and/or periodic
  activities to be performed by the Vendor by
  different types of service categories.
• The maximum fees associated with additional
  non-recurring and/or periodic activities to be
  performed by the Vendor will be based on explicit
  fixed prices proposed for Vendor inputs and the
  actual number of hours worked on the specific
  modification by the Vendors staff and/or the
  staff of a Vendors subcontractor.

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Pricing Overview

• The prospective Vendor must submit a Financial
  Operations Plan that shows how the Vendor will
  fulfill all financial requirements contained in
  the contract resulting from this RFP.

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Pricing Overview

• The cost proposal should include any business,
  economic, legal, programmatic, or practical
  assumptions that underlie the Cost Proposal. HHSC
  reserves the right to accept or reject any
  assumptions.

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Texas Health and Human Services Commission (HHSC)

• Questions Submittal
• Followed by Break

59
Medicaid Fraud and Abuse Detection System (MFADS)

• Non-binding verbal answers to vendor questions
  are provided.
• Binding responses are posted on the procurement
  website by December 12, 2008.

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Closing Comments

• Office of General Counsel
• Collusion
• Conflict of Interest
• Permissible contacts