Sources Sought Notice – R– Actuarial Support Service

Notice Type: Sources Sought Notice

Posted Date: 20-MAR-13

Office Address: U.S. Department of Veterans Affairs;Strategic Acquisition Center;10300 Spotsylvania Ave;Fredericksburg VA 22408

Subject: R-- Actuarial Support Service

Classification Code: R - Professional, administrative, and management support services

Solicitation Number: VA798S13I0079

Contact: Clifford SnipeContract Specialist (540) 479-8450 x248 mailto:[email protected] [Contract Specialist]

Description: Department of Veterans Affairs

VA Strategic Acquisition Center

VA Strategic Acquisition Center

The Department of Veterans Affairs Strategic Acquisition Center (SAC) is issuing this sources sought announcement as a means of conducting market research to identify parties having an interest in and the resources to support this requirement for Actuarial Support Services. The result of this market research will contribute to determining the method of procurement. The applicable North American Industry Classification System (NAICS) code assigned to this procurement is 524298. The Product Service Code is R408.

This notice is for planning purposes and a solicitation is not available at this time. This request for capability information does not constitute a request for proposals, quotes, or bids. Submission of any information in response to this market survey is voluntary and the Government assumes no financial responsibility for any cost incurred. This announcement is to gain knowledge of potential qualified sources relative to NACIS 524298. Responses will be used by the Government to make appropriate acquisition decisions.

Federal Supply Schedule holders, Service-Disabled Veteran Owned Small Business, Veteran Owned Small Business, HUB-Zone Small Business, Small Disadvantaged Business, and Women-Owned Small Business, are encouraged to respond.

If your organization has the potential capacity to perform/supply this service, please provide the following information: 1) Organization name, address, email address, Web site address, telephone number, size and type of ownership for the organization, small business status; and 2) Tailored capability statements addressing the particulars of this effort, with appropriate documentation supporting claims of organizational and staff capability. Capability package should show availability or access to health care data at highly detailed level, previous experience as a prime contractor for actuarial support service, and adequate staff to support the same or similar large projects that spans multiple years. Please limit your response package to no more than 15 pages. If significant subcontracting or teaming is anticipated in order to deliver technical capability, organizations should address the administrative and management structure of such arrangements.

The government will evaluate market information to ascertain potential market capacity to 1) provide the commodity/service consistent in scope and scale with those described in this notice and otherwise anticipated; 2) secure and apply the full range of corporate financial, human capital, and technical resources required to successfully perform similar requirements; 3) implement a successful project management plan that includes: compliance with delivery schedules; and meeting the rigid listed specifications.

Background - In October 1996, Congress enacted the Veterans' Health Care Eligibility Reform Act of 1996, Public Law 104-262. Eligibility Reform transformed the VA health care system from an episodic, inpatient care provider into a comprehensive health care provider and expanded eligibility for health care to all Veterans. To manage resources, the law required VA to implement a priority based enrollment system and to annually assess the resources required to provide care to enrolled Veterans. In 1998, the Veterans Health Administration (VHA) Office of the Assistant Deputy Under Secretary for Health for Policy and Planning (ADUSH/PP) partnered with an actuarial consulting firm to develop the VA Enrollee Health Care Projection Model (EHCPM) to project Veteran demand for VA health care.

The development of the EHCPM requires an extensive collaborative effort between VA and its actuarial consultant. The actuarial consultant provides actuarial and analytical expertise and access to leading experts on health care trends, management efficiencies, and the broader health care environment. ADUSH/PP leads EHCPM development and enhancements, collaborates with VA program offices and outside organizations to support the EHCPM, and communicates with stakeholders on the EHCPM methodology and projections. VA program offices, field staff, and research staff provide expertise on the Veteran enrollee population, VA programs and initiatives, and the VA health care system.

The EHCPM is an actuarial model for projecting Veteran enrollment and demand for VA health care for 20 years into the future. The projections and supporting analyses are central in the development of the VA medical care budget, strategic, capital, and workforce planning, and policy analysis. VA is dependent on the EHCPM projections to support the development of approximately 92 percent of the VA medical care budget. The ADUSH/PP and its actuarial consultants use the EHCPM to provide insight on Veteran demand for VA health care to VA, the Office of Management and Budget, Congress, the Government Accountability Office, Congressional Budget Office, Veteran Service Organizations, and other stakeholders.

For each of the 20 projection years, the EHCPM projects the number of Veterans expected to be enrolled in a geographic area, their total health care needs, and the portion of that care they are expected to receive in VA versus from other health care providers. The expenditure projections that support the VA health care budget request are based on the anticipated costs associated with the projected utilization of services (not projected numbers of patients). A key function of the EHCPM is the ability to modify the underlying assumptions in order to produce projections results for multiple scenarios assuming any of the underlying assumptions change over the 20-year projection period.

The EHCPM currently projects utilization for 81 health care service categories, including long-term care services. Generally, the services VA provides that are comparable to services provided in the private sector are modeled using private sector-based utilization benchmarks. Services that are unique to VA (e.g., blind rehabilitation) or services where VA's practice pattern differs significantly from the private sector (e.g., prosthetics) are modeled using VA experienced-based utilization benchmarks.

The EHCPM accounts for the impact of the following attributes when projecting Veteran enrollment and use of VA health care services:

" Enrollee age, gender, morbidity, and geographic migration patterns

" Enrollee reliance on VA health care versus other health care providers

" Enrollee income, local unemployment rates, and travel distance to VA facilities

" Enrollee transition between enrollment priorities, e.g., movement into service connected priorities and transitions due to changes in income

" Unique utilization patterns of various population cohorts, such as females, new enrollees, specific age cohorts, and veterans of Operation Enduring Freedom, Operation Iraqi Freedom, and Operation New Dawn (OEF/OIF/OND).

" New policies, regulations, and legislation and changes in the broader environment, such as the implementation of the Medicare drug benefit

" VA health care initiatives, such as the mental health capacity improvement initiative

" A continually evolving VA health care system, e.g., quality and efficiency initiatives

" Future changes in health care practice and technology.

The EHCPM has evolved into a very complex health actuarial model to account for all of the known drivers of Veteran demand for VA health care. Projections are developed at a very detailed level-by 13 enrollment priorities (1a, 1b, 2, 3, 4, 5, 6, 7a, c, 8a, b, c, d), two genders, and 14 five-year age bands. Geographically, projections are developed for sectors, which consist of one or more counties. In addition, projections are developed separately for enrollees who used VA prior to Eligibility Reform, for OEF/OIF/OND veterans, and for female Veterans.

The EHCPM is developed using VA actual enrollment, utilization, unit cost, and expenditure data, private sector health care utilization data, nationally recognized actuarial data sets, VA/Medicare enrollee level data match, and quantitative market survey data (e.g., VHA's Survey of Veteran Enrollees). The EHCPM is supported by in-depth analyses of Veteran enrollment rates, enrollee mortality, morbidity, geographic migration, transition among enrollment priorities, reliance on VA versus other health care providers, and assessments of the impacts of drive time, unemployment rates, and income on demand for VA health care. As an example of the complexity of the EHCPM, over 150,000 reliance factors that vary by demographic and geographic detail are used in each of the 20 projection years, and these factors vary by projection year. In addition, stakeholders require that the EHCPM separately quantify the impact of the key drivers of demand for VA health care on enrollment, utilization, and expenditures. Therefore, the factors that drive VA health care demand must be analyzed and input into the EHCPM separately.

The VA health care system and the broader environment are continually changing, and the enrollment, utilization, and expenditure projections must reflect the impact of these changes. This requires that the ADUSH/PP and its actuarial consultants work closely with VA program offices, field staff, and researchers to incorporate their vision for the future delivery of health care services (Patient Aligned Care Team or PACT), the impact of health care initiatives (mental health), the impact of changes in VA's infrastructure, and assess and incorporate the impact of proposed policies (cost sharing), legislation, and regulations (Affordable Care Act), and external events (economic recession) on the VA health care system.

A key challenge in modeling for the Veteran enrollee population is that enrollees have many other options for health care coverage (private insurance, TRICARE, Medicare, Medicaid, etc.). As a result, most enrollees only receive a portion of the total health care they need through the VA health care system. For example, enrollees only choose to receive approximately 20 percent of all of the inpatient care they need from VA. As a result, VA's internal data sources cannot be exclusively used to project total health care needs of the enrolled Veteran population. VA must understand enrollees' total health care needs because many internal and external factors can change enrollees' reliance on VA health care. For services VA provides that are comparable to the private sector, the EHCPM currently utilizes the incumbent's health care benchmarks as a basis to project enrollees' total health care demand.

Description of Work - To support efforts to understand and project Veteran demand for VA health care, VA requires a health care actuarial consulting firm as prime vendor to provide actuarial consulting, modeling, and analytical services. This will be a five-year contract with a base year plus four option periods.

VA requires a wide range of health care actuarial expertise and experience in areas such as morbidity-risk scoring, population and health status assessments, dual or triple eligible populations, U.S. health care trends, health policy analysis, and actuarial modeling capabilities dynamic enough to project utilization for strategic planning at the medical facility-level and at a more global level for budget formulation. Historically, VA has required a significant volume of consulting hours to meet the needs of stakeholders; however, the volume of hours required is not consistent throughout the year.

A high-level description of the requirements follows. These tasks will require extensive collaboration with VA and its stakeholders. This collaboration will be lead by the ADUSH/PP staff.

" Actuarial consulting, modeling, and analytical services to assess the impact of an evolving VA health care system and broader environment on Veteran demand for VA health care.

Tasks are generally defined and accomplished with internal or external workgroups led by ADUSH/PP staff. VA and VHA staff that have clinical and programmatic expertise in the task area provide insight into the VA health care system, data, policies, and programmatic guidance. The Contractor will provide the necessary volume of staff with the appropriate technical and analytical expertise to serve on and assist the workgroup. Together, the workgroup will assess the potential impact on VA and develop assumptions for input into the EHCPM. A significant volume of the tasks completed each year and the staff mix required are not known in advance.

" Maintain, enhance, and annually update the EHCPM with new data from the most recently completed fiscal year (base year) and other newly available data, update supporting analyses, integrate new or updated assumptions and enhanced methodology, and produce Veteran, enrollment, utilization, and expenditure projections for multiple scenarios assuming any or all of the underlying assumptions change over the 20-year projection period.

The annual EHCPM update process begins in June and ends the following April. The enhancements required are developed collaboratively with stakeholders during the update process. The specifics and the number of EHCPM projection scenarios that VA will require are not known in advance.

The EHCPM consists of four main component projection models. The methodology, supporting analyses, and assumptions for the 2012 EHCPM are documented in the 2012 VA Enrollee Health Care Projection Model Documentation and Analysis Report, September 2012.

" Veteran and enrollment projection model

" Utilization projection model based on private sector utilization benchmarks

" Utilization projection model based on VA experience based utilization benchmarks

" Unit cost projection model

The EHCPM has evolved over the past twelve years into a complex model designed to meet stakeholders' needs. The Contractor will assume responsibility for maintaining and updating EHCPM as currently structured. The EHCPM will continue to evolve from its current state to meet stakeholders' needs, and the Contractor will be a key partner with VA in defining how the EHCPM evolves to meet those needs. VA will provide the necessary data, documentation of the methodology and assumptions, and the SAS code that constitutes the EHCPM in its current state.

Contractors will need to propose a comparable methodology or benchmarks for the utilization projection model based on private sector utilization benchmarks. This methodology must meet the objective of projecting Veteran enrollees' total demand for health care services and the portion of that demand that enrollees will receive in VA for services modeled using this model at the level of detail identified in the 2012 VA Enrollee Health Care Projection Model Documentation and Analysis Report, September 2012. In addition, the factors that drive utilization of VA health care services must be analyzed and input into the EHCPM separately.

Responses to this notice shall be e-mailed or faxed to Clifford Snipe, Contract Specialist, FAX 540 479-8450; e-mail address: [email protected]. Telephone responses will not be accepted. Responses must be received in writing no later than 3:00 p.m. ESTMarch 26, 2013. Responses should clearly state their ability to provide actuarial consulting services and maintain the VA Enrollee Health Care Projection Model. If a solicitation is issued, it will be announced at a later date, and all interested parties must respond to that solicitation announcement separately from their response to this announcement.

Link/URL: https://www.fbo.gov/notices/a3ec49122fb17efb687142fe88d8f56d