DHHS, Office of the Secretary, Office of Acquisition Management; Room 443-H, Humphrey Building, 200 Independence Avenue, SW; Washington, D.C. 20201

R -- PERFORM MEDICAL RECORD REVIEW OF APPROXIMATELY 552 RANDOMLY SELECTED BENEFICIARIES TO DETERMINE THE MEDICAL NECESSITY OF PHYSICAL AND OCCUPATIONAL THERAPY SERVICES PROVIDE TO SKILLED NURSING FACILITIES (SNFS) SOL RFP-14-98-HHS-OS DUE 070898 POC Point of Contact -- Debra A. Peters, Contract Specialist, (202) 690-8457 This is a combined synopsis/solicitation for commercial items prepared in accordance with the format 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. This is a request for proposal, RFP-14-98-HHS-OS. This solicitation document and its incorporated provisions are those in effect through Federal Acquisition Circular #97-04. This is a 100% Small Business Set-Aside. The requirement is as follows: BACKGROUND: The Office of Inspector General (OIG) has oversight responsibility for the Medicare program and, as such, must determine that the program is operating as freely as possible from fraud, waste, and abuse. Within the OIG, the Office of Evaluation and Inspections (OEI) conducts program inspections to assure the effectiveness of Department controls placed on Medicare and affected parties. Program inspections are short-term studies that provide the Secretary, Inspector General, Congress and program managers with quick, up-to-date information on the operational efficiency, impact and vulnerability of Department programs. Based on inspections findings, recommendations for program and management improvements are developed, presented and tracked for agency follow-up actions. STATEMENT OF WORK: The Medicare benefit covers physical and occupational therapy provided in skilled nursing facilities (SNFs) under Part A and Part B. Coverage guidelines state that all therapy services (1) must require the skills of a qualified therapist, (2) must be reasonable and necessary and specific and effective treatment for the condition, (3) must be dictated by a written treatment plan and (4) must be ordered by a physician. The treatment plan must include specific and measurable functional goals along with a reasonable estimate of when those goals will be attained. It should describe the specific therapeutic services (modalities) that will be utilized, the frequency of visits, andthe duration of services. Therapists also should document why therapy is medically necessary. While therapies are generally expected to result in the full or partial restoration of function, this is not required as long as "the services are reasonable effective treatment for the patient's condition." Most SNFs provide therapy services "under arrangement." Under arrangement means that SNFs contract with therapy service providers who bill the SNF for services. The SNFs then submit claims to Medicare on behalf of the therapy provider. The billed amount typically includes a markup for SNF overhead. Historically, fiscal intermediaries have reimbursed services billed under arrangement on a cost basis. The Balanced Budget Act of 1997, however significantly changes how SNFs will be reimbursed for physical and occupational therapy. For Part A beneficiaries, it requires that HCFA implement a prospective payment system for SNFs that incorporates therapy services, to be phased in over several years. The HCFA also will implement a $1,500 annual cap on therapy services for Part B beneficiaries, whether or not they reside in SNFs. In addition, the legislation requires that all Part B ancillary services provided to SNF residents be billed to Medicare by the SNFs under a consolidated billing program. Prospective payment rates Part B ancillary service caps, and other provisions may be based on or adjusted using historical cost data. Historical data, however, may not be an appropriate cost measure. In recent years, charges and claims for physical and occupational therapy have increased significantly. In 1996, SNFs charged approximately $6.7 billion for physical and occupational therapy services, over 60 percent increase from 1994. Recent studies suggest that such increases may be a result of weaknesses in HCFA's oversight of therapy services. One GAO report, "Medicare: Tighter Rules Needed to Curtail Overcharges for Therapy in Nursing Homes," starts that it was impossible to determine how much time a therapist spent with a patientby reviewing claims. As a result, it is difficult to determine whether Medicare is being over billed. An OEI probe inspection of California SNFs found unnecessary at five of six SNFs. At one facility, more that 80 percent of the therapy services were medically unnecessary. The purpose of this contract is to conduct a national medical review that will assess the medical necessity of physical and occupational therapy services provided to SNF patients. The results of the review will be used to quantify overpayments for therapy services and to develop baseline data that can be used to assess the impact of the Balanced Budget Act. SCOPE OF WORK: The contractor will provide one occupational therapist and one physical therapist to conduct on-site reviews of beneficiary medical records and therapy ledgers in SNFs. The objective of the review is to determine the medical necessity of physical and occupational therapy services provided to SNF patients. The therapists will review the records of approximately 552 randomly selected beneficiaries in approximately 24 randomly selected SNFs in the continental United States. The OEI will design a sampling plan and will select the sample of SNFs and beneficiaries. The SNFs will be selected from geographic clusters to minimize travel time and distance. The OEI will make all travel arrangements for the therapists and will pay for the required travel expenses. Travel dates will be negotiated between OEI and the contractor, and expenses will be limited to Federal per diem guidelines. Depending on the completeness and status of the beneficiaries' records, the therapists are expected to determine if (1) the patient is a good candidate for physical and/or occupational therapy, (2) the condition warranting the therapy is documented in the records (3) the services are based on medical need, (4) the services were ordered by a physician, (5) the plan of treatment is appropriate, (6) the modalities and frequency and duration of treatment are appropriate and clearly delineated, (7) the appropriate therapy staff perform the services, (8) the records clearly document the patient's progress, (9) the therapy ceases at the appropriate time or transitions to unskilled services, and (10) the services yield positive outcomes. A physical therapist will be responsible for reviewing the medical records of beneficiaries who received physical therapy. An occupational therapist will be responsible for reviewing the medical records of beneficiaries who received occupational therapy. The therapists will collaborate on patients who received both physical and occupational therapy. The therapists will review therapy ledgers to determine who provided the therapy services (e.g. physical therapist, physical therapy aide, physical therapy assistant), the billing unit (e.g. of time, modality), and the dollar amount charged. In approximately half of the visits, OEI staff will accompany the therapists. In the instances where OEI staff are not present, the therapists will be required to hold an introductory meeting with theadministrator(s) at each SNF to explain the review and what will be required of the SNF during the review. During the meeting, the therapists will identify the beneficiaries for whom medical records and therapy ledgers will be reviewed. The therapists will conduct their review according to a data gathering instrument developed by OEI and the therapists. If a therapist cannot complete a beneficiary review for some reason, the therapist will document that reason. The deliverable schedule is as follows: Task 1 -- Develop data gathering instrument and Database for results is due 2 weeks after contract award. Task 2 -- Complete medical review is due 12 weeks after contract award. Task 3 -- Complete analysis of Medical review and provide database of results is due 14 weeks after contract award. The provision at FAR 52.212-1, Instructions to Offerors-Commercial, applies to this acquisition. Submissions shall consist of a pricing proposal that fully details all of the cost to perform the medical record review; and a technical proposal consisting of a cover sheet on letterhead stationary listing the RFP being responded to, the offeror's name, location, and telephone/fax numbers, a statement indicating understanding of the requirements and the ability to comply with the time frames as previously stated, a resume of proposed professional personnel, including any relevant past and/or current experience, education, or training, along with statements of availability, and samples of similar report documents which the offeror has drafted and which have been issued. The Government will evaluate proposals using a tradeoff process. Separate technical and business management/cost/price evaluations will be performed. The technical evaluation will be conducted in accordance with the weighted technical evaluation criteria set forth below and a numerical score (points) assigned to each proposal. Cost proposals will be evaluated to assess the realism of the proposed cost/price and to determine the probable cost to the Government. The relationship of these two will be assessed to determine which proposal represents the best value to the Government, but be advised that technical capability is considered dominant in source selection. To be selected for award, however, a proposal must be fairly and reasonably priced. Technical proposals should address this requirement in sufficient detail that the following criteria can be used to evaluate submissions: Technical Evaluation Criteria -- (1) Offeror shall demonstrate the ability to supply one physical therapists and one occupational therapist, each of whom must be credentialed or licensed in their specialities, must have previous clinical experience and be members of their respective professional associations (20 points); (2) Offeror must demonstrate that both therapists have (a) demonstrated and applied knowledge of Medicare purposes, coverage, utilization, and reimbursement regulations, policies and guidelines for their particular areas of expertise (i.e. physical and occupational therapy) and (b) at least five years of medical review experience, including medical reviews conducted (i) on- site and off-site, (ii) to determine medical necessity (iii) for SNF's patients, (iv) under contract to several physical intermediaries, and (v) in several states and localities (40 points); (3) Offeror must demonstrate that both therapists are certified case managers for a payer or have five years of demonstrated equivalent experience (15 points). Total: 75 points for technical. As a separate part of the technical proposal, offerors include past performance information on three of the most recent, similar reviews done including company/agency name and telephone and FAX numbers for a contact person. Total: 25 points for past performance. Offerors must include a completed copy of the provisions at FAR 52.212-3, Offeror Representations and Certifications-Commercial Item, with their offers. The clause at FAR 52.212-4 Contract Terms and Conditions-Commercial Items, applies to this acquisition. Any clauses or provisions referenced in this notice can be accessed through the Internet address that follows: http://www.gsa.gov/far/90/html/52-000.html/. Offers must contain one original and two copies of both the technical and cost proposals and are due by July 8, 1998 by 4:00 PM EST, at the following location: Department of Health and Human Services, OS/Office of Acquisitions Management, Room 443-H Humphrey Building, 200 Independence Ave., S.W. Washington, D.C. 20201, Attn: Debra A. Peters. The contact point shall be Ms. Debra A. Peters, 202-690-8457. Amendments to this solicitation, if any, shall also be published as Commerce Business Daily synopsis. (0169)

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