Single Source Procurement: New Born Screening - Actuarial and Consulting Services

Pursuant to New York State Finance Law § 163.10(b), The New York State Department of Health is presenting the following summary of relevant circumstances, and material and substantial reasons why a competitive procurement was not feasible.

The New York State Department of Health (DOH), Office of Health Insurance Programs (OHIP), Division of Finance and Rate Setting (DFRS), Requested and received approval of a Contract Reporter Exemption Request to amend the current contract C025673 with Mercer Health and Benefits, LLC (Mercer). This amendment is required to fund actuarial support, technical assistance, and consulting services for activities undertaken by DOH. Payment for these services delivered in managed care programs will be on a capitated basis, and these rates should be calculated by applying methodologies and standards consistent with those used for the State's existing managed care programs to ensure compliance with all State and Federal laws, for which DOH has oversight responsibilities.

DOH is the Single State Agency for the administration of the NYS Medicaid Program, and the existing DOH contract C025673 is the contract instrument for all actuarial and consulting services for the State's managed care programs. Within DOH, the Division of Health Plan Contracting and Oversight has responsibility for oversight of all managed care programs. The Division of Finance and Rate Setting is responsible for all financial and rate-setting activities and for ensuring the adequacy, reasonableness and cost effectiveness of managed care rates for designated programs. As a result, DOH holds the single actuarial contract and utilizes a consistent capitated rate setting approach to ensure consistency across all plans as well as to ensure such rates satisfy Federal Centers for Medicare and Medicaid Services (CMS).

Mercer is the current actuarial serves contractor for all DOH rate setting activities specific to managed care programs and has the expertise in actuarial support, technical assistance, and consulting related to NYS managed care programs that is required to assist DOH, OMH, and OASAS in implementing these MRT recommendations within the required time frames. The use of Mercer ensures that consistent methodologies, standards and approaches are applied when setting rates under the NYS managed care program. Furthermore, as the single state agency for Medicaid, DOH is responsible for regulating and certifying all managed care plans under Article 44 and 49 of the public health law including new plans that are developed to meet the needs of special populations. This Single State Agency role is critical to ensure compliance with all State and Federal laws including the Balanced Budget Act and CFR Part 438.

Mercer is currently providing actuarial and consulting services for DOH under C025673 for its existing managed care programs and as such, they have the unique expertise to assist DOH, OMH, and OASAS with benefit plan design, contract development, oversight systems, and other issues related to the implementation of managed care, including supporting rate and development and certification standards developed by the State for said programs, and ensuring rates are actuarially sound and meet requirements of the Balanced Budget Act or any successor federal requirements. Other services provided by Mercer include: policy support and expert facilitation for state decision making; modeling of financial impact of the New York State redesign; recommending and modeling payment approaches including capitation, risk corridors, stop loss and payment incentives; participation at managed care stakeholder meetings; and designing financial models and procurement for the managed care plans. These activities are all of similar scope for the actuarial/consulting services currently provided by Mercer under this contract.

Mercer is uniquely qualified to ensure consistency in approach and that the NYS managed care programs are in full compliance with Federal and State standards and it would be impractical to utilize the services of any other potential provider at this juncture. DOH plans to competitively rebid the contract for actuarial service once the current contract expires in 2016.

Procurement / Program Name	Actuarial and Consulting Service
Contractor Name(s)	Mercer Health and Benefits LLC
Contract Period	10/28/2009 – 12/31/2016
Contract Number(s)	C025673