Informational Requirements Associated with Organizational Conflicts of Interest in Healthcare Related Contracts

Guest Author: Rodney L. Benson, Attorney, Buchanan Ingersoll & Rooney PC

In recent solicitations, the Centers for Medicare and Medicaid Services (CMS) has required offerors to provide an increased amount of information for CMS’s evaluation of potential organizational conflicts of interest (OCI). For many years, CMS has been extremely vigilant in identifying and resolving potential OCIs. The agency has a myriad of statutory contracting authorities. Pursuant to these authorities, CMS utilizes contractor services to perform virtually all major functions and activities, including paying Medicare claims, identifying and investigating fraud and abuse and auditing and recovering improper payments. Because contractors act in a fiduciary capacity for the United States, and otherwise perform functions that require that they be free of financial interests that might impair their objectivity, CMS has developed specific OCI clauses and requirements for its contracts.

 

In the past, CMS required offerors to submit a Conflicts of Interest Certificate that included a description of all business or contractual relationships or activities that the offeror’s compliance officer viewed as a conflict of interest. For some requirements, CMS requested additional information such as a description of all Medicare contracts held by the offeror. Over the past several months, CMS has expanded the OCI disclosure requirements in its solicitations to include a description of all healthcare related contracts, both government (local, state or federal) and nongovernment, held by the offeror or any affiliated organizations.

 

For many large contractors, with a diverse portfolio of government and commercial healthcare contracts, providing CMS with information regarding all healthcare contracts can be very challenging. But, rather than relying on an offeror’s identification of financial interests that constitute potential OCIs, CMS is independently reviewing and considering offerors’ contractual relationships to ensure that no unmitigated conflicts of interest exist at the time of contract award.

 

In Diversified Collection Services, Inc., B-406598.3, B-406958.4, the Government Accountability Office (GAO) GAO denied a protest against CMS’s award of a task order under the General Services Administration’s Financial and Business Solutions Federal Supply Schedule for the services of a Medicare Secondary Payer Recovery Audit Contractor. The protester alleged that CMS unreasonably concluded that the awardee did not have an unmitigated OCI. GAO stated that it reviews a contracting officer’s consideration of OCI for reasonableness and where an agency has given meaningful consideration to whether a significant conflict of interests exists, GAO will not substitute its judgment for the agency’s absent clear evidence that the agency’s conclusion is unreasonable.

 

The Diversified decision recognizes that an agency can consider and resolve OCI issues that are identified and raised after contract award and the filing of a bid protest. However, it is in an agency’s interest to have identified, investigated and resolved all OCI’s before contract award. CMS has developed a record of success on protests involving OCIs because of the thoroughness of the record it develops in support of its OCI determinations. Therefore, companies that seek to compete for the award of CMS contracts should be prepared to make a full disclosure of all of their healthcare contracts.

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