REQUEST FOR PROPOSALS FOR Preferred Provider … · preferred provider organizations (ppo) and...

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REQUEST FOR PROPOSALS FOR

Preferred Provider Organizations (PPO) AND

Comprehensive Medical Bill Review Services (MBR)

ISSUING OFFICE

DEPARTMENT OF GENERAL SERVICES BUREAU OF PROCUREMENT

FOR DEPARTMENT OF LABOR AND INDUSTRY

STATE WORKERS’ INSURANCE FUND

RFP NUMBER CN00020848

DATE OF ISSUANCE

July 21, 2006

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REQUEST FOR PROPOSALS FOR

PREFERRED PROVIDER ORGANIZATIONS (PPO) AND

COMPREHENSIVE MEDICAL BILL REVIEW SERVICES (MBR)

TABLE OF CONTENTS CALENDAR OF EVENTS Page iii Part I—GENERAL INFORMATION Page 1 Part II—PROPOSAL REQUIREMENTS Page 9 Part III—CRITERIA FOR SELECTION Page 17 Part IV—WORK STATEMENT 0 REVISED - CLICK HERE TO VIEW/DOWNLOAD APPENDICES AND COST PROPOSAL APPENDIX A, STANDARD CONTRACT TERMS AND CONDITIONS APPENDIX B, DOMESTIC WORKFORCE UTILIZATION CERTIFICATION APPENDIX C, COST PROPOSAL APPENDIX D, LOCATIONS AND NUMBER OF POLICY HOLDERS APPENDIX E, PAYROLL CLASS CODES APPENDIX F, PART A AND PART B BILL DATA APPENDIX G, CONFIDENTIALITY CERTIFICATION APPENDIX H, INTERFACE – SWIF TO OFFEROR APPENDIX I, INTERFACE – OFFEROR TO SWIF APPENDIX J, IMAGE INTERFACE APPENDIX, K, PREMIUM BANDS APPENDIX L, MEDICAL BILL WORKFLOW

http://www.dgsweb.state.pa.us/comod/bids/CN00020848/items.xls

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CALENDAR OF EVENTS The Commonwealth will make every effort to adhere to the following schedule:

Activity Responsibility Date

Deadline to submit Questions via email to [email protected]

Potential Offerors 08/04/06

Preproposal Conference— Forum Place, 555 Walnut Street, 6th Floor, Conference Rm #9, Harrisburg, PA 17101.

Issuing Office/Potential

Offerors 08/09/06

Answers to Potential Offeror questions posted to the DGS website (http://www.dgsweb.state.pa.us/comod/main.asp) no later than this date.

Issuing Office 08/15/06

Please monitor website for all communications regarding the RFP.

Potential Offerors Ongoing

Sealed proposal must be received by the Issuing Office at Dept. of General Services, Forum Place, 6th Floor, 555 Walnut Street, Harrisburg, PA 17101.

Offerors 09/06/06 by 1:30 p.m.

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PART I

GENERAL INFORMATION I-1. Purpose. This request for proposals (“RFP”) provides to those interested in submitting proposals for the subject procurement (“Offerors”) sufficient information to enable them to prepare and submit proposals for the State Workers’ Insurance Fund’s (“SWIF”) consideration on behalf of the Commonwealth of Pennsylvania (“Commonwealth”) to satisfy a need for Provider Panels, Preferred Provider Organizations (“PPOs”) and Discounts extended by providers which render medical services to injured employees of SWIF policyholders and for Medical Bill Review Services. I-2. Issuing Office. The Department of General Services (“Issuing Office”) has issued this RFP on behalf of the Commonwealth and SWIF. The sole point of contact in the Commonwealth for this RFP shall be Jan Blocker, 6th Floor, 555 Walnut Street, Harrisburg, PA 17101, [email protected], the Issuing Officer for this RFP. Please refer all inquiries to the Issuing Officer. I-3. Scope. This RFP contains instructions governing the requested proposals, including the requirements for the information and materials to be included; a description of the services to be provided; requirements which Offerors must meet to be eligible for consideration; general evaluation criteria; and other requirements specific to this RFP. I-4. Problem Statement. To contain the cost of health care services provided to its claimants SWIF is seeking to increase the use of provider panels, as permitted by 77 P.S. 531 to utilize PPOs and to obtain discounted prices for health care services rendered to SWIF claimants by health care providers which are not currently part of a panel or PPO. SWIF is also seeking to procure comprehensive Medical Bill Review Services to assist in reviewing and paying bills submitted for medical services provided to its claimants. Additional detail is provided in Part IV of this RFP. I-5. Type of Contract. It is proposed that if the Issuing Office enters into a contract as a result of this RFP, it will be a fee for service and an incentive contract containing the Standard Contract Terms and Conditions as shown in Appendix A and available at http:/www.dgs.state.pa.us/dgs/lib/dgs/forms/comod/procurementforms/std274doc. The Issuing Office, in its sole discretion, may undertake negotiations with Offerors whose proposals, in the judgment of the Issuing Office, show them to be qualified, responsible and capable of performing the Project. Further, in its sole discretion the Issuing Office reserves its right to award all of the services sought by this RFP or part of the services sought by this RFP. I-6. Rejection of Proposals. The Issuing Office reserves the right, in its sole and complete discretion, to reject any and all proposal received in response to this RFP. I-7. Incurring Costs. The Issuing Office is not liable for any costs the Offeror incurs in preparation and submission of its proposal, in participating in the RFP process or in anticipation of award of the contract.

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I-8. Preproposal Conference. A pre-proposal conference will be held as specified in the Calendar of Events. The purpose of this conference is to provide opportunity for clarification of the RFP. It is intended to be an informative dialog regarding the statement of work. Offerors should forward all questions to the Issuing Office in accordance with Part I, Section I-9 to ensure adequate time for analysis before the Issuing Office provides an answer. Offerors may also ask questions at the conference. In view of the limited facilities available for the conference, Offerors should limit their representation to two (2) individuals per Offeror. The conference is for information only. Any answers furnished during the conference will not be official until they have been verified, in writing, by the Issuing Office. All questions and written answers will be posted on the Department of General Services’ (DGS) website as an addendum to, and shall become part of, this RFP. Attendance is strongly encouraged. I-9. Questions & Answers. If an Offeror has any questions regarding this RFP, the Offeror must submit the questions by email (with the subject line “RFP DGS-CN-00020848 Question”) to the Issuing Officer named in Part I, Section I-2 of the RFP. If the Offeror has questions, they must be submitted via email no later than the date indicated on the Calendar of Events. The Offeror shall not attempt to contact the Issuing Officer by any other means. The Issuing Officer shall post the answers to the questions on the DGS website by the date stated on the Calendar of Events. All questions and responses as posted on the DGS website are considered an addendum to, and part of, this RFP in accordance with RFP Part I, Section I-10. Each Offeror shall be responsible to monitor the DGS website for new or revised RFP information. The Issuing Office shall not be bound by any verbal information nor shall it be bound by any written information that is not either contained within the RFP or formally issued as an addendum by the Issuing Office. The Issuing Office does not consider questions to be a protest of the specifications or of the solicitation. The required protest process for Commonwealth procurements is described on the DGS website. I-10. Addenda to the RFP. If the Issuing Office deems it necessary to revise any part of this RFP before the proposal response date, the Issuing Office will post an addendum to the DGS website at www.dgsweb.state.pa.us/comod/main.asp. It is the Offeror’s responsibility to check the website periodically for any new information or addenda to the RFP. Answers to the questions asked during the Questions & Answers period also will be posted to the website as an addendum to the RFP. I-11. Response Date. To be considered for selection, hard copies of proposals must arrive at the Issuing Office on or before the time and date specified in the RFP Calendar of Events. The Issuing Office will not accept proposals via email or facsimile transmission. Offerors who send proposals by mail or other delivery service should allow sufficient delivery time to ensure timely receipt of their proposals. If, due to inclement weather, natural disaster, or any other cause, the Commonwealth office location to which proposals are to be returned is closed on the proposal response date, the deadline for submission will be automatically extended until the next Commonwealth business day on which the office is open, unless the Issuing Office otherwise

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notifies Offerors. The hour for submission of proposals shall remain the same. The Issuing Office will reject, unopened, any late proposals. I-12. Proposals. To be considered, Offerors should submit a complete response to this RFP, using the format provided in Part II, providing 10 paper copies of the proposal to the Issuing Office. In addition to the paper copies of the proposal, Offerors shall submit two complete and exact copies of the technical proposal on CD-ROM in Microsoft Office or Microsoft Office-compatible format. The Offeror shall make no other distribution of its proposal to any other Offeror or Commonwealth official or Commonwealth consultant. Each proposal page should be numbered for ease of reference. An official authorized to bind the Offeror to its provisions must sign the proposal. For this RFP, the proposal must remain valid for 120 days or until a contract is fully executed. If the Issuing Office selects the Offeror’s proposal for award, the contents of the selected Offeror’s proposal will become, except to the extent the contents are changed through Best and Final Offers or negotiations, contractual obligations. The information in the proposal will become a public record upon contract execution, except as limited by Section 106 (b)(1) of the Commonwealth Procurement Code, 62 Pa. C.S. § 106 (b)(1). Each Offeror submitting a proposal specifically waives any right to withdraw or modify it, except that the Offeror may withdraw its proposal by written notice received at the Issuing Office’s address for proposal delivery prior to the exact hour and date specified for proposal receipt. An Offeror or its authorized representative may withdraw its proposal in person prior to the exact hour and date set for proposal receipt, provided the withdrawing person provides appropriate identification and signs a receipt for the proposal. An Offeror may modify its submitted proposal prior to the exact hour and date set for proposal receipt only by submitting a new sealed proposal or sealed modification that complies with the RFP requirements. I-13. Disadvantaged Business Information. The Issuing Office encourages participation by small disadvantaged businesses as prime contractors, joint ventures and subcontractors/suppliers and by socially disadvantaged businesses as prime contractors. Small Disadvantaged Businesses are small businesses that are owned or controlled by a majority of persons, not limited to members of minority groups, who have been deprived of the opportunity to develop and maintain a competitive position in the economy because of social disadvantages. The term includes:

a. Department of General Services Bureau of Minority and Women Business Opportunities (BMWBO)-certified minority business enterprises (MBEs) and women business enterprises (WBEs) that qualify as small businesses; and

b. United States Small Business Administration-certified small disadvantaged

businesses or 8(a) small disadvantaged business concerns. Small businesses are businesses in the United States that are independently owned, are not dominant in their field of operation, employ no more than 100 persons and earn less than $20 million in gross annual revenues ($25 million in gross annual revenues for those businesses in the information technology sales or service business).

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Socially disadvantaged businesses are businesses in the United States that BMWBO determines are owned or controlled by a majority of persons, not limited to members of minority groups, who are subject to racial or ethnic prejudice or cultural bias, but which do not qualify as small businesses. In order for a business to qualify as “socially disadvantaged,” the Offeror must include in its proposal clear and convincing evidence to establish that the business has personally suffered racial or ethnic prejudice or cultural bias stemming from the business person’s color, ethnic origin or gender. Questions regarding this Program can be directed to:

Department of General Services Bureau of Minority and Women Business Opportunities Room 611, North Office Building Harrisburg, PA 17125 Phone: (717) 787-6708 Fax: (717) 772-0021 Email: [email protected]

Program information and a database of BMWBO-certified minority- and women-owned businesses can be accessed at www.dgs.state.pa.us, DGS Keyword: BMWBO. The federal vendor database can be accessed at http://www.ccr.gov by clicking on Dynamic Small Business Search (certified companies are so indicated). I-14. Information Concerning Small Businesses in Enterprise Zones. The Issuing Office encourages participation by small businesses, whose primary or headquarters facility is physically located in areas the Commonwealth has identified as Designated Enterprise Zones, as prime contractors, joint ventures and subcontractors/suppliers. The definition of headquarters includes, but is not limited to, an office or location that is the administrative center of a business or enterprise where most of the important functions of the business are conducted or concentrated and location where employees are conducting the business of the company on a regular and routine basis so as to contribute to the economic development of the geographical area in which the office or business is geographically located. Small businesses are businesses in the United States that are independently owned, are not dominant in their field of operation, employ no more than 100 persons and earn less than $20 million in gross annual revenues ($25 million in gross annual revenues for those businesses in the information technology sales or service business). There is no database or directory of small businesses located in Designated Enterprise Zones. Information on the location of Designated Enterprise Zones can be obtained by contacting:

Aldona M. Kartorie Center for Community Building PA Department of Community and Economic Development

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4th Floor, Commonwealth Keystone Building 400 North Street Harrisburg, PA 17120-0225 Phone: (717) 720-7409 Fax: (717) 787-4088 Email: [email protected]

I-15. Economy of Preparation. Offerors should prepare proposals simply and economically, providing a straightforward, concise description of the Offeror’s ability to meet the requirements of the RFP that is no longer than 75 pages, excluding exhibits and/or appendices. I-16. Alternate Proposals. The Issuing Office has identified the basic approach to meeting its requirements, allowing Offerors to be creative and propose their best solution to meeting these requirements. The Issuing Office will not accept alternate proposals. I-17. Discussions for Clarification. Offerors may be required to make an oral or written clarification of their proposals to the Issuing Office to ensure thorough mutual understanding and Offeror responsiveness to the solicitation requirements. The Issuing Office will initiate requests for clarification. I-18. Prime Contractor Responsibilities. The contract will require the selected Offeror to assume responsibility for all services offered in its proposal whether it produces them itself or by subcontract. The Issuing Office will consider the selected Offeror to be the sole point of contact with regard to contractual matters. I-19. Proposal Contents. Offerors should not label proposal submissions as confidential or proprietary. The Issuing Office will hold all proposals in confidence and will not reveal or discuss any proposal with competitors for the contract, unless disclosure is required:

a. Under the provisions of any Commonwealth or United States statute or regulation; or

b. By rule or order of any court of competent jurisdiction.

After a contract is executed, however, the successful proposal is considered a public record under the Right-to Know Law, 65 P.S. § 66.1—66.9, and therefore subject to disclosure. The financial capability information submitted under Part II, Section II-6 shall not be disclosed in the final contract. All material submitted with the proposal becomes the property of the Commonwealth of Pennsylvania and may be returned only at the Issuing Office’s option. The Issuing Office, in its sole discretion, may include any person other than competing Offerors on its proposal evaluation committee. The Issuing Office has the right to use any or all ideas presented in any proposal regardless of whether the proposal becomes part of a contract. I-20. Best and Final Offers. The Issuing Office reserves the right to conduct discussions with Offerors for the purpose of obtaining “best and final offers.” To obtain best and final offers from Offerors, the Issuing Office may do one or more of the following:

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a. Enter into pre-selection negotiations, including the use of an online auction;

b. Schedule oral presentations; and

c. Request revised proposals.

The Issuing Office will limit any discussions to responsible Offerors (those that have submitted responsive proposals and possess the capability to fully perform the contract requirements in all respects and the integrity and reliability to assure good faith performance) whose proposals the Issuing Office has determined to be reasonably susceptible of being selected for award. The Criteria for Selection found in Part III, Section III-4, will also be used to evaluate the best and final offers. Price reductions offered through any reverse online auction shall have no effect upon the Offeror’s Technical Submittal. Dollar commitments to Disadvantaged Businesses and Enterprise Zone Small Businesses can be reduced only in the same percentage as the percent reduction in the total price offered through negotiations, including the online auction. I-21. News Releases. Offerors shall not issue news releases, Internet postings, advertisements or any other public communications pertaining to this Project without prior written approval of the Issuing Office, and then only in coordination with the Issuing Office. I-22. Restriction of Contact. From the issue date of this RFP until the Issuing Office selects a proposal for award, the Issuing Officer is the sole point of contact concerning this RFP. Any violation of this condition may be cause for the Issuing Office to reject the offending Offeror’s proposal. If the Issuing Office later discovers that the Offeror has engaged in any violations of this condition, the Issuing Office may reject the offending Offeror’s proposal or rescind its contract award. Offerors must agree not to distribute any part of their proposals beyond the Issuing Office. An Offeror who shares information contained in its proposal with other Commonwealth personnel and/or competing Offeror personnel may be disqualified. I-23. Debriefing Conferences. Offerors whose proposals are not selected will be notified of the name of the selected Offeror and given the opportunity to be debriefed. The Issuing Office will schedule the time and location of the debriefing. The debriefing will not compare the Offeror with other Offerors, other than the position of the Offeror’s proposal in relation to all other Offeror proposals. An Offeror’s exercise of the opportunity to be debriefed does not constitute the filing of a protest. I-24. Issuing Office Participation. Offerors shall provide all services, supplies, facilities, and other support necessary to complete the identified work, except as otherwise provided in this Part I, Section I-24. SWIF will make available certain personnel to assist Offerors in implementing the contract. No space or other type of physical facilities will be made available. I-25. Term of Contract. The term of the contract will commence on the Effective Date and will end after a three (3) year period. The contract will have two (2) additional one year renewal options. Any renewal options will be at the same costs in effect during the third year of the contract, unless the Offeror decreases the prices due to efficiency of operations. The Issuing

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Office will fix the Effective Date after the contract has been fully executed by the selected Offeror and by the Commonwealth and all approvals required by Commonwealth contracting procedures have been obtained. The selected Offeror shall not start the performance of any work prior to the Effective Date of the contract and the Commonwealth shall not be liable to pay the selected Offeror for any service or work performed or expenses incurred before the Effective Date of the contract. I-26. Offeror’s Representations and Authorizations. By submitting its proposal, each Offeror understands, represents, and acknowledges that:

a. All of the Offeror’s information and representations in the proposal are material and important, and the Issuing Office may rely upon the contents of the proposal in awarding the contract. The Commonwealth shall treat any misstatement, omission or misrepresentation as fraudulent concealment of the true facts relating to the Proposal submission, punishable pursuant to 18 Pa. C.S. § 4904.

b. The Offeror has arrived at the prices and amounts in its proposal independently

and without consultation, communication, or agreement with any other Offeror or potential Offeror.

c. The Offeror has not disclosed the price(s), the amount of the proposal, nor the

approximate price(s) or amount(s) of its proposal to any other firm or person who is an Offeror or potential Offeror for this RFP, and the Offeror shall not disclose any of these items on or before the proposal submission deadline specified in the Calendar of Events of this RFP.

d. The Offeror has not attempted, nor will it attempt, to induce any firm or person to

refrain from submitting a proposal on this contract, or to submit a proposal higher than this proposal, or to submit any intentionally high or noncompetitive proposal or other form of complementary proposal.

e. The Offeror makes its proposal in good faith and not pursuant to any agreement or

discussion with, or inducement from, any firm or person to submit a complementary or other noncompetitive proposal.

f. To the best knowledge of the person signing the proposal for the Offeror, the

Offeror, its affiliates, subsidiaries, officers, directors, and employees are not currently under investigation by any governmental agency and have not in the last four years been convicted or found liable for any act prohibited by State or Federal law in any jurisdiction, involving conspiracy or collusion with respect to bidding or proposing on any public contract, except as the Offeror has disclosed in its proposal.

g. To the best of the knowledge of the person signing the proposal for the Offeror

and except as the Offeror has otherwise disclosed in its proposal, the Offeror has no outstanding, delinquent obligations to the Commonwealth including, but not

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limited to, any state tax liability not being contested on appeal or other obligation of the Offeror that is owed to the Commonwealth.

h. The Offeror is not currently under suspension or debarment by the

Commonwealth, any other state or the federal government, and if the Offeror cannot so certify, then it shall submit along with its proposal a written explanation of why it cannot make such certification.

i. The Offeror has not made, under separate contract with the Issuing Office, any

recommendations to the Issuing Office concerning the need for the services described in its proposal or the specifications for the services described in the proposal.

j. Each Offeror, by submitting its proposal, authorizes Commonwealth agencies to

release to the Commonwealth information concerning the Offeror's Pennsylvania taxes, unemployment compensation and workers’ compensation liabilities.

k. Until the selected Offeror receives a fully executed and approved written contract

from the Issuing Office, there is no legal and valid contract, in law or in equity, and the Offeror shall not begin to perform.

I-27. Notification of Selection. The Issuing Office will notify the selected Offeror in writing of its selection for negotiation after the Issuing Office has determined, taking into consideration all of the evaluation factors, the proposal that is the most advantageous to the Issuing Office. I-28. RFP Protest Procedure. The RFP Protest Procedure is on the DGS website at http://www.dgs.state.pa.us A protest by a party not submitting a proposal must be filed within seven days after the protesting party knew or should have known of the facts giving rise to the protest, but no later than the proposal submission deadline specified in the Calendar of Events of the RFP. Offerors may file a protest within seven days after the protesting Offeror knew or should have known of the facts giving rise to the protest, but in no event may an Offeror file a protest later than seven days after the date the notice of award of the contract is posted on the DGS website. The date of filing is the date of receipt of the protest. A protest must be filed in writing with the Issuing Office. I-29. Use of Electronic Versions of this RFP. This RFP is being made available by electronic means. If an Offeror electronically accepts the RFP, the Offeror acknowledges and accepts full responsibility to insure that no changes are made to the RFP. In the event of a conflict between a version of the RFP in the Offeror’s possession and the Issuing Office’s version of the RFP, the Issuing Office’s version shall govern.

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PART II

PROPOSAL REQUIREMENTS

Offerors must submit their proposals in the format, including heading descriptions, outlined below. To be considered, the proposal must respond to all requirements in this part of the RFP. Offerors should provide any other information thought to be relevant, but not applicable to the enumerated categories, as an appendix to the Proposal. All cost data relating to this proposal and all Disadvantaged Business cost data should be kept separate from and not included in the Technical Submittal. Each Proposal shall consist of the following three separately sealed submittals:

1. Technical Submittal, which shall be a response to RFP Part II, Sections II-1 through II-7;

2. Disadvantaged Business Submittal, in response to RFP Part II, Section

II-8; and

3. Cost Submittal, in response to RFP Part II, Section II-9. The Issuing Office reserves the right to request additional information, which, in the Issuing Office’s opinion, is necessary to assure that the Offeror’s competence, number of qualified employees, business organization, and financial resources are adequate to perform according to the RFP. The Issuing Office may make investigations as deemed necessary to determine the ability of the Offeror to perform the Project, and the Offeror shall furnish to the Issuing Office all requested information and data. The Issuing Office reserves the right to reject any proposal if the evidence submitted by, or investigation of, such Offeror fails to satisfy the Issuing Office that such Offeror is properly qualified to carry out the obligations of the RFP and to complete the Project as specified. II-1. Statement of the Problem. State in succinct terms your understanding of the services required by this RFP. II-2. Management Summary. Summarize, in narrative form, the proposed effort and a list of the services you will provide to meet the requirements of this RFP. II-3. Implementation and Execution Plan. Describe in narrative form your technical plan for accomplishing the work. Use the task descriptions in Part IV of this RFP as your reference point. Modifications of the task descriptions are permitted; however, reasons for changes should be fully explained. Indicate the number of person hours allocated to each task. Include a Program Evaluation and Review Technique (PERT) or similar type display, time related, showing each event. If more than one approach is apparent, comment on why you chose this approach.

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II-4. IT Requirements. State in succinct terms your understanding of the IT requirements of this RFP and your plan to meet the requirements. Use the task descriptions in Part IV-5 of this RFP as your reference point. II-5. Offeror and Personnel Qualifications. Describe your experience in providing the services required by this RFP. Include experience in (1) establishing provider panels as permitted under the Pennsylvania Workers’ Compensation Act, 77 P.S. 531, or similar legislation in other states, and your success in encouraging employers to use such panels; (2) establishing and managing preferred provider organizations (PPO’s), or utilizing PPO’s established by a different entity, and your success in marketing these to employers, and their employees, for use in the treatment of services for work-related injuries; (3) in negotiating discounts with health care providers with respect to their charges for services rendered in connection with work-related injuries; (4) providing and maintaining a web-based system to support the services requested in this RFP; and (5) experience in providing comprehensive review and pre-payment services related to medical bills for injured workers submitted to workers’ compensation insurance carriers which are subject to the Pennsylvania Workers’ Compensation Act. Experience shown should be work done by individuals who will be assigned to this project as well as that of your company. Similar experience referred to must be identified by the name of the customer, including the name, address, and telephone number of the responsible official of the customer, company, or agency who may be contacted. Include the number of executive and professional personnel, analysts, auditors, researchers, programmers, consultants, etc., who will be engaged in the work. Show where these personnel will be physically located during the time they are engaged in the Project. For key personnel, which include at least the executive staff, the project administrator, the technical (IT) and marketing staff, include the employee’s name and, through a resume or similar document, the Project personnel’s education and experience with: establishing provider panels, establishing or utilizing PPOs, negotiating discounts with providers, providing IT support for such services and/or providing comprehensive bill review and pre-payment services. Indicate the responsibilities each individual will have in this Project and how long each has been with your company. Identify by name any subcontractors you intend to use and the services they will perform. II-6. Financial Capability. Describe your company’s financial stability and economic capability to perform the contract requirements. Financial documents such as audited financial statements or recent tax returns will be acceptable to the Commonwealth. II-7. Objections and Additions to Standard Contract Terms and Conditions. The Offeror will identify which, if any, of the terms and conditions (contained in Appendix A) it would like to renegotiate and what additional terms and conditions the Offeror would like to add to the standard contract terms and conditions. The Offeror’s failure to make a submission under this paragraph will result in its waiving its right to do so later, but the Issuing Office may consider late objections and requests for additions if to do so, in the Issuing Office’s sole discretion, would be in the best interest of the Commonwealth. The Issuing Office may, in its sole discretion, accept or reject any requested changes to the standard contract terms and conditions.

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The Offeror shall not request changes to the other provisions of the RFP, nor shall the Offeror request to completely substitute its own terms and conditions for Appendix A. All terms and conditions must appear in one integrated contract. The Issuing Office will not accept references to the Offeror’s, or any other, online guides or online terms and conditions contained in any proposal. Regardless of any objections set out in its proposal, the Offeror must submit its proposal, including the cost proposal, based on the terms and conditions set out in Appendix A. The Issuing Office will reject any proposal that is conditioned on the negotiation of terms and conditions other than those set out in Appendix A. II–8. Disadvantaged Business Submittal.

II-8.1. Disadvantaged Business Information. To receive credit for being a Small Disadvantaged Business or a Socially Disadvantaged Business or for entering into a joint venture agreement with a Small Disadvantaged Business or for subcontracting with a Small Disadvantaged Business (including purchasing supplies and/or services through a purchase agreement), an Offeror must include proof of Disadvantaged Business qualification in the Disadvantaged Business Submittal of the proposal, as indicated below:

a. A Small Disadvantaged Businesses certified by BMWBO as an MBE/WBE must

provide a photocopy of their BMWBO certificate.

b. Small Disadvantaged Businesses certified by the U.S. Small Business Administration pursuant to Section 8(a) of the Small Business Act (15 U.S.C. § 636(a)) as an 8(a) or small disadvantaged business must submit proof of U.S. Small Business Administration certification. The owners of such businesses must also submit proof of United States citizenship.

c. All businesses claiming Small Disadvantaged Business status, whether as a result

of BMWBO certification or U.S. Small Business Administration certification as an 8(a) or small disadvantaged business, must attest to the fact that the business has 100 or fewer employees.

d. All businesses claiming Small Disadvantaged Business status, whether as a result

of BMWBO certification or U.S. Small Business Administration certification as an 8(a) or small disadvantaged business, must submit proof that their gross annual revenues are less than $20,000,000 ($25,000,000 for those businesses in the information technology sales or service business). This can be accomplished by including a recent tax return or audited financial statement.

e. All businesses claiming status as a Socially Disadvantaged Business must include

in the Disadvantaged Business Submittal of the proposal clear and convincing evidence to establish that the business has personally suffered racial or ethnic prejudice or cultural bias stemming from the business person’s color, ethnic origin or gender. The submitted evidence of prejudice or bias must:

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1) Be rooted in treatment that the business person has experienced in

American society, not in other countries.

2) Show prejudice or bias that is chronic and substantial, not fleeting or insignificant.

3) Indicate that the business person’s experience with the racial or

ethnic prejudice or cultural bias has negatively affected his or her entry into and/or advancement in the business world.

4) BMWBO shall determine whether the Offeror has established that

a business is socially disadvantaged by clear and convincing evidence.

f. In addition to the above verifications, the Offeror must include in the

Disadvantaged Business Submittal of the proposal the following information:

1) The name and telephone number of the Offeror’s project (contact) person for the Small Disadvantaged Business.

2) The business name, address, name and telephone number of the

primary contact person for each Small Disadvantaged Business included in the proposal. The Offeror must specify each Small Disadvantaged Business to which it is making commitments. The Offeror will not receive credit for stating that it will find a Small Disadvantaged Business after the contract is awarded or for listing several businesses and stating that one will be selected later.

3) The specific work, goods or services each Small Disadvantaged

Business will perform or provide.

4) The estimated dollar value of the contract to each Small Disadvantaged Business.

5) Of the estimated dollar value of the contract to each Small

Disadvantaged Business, the percent of the total value of services or products purchased or subcontracted that will be provided by the Small Disadvantaged Business directly.

6) The location where each Small Disadvantaged Business will

perform these services.

7) The timeframe for each Small Disadvantaged Business to provide or deliver the goods or services.

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8) The amount of capital, if any, each Small Disadvantaged Business will be expected to provide.

9) The form and amount of compensation each Small Disadvantaged

Business will receive.

10) For a joint venture agreement, a copy of the agreement, signed by all parties.

11) For a subcontract, a signed subcontract or letter of intent.

g. The Offeror is required to submit only one copy of its Disadvantaged Business

Submittal. The submittal shall be clearly identified as Disadvantaged Business information and sealed in its own envelope, separate from the remainder of the proposal.

h. The Offeror must include the dollar value of the commitment to each Small

Disadvantaged Business in the same sealed envelope with its Disadvantaged Business Submittal. The following will become a contractual obligation once the contract is fully executed:

1) The amount of the selected Offeror’s Disadvantaged Business

commitment;

2) The name of each Small Disadvantaged Business; and

3) The services each Small Disadvantaged Business will provide, including the timeframe for performing the services.

i. A Small Disadvantaged Business can be included as a subcontractor with as many

prime contractors as it chooses in separate proposals.

1) An Offeror that qualifies as a Small Disadvantaged Business and submits a proposal as a prime contractor is not prohibited from being included as a subcontractor in separate proposals submitted by other Offerors.

II-8.2. Enterprise Zone Small Business Participation.

a. To receive credit for being an enterprise zone small business or entering into a

joint venture agreement with an enterprise zone small business or subcontracting with an enterprise zone small business, an Offeror must include the following information in the Disadvantaged Business Submittal of the proposal:

1) Proof of the location of the business’ headquarters (such as a lease

or deed or Department of State corporate registration), including a

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description of those activities that occur at the site to support the other businesses in the enterprise zone.

2) Confirmation of the enterprise zone in which it is located (obtained

from the local enterprise zone office).

3) Proof of United States citizenship of the owners of the business.

4) Certification that the business employs 100 or fewer employees.

5) Proof that the business’ gross annual revenues are less than $20,000,000 ($25,000,000 for those businesses in the information technology sales or service business). This can be accomplished by including a recent tax return or audited financial statement.

6) Documentation of business organization, if applicable, such as

articles of incorporation, partnership agreement or other documents of organization.

b. In addition to the above verifications, the Offeror must include in the

Disadvantaged Business Submittal of the proposal the following information:

1) The name and telephone number of the Offeror’s project (contact) person for the Enterprise Zone Small Business.

2) The business name, address, name and telephone number of the

primary contact person for each Enterprise Zone Small Business included in the proposal. The Offeror must specify each Enterprise Zone Small Business to which it is making commitments. The Offeror will not receive credit for stating that it will find an Enterprise Zone Small Business after the contract is awarded or for listing several businesses and stating that one will be selected later.

3) The specific work, goods or services each Enterprise Zone Small

Business will perform or provide.

4) The estimated dollar value of the contract to each Enterprise Zone Small Business.

5) Of the estimated dollar value of the contract to each Enterprise

Zone Small Business, the percent of the total value of services or products purchased or subcontracted that each Enterprise Zone Small Business will provide.

6) The location where each Enterprise Zone Small Business will

perform these services.

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7) The timeframe for each Enterprise Zone Small Business to provide

or deliver the goods or services.

8) The amount of capital, if any, each Enterprise Zone Small Business will be expected to provide.

9) The form and amount of compensation each Enterprise Zone Small

Business will receive.

10) For a joint venture agreement, a copy of the agreement, signed by all parties.

11) For a subcontract, a signed subcontract or letter of intent.

c. The dollar value of the commitment to each Enterprise Zone Small Business must

be included in the same sealed envelope with the Disadvantaged Business Submittal of the proposal. The following will become a contractual obligation once the contract is fully executed:

1) The amount of the selected Offeror’s Enterprise Zone Small

Business commitment;

2) The name of each Enterprise Zone Small Business; and

3) The services each Enterprise Zone Small Business will provide, including the timeframe for performing the services.

II-9. Cost Submittal. The information requested in this Part II, Section II-9 shall constitute the Cost Submittal. The Cost Submittal shall be placed in a separate sealed envelope within the sealed proposal, separated from the technical submittal. The total proposed cost shall be broken down into the components specified on the Cost Submittal sheet, which is attached to the RFP at Appendix C. Detailed instructions for completing the Cost Submittal sheet are set forth on the sheet. Offerors should not include any assumptions in their cost submittals. If the Offeror includes assumptions in its cost submittal, the Issuing Office may reject the proposal. Offerors should direct in writing to the Issuing Office pursuant to Part I, Section I-9, of this RFP any questions about whether a cost or other component is included or applies. All Offerors will then have the benefit of the Issuing Office’s written answer so that all proposals are submitted on the same basis. Costs must be quoted on the following bases:

1. A cost proposal for medical bill review services. This proposal must include:

a. A charge for reviewing and processing Part A medical bills. This charge must be quoted on a per bill basis.

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b. A charge for reviewing and processing Part B medical bills. This charge must be quoted on a per line basis.

These amounts shall be invoiced to SWIF on a monthly basis. These amounts shall be subject to audit.

2. A cost proposal for services related to provider panels, PPO’s and provider discounts.

a. This proposal must set forth the percentage of savings that the Offeror guarantees SWIF will realize as a result of its activities in this regard. The percentage of savings will be measured as the difference between what SWIF would have paid under the Pennsylvania Workers’ Compensation Fee Schedule and the amount that SWIF pays as a result of the Offeror’s services.

b. SWIF will pay for these services on a monthly basis. These services shall be

invoiced to SWIF each month. The invoice will set forth the savings, which have been achieved because of the use of panel providers, PPO providers, and health care providers who have extended discounts to SWIF claimants. No invoice shall be sent to SWIF until the Offeror exceeds the guaranteed savings level set forth on the Cost Submittal sheet. SWIF will pay nothing for these services if SWIF does not realize the guaranteed savings level. This amount will be subject to audit.

3. A cost proposal for building an interface with SWIF.

c. This proposal must be a one-time, flat fee. After this interface has been successfully implemented, the Offeror will invoice this amount to SWIF.

The Issuing Office will reimburse the selected Offeror for work satisfactorily performed after execution of a written contract and the start of the contract term, in accordance with contract requirements, and only after the Issuing Office has issued a notice to proceed. II-10. Domestic Workforce Utilization Certification. Complete and sign the Domestic Workforce Utilization Certification contained in Appendix B of this RFP. Offerors who seek consideration for this criterion must submit in hardcopy the signed Domestic Workforce Utilization Certification Form in the same sealed envelope with the Cost Submittal.

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PART III

CRITERIA FOR SELECTION III-1. Mandatory Responsiveness Requirements. To be eligible for selection, a proposal must be:

1. Timely received from an Offeror; and, 2. Properly signed by the Offeror.

III-2. Technical Nonconforming Proposals. The Issuing Office reserves the right, in its sole discretion, to waive technical or immaterial nonconformities in an Offeror’s proposal. III-3. Evaluation. The Issuing Office has selected a committee of qualified personnel to review and evaluate timely submitted proposals. Independent of the committee, BMWBO will evaluate the Disadvantaged Business Submittal and provide the Issuing Office with a rating for this component of each proposal. The Issuing Office will notify in writing of its selection for negotiation the responsible Offeror whose proposal is determined to be the most advantageous to the Commonwealth as determined by the Issuing Office after taking into consideration all of the evaluation factors. The Issuing Office will award a contract only to an Offeror determined to be responsible in accordance with the most current version of Commonwealth Management Directive 215.9, Contractor Responsibility Program. III-4. Criteria for Selection. The following criteria will be used, in order of relative importance from the highest to the lowest weighted factors, in evaluating each proposal:

III-4.1. Cost.

III-4.2. Technical: Evaluation will be based upon the following in order of importance:

Implementation and Execution Plan Offeror and Personnel Qualifications IT Technical Requirements

III-4.3 Disadvantaged Business Participation Evaluation will be based upon the following in order of priority:

Priority Rank 1 Proposals submitted by Small Disadvantaged Businesses.

Priority Rank 2 Proposals submitted from a joint

venture with a Small Disadvantaged Business as a joint venture partner.

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Priority Rank 3 Proposals submitted with

subcontracting commitments to Small Disadvantaged Businesses.

Priority Rank 4 Proposals submitted by Socially

Disadvantaged Businesses.

Each proposal will be rated for its approach to enhancing the utilization of Small Disadvantaged Businesses and/or Socially Disadvantaged Businesses. Each approach will be evaluated, with Priority Rank 1 receiving the highest score and the succeeding options receiving scores in accordance with the above-listed priority ranking

To the extent that an Offeror qualifies as a Small Disadvantaged Business or a Socially Disadvantaged Business, the Small Disadvantaged Business or Socially Disadvantaged Business cannot enter into subcontract arrangements for more than 40% of the total estimated dollar amount of the contract. If a Small Disadvantaged Business or a Socially Disadvantaged Business subcontracts more than 40% of the total estimated dollar amount of the contract to other contractors, the Disadvantaged Business Participation scoring shall be proportionally lower for that proposal.

III-4.4 Enterprise Zone Small Business Participation: The following options will be considered as part of the final criteria for selection:

Priority Rank 1 Proposals submitted by an Enterprise

Zone Small Business will receive the highest score.

Priority Rank 2 Proposals submitted by a joint

venture with an Enterprise Zone Small Business as a joint venture partner will receive the next highest score for this criterion.

Priority Rank 3 Proposals submitted with a

subcontracting commitment to an Enterprise Zone Small Business will receive the lowest score for this criterion.

Priority Rank 4 Proposals with no Enterprise Zone

Small Business Utilization shall receive no points under this criterion.

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To the extent that an Offeror is an Enterprise Zone Small Business, the Offeror cannot enter into contract or subcontract arrangements for more than 40% of the total estimated dollar amount of the contract in order to qualify as an Enterprise Zone Small Business for purposes of this RFP.

III-4.5. Domestic Workforce Utilization: Each proposal will be scored for its commitment to use domestic workforce in the fulfillment of the contract. Maximum consideration will be given to those Offerors who will perform the contracted direct labor exclusively within the geographical boundaries of the United States. Those who propose to perform a portion of the direct labor outside of the United States will receive a correspondingly smaller score for this criterion. Offerors who seek consideration for this criterion must submit in hardcopy the signed Domestic Workforce Utilization Certification Form in the same sealed envelope with the Cost Submittal. The certification will be included as a contractual obligation when the contract is executed.

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PART IV

WORK STATEMENT IV-1. Objectives.

IV-1.1. General. Section 306 (f.1) of the Pennsylvania Workers’ Compensation Act, 77 P.S. 531, permits employers to require their injured employees to treat with certain designated providers for 90 days after a work-related injury. 77 P.S. 531 sets forth specific requirements with respect to the composition of panels of providers and the use of panels.

SWIF wishes to further contain the cost of health care services provided to its claimants by: increasing the use of provider panels, as permitted by 77 P.S. 531; utilizing preferred provider organizations (PPO); and obtaining discounted prices for health care services rendered to SWIF claimants by health care providers which are not part of a panel or part of a PPO.

SWIF wishes to procure comprehensive medical bill review services to assist it in reviewing and paying bills submitted for medical services provided to its claimants.

IV-1.2 Specific. Offerors must be able to:

a. Establish panels of health care providers that comply with the requirements of 77

P.S. 531 for SWIF policyholders. SWIF policyholders are located throughout the Commonwealth and the providers on these panels must be located in areas that are readily accessible by SWIF claimants and include qualified health care providers in specialties that are appropriate to render care to SWIF claimants. See Appendix D for information regarding the location of SWIF policyholders throughout Pennsylvania. An Offeror must either have a PPO, or have arrangements with PPO’s throughout the Commonwealth, which can provide care to SWIF claimants; and the health care providers must practice in specialties that are appropriate to render care to SWIF claimants. See Appendix E for information regarding the top 50 industries served by SWIF policyholders. An Offeror must be able to make arrangements with health care providers that are not part of its PPO to provide health care services to SWIF claimants on a discounted basis.

b. Successfully market the concepts of panels of health care providers, PPO’s, and the use of health care providers that provide services to SWIF claimants on a discounted basis to SWIF policyholders and claimants.

c. Provide periodic reports as specified in Section IV-7.

d. Offerors must be able to determine whether services reported on bills are related to the work injury suffered by the claimant; whether the services are properly coded and appropriate to the injury; determine whether billed amounts are correct;

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and ensure that duplicate bills for the same service and service date are not paid. Offerors must be able to maintain accurate Pennsylvania-specific medical fee schedule information to assure that the amount charged does not exceed the fee schedule established for payments under the Pennsylvania Workers’ Compensation Act and must be able to determine if any discounts or reductions should be applied. Upon receipt of reviewed medical bills from Offeror, SWIF will audit a valid statistical sample of reviewed bills and will release medical bills for payment through the Pennsylvania Treasury.

IV-2. Nature and Scope of the Project.

IV-2.1. Panels, PPOs and Discounts a. In 2005, SWIF had over 51,000 policyholders throughout Pennsylvania. In 2005,

SWIF paid nearly 250,000 medical bills totaling $104,756,426. Additional important data regarding SWIF’s business can be found in Appendices D, E, F and K to this RFP.

b. The Offeror must be able to market the services throughout Pennsylvania. See Appendix D for information regarding the location of SWIF policyholders throughout Pennsylvania. SWIF will provide the successful Offeror with information necessary to perform these services, such as a list of policyholder names and addresses and the amount of premium paid by the policyholder. To the extent possible, all information will be provided in electronic format.

c. The Panel/PPO/Discount services must be provided without direct cost to SWIF. The sole compensation for such services will be a percentage of the savings that are realized by SWIF as a result of the Offeror’s services. The requirements of the cost proposal are set forth in Section II-9 of the RFP.

IV-2.2. Medical Bill Review Services a. SWIF has policyholders throughout Pennsylvania and claims for medical services

provided to the injured workers of these policyholders are submitted to SWIF for payment. SWIF must assure that these claims are properly reviewed, processed and paid in correct amounts and in a timely manner. Important data regarding SWIF’s business can be found in Appendices D, F and L to this RFP.

b. A successful Offeror must be able to determine if the services reported on a bill

are related to the work injury and are otherwise appropriate. Offerors must be able to re-price the bills to assure that the payment does not exceed the amount which may be paid under the Pennsylvania Workers’ Compensation Act and that all appropriate discounts and reductions have been extended to SWIF.

IV-3. Requirements.

IV-3.1 Panels, PPOs and Discounts.

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a. Panels. Offerors must be able to form and market panels of health care providers for SWIF policyholders in accordance with the requirements of 77 P.S. 531.

b. PPO’s. Offerors must either have their own PPO networks or have established

relationships with other PPO networks, which can be utilized by SWIF claimants. c. Discounts. Offerors must be able to negotiate discounts from providers which are

not part of the PPO’s which it will utilize, so that SWIF claimants can receive necessary care at a cost lower than the medical fee caps pursuant to the Pennsylvania Workers’ Compensation Act.

d. In accordance with the Commonwealth Standard Terms and Conditions

(Appendix A), L&I/SWIF may conduct an audit of a successful Offeror to assure that services rendered by panel providers, PPO providers and providers which offer discounted prices to SWIF claimants are being provided in an efficient manner, with an effort to expedite the injured worker’s return to work, and not to unnecessarily extend or expand the course of treatment rendered to the injured worker.

IV-3.2 Marketing.

a. Offerors must encourage SWIF policyholders to establish panels of providers for

their employees as permitted by 77 P.S. 531.

b. Offerors must encourage SWIF policyholders to encourage their employees to use health care providers in its PPO.

c. Offerors must encourage providers to provide care to SWIF claimants at discounted prices.

d. With respect to panel providers, PPO providers and discounted providers, the successful Offeror must provide program literature to policyholders and sponsor policyholder seminars which encourage the use of a panel as permitted by 77 P.S. 531, PPO providers and discount providers.

IV-3.3 Medical Bill Review

a. Offerors must be able to determine whether services reported on bills are related to the work injury suffered by the claimant; whether the services are properly coded and appropriate to the injury; determine whether billed amounts are correct; and ensure that duplicate bills for the same service and service date are not paid. Offerors must be able to maintain accurate Pennsylvania-specific medical fee schedule information to assure that the amount charged does not exceed the fee schedule established for payments under the Pennsylvania Workers’ Compensation Act and must be able to determine if any discounts or reductions

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should be applied. Upon receipt of reviewed medical bills from Offeror, SWIF will audit a valid statistical sample of reviewed bills and will release medical bills for payment through the Pennsylvania Treasury.

IV-4. Confidentiality. An Offeror must agree to keep as strictly confidential all data and information that it receives, or to which it has access, while performing the requirements of this Contract, including, but not limited to, all information it receives pertaining to the identity of a claimant and the type of services that a claimant receives. In addition, all data and information acquired by an Offeror shall be and will remain the property of SWIF. In its proposal, the Offeror must:

IV-4.1 Protect Confidential Information. Describe the procedures it has in effect to protect the confidentiality of the information that it will receive, or have access to, in the performance of the Contract, with particular focus on the manner in which it protects information specific to a claimant, particularly any medical or health information specific to a claimant.

IV-4.2 Ensure Confidentiality. Describe the procedures it has in effect to communicate the confidentiality requirements to its employees, contractors, agents or any other persons which it may use to perform the Contract and which may receive, or have access to, information about SWIF, its claimants, and policyholders. Describe the actions it takes to monitor and ensure that its employees, contractors, agents and any other persons it may use to perform the Contract comply with the confidentiality requirements.

IV-4.3 Certify Confidentiality. Agree to sign, and require its employees, contractors, agents, and any other persons which it may use to perform the Contract, to sign, the confidentiality statement prescribed by SWIF, attached to this RFP at Appendix G.

IV-4.4 Transfer Data. Agree to provide tapes or otherwise transfer all SWIF data and information to SWIF or to another Offeror’s system at the conclusion or termination of the contract. Agree to cooperate with and help facilitate all transition activities to be done for all aspects of the contract. Describe how such cooperation will be provided and what procedures for a cooperative, orderly transfer of data and services will be established. Failure to cooperate or the withholding of any information or records requested by SWIF that impairs in any way the transition of the provision of the tasks and services to a different Offeror shall constitute a material breach of the contract, subjecting the Offeror to liability for all damages incurred by SWIF because of such failure.

IV-5. Tasks.

IV-5.1 Implementation and Execution Plan a. SWIF is seeking to reduce workers’ compensation costs incurred by it and its

policyholders through the use of panels, a PPO network, discounts and medical bill review services. Although each service requested in the RFP will be reviewed

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individually, the services are part of comprehensive solution and should be approached as such in the Implementation and Execution Plan.

b. A successful Offeror must provide an Implementation and Execution Plan that

describes in narrative form how it will implement and execute the tasks defined in Sections IV-5.2-IV-5.4 below. The Implementation and Execution Plan must also include the following:

1) Describe how the Offeror will work with designated SWIF

personnel during the implementation of the contract and indicate capability to make an orderly transition of services to coincide with the expiration of the current emergency procurements, without any interruption of services to SWIF customers.

2) Provide a timeline for implementation of all of the work proposed

in this RFP. If a “phased-in” approach is proposed, the start of the phase-in must be coordinated with SWIF and all interim deadlines must be specifically identified. The timeline must also include the Offeror’s approach to testing and implementing any required interfaces.

3) Describe the two distinct processes for implementation -- one for

the Panels/PPO/Discount services and one for the Medical Bill Review services – but also indicate where the implementation plan and services overlap.

4) State how many of your employees or contractors will be used to

market the panel, PPA and discount programs and describe the steps its employees or contractors will take to market the programs. State how many of your employees or contractors will be used to provide medical bill review services.

IV-5.2 Panels, PPOs and Discounts.

a. Panels. Offerors must be able to form and market panels of health care providers for SWIF policyholders in accordance with the requirements of 77 P.S. 531. The proposal must:

5) Describe how panels of health care providers for SWIF policyholders will be formed in accordance with the requirements of 77 P.S. 531. State whether they will include only health care providers that are part of your PPO. Describe how a panel will be customized to meet a policyholder’s specific needs. Describe how health care providers, in particular those that are not part of the PPO network you are using, will be recruited to serve on panels.

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6) Describe the quality assurance procedures that will be utilized.

Describe how the health care providers that will comprise the panels will be periodically evaluated.

7) Describe the records that you will maintain to show which SWIF

claimants use panels that you establish. Describe how you will identify employees covered by panels that do not use the established panels. Describe how you will identify and ensure that SWIF does not pay bills where a policyholder has posted a panel and a claimant of the policyholder did not use a panel provider when s/he was required to by law.

8) Describe how you will update the panel lists that you establish and

explain how often you will update such list to ensure that the provider information is current.

9) Describe what you will do to ensure that the providers on the

panels understand the importance of a cooperative effort among the injured worker, policyholder/employee, SWIF and the treating provider to expedite the injured worker’s return to work.

10) Attach a copy of a sample contract with the panel providers or

describe the provisions that will be included in the contract.

b. PPO’s. Offerors must either have their own PPO networks or have established relationships with other PPO networks, which can be utilized by SWIF claimants. The proposal must:

1) Describe the PPO network. The PPO network must have, at the

inception of the contract, throughout the Commonwealth, an adequate number of health care providers in appropriate specialties so that a PPO provider will be readily available to all claimants. Included within the PPO network must be: Board Certified physicians, chiropractors and other health care providers as defined by 34 Pa. Code 127.3; hospitals, rehabilitation centers and trauma centers; durable medical equipment suppliers; and ancillary medical service providers usually involved with the provision of care to workers’ compensation claimants. State whether you maintain more than one PPO network or have access to more than one PPO network. If you have arrangements to use a PPO, please describe the details of that arrangement. State the length of time that the PPO network you will be using to meet the requirements of this RFP has been in existence.

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2) The successful Offeror must provide a list of all PPO providers within each Pennsylvania county and a map showing the locations of its providers in Pennsylvania. For each provider, the list must show the specialty, address, phone number, and an indication of whether the provider is board certified.

3) State your penetration rate for each county in Pennsylvania. 4) Describe how you recruit health care providers into your PPO

network. Describe the quality assurance procedures that you use in recruiting health care providers. Describe the professional qualifications that each health care provider must meet in order to become part of your PPO. Describe how you periodically evaluate the health care providers in your PPO network.

5) Describe how you maintain a list of the health care providers in

your PPO network. This list must be available via a web-based application that is user-friendly and secure. State how often you will update this list. Describe the various means by which a policyholder or claimant will be able to identify a preferred provider in their geographic area.

6) Describe what you will do to ensure that all the providers within

your PPO and all your staff understand the importance of a cooperative effort among the injured worker, the policyholder/employee, SWIF and the treating provider to expedite the injured worker’s return to work.

7) Provide sample contracts that the PPOs that you will utilize have

with the preferred health care providers. c. Discounts. Offerors must be able to negotiate discounts from providers which are

not part of the PPO’s which it will utilize, so that SWIF claimants can receive necessary care at a cost lower than the medical fee caps set under the Pennsylvania Workers’ Compensation Act. The proposal must:

1) Describe what actions you will take to encourage health care providers that are not part of your PPO to provide health care to SWIF claimants on a discounted basis. Describe your success with encouraging health care providers that are not part of your PPO for other customers.

2) Describe the quality assurance provisions that you will utilize in

recruiting health care providers to provide discounted services to SWIF claimants. Describe how you periodically evaluate the

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health care providers who agree to provide care to SWIF claimants at a discounted basis.

3) Describe how you will maintain a list of providers that have agreed

to provide services on a discounted basis. This list must be available via a web-based application that is user-friendly and secure. State how often you will update this list. Describe the various means by which a policyholder or claimant will be able to identify a provider which provides discounted process in their geographic area. The successful Offeror must provide SWIF and SWIF policyholders with a list of all of these providers within each Pennsylvania county. For each provider, the list must show the specialty, address, phone number, and an indication of whether the provider is board certified.

4) Provide sample copies of the contracts with the providers that

agree to provide discounted services to SWIF claimants. If you do not have contracts prepared, describe the provisions that will be included in the contracts.

d. Marketing. In its proposal, an Offeror must:

1) Describe the actions it will take to encourage SWIF policyholders

to permit it to establish panels of providers for their employees as permitted by 77 P.S. 531.

2) Describe the actions it will take to encourage SWIF policyholders

to encourage their employees to use health care providers in its PPO.

3) Describe the actions it will take to encourage providers to provide

care to SWIF claimants at discounted prices. Describe the actions it will take to encourage SWIF policyholders to encourage their employees to use providers that have agreed to discount their prices for SWIF claimants.

4) With respect to panel providers, PPO providers and discounted

providers, the successful Offeror must provide program literature to policyholders and sponsor policyholder seminars which encourage the use of a panel as permitted by 77 P.S. 531, PPO providers and discount providers. A successful Offeror bears all costs to provide literature to and sponsor seminars for SWIF policyholders, including printing and mailing costs. In addition:

a) The Offeror must provide at least three policyholder

seminars a year. These will be conducted throughout the

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Commonwealth – one in eastern Pennsylvania, one in central Pennsylvania and one in western Pennsylvania. The specific seminar locations must be approved by SWIF.

b) The Offeror must attach copies of sample marketing

materials that it intends to use to encourage SWIF policyholders to use provider panels, to participate in the PPO and to use discount providers.

c) The Offeror must attach copies of sample materials it

intends to distribute to policyholders and employees which describe the benefits and responsibilities of using panel providers, PPO providers, and discount providers.

d) The successful Offeror must submit all marketing and

informational materials to SWIF and the Department of Labor and Industry’s (L&I) Press Office at least 15 calendar days before use and distribution. These materials may not be used until they are approved in writing by SWIF and L&I’s Press Office.

e) The Offeror must state how many of its employees or

contractors will be used to market the panel, PPO and discount programs and a description of what its employees and contractors will do.

e. IT Requirements for the Provider Panel/PPO/Discount Services.

1) An Offeror’s proposed web-based sites must be user-friendly and

secure. Describe your understanding of this requirement and provide representative screen shots.

2) Describe the web-based PPO List system availability, i.e. 24x7,

Monday through Friday.

3) Describe how frequently the web-based systems are updated to maintain a current list of PPO providers and providers that have agreed to discount their prices for SWIF claimants.

4) Describe the level of ADA compliance for the proposed web-based

systems.

5) Describe how the Offeror’s proposed system uses industry standard best practices with regard to user sign-on and password authentication.

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6) The Offeror must describe how its proposed system provides for confidential and secure access to information including use of SSL if web-based.

7) Describe the data needed from SWIF. Data must be exchanged

between the Offeror and SWIF daily. The exchange of data must be completed electronically. SWIF is responsible for building and implementing an outbound interface to the Offeror and the Offeror is responsible for accepting and processing the data within the Offeror’s system, including performing any data transformation or conversions necessary to import SWIF’s data into the Offeror’s system.

8) Describe the Offeror’s backup and recovery strategy for all

information maintained as a part of this service.

IV-5.3 Medical Bill Review a. An Offeror must describe in its proposal how it will review and process medical

bills on behalf of SWIF and in accordance with the Pennsylvania Workers Compensation Act and related regulations. SWIF expects a successful Offeror to use its own bill review and processing technology. As discussed in Subsection e (Technical System Requirements for Medical Bill Review) below, SWIF further requires a successful Offeror to develop and maintain an interface with the Powercomp® system used by SWIF so that data can be exchanged between SWIF and the Offeror on a daily basis. In its proposal, an Offeror must:

1) Describe its proposed processes for receiving medical bills and provider notes directly from SWIF and/or providers, both electronically and on paper. Bills misdirected to SWIF will be sent overnight to the successful Offeror.

2) Describe its processes for imaging paper medical bills and provider

notes. Provider notes are required for payment of all medical bills.

3) Describe its processes for handling medical bills that do not have the required Provider notes.

4) Describe its processes for indexing images.

5) Describe the business processes that the Offeror follows in its

review of medical bills. Medical review will include, but not be limited to, applying the Part A and Part B Fee Schedules; reviewing coding and unbundling of charges; auditing of complex bills; and negotiating trauma bills.

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6) Describe how the Offeror will track and ensure that all bills are reviewed, processed and submitted to SWIF for payment within ten (10) working days of the date that the Offeror receives the bill directly or from SWIF.

7) Describe its procedures for facilitating requests by SWIF for

“rush” processing of medical bills.

8) Describe the processes used to identify duplicate bills and ensure that SWIF does not pay duplicate bills.

9) Describe proposed processes to handle the medical bill when no

claim number is found in the data feed from the SWIF system. SWIF claim numbers are automatically assigned within the SWIF transactional system as the claim is received and processed. The format is 8 digits.

b. Describe its processes for determining whether medical services rendered to a

workers’ compensation claimant are reasonable and related to the work-related injury and whether the services are appropriate.

1) Describe the processes the Offeror uses to make an assessment and

adjudication of the reasonableness and relatedness of the bill to the accepted work injury, or injuries; the appropriateness of the services provided. (Adjudication is the activity of assuring that SWIF pays for services in conformance with the Pennsylvania Workers’ Compensation Act.);

2) State how the Offeror will provide second level review of coding

and liability determinations. What type of personnel – nurses, coding specialists, utilization review specialists, others – will provide this level of review and how many of each type of personnel will be dedicated to handling SWIF work?

3) Describe the Offeror’s source or methodology for ICD-9 and CPT

code relatedness rules and for the National Correct Coding Initiative and update schedule.

4) Describe how Offeror will notify providers of denied bills and

return denied bills to providers.

c. Describe its processes for determining whether the fee reported for a service is in accordance with the Pennsylvania Workers’ Compensation Fee Schedule. Describe the processes it uses to assure that SWIF has taken advantage of all discounts and reductions available through a successful Offeror’s panel, PPO and discount programs.

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1) Explain how you maintain current and accurate Pennsylvania-

specific medical fee information, in accordance with the Pennsylvania Workers’ Compensation Act and the regulations promulgated thereunder.

2) Describe how you will determine whether reductions or discounts

should be applied to the billed amount.

3) Describe the frequency that the Offeror reviews and updates fee schedules and usual and customary charges. These reviews and updates must occur at least monthly.

4) Describe how the Offeror defends or assists clients in defending

the statistical methodology for establishing UCR’s.

d. Describe the quality assurance program the Offeror uses for medical bill review and processing. Describe any internal systems or audit controls to ensure the accuracy of billed amounts. These controls should include:

1) Explain the process for prevention of payment of duplicate medical

bills. 2) Describe review of medical fee schedule procedures, including the

extent to which provider bills are audited for coding accuracy and compliance with reimbursement limitations.

3) Explain the process for ensuring accuracy of remittance to proper

provider (i.e.. Tax ID Number, Proper Location).

4) Describe frequency and extent of supervisory review of medical bills.

5) Describe any additional audits you will conduct on Pennsylvania

workers’ compensation bills. What percentage of bills processed will be audited? Who will perform the audits? Are there specific situations that initiate an audit?

6) Describe any system generated audit flags and medical edits within

the Offeror’s system.

7) Describe how you will communicate the results of your audits to SWIF.

e. Technical System Requirements for Medical Bill Review.

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1) Based on need, SWIF will install one full T1 or fractional T1 line direct circuit between SWIF and the Offeror’s main network. The Offeror must provide a Router with a Layer 2 or 3 switch port for connection. Describe your understanding of this requirement.

2) The Offeror is responsible for providing all workstations, software,

scanners, printers and any other equipment and supplies that will be used by their staff. Describe your understanding of this requirement.

3) SWIF is expecting three (3) interfaces to be developed. The first

will be from SWIF to Offeror and will provide data related to claims and policies. A representative list of the claims and policy data to be provided is attached at Appendix H. The second will be from Offeror to SWIF, transmitting data related to the medical review. A representative list of the minimum medical review data that must be transmitted to SWIF is attached at Appendix I. The third will be from Offeror to SWIF, transmitting indexed images related to the medical review. A representative list of the minimum indexed image data that must be transferred to SWIF is attached at Appendix J. Upon importing the data from Offeror, SWIF will audit a statistically valid sample of reviewed bills and will release medical bills for payment through the Pennsylvania Treasury.

a) Describe the Offeror’s plan to work with SWIF to

document the requirements for the interfaces between the Offeror and SWIF.

4) Describe the Offeror’s plan to work with SWIF to develop, test and

implement the required interfaces. The Offeror is responsible for building and implementing outbound interfaces to SWIF. SWIF is responsible for accepting and processing the data through SWIF’s system. SWIF is responsible for building and implementing outbound interfaces to the Offeror and the Offeror is responsible for accepting and processing the data within the Offeror’s system, including any data transformations or conversions necessary to import the data into the Offeror’s system. The Offeror is also responsible for any data transformations or conversions necessary in the export of data to SWIF.

5) Describe the Offeror’s information requirements that, at a

minimum, will be needed from the SWIF system in order to review medical bills.

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6) At a minimum, SWIF will need the information listed in Appendix I from a successful Offeror’s system in order to review and pay medical bills. Describe your understanding of this requirement and list any additional data elements that may be required.

7) Data imports and exports must be in a format mutually agreed to

by the Offeror and SWIF. Describe the proposed possible formats for data import and export. Data imports and exports must occur daily. The SWIF image system stores images in TIFF format.

8) Describe the Offeror’s ability to accept medical bills and provider

notes in electronic format. Medical bills submitted in electronic format must follow ANSI X.12 standards. Describe the Offeror’s ability to accept Provider notes in electronic format.

9) Describe the Offeror’s back-up and recovery strategy for all

information maintained as part of its services to SWIF, including its customer service call center.

10) Describe the frequency of regular updates/maintenance to the

Offeror’s proposed system and the frequency of regular downtime/maintenance .

11) Describe your proposed scanning and image capabilities.

IV-5.4 Customer Service

a. Customer Service Calls.

1) SWIF’s Customer Service Unit (CSU) will be the first point of

contact for all calls related to medical bill discounted amounts. The CSU unit will handle calls related to the following issues: (1) bill status in payment cycle; (2) history of bills paid; (3) questions related to claim (i.e. claim number, claim status); and, (4) questions specifically related to bill payment window.

2) A successful Offeror must have a process to handle questions related to the actual review and approval of the bill or those unable to be addressed by SWIF’s CSU personnel. Currently, SWIF receives approximately 25 such calls per day. A typical call lasts less than 10 minutes, although some calls last as long as 45 minutes.

3) Describe the process to handle customer service calls, how many employees you will devote to SWIF customer service calls and the days and hours your employee(s) will be available to handle

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customer service calls. A successful Offeror’s call center must operate at least during SWIF’s CSU hours of operation, which currently are 8am-4pm Monday through Friday. Describe your process for handling calls that made outside of your regular hours of operation.

b. Customer Satisfaction Surveys. Describe Offeror’s use of third party surveys on a

yearly basis to determine providers’ satisfaction with the Offeror’s Medical Bill Review processes, how it will ensure validity of results, and how the results will be shared with SWIF.

c. Grievance Process. Describe Offeror’s process for assisting SWIF, as necessary,

in grievance and complaint resolution processes. Grievance and complaint resolution processes must comply with the provisions of the Pennsylvania Workers’ Compensation Act and the regulations promulgated thereunder. The Offeror must assure that its involvement in processing medical claims submitted to SWIF will not compromise SWIF’s compliance with the law and regulations.

IV- 6. Service Level Agreements and Liquidated Damages. A successful Offeror will be able to meet the following service level requirements, which have been designed to ensure that the processes most vital to SWIF’s business are completed on time and without error. In the event that the following service level requirements are not met, an Offeror may incur liquidated damages. SWIF either may deduct liquidated damages from amounts due or may bill for the liquidated damages. Provided, however, if SWIF decides to deduct liquidated damages from amounts due, SWIF shall notify the Offeror in writing of any claims for liquidated damages before it deducts such amounts. In its proposal, an Offeror must:

IV-6.1 Image Quality. Describe the measures it will put in place to meet the following image quality requirements:

a. Scanning density – scanned images must meet the TIFF resolution of 200dpi;

b. Document preparation – staples must be removed, torn edges must be taped,

documents less than 8”x10” (i.e. receipts, sticky notes) must be taped to letter sized carrier sheets and all documents that are hard to read must be stamped “Illegible Original” and the Offeror must request a legible replacement copy from the provider; and,

c. Indexing – documents must be indexed with the correct claim number, document

date, medical document flag and document type.

To ensure the image quality requirements are met, SWIF will audit a statistically valid sample of all scanned documents. SWIF will multiply the percentage of image failures by the number of pages scanned by the Offeror in the past 30 business days to calculate an audited failure rate. SWIF will multiply the audited failure rate by $0.15 to calculate the

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liquidated damages that the Offeror may be assessed for failing to meet image quality requirements.

IV-6.2 Data Processing. SWIF’s data processing depends on timely receipt of information from the Offeror. If the Offeror fails to provide SWIF with data by 5:00 p.m. on a business day, SWIF may lose up to an entire day’s worth of work at a significant cost and disruption to services. Describe the measures you will take to ensure that the data file is provided to SWIF each business day by 5:00 p.m. of the same day. There will be a 30 minute grace period for delivery of the daily data file. Every day that the data file is provided to SWIF after 5:30 p.m., an Offeror may be assessed liquidated damages in the amount of $15,000.00. IV-6.3 Bill Processing Time. Describe the measures you will use to ensure that bills are processed within ten (10) days of your receiving them. To ensure that the ten (10) day processing requirement is met, a successful Offeror must provide SWIF with a monthly report showing the average processing time per month. If the average processing time exceeds 10 days for any monthly period, an Offeror may be assessed liquidated damages of: (1) for the first month that exceeds the l0 day average, 10% of the processing fees paid that month; (2) for the second consecutive month that exceeds the 10 day average, 20 % of the processing fees paid that month; (3) for the third consecutive month that exceeds the 10 day average, 20% of the processing fees paid that month. Furthermore, SWIF may terminate the Offeror’s contract for cause.

IV-6.4 Bill Processing Accuracy. Through its Control Unit, SWIF will audit medical bills processed by a successful Offeror for accuracy, appropriateness and reasonableness. SWIF’s Control Unit will audit a statistically valid sample of all reviewed bills using the following error ratio standards:

a. Greater than 1% for the paid or denied dollars on all bills audited; b. Greater than 3% for the number of incorrectly paid bills out of all bills audited; c. Greater than 3% error rate for data entry.

If the error ratio standards for any of the above are exceeded: (1) for the first month, for each error ratio standard that is exceeded, the Offeror shall provide and implement a written corrective action plan within 10 business days of SWIF notifying the Offeror of the excessive error ratio; (2) for the second consecutive month, for each error ratio standard exceeded, an Offeror may be assessed liquidated damages of 10% of the processing fees paid that month (i.e., if two standards are exceeded, the Offeror may be assessed 20% of the processing fees paid that month to SWIF as liquidated damages); (3) for the third consecutive month during which any error ratio standard is exceeded, an Offeror may be assessed liquidated damages of 10% of the processing fees paid that month, for each error ratio exceeded (i.e., if two standards are exceeded, the Offeror may be assessed 20% of the processing fees paid that month to SWIF as liquidated damages). Furthermore, SWIF may terminate the Offeror’s contract for cause.

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IV-7. Reports and Project Control. The Offeror must describe the type of status reports it will provide to SWIF. These reports must be provided on a monthly basis and must include at least:

IV-7.1 Panels: On a monthly basis, the Offeror must provide reports which show: (1) a list of the policyholders it has contacted about establishing panels pursuant to 77 P.S. 531; (2) a list of the policyholders for which it has formed a panel of providers; and (3) a list of SWIF claimants which have used panel providers. After achieving the guaranteed savings amount, the Offeror must also provide a monthly invoice that sets forth the savings that have been achieved because of the use of panel providers. This amount will be subject to audit. The Offeror must describe the records it will maintain which will enable SWIF to verify, by audit, the amount of monthly savings reported. All such records must be maintained for at least five (5) years after the termination of the Contract.

IV-7.2 PPO: On a monthly basis, the Offeror must provide reports which show: (1) a list of the policyholders it has contacted about using its PPO providers; (2) a list of the policyholders which have agreed to use its PPO providers; and (3) a list of SWIF claimants which have used PPO providers. After achieving the guaranteed savings amount, the Offeror must also provide a monthly invoice that sets forth the savings that have been achieved because of the use of PPO providers. This amount will be subject to audit. The Offeror must describe the records it will maintain which will enable SWIF to verify, by audit, the amount of monthly savings reported. All such records must be maintained for at least five (5) years.

IV-7.3 Discounts: On a monthly basis, the Offeror must provide reports which show: (1) a list of the health care providers which it has contacted about extending discounts to SWIF claimants; (2) a list of the providers which have agreed to provide health care to SWIF claimants at a discounted rate and the amount of each discount extended; and (3) a list of SWIF claimants that have used discount providers. After achieving the guaranteed savings amount, the Offeror must also provide a monthly invoice that sets forth the savings that have been achieved because of the use of health care providers that have agreed to extend discounts to SWIF claimants. This amount will be subject to audit. The Offeror must describe the records it will maintain which will enable SWIF to verify, by audit, the amount of monthly savings reported. All such records must be maintained for at least five years.

IV-7.4 Service Level Agreements. On a monthly basis the Offeror must provide: (1) a report that lists each of the days that data exchange was made after 5 p.m. and the total liquidated damages amount potentially owed (Number of Times Data Was Exchanged After 5 p.m. x $15,000); (2) a report that provides the monthly average bill processing time and the total liquidated damages potentially owed (see Section IV-6.c); (3) a report that lists the number of pages scanned each business day.

IV-7.5 Policyholder and Claimant Satisfaction. Within 90 days of the end of each contract year, the successful Offeror must successfully complete and provide to SWIF a survey conducted by a third party that details the satisfaction of policyholders and claimants with respect to the panel providers, the PPO providers, and the providers that extend discounts to SWIF claimants. Based on the results of this survey, the successful Offeror will

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develop a plan to improve policyholder and claimant satisfaction with these programs. The Offeror must describe in its proposal how it will conduct this survey.

IV-7.6 Reports. All reports must be furnished to SWIF on a monthly basis in a mutually agreeable electronic format. Describe the proposed possible formats for reports.

a. If SWIF requests changes to reports or additional reports, describe how that will

be handled. Describe your ad hoc reporting capabilities, process to request ad hoc reports and time it takes to create such reports.

IV-8. General Company Information. An Offeror must provide basic information about its organization and experience. In its proposal, an Offeror must provide the following information about its organization:

a. Legal name and any fictitious names b. Legal form of your business

c. State of incorporation. State where it conducts business and where it is registered

to do business.

d. The names of affiliates, franchises and any other strategic relationships

e. An organizational chart, including a detailed chart for your administrative, production and sales units

f. A list of the names and addresses of your officers and directors, chief executive

officer, chief operating officer, chief financial officer, director of marketing and medical director.

g. State the number of years it has been performing services similar to those required

under this RFP. Provide specific information, including descriptions of projects of similar scope that will demonstrate the success it has had in providing these services.

h. Provide the names of its three largest, current customers, including a contact for

each customer, the phone number and email address for that contact, and the revenue received from that customer during the last 3 years, or for as long as it has been its customer, whichever is shorter. State the total number of customers for the last three years and the number of customers retained for each of those years.

i. Identify the project manager for this project, including a description of his

education and experience. This person will serve as the primary point of contact

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for this project. Provide a description of the education and experience of persons filling the positions set forth on the organization chart required above.

j. Identify and describe the features that distinguish you from your competitors.

k. If you are awarded a contract under this RFP, will you have to increase your staff?

If so, by how much? How will you recruit and train your staff?

l. Provide copies of your audited financial statements or tax returns for the last three (3) years.

m. If available, provide a copy of your current D&B® report or comparable financial

information.

n. Provide the addresses of the offices/locations where medical bills will be processed.

o. Describe the types of services, other than those requested in this RFP, which it provides.

p. Provide a copy of the Offeror’s disaster recovery plan. If no plan is available,

describe how you will continue to comply with the requirements of this RFP in the event of a disaster at one or more of your offices.

q. Provide your current hours of operation. Times must be quoted in EST.

Medical Bill Processing

FROM TO

Mon. – Fri. ______________ _____________ Sat. ______________ _____________ Sun. ______________ _____________ Holidays ______________ _____________

IV-9. Contract Requirements—Disadvantaged Business Participation and Enterprise Zone Small Business Participation. All contracts containing Disadvantaged Business participation and/or Enterprise Zone Small Business participation must also include a provision requiring the selected contractor to meet and maintain those commitments made to Disadvantaged Businesses and/or Enterprise Zone Small Businesses at the time of proposal submittal or contract negotiation, unless a change in the commitment is approved by the BMWBO. All contracts containing Disadvantaged Business participation and/or Enterprise Zone Small Business participation must include a provision requiring Small Disadvantaged Business subcontractors, Enterprise Zone Small Business subcontractors and Small Disadvantaged Businesses or Enterprise Zone Small Businesses in a joint venture to perform at least 50% of the subcontract or

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Small Disadvantaged Business/Enterprise Zone Small Business participation portion of the joint venture. The selected contractor’s commitments to Disadvantaged Businesses and/or Enterprise Zone Small Businesses made at the time of proposal submittal or contract negotiation shall be maintained throughout the term of the contract. Any proposed change must be submitted to BMWBO, which will make a recommendation to the Contracting Officer regarding a course of action. If a contract is assigned to another contractor, the new contractor must maintain the Disadvantaged Business participation and/or Enterprise Zone Small Business participation of the original contract. The selected contractor shall complete the Prime Contractor’s Quarterly Utilization Report (or similar type document containing the same information) and submit it to the contracting officer of the Issuing Office and BMWBO within 10 workdays at the end of each quarter the contract is in force. This information will be used to determine the actual dollar amount paid to Small Disadvantaged Business and/or Enterprise Zone Small Business subcontractors and suppliers, and Small Disadvantaged Business and/or Enterprise Zone Small Business participants involved in joint ventures. Also, this information will serve as a record of fulfillment of the commitment the selected contractor made and for which it received Disadvantaged Business and Enterprise Zone Small Business points. If there was no activity during the quarter then the form must be completed by stating “No activity in this quarter.” NOTE: EQUAL EMPLOYMENT OPPORTUNITY AND CONTRACT COMPLIANCE STATEMENTS REFERRING TO COMPANY EQUAL EMPLOYMENT OPPORTUNITY POLICIES OR PAST CONTRACT COMPLIANCE PRACTICES DO NOT CONSTITUTE PROOF OF DISADVANTAGED BUSINESSES STATUS OR ENTITLE AN OFFEROR TO RECEIVE CREDIT FOR DISADVANTAGED BUSINESSES UTILIZATION.

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APPENDIX B DOMESTIC WORKFORCE UTILIZATION CERTIFICATION

Each proposal will be scored for its commitment to use the domestic workforce in the fulfillment of the contract. Maximum consideration will be given to those Offerors who will perform the contracted direct labor exclusively within the geographical boundaries of the United States. Those who propose to perform a portion of the direct labor outside of the United States will receive a correspondingly smaller score for this criterion. In order to be eligible for any consideration for this criterion, Offerors must complete and sign the following certification. This certification will be included as a contractual obligation when the contract is executed. Failure to complete and sign this certification will result in no consideration being given to the Offeror for this criterion. I, ______________________[title] of ____________________________________[name of Contractor] a _______________ [place of incorporation] corporation or other legal entity, (“Contractor”) located at ________________________________________________________________ ____________________________________________________________________________[address], having a Social Security or Federal Identification Number of ________________________, do hereby certify and represent to the Commonwealth of Pennsylvania ("Commonwealth") (Check one of the boxes below):

All of the direct labor performed within the scope of services under the contract will be performed exclusively within the geographical boundaries of the United States.

OR

________________ percent (_____%) [Contractor must specify the percentage] of the direct labor performed within the scope of services under the contract will be performed within the geographical boundaries of the United States. Please identify the direct labor performed under the contract that will be performed outside the United States: ____________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ [Use additional sheets if necessary]

The Department of General Services [or other purchasing agency] shall treat any misstatement as fraudulent concealment of the true facts punishable under Section 4904 of the Pennsylvania Crimes Code, Title 18, of Pa. Consolidated Statutes. Attest or Witness: ______________________________ Corporate or Legal Entity's Name _____________________________ ______________________________ Signature/Date Signature/Date _____________________________ ______________________________ Printed Name/Title Printed Name/Title

C O M M O N W E A L T H O F P E N N S Y L V A N I A DEPARTMENT OF GENERAL SERVICES

555 Walnut Street, Forum Building H A R R I S B U R G

Subject: SWIF PPO and Medical Bill Payment RFP Bid Number: CN00020848 Opening Date/Time: 09/06/2006 1:30 p.m. Flyer: Addendum #1 To All Bidders: Clarifications:

1. Appendix A can be linked to at the following hyperlink: http://www.dgs.state.pa.us/dgs/lib/dgs/forms/comod/procurementforms/std274.doc

2. Appendix B is located at the end of the RFP document on Page 43.

3. The Preproposal Conference on August 9th will be at 10:00 a.m. in Conference Room #9. Except as clarified and amended by this flyer, the terms, conditions, specifications, and instructions of the invitation to bid and any previous flyers, remain as originally written. Any questions concerning this bid direct to: Janice Blocker, Associate Commodity Manager at 717-703-2943 Very truly yours, _Janice M. Blocker_________________________ for Nicholas Kaczmarek, Chief Procurement Officer Bureau of Procurement

http://www.dgs.state.pa.us/dgs/lib/dgs/forms/comod/procurementforms/std274.doc



Subject: SWIF PPO and Medical Bill Payment RFP Bid Number: CN00020848 Opening Date/Time: 09/06/2006 1:30 p.m. Flyer: Addendum #2 To All Bidders: The following items

1. Twelve (12) copies of the proposal must be submitted.

2. A new Appendix Workbook is included in this addendum to include a revised Appendix C, H, and I. Also an additional M and N has been added. Updated forms that are part of the response must be the latest form posted or the bid will be rejected.

3. Final Questions

4. Preproposal Attendee List

Except as clarified and amended by this Flyer, the terms, conditions, specifications, and instructions of the invitation to bid and any previous flyers, remain as originally written. Any questions concerning this bid direct to: Janice Blocker, Associate Commodity Manager at 717-703-2943 Very truly yours, _Janice M. Blocker_________________________ for Nicholas Kaczmarek, Chief Procurement Officer Bureau of Procurement

8/15/2006 12:59 PM 1

RFP DGS-CN-00020848 QUESTIONS & RESPONSES

1. When the DGS assumed responsibility for reissuing the RFP on behalf of SWIF, why didn’t the DGS issue an RFP which addressed only those services (repricing) which have been outsourced for the past 1-1/2 years to “emergency” vendors?

This question is irrelevant to the preparation of a proposal in response to this RFP and, therefore, no further response is required. 2. What was the DGS/SWIF’s reasoning for once again complicating this particular

procurement by adding panel development, PPO network, non-network, adjudication, electronic transfer, and image storage services when these are not services that SWIF has an immediate need for or at least has not issued emergency procurements for? Wouldn’t the decision to add these services significantly increase the chances of the RFP being withdrawn or the bids rejected again?

This question is irrelevant to the preparation of a proposal in response to this RFP and, therefore, no further response is required.

3. Did the DGS make any effort to recruit individuals who were experienced with

medical bill review, repricing, panel development, PPO network, and non-network services to assist with the writing of this RFP? If so, what are the names of those individuals and what are their relevant backgrounds? Are any of these individuals’ potential offerors, affiliated or contracted with potential offerors, or contracted with SWIF for any other services? Did these individuals have access to the reasons the previous bids were withdrawn and/or rejected in the past? If so, what were those reasons? Did they have access to the revisions made to the previous RFP’s due to the prospective vendors’ RFP questions? If so, why didn’t they incorporate them into this new RFP so that it wouldn’t need revised again?


4. If this RFP is withdrawn or “all bids rejected”, will the DGS consider issuing an

RFP for only the repricing services which are currently being outsourced to “emergency vendors”?


5. Are the “emergency vendors” currently performing any other services listed in

this RFP, other than repricing? If so, please identify those.

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The emergency vendors are entering and repricing medical bills.

6. Section IV-5.1 b(1) of this RFP states “Describe how the Offeror will work with designated SWIF personnel during the implementation of the contract and indicate capability to make an orderly transition of services to coincide with the expiration of the current emergency procurements, without an interruption of service to SWIF customers”. In order for an Offeror to adequately reply to this requirement, can you please convey the actual expiration date of the current emergency procurements? If this date is the actual last expiration date of the emergency procurement and no further extensions are approved by the DGS, will the DGS at minimum require that SWIF consider other vendors for the emergency procurements if, for any reason, a vendor is not selected for this RFP?

The scope of work sought by the RFP exceeds the services being provided pursuant to current emergency procurements. Potential Offerors should refer to the RFP and formal question responses in preparing their RFP proposals. The Commonwealth anticipates awarding a contract for the services sought by the RFP as soon as possible. The current emergency procurements expire on October 31, 2006.

7. In order for Offerors to be competitive with the emergency vendors and since

contract procurement information is public information, can you please provide the contract price and service terms between SWIF and the two current emergency vendors? Specifically, what are the prices SWIF is paying to each vendor for the following repricing services:

A. Per line repricing charge for Part B bills B. Flat fee for Part A bills C. Any and all additional fees such as incentive or implementation fees If there is an alternative pricing structure other than the above, please provide detailed information regarding the price and terms.

The scope of work sought by the RFP exceeds the services being provided pursuant to current emergency procurements. Potential Offerors should refer to the RFP and formal question responses in preparing their RFP proposals. The Commonwealth anticipates awarding a contract for the services sought by the RFP as soon as possible. The current emergency procurements expire on October 31, 2006. The Part A bill charge in the emergency procurements is $30. The Part B bill per line charge in the emergency procurements is $1. The duplicate/flawed bill fee is $5 per bill.

8. According to Section 1-15, offerors are to limit their response to 75 pages or less (excluding exhibits and appendixes). Therefore, please clarify what format you would prefer a vendor to respond to each Section. Specifically, would you prefer

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that the vendor restated the SWIF requirement and then respond to the requirement below each one? Or could a vendor just state the Section number and paragraph and respond? Depending on the DGS’s preference, the number of pages for the bid response may need increased.

Please format responses per the instructions on pages 9 through 16 of the RFP. It is not necessary to restate the RFP requirements in the response. Referencing the relevant RFP Section number and paragraph is acceptable and encouraged.

9. Section I-16 Alternate Proposals indicates that the Issuing Office will not accept

alternate proposals. In this particular instance, when SWIF has repeatedly withdrawn RFP’s and rejected bid all bids, what is the DGS’s reasoning for not allowing offerors to submit a more functional and cost effective alternative bid response that makes fiscal and operational sense in addition to the required response? Wouldn’t this be a good way for the DGS to understand how many other Pennsylvania insurance carriers have successfully implemented these services? To our knowledge, there is no other PA insurance carrier that has implemented these services in the manner required in this RFP. What research did the DGS/SWIF conduct to determine the requirements in this RFP?


10. Section II-5 (5) Offeror and Personnel Qualifications requires offerors to describe

their experience with “providing comprehensive review and prepayment services related to medical bills for injured workers submitted to Compensation Act”. Since there is no provision in the PA WC Act for any type of prepayment services, please clarify the definition and relevance of prepayment services as it applies to this RFP.

Bills will continue to be paid by the Treasury of the Commonwealth of Pennsylvania. “Prepayment” merely refers to the services that must be performed by a Successful Offeror up to the point that it notifies SWIF that a bill should be paid and identifies the amount that should be paid and SWIF take the necessary actions to effect payment by the Treasury.

11. Section II-7 Objections and Additions to Standard Contract Terms and Conditions

explains how an offeror would identify terms and conditions (contained in Appendix A) it would like to renegotiate and what terms they would like to add. Where in the RFP response would an offeror object to a provision in Section I-19 Proposal Contents? Specifically, how would an offeror object to the provision “All material submitted with the proposal becomes the property of the Commonwealth of PA and may be returned only at the Issuing Office’s option. The Issuing Office has the right to use any or all ideas presented in any proposal regardless of whether the proposal becomes part of a contract.”?

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If this requirement is mandatory and cannot be objected, does the DGS recommend that all offerors keep their responses vague or reply that certain information will be provided if offeror is selected as the official vendor to prevent SWIF from utilizing our confidential and proprietary information for their own benefit without compensation to us? Can SWIF legally or ethically continue to issue RFP’s for the same services and continually withdraw and reject the bids so that they can eventually collect enough of the offerors’ information to perform the services on their own? What recourse, legal or otherwise, would an Offeror have if they ultimately decided to do this?

“Material” in this provision does not mean intellectual property; it merely means the proposal package. While the Commonwealth will have the right to use ideas presented in vendors’ proposals, the provision is not intended to assert that the Commonwealth may use vendor-owned information in violation of intellectual property rights or without compensation. Offerors may not object to this provision and should disclose sufficient information in their proposal upon which the Commonwealth may properly evaluate the technical merits of the proposal. Offerors must seek their own legal counsel. The remainder of the question is irrelevant to preparation of responses to this RFP and, therefore, no further response is required. 12. Sections IV-1.2 (d), IV-2.2 (b), and IV-3.3 indicate that “Offerors must be able to

determine whether services reported on bills are related to the work injury suffered by the claimant and whether the services are appropriate to the injury. Since the SWIF adjusters typically perform these services, is SWIF now outsourcing their adjusting function via this RFP? Without access to the actual injury report and the information gathered by the SWIF investigators, how could the DGS/SWIF reasonably expect a medical bill review and repricing vendor to perform this claims adjudication process? Since this is not a reasonable function performed by medical bill review and repricing vendors, will the DGS consider deleting this requirement? If not, please provide clarification.

SWIF adjusters are currently responsible for overall management of claim files. SWIF adjusters will continue to perform this function after a successful offeror is selected. A successful offeror will have access to the information it needs to perform the services required by the RFP through the interface, as described is Section IV-5.3 e 3 of the RFP.

13. Section IV-5.3 b. (1) indicates “Describe the processes the Offeror uses to make

an assessment and adjudication of the reasonableness and relatedness of the bill to the accepted work injury, or injuries; the appropriateness of the services provided. (Adjudication is the activity of assuring that SWIF pays for services in conformance with the PA WC Act). Since reasonableness of the bill can only be addressed via the official Utilization Review Process outlined in the Act, how can

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the DGS make this a requirement of an Offeror? Also, determining the overall relatedness of the bill to the accepted work injury is typically the responsibility of the insurance adjuster. Again, is SWIF proposing to outsource their adjusting services via this RFP? If so, please provide to what extent the offeror is expected to provide this service?

The Commonwealth is not proposing outsourcing its adjuster function. A successful offeror is expected to determine the relatedness of the services on a bill to the accepted work injury. A successful offeror is expected to identify to SWIF bills and/or claims that it believes should receive UR. SWIF will be responsible for UR.

14. Section IV-5.3 c. (3) indicates “Describe the frequency that the Offeror reviews

and updates fee schedules and usual and customary charges. These reviews and updates must occur at least monthly”. Since the PA Bureau of WC only issues fee schedule updates on a quarterly basis, updates could not occur “at least monthly”. Would the DGS consider changing this requirement based on this factual information? Also, Since the PA Bureau of WC does not currently recognize any usual and customary charge database, there are no updates for the offeror to “review and update”. Will the DGS consider eliminating this requirement from this RFP as it is not applicable to WC in PA?

The “reviews and updates” of fee schedules in Section IV-5.3 c refers to a successful offeror’s PPO/network fee schedules that it has with providers.

15. Section IV-5.3 c. (4) indicates “Describe how the Offeror defends or assists

clients in defending the statistical methodology for establishing UCR’s.” Again, since the PA Bureau of WC does not recognize any UCR database and there is no current case law on the issue, this would be an unattainable requirement for any repricing vendor doing business in PA. Therefore, would the DGS consider deleting this requirement?

The Commonwealth will not delete this requirement. A successful offeror must be able to defend its methodology for all calculations and data used to establish UCR amounts to be paid by the Commonwealth.

16. Section IV-6.1 (b) indicates the following image quality requirement “Document

preparation – staples must be removed, torn edges must be taped, documents less than 8” x 10” (ie receipts, sticky notes) must be taped to letter-sized carrier sheets and all documents that are hard to read must be stamped “illegible original” and the offeror must request a legible replacement copy from the provider”. Since providers typically send their bills and documentation directly to SWIF, wouldn’t SWIF be responsible for this function before scanning the bills to the repricing vendor? If not, we believe this requirement is entirely too cumbersome and unreasonable and has never, to our knowledge, been requested by any other

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insurance carrier who outsources repricing services. In view of this, would the DGS consider deleting or amending this requirement?

Per the requirements listed in Section IV-6.1 b of the RFP, the Commonwealth is seeking a vendor to provide document preparation services. The Commonwealth will not delete or amend this requirement.

17. The Chief Healthcare Cost Containment Officer of the PA Bureau of WC has

stated during annual repricing training sessions that repricing vendors are not to contact providers to request information, and we believe this recommendation provides protections for both the providers and the insurance carriers. Therefore, would the DGS consider removing the requirement to have the vendor contact the provider for replacement copies of documentation as this is contrary to what the Bureau has recommended? Additionally, numerous providers submit illegible documentation with their bills and this gives the medical bill review company the ability to deny payment for the particular services that cannot be identified in the documentation. Do you agree that the requirement to contact the provider to obtain more legible documentation would be a disservice to SWIF and it’s policyholders as the providers have an obligation to bill correctly the first time?

SWIF will work with the successful offeror to develop a process by which illegible documentation will be identified so that the successful offeror will not responsible for contacting providers to request replacement documentation.

18. Section IV-6.2 Data Processing indicates that “Every day that the data file is

provided to SWIF after 5:30 p.m. an Offeror may be assessed liquidated damages in the amount of $15,000.” Since $15,000 seems to be an unreasonable and excessive amount, how did the DGS/SWIF arrive at this “damage” amount? Would SWIF consider extending this time period to allow for second shift repricing? If not, what is their reasoning? If the SWIF offices do not open until 8 a.m., what is the reasoning behind requiring the data transfer be completed by 5:30 p.m. the previous day? Since this requirement does not indicate an exemption for confirmed natural disasters, terrorism, or any other type of emergency, would the DGS consider amending this to address these unforeseeable emergencies? What about circumstances beyond the Offeror’s control such as power outages, connectivity problems with dedicated T-1 line, etc…? Will the Offeror be assessed liquated damages if the file(s) cannot be delivered due to connection problems on SWIF’s end?

The Commonwealth will not consider extending the time period to allow for second shift repricing. Depending on the day of the week and the time of the month, the SWIF batch may run from 8 to 12 hours. In order to run the batch, users must be locked out of the system. If the batch is not completed by 6AM, users at SWIF at the headquarters in Scranton and in all of the district offices are unable to work. The cost of having all staff idle is slightly less than $15,000 per hour.

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A Successful Offeror will not by assessed liquidated damages if the file(s) cannot be delivered due to connection problems on SWIF’s end. A Successful Offeror may not be assessed liquidated damages if the file(s) cannot be delivered due to confirmed emergencies beyond the control of the offeror. 19. Section IV-7.1 Panels indicates “After achieving the guaranteed savings amount,

the Offeror must also provide a monthly invoice that sets forth the savings that have been achieved because of the use of panel providers”. Since functional provider panels have been proven to significantly reduce indemnity costs as well as medical costs, will SWIF provide the selected vendor with this indemnity cost information to provide actual savings reports? Will reductions in indemnity costs be considered in the overall savings equation? If not, what is the reasoning behind this decision?

The Commonwealth will not consider reductions in indemnity costs as part of the medical savings sought by this RFP.

20. Section IV-7.4 Service Level Agreements makes references that the Offeror will

be charged liquidated damages for data transfers after 5 p.m. Since Section IV-6.2 indicates damages will be accessed after 5:30 p.m., not 5 p.m., this would require clarification by the DGS/SWIF as it appears to be contradictory.

Section IV-7.4 contains a typographical error. Section IV-7.4 (1) should read as follows:

A report that lists each of the days that data exchange was made after 5 p.m. and the total liquidated damages amount potentially owed (Number of Times Data Was Exchanged After 5:30 p.m. x $15,000).

21. IT Requirements – General - What is the nature of the electronic transfer between

SWIF and the Offeror? Does SWIF provide an FTP site to log into? Does SWIF require the Offeror to maintain an FTP site for SWIF to download data from? Is special client software required for the Offeror to establish the transfer to and from the Powercomp system?

The data interface exchange will occur across the T-1 line on the L&I network. No special software will be required for the data exchange, however, as stated in Section IV-5.3 e 7 of the RFP, data imports and exports must be in a format mutually agreed to by the Offeror and SWIF.

22. IV-5.3 Medical Bill Review (e) Technical System Requirements for Medical Bill

Review General – In order to fully understand the Interface requirements and to determine any enhancements required by an Offeror, definitions for the fields contained in Appendices H, I, and J need to be provided by SWIF. Will SWIF

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provide these definitions as part of a supplement to the RFP? Will there be a provision on the interface for the billing provider’s data? How does the Offeror obtain the unique Powercomp bill ID to be used in Appendix J? How is the full path of the image file determined?

Appendices H and I have been amended to include field definitions. SWIF will accommodate a provision for billing provider data on the interface. Once a bill is interfaced into Powercomp®, the Powercomp® system will automatically generate its own unique bill ID. SWIF expects that a successful offeror will likely create its own bill ID for processing purposes. The path of the image file is defined in the Onbase imagining application used by SWIF, so, D:\DIPIN is just a directory SWIF will set up on its Windows server. All images can start with this directory. In our example, \SWIFCWO04236-195224_002.TIF is just the name of the tif file.

23. Is SWIF wholly responsible for maintaining the T-1 or partial T-1 line installed in

the Offeror’s office for the purpose of providing services under this RFP? What requirements does the Offeror have to meet regarding the documents after they are scanned and transferred to SWIF? Does the Offeror have to store them for a certain period of time? Does the Offeror have to physically send them to SWIF?

Yes, SWIF is responsible for maintaining a T-1 line. SWIF requires that a Successful Offeror retain a hard copy of medical records and imaged documents for 14-days.

24. The [RFP requests] that offerors quote a single Unit Price for Part A medical bills

and it does not differentiate between inpatient (DRG) bills vs. outpatient/rehabilitation Part A bills. Because repricing companies are typically paid a unit price for inpatient (DRG) bills and paid a per line charge for Part A outpatient/rehabilitation bills, will the DGS consider amending this cost submittal to reflect the industry standard?

SWIF does not differentiate between different types of Part A bills and per the Cost Submittal portion of the RFP seeks a single unit price for Part A bills. The Commonwealth is not going to modify the Cost Submittal sheet.

25. The Cost Submittal indicates that an Offeror is to quote a guaranteed savings

percentage and the Offeror will not be paid any monies unless they exceed the guaranteed savings percentage. If the Offeror does exceed the guaranteed savings percentage, they would be paid 40% of savings above that about. Most local and regional companies including DBE’s and MWBE’s lease their PPO networks and they have a financial obligation to pay those networks a percentage of savings for their network discounts. Since this reimbursement structure appears to penalize a vendor for obtaining savings below the fee schedule until they reach a guaranteed amount, would the DGS be receptive to eliminating this “guaranteed amount” in

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lieu of a lower percentage of overall savings below the fee schedule? To our knowledge, vendors in our industry have never been paid under such a payment structure which would appear to carry a significant amount of financial risk for them. Does the DGS/SWIF understand that these guaranteed savings percentages could be significantly eschewed by excessive trauma bills which require 100% reimbursement if they cannot be negotiated and this would not be a fair and reasonable pricing structure for the Offerors?

The Commonwealth believes the proposed cost structure is reasonable. The Commonwealth is not going to modify the Cost Submittal sheet. 26. The Cost Submittal indicates that these are panel/PPO/Discount savings. What is

meant by “Discount” savings? This savings amount requires clarification as the DGS has not represented how the Offeror would be reimbursed for savings below the fee schedule for manual medical bill review, applying National Correct Coding Edits, and any other savings below the fee schedule.

As stated in Section IV-5.2 c, page 26 of the RFP, “Discount” refers to discounts from health care providers that are not part of an offeror’s PPO but do provide health care to SWIF claimants on a discounted (i.e. below Workers’ Compensation Fee Schedule) basis. 27. Since the proposed reimbursement structure is not reasonable for the Offeror and

could be unnecessarily costly to SWIF, would the DGS be receptive to learning how the majority of vendors are reimbursed in our industry? If not, would the DGS be receptive to conducting a survey of various WC carriers in our state to determine how they reimburse repricing companies for these services?

This question is irrelevant to the preparation of a proposal in response to this RFP and, therefore, no further response is required. 28. With regard to Appendix F (Part A and Part B Bill Data), there are only physical

therapy (PT) figures listed for each year for Part B providers. Since the majority of PT providers in this state are classified as Part A providers, why are there no figures listed under the Part “A” column for each year for PT? If the answer is that SWIF has no mechanism to differentiate Part “A” PT bills from Part A hospital bills and included both payments in the “Hospital” column, how could the DGS expect an Offeror to reasonably calculate guaranteed and anticipated savings percentages as the discounts Offerors can obtain from hospitals vs. PT providers vary dramatically?

SWIF does not maintain further detailed data on its Part A bills. SWIF expects a successful offeror to use its experience in the marketplace to calculate savings with a reasonable degree of certainty allowing for the variance in discounts between hospitals and physical therapy providers.

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29. Since Appendix F indicates that there is no data related to trauma bills, how can an Offeror estimate guaranteed and anticipated savings on these bills for this RFP? If trauma bill data is not provided, are Offerors to assume that discounts they obtain on trauma bills will not be included in the overall savings equation?

Savings on trauma bills will be included in the overall savings equation. In 2005, SWIF experienced approximately $18.7 million in trauma charges. Currently, SWIF nurses negotiate trauma bill rates. Per section IV-5.2 b, page 25, of the RFP, SWIF expects a successful vendor to negotiate trauma bill rates. For trauma bills the savings will be measured as the difference between a baseline savings of 10%, which is what SWIF would have saved if it continued to negotiate trauma bills itself, and the savings to SWIF above the 10% baseline that result from the successful offeror’s trauma bill negotiations. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills. 30. Where is the data for Part A providers who are Ambulatory Surgical Centers?

Part A providers who are Ambulatory Surgical Centers are included within the data provided under the heading “Hospitals” on Appendix F.

31. If SWIF has no mechanism to provide Offerors with the information [referenced

in Questions 29, 20,and 31], would the DGS agree to modify the Cost Submittal to eliminate the guaranteed savings percentage requirement in lieu of an overall savings percentage?

The Commonwealth is not going to modify the Cost Submittal sheet.

32. Since SWIF made quite a substantial investment in new claims software,

PowerComp, which has repricing capability, what is the reasoning behind SWIF’s decision to outsource this entire function? Has SWIF determined that PowerComp’s repricing feature is not functional?

This question is irrelevant to the preparation of a proposal in response to this RFP and, therefore, no further response is required. 33. Since SWIF is currently the largest WC carrier in Pennsylvania with the highest

volume of bills, wouldn’t it be more cost effective for SWIF to perform these services in-house with its own employees? Has SWIF done any studies to support the cost savings they are trying to achieve by outsourcing this function?

This question is irrelevant to the preparation of a proposal in response to this RFP and, therefore, no further response is required. 34. Should this RFP be withdrawn or bids rejected, would the DGS be receptive to

forming a committee of professionals with expertise in this field to determine the

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best and most cost effective approach to implementing a comprehensive medical bill review, panel development, and network discount program for SWIF?


35. Please provide a definition of “Image Failure” within the context of requirements

set forth in Section IV-6.1. Image failure is defined as: (1) documents that failed to meet the TIFF resolution of 200 dpi; (2) documents that passed the Offeror's QC process but are found to be illegible when viewed by SWIF staff; or (3) documents that were incorrectly indexed (wrong claim number, incorrect or invalid document date, incorrect or invalid medical document flag or incorrect or invalid document type). 36. The RFP states “documents must be indexed with the correct claim number,

document date, medical document flag, and document type”. What level of functionality are you seeking as far as being able to retrieve data electronically, specifically as it relates to document date, medical document flag, and document type?

SWIF seeks functionality to enable document retrieval within the SWIF system, therefore, the document claim number, document date, medical document flag and document type are needed.

37. Are the liquidated damages in the third consecutive month 20% as written, or was

this a typo and was it meant to be 30% (noted as 10% first month, 20% second consecutive month, 20% third consecutive month)?

The liquidated damages described in Section IV-6.3 and IV-6.4 are correct as written – 10% for the first month, 20% for the second consecutive month and 20% for the third consecutive month. 38. 10 days is understood to be calendar days, not business days? Assuming a system

whereby processed bills are pended to the adjuster electronically for approval, ten days would be from receipt to pending status?

“10 days” means 10 calendar days from receipt to pending status. 39. Please define the auditing process to be conducted by the Control Unit and how

specifically accuracy, appropriateness, and reasonableness will be defined. The SWIF Control Unit will review bills to ensure that the amount to be paid is accurate, that the services to be paid for are appropriate for the claimed injury and there is a causal relationship between the treatment billed and the claim made.

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40. What are the credentials of the individuals who will be conducting the audit process?

The SWIF Control Unit is comprised of SWIF Medical Supervisors and Reviewers. 41. Will the Offeror be informed of the specific bills included in the sampling? If as a result of an audit SWIF seeks liquidated damages, SWIF will identify the audited bills that are the basis for the liquidated damages sought. Liquidated damages will be calculated as described in section IV-6 of the RFP.

42. What percentage is considered to constitute a statistically valid sample? The percentage that constitutes a statistically valid sampling depends on the universe of bills being audited, as well as other factors such as the confidence level, the interval level and the prescribed error rates. 43. What grievance procedure will be placed in effect if the Offeror does not agree

with the findings of the auditor? A Successful Offeror may consider filing a claim under the Commonwealth Procurement Code, 62 Pa. C.S.A. 1712.1. 44. Does the “Repriced Amt” reflect application of fee schedule reductions only, or is

SWIF currently utilizing a PPO or other type of cost containment other than fee schedule, to include the IBC network? Please respond for all years of data.

For all years of data contained in Appendix F the “Repriced Amt” reflects only the application of the Workers’ Compensation Fee Schedule. SWIF does not currently utilize a PPO. 45. What process is currently being followed in the management of trauma bills? Currently, SWIF nurses negotiate trauma bill rates. Per section IV-5.2 b, page 25, of the RFP, SWIF expects a successful vendor to negotiate trauma bill rates. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills. 46. What percentage of insureds currently have a panel in place? SWIF does not maintain data regarding the use of panels by its policyholders. 47. Are existing panels linked to a specific network? SWIF does not maintain data regarding the use of panels by its policyholders. If there are SWIF policyholders that have established panels, those panels are not linked to a network maintained or sponsored by SWIF.

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48. With regard to the Estimated Annual Value of Medical Bills Paid, (WCA Fee

Schedule) figure of $105,000,000, please confirm whether this refers to the estimated Provider Fees after application of fee schedule reductions only. If this is not the case, please alternately define.

The Estimated Annual Value of Medical Bills Paid refers to the estimated Provider Fees after the application of the Workers’ Compensation Fee Schedule and the negotiation of trauma bills by SWIF’s nurses only. The $105,000,000 is the estimated amount that a successful offeror’s panel/PPO/discount and trauma bill negotiation services can impact. 49. Is [the Estimated Annual Value of Medical Bills Paid] an estimate or an

established baseline? The Estimated Annual Value of Medical Bills Paid is an estimate. It is not a baseline; it is not a guarantee. 50. How will [the Estimated Annual Value of Medical Bills Paid] be adjusted based

on either positive or negative variations in volume? The Estimated Annual Value of Medical Bills Paid is an estimate that was developed from recent data for purposes of the Cost Submittal Sheet. A successful offeror will be compensated based on the value of savings achieved below the incurred annual value of medical bills paid after the application of the Workers’ Compensation Fee Schedule. The risk of fluctuations in the volume of bills and the amount of bills is the offeror’s. 51. Will the Offeror be compensated in any manner for savings generated less than or

equal to the Guarantee amount? No. A successful offeror will only be compensated for savings generated above the Guarantee amount. 52. If the Offeror does not utilize a Small Disadvantaged Business, Socially

Disadvantaged Business or an enterprise zone small business, must the Offeror file a Disadvantaged Business Submittal?

An offeror must file a Disadvantaged Business Submittal even if the offeror does not utilize a Small Disadvantaged Business, Socially Disadvantaged Business or an enterprise zone small business in its proposal.

53. Can the Issuing Office provide an example of a Program Evaluation and Review

Technique (PERT) or similar type format that is acceptable in showing the time related to each event in the implementation and evaluation plan?

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A sample PERT chart and description of its components can be found at: http://whatis.techtarget.com/definition/0,,sid9_gci331391_top1,00.html. Please refer to the Work Statement section of the RFP (pages 20-39) for the specific tasks that should included in implementation and evaluation plan.

54. Since SWIF expects the “successful Offeror to use its own bill review and

processing technology” (IV-5.3), can a prime contractor that is a PPO outsource the medical bill review services to a subcontractor or joint venture partner that provides medical bill review services?

Yes. The Commonwealth encourages the formation of joint ventures and/or subcontractor relationships to address the services requested in the RFP.

55. In II-9, the Cost Submittal indicates “no invoice shall be sent to SWIF until the

Offeror exceeds the guaranteed savings level set forth on the Cost Submittal sheet”. If the Offeror meets but does not exceed the “guaranteed savings level”, would the Offeror send the invoice to SWIF?

No. A Successful Offeror will only be compensated for savings generated above the guarantee amount.

56. In II-9, SWIF indicates it “will pay nothing for these services if SWIF does not

realize the guaranteed savings level”. Does the guaranteed savings level serve as an absolute monthly threshold? Can the guaranteed savings level be considered an average monthly savings level? For example, suppose savings in one month are below the guaranteed savings level and in the subsequent month savings are above the guaranteed level of savings. Would SWIF consider averaging the two months and basing payment on the average guaranteed savings level?

The guaranteed savings level is an annual threshold. SWIF will begin compensating a successful offeror after the annual threshold is exceeded.

57. Why is the “Repriced Amount” in Appendix F $86,007,665 and the amount paid

and the “Medical Paid” in Appendix D $104,756,426? It is stated that the information in Appendix F excludes trauma bills, but $18.7 Million in Trauma charges seems excessive based on SWIF’s volume.

The difference between the “Repriced Amount” in Appendix F ($86,007,665) and the “Medical Paid” in Appendix D ($104,756,426) is the amount incurred in trauma bills after negotiation by SWIF’s nurses. Per section IV-5.2 b, page 25, of the RFP, SWIF expects a successful vendor to negotiate trauma bill rates. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills.

58. What savings is included in the 2005 Savings? Are duplicates that were identified

included in the savings? Is data from SWIF’s outsource vendors included in the total?

http://whatis.techtarget.com/definition/0,,sid9_gci331391_top1,00.html

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The “Amt Saved” in Appendix F is the difference between the amount originally billed and the amount billed after the application of the Workers’ Compensation Fee Schedule. The data in Appendix F does not include duplicates. Data from outsource vendors is included in the Appendix F data.

59. The price sheet asks for only one (1) year. What pricing adjustments are

allowable in years two (2) and three (3)?

The Commonwealth seeks a single unit price for Part A and Part B bills for the term of the contract.

60. We anticipate savings to increase from year one (1) to year three (3). Is the same

savings percentage required for all three (3) years?

Yes.

61. In Appendix F, 2005 medical paid is listed on two (2) different pages as eighty six million dollars ($86,000,000.00) and one hundred and four million dollars ($104,000,000.00). (Please explain.)

The difference between the “Repriced Amount” in Appendix F ($86,007,665) and the “Medical Paid” in Appendix D ($104,756,426) is the amount incurred in trauma bills after negotiation by SWIF’s nurses. Per section IV-5.2 b, page 25, of the RFP, SWIF expects a successful vendor to negotiate trauma bill rates. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills.

62. The price sheet requires the Offeror to guarantee a level of Preferred Provider

Organization (PPO) savings. If the Offeror does not meet the guarantee are repricing fees at risk?

Repricing fees will be paid on a monthly basis independent of any guaranteed savings payments. Repricing fees are at risk only to the extent that a successful offeror is paid pro rata savings but then fails to achieve the guaranteed annual savings level – see Response to Questions 103 and 107.

63. Are savings from the Correct Coding Initiative considered in the savings

percentage?

No. The savings percentage considers only the difference between what SWIF would have paid under the Workers’ Compensation Fee Schedule and the amount SWIF pays as a result of the successful offeror’s Panel/PPO/Discount services and negotiated trauma savings beyond the 10% baseline -- see Response to Questions 76, 99 and 102.

64. Is there a requirement for a specific DBE, WBE percentage participation in this

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contract?

There is no requirement for a specific percentage of DBE, WBE participation in this contract. DBW, WBE participation will be one of five scored criteria as described on pages 17-19 of the RFP.

65. Will SWIF provide the Offeror with a zip code listing for its insureds?

SWIF will provide a successful offeror with the zip codes of its insureds.

66. How will the Offeror know if a claim is accepted or denied? The successful offeror will be able to get active claim and claim denial information through system interface described in Section IV-5.3 e of the RFP.

67. In Appendix F, does the bill count and billed amount include duplicates?

No.

68. Can SWIF provide a breakdown of Hospital Inpatient costs by county? No.

69. Can SWIF provide the percentage or dollar amount of Hospital Inpatient

costs that are trauma or burn-unit related?

No.

70. Does SWIF expect the Offeror to file utilization reviews (UR’s) with the Bureau? No. SWIF expects to develop a process with the successful offeror by which the successful offeror will identify claims that may need URs. SWIF will review such claims and file any URs with the Workers’ Compensation Bureau.

71. Who is currently providing the services outlined in the Project Scope (pg 21 of

39)? No one currently provides the Panel/PPO/Discount services referenced in the RFP (i.e. Section IV-1.2 a, b). 72. What percentage of savings and PPO-related fees is the current vendor/provider

charging? No one currently provides the Panel/PPO/Discount services referenced in the RFP (i.e. Section IV-1.2 a, b).

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73. In addition to Pennsylvania, what other venues are or could be involved and what are these venues?

Pennsylvania is the only venue involved. No other venues are or could be involved under this RFP. 74. Are there any limitations to partnering arrangements by an “Offeror”? The Commonwealth encourages the formation of joint ventures and/or subcontractor relationships to address the services requested in the RFP. 75. Can the onerous and cumbersome task of creating a provider map be removed?

Section IV-5.2 b 2 of the RFP (page 26) seeks “a list of all PPO providers within each Pennsylvania county and a map showing the locations of its providers in Pennsylvania.” It is not necessary to locate each individual provider on the requested map. Referencing the number of providers in each county on a map and separately listing by county each provider by name, specialty, address, phone number and board certification is acceptable.

76. How and how often is the percentage of savings and according compensation

calculated? Weekly? Monthly? Does this percentage of savings include all reductions generated by Offeror? Does SWIF have a formula for these calculations?

The percentage of savings and related compensation will be calculated on an annual basis. This percentage of savings includes all savings below the Workers’ Compensation Fee Schedule that are generated by the successful offer. The savings for Panel/PPO/Discount services will be measured as the difference between what SWIF would have paid under the Workers’ Compensation Fee Schedule and the amount SWIF pays as a result of the successful offeror’s Panel/PPO/Discount services. For trauma bills the savings will be measured as the difference between a baseline savings of 10%, which is what SWIF assumes it would have saved if it continued to negotiate trauma bills itself, and the savings to SWIF above the 10% baseline that result from the successful offeror’s trauma bill negotiations. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills. 77. Regarding liquidated damages is there a demand notice and opportunity to cure

before being assessed? Does the Offeror have the right to right to challenge any large penalties in the Board of Claims?

Notice and an opportunity to cure is provided for in Section IV-6.4 of the RFP. A Successful Offeror may consider challenging any liquidated damages imposed by filing a claim under the Commonwealth Procurement Code, 62 Pa. C.S.A. 1712.1.

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78. According to section IV-4.3 all involved parties must sign a confidentiality

agreement prescribed by SWIF. Does this statement need to be signed by all employees/related parties for the bid or for the beginning of the contract?

Confidentiality agreements must be filed after the contract is awarded.

79. What is meant by County PPO penetration rates? How should these figures be

expressed as percentages of the total network? Raw number? Providers to population? Or another format?

The penetration rate information sought by Section IV-5.2 b 3 is an offeror’s penetration rate for existing clients. 80. Are the executive addresses required for section IV-8 (f) home or work addresses?

Work addresses are required by section IV-8 f.

81. Does the potential exist to split the contract into a PPO provider and a Medical

Bill Re-pricing provider? If yes, does the possibility exist that the contract for re-pricing and PPO be awarded to different entities?

The contract will be issued to a single entity. The Commonwealth encourages the formation of joint ventures and/or subcontractor relationships to address the services requested in the RFP.

82. Is it possible to bid on only one portion of services described in RFP Number

CN00020848 (e.g., to bid only on either the Preferred Provider Organization or the Comprehensive Medical bill Review services portion of the RFP)?

The contract will be issued to a single entity. The Commonwealth encourages the formation of joint ventures and/or subcontractor relationships to address the services requested in the RFP.

83. The RFP specifies that the Offeror shall submit 10 paper copies of the proposal to

the Issuing Office and two complete and exact copies of the technical proposal on CD-ROM in Microsoft Office or Microsoft Office compatible format. Is it acceptable to provide the 2 copies on CD-ROM in Acrobat “pdf” format?

All documents on the C-ROM must be in MS Office or MS Office compatible format. The CD-ROM can contain multiple MS Office compatible documents. Scanned Adobe PDF files will not be accepted on the CD-ROM. 84. After medical invoices and records have been imaged for download to SWIF,

what requirements/arrangements or timeframes have been established for subsequent disposition of the hard copy paper records received by the Offeror?

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SWIF requires that a Successful Offeror retain a hard copy of medical records and imaged documents for 14-days after the medical records and invoices have been imaged. 85. IV-5.3 Medical Bill Review; c. 4) indicates “Describe how the Offeror defends or

assists clients in defending the statistical methodology for establishing UCR’s.” (Page 31). Please provide the Issuing Office’s definition of “UCR’s” in the context of this RFP. The Pennsylvania Bureau of Workers’ Compensation defines (UCR) Usual, Customary, and Reasonable as the amount the provider charges.

The definition for UCR in the context of this RFP is the same as the Bureau of Workers’ Compensation’s definition. 86. Is the intention of this RFP that the medical bill repricing be performed within the

PowerComp system, or is it performed utilizing the Offeror’s systems and software, with processed results of the medical bill review subsequently downloaded to SWIF’s PowerComp system and software?

Medical bill repricing must be performed using the successful offeror’s systems and software. Processed results of the medical bill review will subsequently be downloaded to the PowerComp® system and software used by SWIF. 87. During the first 21 days following a work-related injury, it is possible that a claim

denial may be issued. How will the Offeror be notified of claim denials? Will the Offeror be provided access to SWIF’s PowerComp claim system to determine claim status when reviewing medical bills?

The successful offeror will be able to get active claim and claim denial information through system interface describe in Section IV-5.3 e , page 32, of the RFP.

88. If during the first 21 days of a work-related injury claim, repricing is being

performed to stay within the 10 day processing timeframe required by the RFP, and the claim is later denied, will the Offeror be held financially responsible for the PPO discounts taken during this time period, or will SWIF accept responsibility?

In cases where acceptance has not been determined, a successful offeror should pend payment of the medical bill until a final determination is rendered, at which time the 10-day clock begins. A bill should not be processed for payment by SWIF unless the claim has been accepted by SWIF. If a successful offeror mistakenly processes a bill for payment before the claim is accepted, any discounts earned on the bill will not be counted toward the guarantee savings amount.

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89. Most PPO network provider contracts require payment to the provider within a specified timeframe (generally 30 days from the carrier’s receipt of the provider invoice), or the PPO discount no longer applies. What is SWIF’s proposed payment schedule (e.g., the length of time from receipt of the completed reviewed medical bills from the Offeror, until payment is issued to the provider)?

Payment to providers is expected to follow the regulations of the Pennsylvania Workers’ Compensation Act. 90. We have a staff of RNs and certified bill coders who are experienced in bill

review for relatedness and proper bill coding. Will we have access to SWIF’s claim system to verify that charges are related to the work injury? Will we be permitted to make those decisions regarding relatedness and causation, or will those be made by SWIF’s nursing staff, as is currently the case?

A successful offeror will have access to SWIF’s claim information through the interface. A successful offeror is expected to determine whether services reported on bills are “related to the work injury suffered by the claimant; whether the services are properly coded and appropriate to the injury; determine whether billed amounts are correct; and ensure that duplicate bills for the same service and service date are not paid.” (See Section IV-1.2 d of the RFP, pages 20-21.) 91. While processing medical bills, a bill may be denied for various reasons (i.e., not

related to the work injury, denial due to CCI edits with bundling and unbundling, no documentation supplied by the medical provider, etc.) This information can be supplied on a system-generated EOR (Explanation of Reimbursement). Will the Offeror be permitted to add system-generated remarks/comments to SWIF EORs?

No. 92. The link in the RFP directing bidders to the Standard Contract is no longer valid.

A search for standard procurement form 274 brings up the following two options: 1) STD-274, Standard Contract Terms & Conditions for

Services, 05/07/04

2) STD-274 (SAP), Standard Contract Terms & Conditions

– SAP, 05/07/04

Which is the correct contract to be used for this RFP?

STD-274 (SAP), Standard Contract Terms & Conditions – SAP, 05/07/04 is the correct Terms and Conditions for this RFP and can be found at Appendix A to the RFP (http://www.dgs.state.pa.us/dgs/lib/dgs/forms/comod/procurementforms/std274_sap.doc).

93. Eileen Wunsch, Chief, Health Care Services Review Division, Bureau of WC, has

actively publicized what she states as the Department of Labor and Industry’s

http://www.dgs.state.pa.us/dgs/lib/dgs/forms/comod/procurementforms/std274_sap.doc

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policy that PPOs that are not Coordinated Care Organizations (and we believe there are no CCOs active in Pennsylvania currently) have no legal status in Pennsylvania, and their contracts with their participating providers will not be recognized or enforced by the Department. It is our understanding that she has urged providers to ignore their contractual obligations to PPOs when submitting bills for payment. Further, she has cited 34 Pa. Code Sec. 127.203(a) in support of her position that employers and insurers may not authorize PPOs or other third parties to receive bills on their behalf, even though this regulation appears designed to protect payers rather than to restrict their methods of operation. (Illinois statutes have similar language, but Illinois regulators expressly permit providers to submit bills to insurers or their agents.) Will SWIF require PPOs it contracts with to be certified as CCOs, and will SWIF require providers to submit bills directly to employers?

A PPO is not required to be a Coordinated Care Organization. Providers will not be required to submit their bills to employers. Providers will be required to submit their bills to the successful offeror. SWIF recognizes that occasionally bills will be submitted to SWIF instead of to the successful offeror. When this happens, SWIF will forward the bills to the successful offeror. (See Section IV-5.3 of the RFP.) 94. On page 10 of the RFP, it is asked that offeror describe their experience

“providing and maintaining a web-based system to support the services requested in this RFP”. Which specific services are being required via web-based applications?

This refers to the listing of PPO’s as described in Sections IV-5.2 b 2, IV-5.3 b 5 and IV-5.2 c 3. 95. Criteria for Selection: The RFP describes the priority ranking of various criteria.

Could you provide the specific point values or scoring methodology for these various options?

No. 96. The Calendar of Events end with the date the proposal is due. Is there any

information regarding the timeframes regarding proposal evaluation, selection and program implementation?

The Commonwealth will endeavor to evaluate RFP responses as quickly as possible and intends to award a contract for the services sought by the RFP without delay. 97. Page 24 refers to the “orderly transition of services to coincide with the expiration

of the current emergency procurements”. Could you provide more detail as the specific services included in the current emergency procurements and the dates they expire?

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The scope of work sought by the RFP exceeds the services being provided pursuant to current emergency procurements. Potential Offerors should refer to the RFP and formal question responses in preparing their RFP responses. The Commonwealth anticipates awarding a contract for the services sought by the RFP as soon as possible. The current emergency procurements expire on October 31, 2006. 98. Page 26 item 3 asks for penetration rates of each county in PA. Penetration rates

are a function of a distinct population and who that population is using. It is not a prospective measure, nor can it be calculated without a patient population. As such, are you asking for the penetration rates of existing clients?

The penetration rate information sought by Section IV-5.2 b 3 is an offeror’s penetration rate for existing clients. 99. Sections IV-7.1, 7.2 and 7.3 refer to “guaranteed savings amounts”. Could you

define what these are and their impact on cost proposals for this contract? The “guaranteed savings amounts” referred to in Sections IV-7.1, 7.2 and 7.3 is the guaranteed savings percentage sought on the Cost Submittal sheet – see line 38. This percentage of savings includes all savings below the Workers’ Compensation Fee Schedule that are generated by the successful offer. The savings for Panel/PPO/Discount services will be measured as the difference between what SWIF would have paid under the Workers’ Compensation Fee Schedule and the amount SWIF pays as a result of the successful offeror’s Panel/PPO/Discount services. For trauma bills the savings will be measured as the difference between a baseline savings of 10%, which is the amount SWIF assumes it would have saved if it continued to negotiate trauma bills itself, and the savings to SWIF above the 10% baseline that result from the successful offeror’s trauma bill negotiations. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills. 100. The term of the contract is defined as three years with two additional one

year options, with costs to be maintained at or below those in effect in year three. A key component of the costs is the percentage of savings component. Obviously, the revenue required to cover the costs of this program will be translated into the a savings percentage as required by this contract. This savings percentage will be determined based on current PA WC fee schedules: a significant change to the fee schedule could result in changes to savings. Will revised costs be allowed in the event of changes to state fee schedules?

No. 101. What interface will be available to the awarded vendor to determine

medical bill relatedness to the claim?

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Policy and claim data described in Appendix H will be provided through the interface.

ADDITIONAL QUESTIONS RECEIVED ON 08/09/2006 & RESPONSES 102. Is there any payment for negotiation of trauma bills or negotiation of non

network Services? The negotiation of trauma bills and the negotiation of non-network services will be compensated by a flat fee and a portion of generated savings. For non-networked services the savings will be measured as the difference between what SWIF assumes it would have paid under the Workers’ Compensation Fee Schedule and the amount SWIF pays as a result of the successful offeror’s discounts from non-network providers. The flat fee paid for bill review and processing of discounted bills will be at the per bill rate for Part A bills and at the per line rate for Part B bills. For trauma bills the savings will be measured as the difference between a baseline savings of 10%, which is the amount SWIF assumes it would have saved if it continued to negotiate trauma bills itself, and the savings to SWIF above the 10% baseline that result from the successful offeror’s trauma bill negotiations. See Appendix M which provides data regarding SWIF’s negotiation of trauma bills. The flat fee paid for review and processing of trauma bills will be per bill at the Part A bill rate. 103. As noted, the reimbursement to the offeror for savings above the guarantee

will not be paid until the annual guarantee is exceeded. This seems over burdensome on the offeror as they will incur expenses related to PPO, trauma negotiations and pre review without reimbursement up and until the annual guaranteed savings is exceeded. In fact, this practice may serve to increase per line charges as offerors seek to cover out of pocket expenses. Will the Commonwealth be willing to pro rate the guaranteed savings on a monthly basis, so that any savings exceeded in the month will be paid to the offeror and any savings less than the guarantee would be reimbursed to the Commonwealth?

The payment for guaranteed savings in the RFP, Section II-9 2. b, is revised as follows:

2. b. SWIF will pay for these services on a monthly basis. These

services shall be invoiced to SWIF each month. The invoice must set forth the amount SWIF would have paid under the Workers’ Compensation Fee Schedule, the amount SWIF pays as a result of the successful offeror’s use of panel providers, PPO providers, and health care provider discounts, the amount saved above the trauma bill baseline

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of 10%, the percentage of savings guaranteed to SWIF in the successful offeror’s Cost Submittal Sheet and the percentage of savings achieved that month. SWIF will reimburse a successful offeror a pro rata amount of the offeror’s share of savings each month the successful offeror produces savings exceeding the guaranteed amount. SWIF will pay nothing for these services for any month the guaranteed savings amount is not exceeded. If SWIF pays some monthly savings, but the annual guarantee is not met at the end of any year, SWIF will retain bill review and processing fees until the overpaid savings are recovered or invoice the offeror for the amount owed. Otherwise, bill review and reprocessing fees will be paid independently of SWIF’s reimbursement to a successful offeror for savings generated. The amount of savings claimed will be subject to audit.

104. Can you elaborate on how the Backerd EDI and Image File will be used

by SWIF? For example; Where in the workflow will the adjuster be able to view the image of the bill and the repriced data?

A successful offeror’s interface with SWIF will provide the means for the adjuster to access the imaged documentation on SWIF’s Onbase system. The repriced data will be available through the interface with the Powercomp® system used by SWIF. 105. Is $105,000,000 on Cost Saving Form “net” medical dollars after bill

review savings? In other words, is the $105,000,000, the amount that the PPO can access / impact? Re: Question 48

The Estimated Annual Value of Medical Bills Paid refers to the estimated Provider Fees after the application of the Workers’ Compensation Fee Schedule and the negotiation of trauma bills by SWIF’s nurses only. The $105,000,000 is the estimated amount that a successful offeror’s panel/PPO/discount and trauma bill negotiation services can impact.

106. Of the 250,000 bills, how many are out of state and what other states?

SWIF does not maintain data regarding the number of out of state bills and where the out of state bills originate.

107. The Guarantee Program requires reconsideration. If the vendor must wait

until total savings guaranteed are achieved before reimbursement of dollar one, then that does not seem fair or reasonable. We recommend interim reimbursement on a monthly basis. Will SWIF consider Interim Reimbursement on a monthly basis which assess monthly guarantee monthly?

The payment for guaranteed savings in the RFP, Section II-9 2. b, is revised as follows:

8/15/2006 12:59 PM 25

2. b. SWIF will pay for these services on a monthly basis. These services shall be invoiced to SWIF each month. The invoice must set forth the amount SWIF would have paid under the Workers’ Compensation Fee Schedule, the amount SWIF pays as a result of the successful offeror’s use of panel providers, PPO providers, and health care provider discounts, the amount saved above the trauma bill baseline of 10%, the percentage of savings guaranteed to SWIF in the successful offeror’s Cost Submittal Sheet and the percentage of savings achieved that month. SWIF will reimburse a successful offeror a pro rata amount of the offeror’s share of savings each month the successful offeror produces savings exceeding the guaranteed amount. SWIF will pay nothing for these services for any month the guaranteed savings amount is not exceeded. If SWIF pays some monthly savings, but the annual guarantee is not met at the end of any contract year, SWIF will retain bill review and processing fees until the overpaid savings are recovered or invoice the offeror for the amount owed. Otherwise, bill review and reprocessing fees will be paid independently of SWIF’s reimbursement to a successful offeror for savings generated. The amount of savings claimed will be subject to audit.

108. Would DGS consider reassessing the answer to question 63 and include

savings from medical bill review and correct coding?

The Commonwealth believes the proposed reimbursement structure for this RFP is reasonable.

109. Regarding question 62; Is there any penalty for not meeting the guarantee,

other than not getting paid?

The guaranteed savings amount contained in an offeror’s proposal is considered material and important and will be relied upon during the proposal evaluation process. After the contract is awarded to a successful offeror, SWIF will monitor the guaranteed savings on a monthly basis. If a successful offeror fails to deliver the savings guaranteed in its proposal after a reasonable amount of time, SWIF may find the offeror in default of its obligations and the offeror could face termination of the contract and debarment by the Commonwealth.

110. With regard to the manual bill review process that a vendor must perform

to provide SWIF with significant savings below the fee schedule. How will SWIF compensate the offeror? NOTE: These are not standard repricing charges and are not associated with the WCC edits.

The only payment which will be made for medical bill review services will be the fixed fee payments. Savings realized by panel providers will be part of the guaranteed savings calculation.

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111. Do the Department of General Services (DGS) / SWIF understand that the potential for medical bill review savings over and above the WCC edits for SWIF are just as substantial as PPO savings?


112. If SWIF does not incentivize an offeror to achieve savings [over and

above the WCC edits], does DGS recognize that offerors will not be incentivized to provide these savings?


113. Does the Department of General Services know that the PA Bureau of WC

provides annual Medical Bill Review Training to repricing companies and they strongly recommend that insurance carriers utilize vendors who provide these services?


114. To my knowledge all of The Bureau of Minority and Women Business

Opportunities (BMWBO) that would be interested in bidding this pay an access fee to a National PPO to access their network discounts for their clients. Does the Department of General Service recognize that any BMWBO would be financially harmed by the “no pay if you do not meet the guarantee” reimbursement methodology as they must pay the PPO company for those savings.

The Commonwealth has revised its payment structure for the savings portion of the RFP. Please see the Response to Questions 103 and 107. A successful offeror will be reimbursed a pro rata amount of its share of savings each month it achieves savings in excess of its proposed guarantee amount.

115. SWIF, in the RFP, has indicated their total combined savings for 2005

were at the 48% level; 2004 at the 45% level; and 2003 at the 46% level. These saving levels are difficult for any operation to achieve due to the fact that there were no PPO discounts utilized in the savings process. Will SWIF produce audited financials that will verify their stated annual savings levels?

The data provided in Appendix F is the data maintained by SWIF regarding the repricing and recoding of bills to the Workers’ Compensation Fee Schedule and has been audited by the Pennsylvania Auditor General. SWIF expects a successful offeror to use its experience in the marketplace to calculate savings below the Workers’ Compensation Fee Schedule with a reasonable degree of certainty.

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116. Will Offerors be able to conduct an audit of SWIF’s indicated savings, in conjunction with Offerors’ guarantee?

Per the requirements of the RFP a successful offerors will be responsible for both repricing/recoding bills to the Workers’ Compensation Fee Schedule (WCFS) and generating discounts below the WCFS. Thus, a successful offeror will have all of the data relating to savings and will not need to audit SWIF. If a successful offeror believes that SWIF did not correctly pay it, it may consider filing a claim under the Commonwealth Procurement Code, 62 Pa C.S.A. 1712.1. SWIF expects a successful offeror to use its experience in the marketplace to calculate savings below the Workers’ Compensation Fee Schedule with a reasonable degree of certainty.

117. If discrepancies are found in SWIF’s stated annual savings, will Offeror be

able to modify it’s saving guarantee?

SWIF expects a successful offeror to use its experience in the marketplace to calculate savings below the Workers’ Compensation Fee Schedule with a reasonable degree of certainty. If a successful offeror believes that SWIF did not correctly pay it, it may consider filing a claim under the Commonwealth Procurement Code, 62 Pa C.S.A. 1712.1.

118. It appears that the Cost Proposal Sheet is not calculating correctly at Line

48, "Excess Savings of $5 Million - $10 Million". Should the calculation in Line 48 be Line 41 minus Line 44 if positive otherwise Zero?

The amount in Line 48 was not being calculated correctly on the original Cost Proposal Sheet. This has been corrected. Please use the corrected Cost Sheet, which has been posted on the DGS website.

119. Section I-12 Proposals of the RFP states “In addition to the paper copies

of the proposal, Offerors shall submit two complete and exact copies of the technical proposal on CD-ROM in Microsoft Office or Microsoft-compatible format.” Does the CD version of the RFP have to be contained in a single Office-compatible document? If so, does the document have to be a Microsoft Word document? If the CD can contain multiple Office-compatible documents, can they be different types (Word, Excel, Visio, Powerpoint, etc…)? Can the CD contain scanned Adobe PDF files if documents submitted as part of the RFP currently only exist as a PDF file? Examples of this would be printed marketing materials.

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All documents on the C-ROM must be in MS Office or MS Office compatible format. The CD-ROM can contain multiple MS Office compatible documents. Scanned Adobe PDF files will not be accepted on the CD-ROM.

120. Section IV – 7.3 Discounts of the RFP states “After achieving the

guaranteed savings amount, the Offeror must also provide a monthly invoice that sets forth the savings that have been achieved because of the use of health care providers that have agreed to extend discounts to SWIF claimants. This amount will be subject to audit. The Offeror must describe the records it will maintain which will enable SWIF to verify, by audit, the amount of monthly savings reported.” How are differences between the Offeror’s savings report and SWIF’s audit of those reports handled? Does the Offeror have the right to inspect any SWIF internal data used by SWIF to audit a submitted discount savings report? Will any duplicate payments to providers made by SWIF that are determined to not be the fault of the Offeror be excluded from the audit?

SWIF will audit the reports provided by a successful offeror. Duplicate payments should be eliminated at bill entry by a successful offeror. If it is discovered that duplicate payments have been made through no fault of the successful offeror, these payments will not be included in the audit. If as a result of an audit SWIF identifies savings that it believes were incorrectly included in the savings report, SWIF will identify those instances to the successful offeror and reduce any savings payments by the incorrectly included amounts. If a successful offeror believes that SWIF did not correctly pay it, it may consider filing a claim under the Commonwealth Procurement Code, 62 Pa. C.S.A. 1712.2.

121. To insure that the offeror's savings guarantee in the price proposal is

reasonable and attainable, will SWIF require that fees derived from repricing work be put at risk against the guaranteed savings amount? If the total guarantee is not realized by SWIF over the initial three year term of the contract, the offeror will be required to return some or all of its repricing fees to make up the shortfall.

Repricing fees will be paid on a monthly basis independent of the guaranteed savings payments. Repricing fees are at risk only to the extent that a successful offeror is paid a pro rata amount of its savings but then fails to achieve the guaranteed annual savings level – see Response to Question 103 and 107.

122. The availability of 1099 provider data will enable prospective vendors to

more confidently and aggressively bid guaranteed PPO network savings amounts in their proposal response to this RFP. Can a 1099 report that includes total dollars paid to providers, by service type (Radiology, in-patient hospital, physical therapy, etc.) the providers full demographics (name, address and zip code) and Tax ID number be provided for the most recent 12 month or 90 day period?

The Commonwealth has included extensive data regarding SWIF’s bills and payments with this RFP. The Commonwealth expects that the data provided along

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with an offeror’s experience in the marketplace will allow all potential offerors to calculate savings below the Workers’ Compensation Fee Schedule with a reasonable degree of certainty.

* * * NOTE: The total amount paid in Appendix D does not match the sum of the amounts paid on Appendix F and Appendix M. The difference is due to the fact that the databases from which the data for the appendices was pulled track refunds and duplicate payments differently. Also, SWIF implemented a system conversion in the middle of 2005, which affected how data was captured and retained through the years in certain databases. For purposes of responding to this RFP, please refer to the Estimated Annual Value of Medical Bills Paid ($105,000,000) as the estimated amount that a successful offeror’s panel/PPO/discount and trauma bill negotiation services can impact.

PREPROPSAL LIST OF ATTENDEES

8/9/2006 CN00020849 SWIF PPO and Medical Bill Payment RFP Preproposal Meeting Attendees (Please check One) Specify

No. COMPANY ADDRESS CONTACT PERSON TITLE TELEPHONE # EMAIL ADDRESS PPO MEDICAL BILL PAYER OTHER

1 Ampro 1255 McFarland 400 Dr., Alpharetta, GA 30004 Jim Webb VP 770 7520 0122 [email protected] X

2 BMWBO 611 North Office Building, Harrisburg, PA 17125 Gina Peters Administration 717 346-8105 [email protected]

3 Comp Services 1717 Arch Street, Philadelaphia, PA John Madigan Director, Provider/Relations 215 587 1985 [email protected] X X

4 Concentra King of Prussia, PA Barbara Mathoni RBM 800 221 2836 [email protected] X

5 CorVel 600 Wilson Lane, Mechanicsburg, PA 17055 Dee VanGavru RVP 717 796 0992 [email protected] X X

6 CorVel 600 Wilson Lane, Mechanicsburg, PA 17055 Mark Beck Acct. Executive 717 796 0992

7 First Health Corp 2312 Lombard Street, Philadelphia, PA Stephen Field Director, National Sales 215 772 9434 [email protected] X

8 GCM 444 Liberty Avenue, Gateway, PA 15222 Jeff Bergman Principle 877 706 8374 [email protected] X

9 Health Options Mgmt Services 1970 Technology Prkwy, Mechanicsburg, PA Paul Rudnick Director of Marketing 717 728 5502 [email protected] X

10 Hoover Rehab Services 1970 Technology Prkwy, Mechanicsburg, PA Terry Folk Director of Operations 717 728 5502 [email protected] X

11 Hoover Rehab Services 1970 Technology Prkwy, Mechanicsburg, PA Peter Kramer Council 717 728 5502 [email protected] X X

12 LECS Comptroller Office 15th Floor, Labor and Industry Building Mary Lou Jones Accounting 717 783 9117 [email protected]

13 LECS Comptroller Office 15th Floor, Labor and Industry Building Aneeta Sanyal Accounting 717 772 2341 [email protected]

14 Marsh 2 N. 2nd Street, Harrisburg, PA Scott Liebel AVP 717 720 4554 [email protected] X X

15 MCMC 701 Technology Drive, Ste 100, Canonsburg, PA 15317 B. J. Dougherty Senior, VP 724 745 5900 [email protected] X

16 Med Risk 2701 Renaissance Blvd, King of Prussia, PA Ruth Estrich VP 610 768 5812 [email protected] X X

17 Med Risk 2701 Renaissance Blvd, King of Prussia, PA Ed McBurnie VP, Sales 610 768 5812 [email protected] X X

18 PMA Mgmt Corp 380 Sentry Pkwy, Blue Bell, PA 19422 Lisa Romeu MGR, OPS & SVC 610 397 5372 [email protected] X X

19 PMA Mgmt Corp 380 Sentry Pkwy, Blue Bell, PA 19422 Meg Schumer VP, CUST & SVC 610 391 3401 [email protected] X X

20 Premier Comp Solutions 100 Hightower Blvd. Ste 300, Pittsburgh, PA 15205 Linda Schmac President 412 494 4001 [email protected] X X

21 VRS.Inc 300 N. 2nd Street, Harrisburg, PA T. M. Carlock President 717 805 7770 [email protected] Subcontractor

22 VSI 101 Erford Road, Camp Hill, PA Ed Karls Director 717 979 6813 [email protected] - -

23 Workwell 25 W. Main, Carnegie, PA 15106 Chris Yanakos EVP 412 279 5300 [email protected] X

24 Workwell 25 W. Main, Carnegie, PA 15106 John Lecornu DBD 412 279 5300 [email protected] X

8/15/2006 Page 1


H A R R I S B U R G August 22, 2006

Subject: Preferred Provider Organizations and Medical

Bill Review Services Bid Number: CN00020848 Opening Date/Time: 9/6/2006, 1:30PM Flyer: Addendum # 3 To All Offerors: The aforementioned solicitation is hereby stayed pending resolution of a protest. The proposal opening date has been postponed indefinitely and will be rescheduled upon resolution of the protest. A Flyer will be issued at that time establishing a new proposal opening date. Except as clarified and amended by this flyer, the terms, conditions, specifications, and instructions of the request for proposal and any previous flyers, remain as originally written. Any questions concerning this RFP direct to: Janice M. Blocker, Associate Commodity Manger at 717-703-2943 Very truly yours, Janice M. Blocker _________________________________________ for Nicholas Kaczmarek, Chief Procurement Officer Bureau of Procurement



Subject: SWIF PPO and Medical Bill Payment RFP Bid Number: CN00020848 Opening Date/Time: 10/31/06 1:30 p.m. Flyer: Addendum #4 To All Bidders: The following items have been changed: 1. The stay on the bid protest has been lifted and the new due date is October 31, 2006 at 1:30 p.m. 2. This flyer is to also clarify the data and cost structure provided in relation to the aforementioned

solicitation. The Cost Submittal Sheet (Appendix C to the RFP) calculates annual savings using a $105,000,000 baseline figure. The $105,000,000 figure is an estimated annual value of medical bills paid by SWIF (after application of the Workers Compensation Fee Schedule) and is based on the value of medical bills paid by SWIF in 2005. As Appendix C shows, the average annual value of medical bills paid by SWIF over the last five years is $70,979,285, though the annual amount paid has been trending steadily upwards. SWIF anticipates that this year it will experience an unusually large, one-time increase in the annual value of medical bills paid because SWIF is processing through a backlog of medical bills. SWIF anticipates that when the backlog is eliminated later this year, going forward the annual value of medical bills paid will continue along the usual trend line. The purpose of the $105,000,000 baseline figure is to provide a consistent basis from which to calculate all offeror’s proposed savings guarantees. The $105,000,000 figure is neither a cap on nor a guarantee of the value of medical bills that can be affected by a successful offeror’s services. A successful offeror will be compensated based on the actual annual value of medical bills paid each year of the contract. By way of example, if the annual value of medical bills paid after the application of the Workers Compensation Fee Schedule for contract year one is $115,000,000, the successful offeror’s savings compensation for that year will be calculated based on $115,000,000. Except as clarified and amended by this Flyer, the terms, conditions, specifications, and instructions of the invitation to bid and any previous flyers, remain as originally written. Any questions concerning this bid direct to: Janice Blocker, Associate Commodity Manager at 717-703-2943 Very truly yours, _Janice M. Blocker_________________________ for Nicholas Kaczmarek, Chief Procurement Officer Bureau of Procurement



Subject: SWIF PPO and Medical Bill Payment RFP Bid Number: CN00020848 Opening Date/Time: 10/31/06 1:30 p.m. Flyer: Addendum #5 To All Bidders: The following information was corrected: 1. Appendix N…..the RFP number is changed to CN00020848.

Except as clarified and amended by this Flyer, the terms, conditions, specifications, and instructions of the invitation to bid and any previous flyers, remain as originally written. Any questions concerning this bid direct to: Janice Blocker, Associate Commodity Manager at 717-703-2943 Very truly yours, _Janice M. Blocker_________________________ for Nicholas Kaczmarek, Chief Procurement Officer Bureau of Procurement

REQUEST FOR PROPOSALS FOR Preferred Provider … · preferred provider organizations (ppo) and...

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