Better Health Care for all Floridians. June 25, 2013
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1 RICK SCOTT GOVERNOR Better Health Care for all Floridians ELIZABETH DUDEK SECRETARY June 25, 2013 Prospective Vendor: Subject: Solicitation Number: AHCA RFP /13 Title: Hospital Cost Report Audits and Federal Disproportionate Share Hospital (DSH) Program Payment Reconciliations Addendum No. 1 The enclosed information has been provided for consideration in the preparation of your response to the above mentioned RFP. All other terms and conditions of the RFP remain in effect. To the extent this Addendum gives rise to a protest, failure to file a protest within the time prescribed in section (3), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes. Sincerely, Marianne Yancey Marianne Yancey OMC Manager Procurement Office Enclosures: Addendum No. 1 (4 Pages) s and Answers (3 Pages) 2727 Mahan Drive Mail Stop #15 Tallahassee, FL Visit AHCA online at
2 AHCA RFP /13 HOSPITAL COST REPORT AUDITS AND FEDERAL DISPROPORTIONATE SHARE HOSPITAL (DSH) PROGRAM PAYMENT RECONCILIATIONS ADDENDUM NO. 1 Item #1 Attachment C, Special Conditions, Section C.39, General Instructions for Response Preparation and Submission, Item E., Technical Response, sub-item 7., Staffing,, is hereby amended to include paragraphs f. and g. as follows: f. The respondent shall provide a description of its subcontractor utilization plan which should identify any current or anticipated subcontracts the respondent will use for the provision of the services and deliverables required by this RFP. The respondent s description should include at a minimum: 1. The name of the subcontracted organization(s), if known at time of response submission; 2. The services to be provided; 3. The qualifications of the subcontracted organization(s); and g. The respondent shall describe its proposed approach to coordinate and communicate with any proposed subcontractors and the Agency to ensure effective integration of services. Item #2 Attachment D, Scope of Services, Section D.5, Services Provided by the Vendor, Item C., Exit Conference, is hereby amended to include sub-items 2. and 3., as follows: 2. Exit Conferences may be held face to face or via written communication as agreed to by the provider. The Vendor must include the method it utilized to hold the Exit Conference in its examination paper submission to the Agency. 3. If the provider elects to waive the Exit Conference, the Vendor must obtain the provider s waiver in writing and include that with examination paper submission to the Agency. Item #3 Attachment D, Scope of Services, Section D.5, Services Provided by the Vendor, Item E., Other Examination Terms and Conditions, sub-item 3., the first sentence is hereby deleted in its entirety and replaced with the following: The Vendor shall notify the Agency s Contract Manager if the Vendor believes conditions exist that prevent it from providing a unqualified opinion. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK AHCA RFP /13, Addendum No. 1, Page 1 of 4
3 Item #4 Attachment D, Scope of Services, Section D.5, Services Provided by the Vendor, Item G., Staffing, sub-item 3., is hereby deleted in its entirety and replaced with the following: 3. The Vendor shall utilize professional and/or para-professional staff for the completion of the audits and a Certified Public Accountant shall approve each audit. The Vendor s Contract Manager may be utilized for the approval function. Item #5 Attachment D, Scope of Services, Section D.5, Services Provided by the Vendor, Item G., Staffing, sub-item 6. is hereby deleted in its entirety and replaced with the following: 6. The Vendor shall not enter into any subcontract for services to be provided under the resulting Contract without the express written prior consent of the Agency. The Vendor shall maintain full responsibility for all work to be performed under the Contract. Each approved subcontractor shall be subject to the same terms and conditions as the Vendor. The Vendor shall submit all subcontracts, and any amendment(s) to approved subcontracts, to the Agency no later than fifteen (15) calendar days prior to the effective date of the subcontract and/or the amendment. The Agency s Contract Manager shall approve subcontracts in writing within thirty (30) calendar days after receipt. Item #6 Attachment D, Scope of Services, Section D.8, Performance Standards and Liquidated Damages, Table 1, Performance Standards and Liquidated Damages, the eighth (8 th ) row is hereby amended to now read as follows: The Vendor shall perform a minimum of twohundred and seventy (270) Hospital cost report audits and seventy (70) Federal DSH audits per year of the Contract resulting from this RFP, unless otherwise directed by the Agency in writing. Failure of the Vendor to perform the minimum number of hospital cost report audits and Federal DSH audits may result in liquidated damages of $5,000 for each audit that is not performed. In the event there are fewer than seventy (70) providers which received DSH payments, the Vendor shall not be penalized for being unable to meet the minimum audit requirement. Item #7 Attachment D, Scope of Services, Section D.9, Method of Payment, Item A., the sixth (6 th ) sentence is hereby amended to now read as follows: The Agency will pay the Vendor in arrears progress payments for each documented hour of work performed towards completion of an examination, including examinations cancelled after the Vendor has begun work on them. AHCA RFP /13, Addendum No. 1, Page 2 of 4
4 Item #8 Attachment D, Scope of Services, Section D.9, Method of Payment, is hereby amended to include Item I. as follows: I. The Agency will compensate the Vendor for service hours completed for cancelled examinations up to the point of the Agency s notification of cancellation. Item #9 Attachment E, Evaluation Criteria, Part II, Evaluation Criteria, Preamble and Scoring Table, are hereby deleted in their entirety and replaced as follows: EVALUATION CRITERIA Independent evaluators will use this sheet to assign points to all responses evaluated and designated as responsive. Evaluations will be based on the detailed evaluation criteria components indicated in Attachment E, Detailed Evaluation Criteria Components. A. Mandatory Documentation B. Past Performance Maximum Raw Score Possible Weight Factor Maximum Points Possible 1. Client #1 59 X 1 = Client #2 59 X 1 = Client #3 59 X 1 = 59 C. Financial Information 20 X 3 = 60 D. Cost Proposal 5 X 15 = 75 E. Technical Response 1. Table of Contents 2. Executive Summary 3. Organizational Structure and History 10 X 3 = Experience and Qualifications 30 X 3 = Examinations 20 X 7 = Reporting 10 X 2 = Staffing 40 X 5 = Internal Quality Assurance 10 X 2 = Data Transmission and Security 25 X 1 = 25 Total Rating: 837 AHCA RFP /13, Addendum No. 1, Page 3 of 4
5 Item #10 Attachment E, Evaluation Criteria, Part II, Detailed Evaluation Criteria Components, Item 7., Staffing, is hereby amended to include sub-items g. and h., as follows: g. The appropriateness of the respondent s subcontractor utilization plan. h. The adequacy and appropriateness of the respondent s proposed approach to coordinate and communicate with any proposed subcontractors and the Agency to ensure effective integration of services. Item #11 Attachment J-1, Detailed Budget, the page footer is hereby amended to read: AHCA RFP /13, Attachment J-1, Page 1 of 1 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK AHCA RFP /13, Addendum No. 1, Page 4 of 4
6 AHCA RFP /13 Hospital Cost Report Audits and Federal Disproportionate Share Hospital (DSH) Program Payment Reconciliations s and Answers Agency Reference # Vendor Name Date Received Vendor No. Answer 1 Myers and Stauffer, CPA June 11, Section C.39.C of the RFP states in part that The respondent shall submit its most recent audited financial statements. As a Certified Public Accounting firm we do not The requirement is for audited financial statements. Unaudited financial have audited financial statements, which is a common practice among CPA firms. statements cannot be used as a substitute and no other alternative will Would unaudited financial statements satisfy the requirements of C.39.C? If not, be considered. There is no known restriction that would prohibit a CPA what alternative option would be available to satisfy this section of the RFP? firm from having its financial statements audited rather, as stated in the Section C.39.C also states that Failure to submit financial information as required question, it is a practice or business decision of some CPA firms not to will result in rejection of the response. Since many CPA firms will not be able to have audited financial statements. meet this requirement, is it the intent of the Agency to restrict the ability of qualified CPA firms from responding to this RFP? 2 Myers and Stauffer, CPA June 11, Section D.5.B of the RFP outlines the services to be provided under the Disproportionate Share Hospital Program (DSH) Payment Reconciliation portion of the contract. It discusses reviewing the states methodology, the state s audit Yes. The final deliverable of the DSH payment reconciliation process is protocol, and compiling and summarizing calculated DSH limits and payments that the production and issuance of a certified independent audit of the DSH were made. Is the final deliverable of the DSH payment reconciliation process the program as required by the final DSH audit federal rule published production and issuance of a certified independent audit of the DSH program as 12/19/2008. The first DSH audit period that the successful vendor is required by the final DSH audit rule published 12/19/2008? If not, please describe in responsible for will be the state plan rate year 2011 (DSH audit report detail what the final deliverable is for this section of the RFP. due to CMS on or before 12/31/14). If the final deliverable is a certified audit report, will the first DSH audit period that the successful vendor is responsible for be the state plan rate year 2011 (DSH audit report due to CMS on or before 12/31/14)? Myers and Stauffer, CPA June 11, June 11, June 11, Please indicate how the prior vendor was compensated for the services under this RFP. If a rate per hour was used, what were the hourly rates at each staffing category and what was the number of hours paid at each staffing category? If a fixed fee was used, what was the fixed fee(s) per unit (e.g. audit, desk review, etc.) and how many audits were paid for under the contract? If permissible with your procurement rules, please provide a copy of the current vendor s contract for these services for the past five years. Under Staffing Item #7 Attachment C Page 20 of 23, Paragraph c states that A resume shall be included for the proposed contract manager, including documentation of current Florida CPA licensures. Similar requirement is not included in paragraph b for other staff. Is there a requirement that all other staff have a Florida CPA license? Attachment D, Page 9 of 13. The Vendor shall utilize Certified Public Accountants for completion of the audits. Attachment D, page 10 of 13 states All Examination staff must be employed in a Professional or Para Professional accounting position. These two statements appear to be conflicting. What is a Professional or Para Professional? Please clarify. The hourly rate for the encumbent vendor is $ Interested parties may request copies of public records through the Agency's Public Records Office at publicrecordsreq@ahca.myflorida.com. No. The Agency only requires the Vendor's Contract Manager to be a Certified Pubilic Accountant. The Vendor may elect to employ additional CPAs as part of their staffing plan to ensure all functions of the RFP are performed as required. The Agency's intent is to allow the Vendor to utilize both professional and para-professional accounting positions for the completion of the audits. See Addendum Item #4. 6 June 11, Would an Exit Conference be required for all engagements, or could the results of smaller engagements, or engagements where there are no significant findings be communicated in writing? In addition, would providers have the ability to waive an Exit Conference, if they would like to do so? The Agency will allow written communications between the Vendor and the provider being audited to serve as the exit conference as long as the communication is documented and recorded in the examination paper submission. Providers may waive the exit conference and the Vendor must provide evidence of the provider's waiver with the examination papers. See Addendum Item #2. AHCA RFP /13, s and Answers, Page 1 of 3
7 AHCA RFP /13 Hospital Cost Report Audits and Federal Disproportionate Share Hospital (DSH) Program Payment Reconciliations s and Answers Agency Reference # Vendor Name Date Received Vendor No. Answer 7 June 11, Attachment D, page 10 of 13 paragraph 6 states that The Vendor shall not enter into any subcontract for services to be provided under the Contract resulting from this RFP. Attachment C, paragraph C.20 states The successful vendor shall not subcontract, assign, or transfer any work identified under this RFP or the resulting Contract, with the exception of those subcontractors identified in the prospective vendor s response, without prior written consent of the Agency. Please clarify this information, which appears to be conflicting. We believe the agency meant to allow subcontractors for the Prime Vendor which would be beneficial to the AHCA. See Attachment C, Section C.20, Subcontracting, which states "The successful vendor shall not subcontract, assign, or transfer any work identified under this RFP or the resulting Contract, with the exception of those subcontractors identified in the prospective vendor s response, without prior written consent of the Agency." See Addendum Item #5. 8 June 11, The Vendor shall submit an examination timeline to the Agency no later than thirty (30) calendar days of receiving notice of the assigned examination. Does this apply to special circumstances or already predetermined work load? Yes, unless otherwise notified by the Agency, the Vendor shall submit an examination timeline to the Agency with each assigned examination as described in the RFP. 9 June 11, Table 1 of Attachment D, states that failure to complete a minimum of 70 Federal DSH audits per year could result in liquidated damages of $5,000 per each audit not Yes, if there are fewer than 70 providers which received DSH payments, performed. Is it correct to assume that this is not applicable if there are less than the Agency would not impose liquidated damages upon the Vendor for 70 providers which received DSH funds and therefore required an audit in any failure to meet the minimum requirement. See Addendum Item #6. particular year? 10 June 11, Would reopening be included in the required minimum count of 270, and would they require submission of an NPR package? Yes, reopening would be included in the required minimum count of 270. The reopening would require submission of an NPR package June 11, June 11, KPMG, LLP June 11, KPMG, LLP June 11, KPMG, LLP June 11, KPMG, LLP June 11, KPMG, LLP June 11, KPMG, LLP June 11, Can you clarify the number of Charity Care / Disproportionate Share Reimbursement reviews that will be required to be completed under this RFP? Did the agency intentionally intend to limit respondents to only Florida licensed public accounting firms and will responses by non CPA firms with CPA Contract Managers be disqualified? Para. C.41: Although paragraph D.5.G.6 Says that The Vendor shall not enter into any subcontract for services to be provided under the Contract resulting from this RFP, would the Agency permit use of a subcontractor as part of the Conflict of Interest Mitigation Plan as an action to mitigate, neutralize, or avoid organizational conflicts of interest? Para. D.3; D.5.A: What extent (percentage or number) of the approximate 270 cost report examinations and approximate 70 DSH audits have historically been reviewed at the field audit level? One Charity Care / Disproportionate Share Reimbursement review would be required for each provider that recieves a DSH payment. The Agency's intent is to contract with a Vendor currently licensed to practice public accounting in the state of Florida and the successful vendor shall be required to maintain such licensure during the entire term of the resulting Contract. See Attachment C, Section C.20, Subcontracting, which states "The successful vendor shall not subcontract, assign, or transfer any work identified under this RFP or the resulting Contract, with the exception of those subcontractors identified in the prospective vendor s response, without prior written consent of the Agency." See Addendum Item #5. This data is not available. Para. D.4: Will the Agency provide previous and/or on-going information to establish compliance with the Medicaid DSH requirement that hospitals provide nonemergency obstetric services coverage or have a statutory exemption from Yes, the Agency will provide this information to the vendor. it? Para. D.5.A.1.c.3: Will notices of program reimbursement (NPR) be issued by the Agency? Para. D.9: For any examinations that the Agency should direct to be stopped before completion, should, for the purpose of payment, these be deemed completed in the month when the stoppage was directed? Para. E.3.: Is qualified opinion supposed to be unqualified opinion in the statement The Vendor shall notify the Agency s Contract Manager if the Vendor believes conditions exist which prevent it from providing a qualified opinion? No, the Vendor will issue all NPR. The Agency will compensate the vendor for service hours performed towards the completion of all examinations, including cancelled examinations. See Addendum Item #8. Yes, this was a typographical error. Para. E.3. should say "The Vendor shall notify the Agency s Contract Manager if the Vendor believes conditions exist which prevent it from providing an unqualified opinion." See Addendum Item #3. AHCA RFP /13, s and Answers, Page 2 of 3
8 AHCA RFP /13 Hospital Cost Report Audits and Federal Disproportionate Share Hospital (DSH) Program Payment Reconciliations s and Answers Agency Reference # Vendor Name Date Received Vendor No. Answer 19 KPMG, LLP June 11, Para. C.24 & C.39.C: KPMG LLP, as is the case with other certified public accounting firms, prepares its financial statements in accordance with the Partnership Agreement, Bylaws, and Operating Method Accounting Policies and Guidelines, primarily utilizing the accrual method of accounting. Where not otherwise prescribed, U.S. Generally Accepted Accounting Principles (GAAP) are applied. This method, also referred to as Other Comprehensive Basis of Accounting (OCBOA) is in accordance with the partnership agreement. KPMG LLP is a private limited liability partnership and therefore does not produce a The requirement is for audited financial statements. The basis of full-disclosure annual report. KPMG LLP prepares condensed balance sheets and accounting can vary as the only qualification on the audit is that it not other financial information. have an adverse or disclaimer of opinion. So the financial statements As of September 30, 2012, KPMG LLP reported total revenue over $5.7 billion. By described could potentially meet the requirement if they are audited. all the key financial measures of our firm, these results reflect continued financial Because they would not be GAAP based financial statements, the audit stability. This fundamental strength allows us to make the necessary investments in would have to include a qualified opinion which is acceptable for this the people and technology that keep us at the forefront in professional services. solicitation. Our operations are characterized by strong annual financial results, a diversified client base, and strong leadership possessing the vision to direct the firm into the future. If you would like additional information, we can arrange for you to speak directly with our chief financial officer. Since KPMG is not required by professional or regulatory standards to prepare audited financial statements, we believe this requirement does not apply to our firm. Therefore, will AHCA accept KPMG s condensed balance sheets and other financial information in lieu of audited financial statements? 20 KPMG, LLP June 11, KPMG, LLP June 11, RFP, Attachments A and B: We note that the Agency has included PUR 1000 and PUR 1001 as attachments to the RFP, in addition to a sample contract. We request that AHCA please clarify the documents that will be incorporated into the Agreement, and the precedence of each document. Attachment B, PUR 1000, Para. 35: In order to fully understand the insurance requirements, we request AHCA to identify the minimum coverage limits that would be acceptable. The attachments that will be included in the Contract resulting from this RFP are listed on the last page of Attachment H, Standard Contract, and are included as Exhibits to Attachment H. In the event of conflict among Contract documents, any identified inconsistency in the Contract resulting from this RFP shall be resolved by giving precedence in the following order: 1) The Contract resulting from this RFP, including all attachments; 2) Amendments to the Contract resulting from this RFP; 3) AHCA RFP /13, including all addenda; and 4) The awarded Vendor s response to AHCA RFP /13. The minimum coverage limits required are specified in this RFP in Attachment H, Standard Contract, Section I., Item G., Insurance (Page 3 of Attachment H). AHCA RFP /13, s and Answers, Page 3 of 3
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