No-tender contract nets company $55 million in state for contact tracing | Lebanon
In early summer 2020, as the COVID-19 pandemic overwhelmed even the nation’s most robust public health programs, Tennessee became one of the few states to choose to outsource contact tracing. to a private supplier.
In June 2020, Hendersonville-based Xtend Healthcare, a for-profit medical billing company with no prior infectious disease experience, signed its first $20 million untendered contract to perform contact tracing. for Tennessee.
The contract has since been extended five times by the Tennessee Department of Health. The latest extension, on October 25, gave the company a maximum total compensation of $75 million over the term of the contract, which now ends on January 31.
As of Nov. 17, the company had received $55,275,755, an average of $3.1 million per month so far, according to bills and information provided by the health department.
The pandemic has forced every state to rapidly ramp up contact tracing, which — in combination with widespread testing — has served as an important tool to help identify people potentially infected with COVID-19 to prevent its spread.
In June 2020, a Hendersonville firm landed its first state contract to perform contact tracing, despite having no experience in the field or a bidding process. Since then, Xtend Healthcare has received over $55 million and has the contractual potential to be compensated for up to $75 million.
Sixteen states have chosen to keep contact training entirely in-house. Most of the others – 26 states – have formed partnerships with universities or private companies. Tennessee was among nine states that chose to primarily outsource contact tracing, according to a joint analysis of the states’ contact tracing infrastructure by the National Academy for State Health Policy and Mathematica, organizations that provide analytics. to officials.
Tennessee’s contract with Xtend is part of more than $742 million spent by the Tennessee Unified Command Group — made up of the Department of Health, Tennessee Emergency Management Agency, and Department of Safety and Security. Homeland Security – from March 2020 to May 2021, a figure that does not include payments from Xtend since then.
Most of those contracts were sole-source contracts, agreements entered into bypassing the state procurement system in an urgent effort to respond to the spread of COVID.
But lawmakers on both sides of the political aisle are increasingly raising questions about high-value contracts quickly awarded in response to the pandemic. The vast majority of these pandemic-related contracts are being paid for with federal COVID dollars, not government funds.
Sen. Todd Gardenhire, a Chattanooga Republican who chairs the Legislative Budget Review Committee, made it clear earlier this month that he was investigating the state’s use of no-tender contracts. during the pandemic, stating “we just want to make sure everything is in place and more and we understand why there are no competing offers.”
Governor Bill Lee in August defended those contracts. Calling non-competitive contracts “absolutely the right thing to do,” Lee told the Lookout “we walked away from that when it was no longer needed.”
Two months later, on October 20, the state issued a formal request for proposals for contact tracing, for the first time inviting bidders to participate in a competitive process to select the state’s contractor at the to come up. The request outlines the one-year contract for $20 million, a cost that also includes vaccine outreach efforts, with an estimated cost of $20 million.
Five days after the RFP was issued, Department of Health Commissioner Dr. Lisa Piercey signed a $20 million contract extension with Xtend through the end of January 2022.
When asked last week if Piercey was happy with Xtend’s performance, a health department spokeswoman said “the state is satisfied with the work of this vendor.”
The provider, however, has at times drawn criticism for its work on the pandemic.
In November 2020, four Xtend contact tracer workers told WPLN — Nashville’s public radio of extended backups to reach patients until their infectious periods have passed — or after a period of quarantine for close contacts.
And as the school year began for Tennessee public schools — coinciding with the rapid spread of the Delta Variant — school officials and parents in Knoxville, Clarksville, Sumner County and elsewhere began angrily criticizing the failure of state contact tracing efforts to provide timely notifications on positive cases to schools and families. Parents said they learn of COVID cases in their students’ classrooms on Facebook, in car lines, and often days after a quarantine period expires. A Department of Health spokesman said at the time that it was the responsibility of state health officials, through their contractor Xtend, to provide contact tracing in schools.
A spokesperson for Xtend told the Tennessee Lookout in September that it relied on the state health department to provide them with a list of school-related contacts to call and joined state officials. to criticize some school districts for their refusal to cooperate.
“While many schools regularly share information – unfortunately some schools choose not to track contacts or share information with the health department,” said Paul Hartwick, a spokesperson for Xtend, in a September 22 email. “Xtend operates cases and/or contacts provided by the health service. In these cases, the lack of information prevents the health service from following up.
Hartwick did not respond to the Lookout’s request to answer additional questions about their contact tracing efforts last week.
Xtend has also encountered controversy over its pandemic contracts elsewhere.
New Jersey has secured a $29.2 million contract for Xtend to staff an immunization hotline that takes appointments for residents who have been criticized for giving confusing information or being redirected to other sources for the Rendez Vous.
Xtend has been operating in Hendersonville since 2009, primarily providing patient billing services to hospitals. In 2015, it earned $70 million in revenue, according to a press release from Navient announcing that it had acquired the Tennessee company. In 2019, Xtend received a $150,000 FastTrack grant from the state in exchange for its commitment to create 200 jobs.
Xtend’s Tennessee contract helped its parent Naviant’s results during a turbulent time as it faced heightened scrutiny from Congress and government regulators over its federal consumer lending business. students. The company faces multiple lawsuits from state attorneys general and the U.S. Consumer Financial Protection Bureau over allegations of abusive lending practices related to the 5.6 million student borrower accounts it she holds.
He announced in September that he would be leaving the federal student loan servicing business for good.
In October, as Navient reported millions in losses from its student loan division, it announced a “focus on growth opportunities,” including pandemic-related contracts with state governments. Revenue, according to Navient’s Q3 2021 presentation to investors, was up $32 million, or 36%, from a year ago, “primarily due to revenue from new contracts to support states in emergency services in the event of a pandemic”.
Senator Heidi Campbell, a Democrat from Nashville, said last week that “the pattern of awarding untendered contracts to unsavory companies is truly alarming, especially at this unique time when we have more money. federal coming into our state than we’ve ever had”. .
Fiscal responsibility is not a partisan issue. We all want to know that our hard-earned taxpayers’ money is being used responsibly for the benefit of our citizens.
According to Loren Lipworth, associate director of the division of epidemiology at Vanderbilt University Medical Center, state health departments are beginning to scale back their contact tracing efforts as the pandemic wanes and vaccines become available.
“Whether there’s still a cost advantage depends a lot on the immunization landscape in a community,” Lipworth said. “But as a state, we are not at a point where infection without contact tracing will not lead to an epidemic. There are still counties in Tennessee with very low vaccination rates. The role of contact tracing in these areas has not changed significantly. »
Tennessee Lookout is a nonprofit news site covering state government and politics.