CNMI Opens Bidding To Provide ‘Healthcare System Analysis’

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Sole source contract with The Medical City rejected

By Tammy Doty

SAIPAN, CNMI (Marianas Variety, May 17, 2012) – Following just five days of discussions with Philippine-based healthcare company The Medical City, or "TMC," Commonwealth of the Northern Mariana Islands (CNMI) Gov. Benigno R. Fitial changed course and elected to go the route of an open request for proposal (RFP).

A first draft of the request for proposal for "Healthcare System Analysis" of the Commonwealth Healthcare Corp. (CHC) was in process a week-ago, but was put on hold when TMC arrived on island and offered to do a free assessment — at least initially.

Apparently, TMC requested a fee of $150,000 for the report if they were not given the inside track as "first-in-line" for the long-term CHC contract.

Attorney General Edward T. Buckingham drafted a memorandum of agreement with TMC that spelled out a three-track approach.

Firstly, the governor could award a sole-source consulting and/or management contract to TMC, due to CHC being under a state of emergency that sets aside all normal procurement procedures and regulations.

TMC would receive no compensation for the assessment, and future fees would be formalized in the contract.

Secondly, TMC’s assessment may be judged worthwhile, but decision-makers may choose a company other than TMC to implement the proposed changes.

In this scenario, TMC would be compensated $150,000 or actual value of its work product (whichever is less) as determined by the Commonwealth.

Thirdly, the NMI may view the assessment as unusable and will neither compensate TMC for the study nor hire another consultant to implement same; in effect the process would restart.

Over the weekend, however, murmurings of TMC upping the price to $200,000 began to surface, to which Buckingham declined to comment on when interviewed.

An email to TMC was sent by the AG yesterday informing them that the governor had chosen an open procurement process, and therefore a final MOA would be completed once a vendor was selected.

It was not known whether TMC would choose to participate in the RFP.

When asked what prompted the change of decision by the governor, Buckingham emphasized the objective of transparency, and slowing-down the process to ensure the final product "serves the long-term interests of the people and good business practices."

The AG confirmed key CHC leadership was involved in the decision to issue an RFP and was described as "on board" with the process, and supports the governor’s assessment.

In the meantime, as the RFP is finalized and advertised to potential vendors, Lt. Gov. Eloy S. Inos asked CHC leadership to provide a three-month critical supplies list to the government for review.

Funds to pay for the need-list are expected to come from the remaining $7 million of the MPLT line of credit money which was set aside for CHC in February.

[PIR editor’s note: Meanwhile, the Commonwealth Utilities Corporation has confirmed that the CHC has paid part of its outstanding dues. According to a Saipan Tribune report, CHC paid $231,844.33 off from its massive bill, leaving about $2.48 million left unpaid.]

Next steps

The AG’s office provided a five-page draft RFP that outlined in detail the scope of work and proposal requirements.

Overall, the RFP seeks "Analysis to identify major inefficiencies of current healthcare services at the main healthcare center of Saipan and the clinics on Tinian and Rota."

The scope of work includes all sections and functions of NMI’s healthcare system, including "Other Services": federally funded public health programs; the Transitional Living Center; the Women, Infant & Children program; health information exchange program; and rural health information technology network development.

Furthermore, the RFP draft included the medical referral program for analysis, due to the program’s cost increase from $3 million in 2010 to $7 million in 2011.

Proposal structure

The NMI specifically asked that each proposal focus on six key areas: critical elements of the healthcare system; identifying areas of service that use too many resources; identifying areas where significant cost-savings can be achieved; identifying areas of opportunity for revenue enhancement; evaluation of Tinian and Rota health clinics; and the medical referral program.

Proposal evaluation

Submissions will be sought from firms with extensive backgrounds in evaluating efficiency and effectiveness of small community healthcare systems, specifically within the last 24-months.

The evaluation score begins at 100 and breaks down into three categories.

Recent experience of the submitting firm, and assigned personnel in evaluation of hospital operation was weighted at 35-points.

Additionally, structure of the proposed study and the timetable was also 35-points.

Lastly, the cost of the study was weighted at 30-points.

The NMI’s RFP draft did not include compensation to subsidize the cost of vendor submissions, and all expenses incurred in participating in the process will be borne by the bidders.

OIA support

The U.S. Department of the Interior’s Office of Insular Affairs (OIA) is in discussions with the governor in an effort to identify funding to pay for the project, to be defined by the winning RFP vendor.

An agreement has not been finalized, but Buckingham expressed optimism that Interior Assistant Secretary Tony Babauta would step forward to assist the NMI in paying for the implementation of the winning proposal.

"The commonwealth appreciates the consideration of Assistant Secretary Babauta, and further details will be forthcoming as the process moves forward," stated Buckingham.

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