Single Source Procurement: Opt Out Mailing Project

The Department of Health Office of Health Insurance Programs (OHIP) is requesting a Contract Reporter Request to comple a mandatory mass Medicaid mailing for over 6.1 million members scheduled for completion by mid-Fall 2015. The mailing is necessary to comply with the federal requirements to ensure that all Medicaid enrollees have the freedom of choice to Opt Out of the high priority New York State Delivery System Reform Incentive Payment (DSRIP) program.

The requested single source mail distribution vendor is the New York State Industries for the Disabled (NYSID). NYSID, including its member agency The Center for Disability Services/Center for Commercial Services (CFDS/CFCS) will complete the mail fulifilment and reproduction services. The vendor will be responsible for purchasing supplies, postage and all distribution services necessary to implement the mailing, including: printing and mailing of the letters, receiving undeliverable mailings and scanning of the undeliverable mail. NYSID will use it's updated mailing fulfilment technologies to clean up and process bad addresses so they can become deliverable to the member.

Selection of the preferred vendor by OHIP began in early April 2015. The Department referenced the NYS Procurement Preferred Source Guidelines for determination of preferred vendors permissible for reproduction and distribution of mailings. The New York State Industries for the Disabled (NYSID) responded to the Department's DSRIP Opt Out mailing request. In early meetings with NYSID, the Department discussed requirements and specifications of the Medicaid mailing. The requirements for mailing carried outside the distribution of letters, with NYSID holding responsibilities to cleanse the member address files, scan undeliverable mailings and the customization of mail merges for the letter templates. The one contract between the Department and NYSID inclusive of the DSRIP Opt Out mailing will be executed over the timeframe of September 1, 2015 through August 31, 2016.

The DSRIP Program, approved by CMS in April 2014, will fundamentally transform the NYS Medicaid system through the newly organized 25 Performing Provider Systems (PPS). While we are able to share Medicaid data with the lead in the PPSs, these healthcare collaboratives cannot share Medicaid enrollee data with their provider networks until the Opt Out is complete. Much of the DSRIP funding after 2015 is pay for performance and a critical criterion is the ability for the Performing Provider System to analyze their population at their specific performance measurement and member level. The Performing Provider Systems (PPS) need data to determine where they are being successful and where they are not so they will have the critical ability to drill down to the member level and address care gaps, and be able to meet their objectives. Since the network of providers is providing/delivering the service to the Medicaid members for DSRIP, it is critical for it to have access to this data. The network of providers also needs access to its members to support specific metrics reporting.

The necessity for the NYSID's performing the DSRIP Opt Out mailing can be summarized as follows:

  • Ability for NYSID to meet the aggressive timeline of DSRIP. The DSRIP project requires printing and distributing 6.1 million Opt Out letters to the Medicaid members in six weeks from contract signing to completion of the entire mailing. Directly after initial discussions with OHIP, NYSID started many activities to jump start this project. NYSID has begun the testing of sample files and encrypted barcodes, creation of the artwork (proofs) for the envelopes and purchasing of equipment to meet the capacity/distribution requirements. NYSID began these initial steps in advance to be prepared to achieve the critical milestones presented by the Department.

  • NYSID was the only vendor to agree to the requirements. The completion of the initial 6.1 million letters for distribution holds a six week timeframe for NYSID. The speed to complete this mailing is a non-negotiable requirement due to the criticality of completing the Opt Out so that data can be shared with the PPS and their partners. OHIP began the process by exploring other distribution options (including the Public Affairs Group (PAG)). It was determined other print entities were not able to complete the mailing within the timeline developed by the Department.

  • NYSID meets many of the requirements as a preferred vendor. As required, the Department offered the DSRIP Opt Out mailing fulfillment to NYSID as a Preferred Vendor who was qualified to perform mailing services that included reproduction and photocopying. Subsequent to the offer, months were spent meeting with NYSID to develop the project specifications (including mailing volume, letter size, envelop printing, and timeframe) and an itemized, per unit pricing concurrence that included assuring the most cost effective postage pass through costs. The Department has also worked to complete the associated data exchange and transmission coding required by the project. After approval of the Price for Concurrence by the Department, the New York State Office of General Services (OGS) reviewed the purchase and casted doubt on whether the reproduction of the 6.1 million letters sent to individual Medicaid enrollees can be performed by NYSID as a Preferred Vendor. OGS indicated the DSRIP Opt Out mailing constitutes "digital printing" which the Procurement Council has determined cannot be performed by a Preferred Vendor. While NYSID is disputing this determination by OGS, the Department's DSRIP Opt Out mailing time frames will not permit delaying procurement of NYSID as the mailing vendor until possible resolution of the issue.

  • The Department followed NYS Procurement Preferred Source Guidelines. The NYS Industries for the Blind (NYSIB) and the NYS Industries for the Disabled (NYSID) were the only two preferred vendors able to provide the service offerings of "Mail Fulfillment Services". NYSIB expressed early in the process the organization will not be able to meet the volume and timeline requirements. NYSID responded to the request explaining both mail fulfillment services and document processing (photocopying and reproduction) are preferred service offerings for mailing distribution.

  • Investment in infrastructure. NYSID invested time to work on network connections to transmit data with NYSID and partners to receive the mailing data. Over a month was spent finalizing the process so the aggressive mailing deadline can be met.

  • 2-Factor Authentication (2FA) compliance by the vendor. Given the large amount of Protected Health information (PHI) for this mailing, the Department mandates strong 2-factor authentication (2FA) security to govern this process. NYSID has invested in 2FA process and over a month was spent finalizing this process by the Department of Health (DOH) Security Workgroup. NYSID has invested in equipment to securely transfer Medicaid files from the Department. NYSID is also in development to create a secured VPN tunnel which will connect to other vendors for this project.

  • Requirement specifications between NYSID and the Department. The Department finalized distribution and reproduction requirements with NYSID to meet the very specific needs of the DSRIP program. Months were spent by both the NYSID and OHIP to fully understand the requirements and confirm the process in which NYSID will satisfy and implement. This expands beyond the reproduction and distribution process and includes items such as address cleansing and handling undeliverable mailing not reaching the member.

  • Experience with distribution and reproduction services. The Center for Disability Services/Center for Commercial Services (CFDS/CFCS), a member agency of NYSID, has been providing distribution/mailing services to New York State agencies for over 25 years. The CFDS/CFCS processes over 2.5 million pieces of mail each month at their within the Albany, NY location. The CFDS/CFCS currently holds Preferred Source contracts with NYSID for the Office of Temporary and Disability Assistance (OTDA), the Department of Health (DOH), the New York State Insurance Fund (NYSIF), the Department of Labor (DOL), the New York State Unified Court System, as well as several commercial customers. The CFDS/CFCS handles reproduction and distribution services on sensitive data including checks and client notices

    • Of the 2.5 million pieces 10% is completed using reproductive services.
    • The DSRIP Opt Out mailing will leverage the same reproductive services completed for other state agencies and commercial services under Preferred Source contracts held with NYSID.

  • Experience in cleanse address file process. An important requirement is getting the mail to the member as quickly as possible. For mail that is undeliverable and unable to be resolved, the member is considered Opted Out which does not support DSRIP. When reviewing the address files against the USPS and National Change of Address (NCOA) over 1.5 million member address files were categorized as not acceptable by the USPS automated sorting systems. These mailings will need to be sent at full price rate of $.485 and will not qualify for presorted discounted rates. NYSID's has the ability to clean-up the potential bad address files and reduce the postage cost for the Department. The Department lacks experienced resources in this area and this will also save the Department months of manual processing time for address files. The cleansing and correction of the address files will allow the address files to be accepted by the USPS and reduce the postage cost to the discounted rate $.416.

  • Reduced time and cost for undelivered mailings. By utilizing the vendors cleansing file services, we expect a higher accuracy rate of reaching the member in the first mailing. As a result, we will achieve cost savings in reproduction of secondary mailings. Expected areas of cost savings include reduction in scanning of mail that is undeliverable, creation/reproduction of a new mailing, shredding of the undeliverable mail returned and postage.

Procurement / Program Name Opt Out Mailing Project
Contractor Name(s) New York State Industries for the Disabled (NYSID)
Contract Period 9/1/2015 – 8/31/2016
Contract Number(s) C030578