Unpacking HRSA Site Visit Protocol (SVP): Monitoring Contract Performance (Ch 12, Element f)

Health centers are commonly confused about what it means to “monitor contract performance” for the contracts the health center enters into to provide health center services or to acquire other goods and services in support of the HRSA-approved scope of project. This is a requirement in HRSA’s Program Requirements and can be found in the HRSA Site Visit Protocol, Chapter 12, Element f.

First, it’s important to look at and think through what HRSA’s intent is in requiring health centers to have this language in a contract. Well, if you boil all of HRSA’s Program Requirements down, you start to see a few themes emerging. One could argue that HRSA wants its grantees to provide continuous documentation that the health center provides as many patients as possible, and access to the highest quality care that is responsive to the needs of the community, while being good stewards of the government’s resources. That pretty much covers it, doesn’t it?

So, health center leaders can extrapolate that the requirement to “monitor” contract performance is mandatory because HRSA wants to ensure that this service being provided on behalf of the federal government is providing a service that is accessible, high-quality, responsive to the needs of the community, and are good stewards of the government’s resources. Though HRSA is not prescriptive in how health centers are to monitor contract performance, leaders can get some good ideas by thinking through these themes.

Chapter 12, titled, “Contracts and Subawards”, contains two main sections: Contracts-Procurement and Monitoring (Elements a-f) and Subawards-Monitoring and Managing (Elements g-j).

The Health Center Compliance Manual applies to all health centers. “Health center” refers to entities that apply for or receive a Federal award under section 330 of the PHS Act (including section 330 (e), (g), (h) and (i)), section 330 subrecipients, and organizations designated as look-alikes (HRSA Compliance Manual). However, chapter 12 of the Compliance Manual (Contracts and Subawards) does not apply to Look-Alikes (LALs) for any elements related to federal funding. During the pandemic though, LALs did receive COVID-19-related federal funds; therefore, LALs would need to have followed these requirements within a certain timeframe. Additionally, elements “g, h, i, and j” deal with subawards, which are only applicable to a handful of health centers and are not covered in this article.

Elements “a, b, c, d, e, and f” deal with purchasing and contracts and often result in more questions and uncertainties since the supplied guidance regarding requirements is not prescriptive. Many of the covered transactions can be of low frequency, and when they do come up, health center staff may have forgotten the details of how to approach them. One question we commonly receive is centered around Chapter 12, Element f, and specifically questions 11.2 and 11.3.

If the health center has one or more contracts to provide health center services or for other goods and services that support the HRSA-approved scope of project, the Site Visit Protocol asks, “Based on the sample of contracts reviewed, do these contracts contain provisions that address the following areas:

• 11.1 - Specific activities or services performed or goods provided by the contractor? (Yes, No, or N/A);

• 11.2 - How the health center will monitor contractor performance? (Yes, No, or N/A)

• 11.3 - Requirements for contractor data reporting, including reporting frequency? (Yes, No, or N/A)”

The mechanisms for health centers to use in monitoring contract performance will vary based on the nature of the services provided in the contract, the volume of usage, and the length of the contract, to name a few.

It is unimaginable that a contract would miss the target on question 11.1. The contract must identify what services or products are to be provided.

Question 11.2 is easier to understand but more difficult to implement. Fortunately, the Compliance Manual allows for freedom in determining the most important components of the contract in gauging its performance. Consider these outcomes as the starting point of each conversation. Such language must cover the agreed-upon data reporting to be reviewed, the determined time period to be covered by the data, and the frequency of the review.

Question 11.3 becomes even more vague in implementation. This area can also provide much clarity to the contract by laying out expectations for activities not directly considered in its performance. This requirement opens up for disclosure of information needed to protect the health center. The health center may need to receive data to incorporate into the UDS Report. The health center will want to know if the contracted entity fell prey to a cyber threat. Who owns and is responsible for equipment utilized in providing services can be very important and may require risk minimization. These too often are not considered when creating the contract but can prevent a lot of headaches when negative events occur.

The chapter never states that monitoring of contract performance is to be internal only. The best approach is when the health center can conduct a bilateral conversation with the contractor. Imagine if all the health centers’ systems have been developed for consistency, efficiency, and accuracy but patients are still not successfully being seen. What if the problem lies within the health center and not the contracted organization? What if “Employee A” is the sweetest grandmother type to all on the health center staff, but is rude and demanding when calling the referral organization? The health center may never uncover the problem without meeting with the outside organization.

On a daily, weekly, and monthly basis, the staff communicate regularly. For the annual review, the included participants may be out of the loop on how the contract is meeting the needs of both organizations. Additionally, the review can open dialogue about the future. This could be that the health center anticipates next year’s needs to exceed the prior year’s needs. The contractor might even mention if they anticipate changes in what they can supply. Consider if a provider is contemplating retirement in nine months. How helpful would it be to know this information well in advance in hopes of limiting any gaps in services?

Of note, many health centers tend to exclude these requirements from any 1099-compensated providers. The reasoning is that peer review addresses clinical concerns. This may be true, but there is so much more that can and should be monitored regarding performance. What if the provider is routinely late to the clinic or fails to close encounters on time? Are there productivity expectations? If so, how and when should these be addressed? If the organization issues a laptop to the individual or group, what are the expectations for protecting that asset when it is not in use? What are the expectations if the equipment is lost, damaged, or stolen? It would be great if all of that had been worked out in advance and included in the contract.

Some suggestions for how a health center could evaluate whether a service is accessible and responsive to the needs of the community might be to utilize Patient Satisfaction Surveys specific to the service. Determining whether a service is high-quality might be measured by evaluating related metrics, quality outcomes, or key performance indicators (KPIs). Assessing financial stewardship may be performed by reviewing periodic audits or financial reports.

When determining how your health center will evaluate a specific service, individualize the language to be specific to that vendor and service. For example, a contract with a phone call center may require a totally different set of interventions than a locum tenens/staffing contractor. There is likely no, “one-size-fits-all” that will work for every service contract.

Here are a few examples of language that may signal program monitoring to a HRSA reviewer.

The ABC Clinic and CHC will meet annually to review data regarding the performance of the contract. To lead our discussion, we will review the number of days out referrals are being accepted. The time frame of data reviewed will cover each quarter of the previous twelve months. Additionally, the discussion will cover feedback received in patient satisfaction surveys for the year under review. Lastly, each company will bring survey information from each organization’s staff on any issues or concerns that remain outstanding.

ABC Clinic will bill for services provided, and CHC is responsible for forwarding any sliding fee eligibility data to ABC Clinic.

ABC Clinic will provide all data required to assist CHC in the completion of the annual UDS Report.

Services will be provided at ABC Clinic using their own equipment and EMR system. These systems will ensure the highest confidentiality of patient information. Any data breach must be brought to CHC’s leadership team immediately.

[HEALTH CENTER] will utilize the following mechanisms to monitor contractor performance:

• Patient Satisfaction: At least annually, [HEALTH CENTER] will survey a sample of patients who have received services provided by [PARTNER] and ask questions pertaining to services received from [PARTNER]. Survey results will be reviewed by [HEALTH CENTER] and shared with [PARTNER] as appropriate. Any areas of improvement will be addressed and [HEALTH CENTER] will develop a plan for improving patient satisfaction.

• Follow-Through With Responsibilities Outlined in MOU: At least annually, [HEALTH CENTER] will review this MOU and evaluate the activities, services or goods agreed to be provided.

• Quality Outcomes: Each year, [HEALTH CENTER] will establish health center outcome goals for clinical metric [METRIC NAME]. [HEALTH CENTER] will share metric outcomes in relation to the stated goals with [PARTNER] at least annually. If outcomes fall below the stated goal, [HEALTH CENTER] will develop an intervention to work to improve the clinical outcome.

• Audits of Financial Reports/Invoices: Each quarter, the health center will audit invoices/financial reports for services provided to health center patients to ensure billing is according to the agreement set in this MOU.

Whenever a contract is deemed to insufficiently cover the required contract provisions, revising the entire contract may not always be necessary. The recommendation is to add an addendum to the contract for the missing language. This is simpler and more efficient. For larger contracting organizations, revisions can become bogged down in legal departments. Submitting an addendum only addressing the areas of noncompliance might move through the larger systems faster.

Here are some final considerations regarding contracts.

• Evergreen contracts signed prior to 2018 are likely noncompliant. (The Compliance Manual was released in 2018.) The incorporation of required contract components would have been hard to include. It is recommended that any contracts signed prior to 2018 be reviewed for current HRSA compliance.

• All health centers need to have a system for monitoring and organizing contracts. For smaller organizations, a spreadsheet may be all that is needed. Larger companies typically have more contracts and can justify using contract management software.

• The use of reminders is very helpful. This could involve using a calendar that sends reminders or adding a column on the spreadsheet to document the date when the next review meeting should occur.

• Often during HRSA Operational Site Visit (OSV) contract reviews, the team will recommend that older contracts need to be replaced with new contracts. It is not uncommon for reviewers to read contracts that are older than ten or even twenty years. While this recommendation is not supported by the Compliance Manual, good business practices require every contract to be reworked at some point. One approach is to rework a contract when neither of the signors remains employed at their respective organizations. Another approach is to limit the number of times contracts can be extended. When the time comes, create a new and improved contract that sufficiently covers and protects the health center regarding current and future expectations.

The HRSA Site Visit Protocol allows for great flexibility in constructing the contract language. Seek to include requirements that most closely align with the health center’s goals from the service or goods to be provided. Be mindful of establishing data sets and intervals of review that the health center can manage. At the same time, meeting more frequently likely increases the probability that the contract will continue to meet the needs of the organization and its patients, which really is what matters most.

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