PHA Client Wins 3rd Contract at Bethesda National Naval Medical Center

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McLean, Virginia—Potomac Health Associates, Inc. (PHA) announced that its client, Cardiac, Vascular and Thoracic Surgery Associates (CVTSA), of Annandale, Virginia was re-awarded the five-year contract for cardiovascular and thoracic surgery at Bethesda National Naval Medical Center (NNMC). This is the third time that CVTSA has called upon PHA in the past 10 years to help it prepare its proposal and advise it with contract negotiations with the Navy. CVTSA first retained PHA in 1996 when the contract was initially put up for competitive bid. CVTSA retained PHA again in 2001 when the contract was put up for competitive bid a second time, and most recently, earlier this year, when it was up for competitive award again.

CVSTA LogoWith 14 surgeons, CTSA ranks as one of the Washington, DC area’s largest and most highly regarded cardiac surgery groups. CVTSA is affiliated with Inova Health System, in Falls Church, Virginia. Inova’s Fairfax Hospital, rated by U.S. News & World Report as one of the nation’s top hospitals for cardiology and the treatment of cardiac disease, was ranked earlier this year as the 26th top cardiac and cardiac surgery program in the country. This is the tenth time in the past 11 years that Inova Fairfax Hospital has been ranked among the nation’s best hospitals.

Under their current contract with the Navy, CTSA will provide cardiovascular and thoracic surgery, clinical oversight and supervision of residents, and 24-hour on-call back-up. The contract also calls for CVTSA to provide cardiac perfusionists, operating room nursing personnel and surgical physician’s assistants. As the Navy’s flag-ship hospital, Bethesda primarily treats military eligibles, e.g., active duty personnel and their dependents, retired military personnel and their eligible dependents, and survivors. Perhaps best known in the public eye as the location where the President of the United States receives annual physical exams, Bethesda NNMC is also on 24-hour call to treat members of Congress and some of the highest ranking members of the executive branch in the event of a medical emergency.

With the release of the follow-on RFP earlier this year, PHA advised CVTSA about several complex pricing issues that first surfaced in the previous contract when the Navy converted what was previously a non-personal services contract into a personal services contract (PSC). The conversion had significant implications on compensation associated with a PSC as defined in 3 USC §102. In retaining PHA again, CVTSA was able to negotiate a successful contract, despite the statutory limits on compensation as defined in 10 USC §1091. Another sensitive issue that emerged in contract negotiations this time was the treatment of the employer share of FICA contributions under a PSC. PHA advised CVTSA that several financial positions the Navy sought to adopt were of questionable justification, however, negotiations were complicated by uncertainties about the potential threat presented by the opening earlier in the year of the Heart Center at Suburban Hospital, directly across the street from NNMC. Suburban’s Heart Center is a collaborative effort between Suburban Hospital, the National Institutes of Health and Johns Hopkins. PHA worked with CVTSA to develop a strategy that allowed CVTSA to protect its financial interests without creating an adversarial negotiating posture with the Navy.

Potomac Health Associates, Inc. is a professional services firm that specializes in federal health care contracting and business development for commercial and government clients. Since its inception, the firm has helped its clients win in excess of $300 million in competitive awards from the VA, and $3.5 billion in competitive and non-competitive federal contract awards from all federal agencies.

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