Appendix A--A Standard Request for Proposal (RFP)

Standard RFP specifications, characteristics, and components are listed below (Bazelon Center for Mental Health Law, 1995;Dougherty, 1996; Horvath and Kaye, 1995; IOM, 1996;Litwak, 1997; Rosenbaum et al., 1997).

Standard RFP Specifications

The role of the managed care organization (MCO) within the rest of the system;

The clinical, operational, and financial structures of the managed care arrangement;

The maximum time periods within which patients can access different types of care (adjusted for type of care, severity of need, and geographical factors);

The specific services to be provided by the MCO (and those not provided);

The purchaser's expectations about standards of care;

The mechanisms by which enrollees can access and use clinical services;

The methods by which access, quality, and outcomes will be measured;

The means by which the MCO's compliance with contract provisions will be measured, monitored, evaluated, and enforced;

Incentives and sanctions (penalties) associated with specified and obtainable performance standards and the conditions for applying them; and

Specific mechanisms to identify and resolve any differences of interpretation of contract language and to modify the contract as needed.

Standard Structural Characteristics of an RFP

Program Parameters:

The eligible population;

Clinical, social, and residential services covered;

Limitations of covered services;

Definition of medical necessity;

Geographic coverage; and

Funding sources.

Content Areas:

Clinical system design requirements or limitations;

Network design requirements or limitations (including permissible risk sharing with provider system);

Enrollment procedures;

Member services requirements;

Quality management;

Claims payment;

Reporting requirements;

Data exchange and management information system; and

Implementation schedule.

Major Sections of the RFP:

The statement of work;

The services description and requirements;

The roles and responsibilities of the parties; and

The implementation requirements.

Standard Business, Financial, and Legal Specifications:

Qualifications of bidders;

Bidding process:

- Bidding conference;

- Manner of submission of proposals (e.g., due date, copies, structure, any required separation of bidder's program and financial proposals);

- Process for review of proposals;

- Site visits policy; and

- Opportunity (if any) for clarification of amendment of bids.

Minimum financial requirements for bidders, financial arrangements between the State and the MCO;

Risk reserve requirements;

Limitations on profit or reinvestment of surplus;

Permissible financial arrangements between MCO and provider networks; and

Legal requirements:

- Right of the State or county to withdraw procurement and withhold award;

- Conflict of interest;

- Contact between purchaser and bidders;

- Conditions for final awards; and

- Contract to follow RFP award.

Standard Components of an RFP

Bidder's cover letter or transmittal letter noting key objectives and timetable for submission (see Appendix B of this guide);

Definition of terms;

Summary of overall objectives of the initiative;

Description of the specific eligibility categories of recipients;

Descriptions of all services to be delivered by the contractor, including covered direct services and any administrative and management services. Alternatively, the RFP could include a set of purchasing specifications that are incorporated into the RFP and the contract. The services of the contractor will include, but not be limited to:

- Enrollment and eligibility determination responsibilities;

- Member services support;

- Network development and management;

- Utilization management;

- Quality management;

- Management information systems;

- Claims payments;

- Federal and third-party revenue activities; and

- Procedures for the administration of complaints and appeals.

Procedures and requirements for all activities that are expected of the contractor, including meetings, reporting, and deliverables, among others;

Summary of the purchaser's responsibilities;

All requirements for the contract, such as dates of implementation and period of contract;

Description of the financing and reimbursement models of the service system, including administrative payments, service payments, and requirements for provider payment;

Requirements for the proposal. This section would include detailed requirements for submission of the proposal, including required sections of the proposal, issues to be addressed, page lengths, format, and submission instructions. Proposals should contain a business proposal, a technical proposal, and a cost proposal;

Description of the proposal evaluation process. Bidders should generally be rated on their experience and capabilities in the following areas: customer service; network development and management; utilization management; quality management; complaints, grievances, and appeals; information systems; benefit management; and general administration;

Information on procurement, including addresses and phone numbers of responsible parties in the agency, dates of key events (e.g., due date, award date), and rights of the purchaser to modify the RFP; and

Contract close-out procedures and requirements in the event of a cancellation of the contract.

Last Updated 11-7-02