No-tender contract earns company $ 55 million state for contact tracing – Tennessee Lookout


In early summer 2020, as the COVID-19 pandemic overwhelmed even the country’s most robust public health programs, Tennessee became one of the few states that chose to outsource contact tracing to a private supplier.

In June 2020, Hendersonville-based Xtend Healthcare, a for-profit medical billing company with no previous infectious disease experience, signed its first non-tender $ 20 million contract to perform contact tracing for the Tennessee.

The contract has since been extended five times by the Tennessee Department of Health. The latest extension, on October 25, gave the company maximum total compensation of $ 75 million over the term of the contract, which now ends on January 31.

As of Nov. 17, the company had received $ 55,275,755, an average of $ 3.1 million per month so far, according to invoices and information provided by the Department of Health.

The pandemic has forced every state to quickly speed up contact tracing, which, in combination with widespread testing, has served as an important tool to help identify people potentially infected with COVID-19 in order to prevent its spread.

In June 2020, a Hendersonville company landed its first contract with the state to conduct contact tracing, despite no experience in the field or a tendering process. Since then, Xtend Healthcare has been paid over $ 55 million and has the contractual potential to be compensated up to $ 75 million.

Sixteen states have chosen to keep contact training entirely in-house. Most of the rest – 26 states – have formed partnerships with universities or private companies. Tennessee was among nine states that chose to primarily outsource contact tracing, according to a joint scan of state contact tracing infrastructure by the National Academy for State Health Policy and Mathematica, organizations that provide analysis to public officials.

Tennessee’s contract with Xtend is among more than $ 742 million spent by the Tennessee United Command Group – made up of the Department of Health, the Tennessee Emergency Management Agency, and the Department of Safety and Security. Homeland Security – from March 2020 to May 2021, a figure that does not include Xtend payments since then.

Most of those contracts were sole-source contracts, deals made bypassing the state’s supply system in an urgent effort to respond to the spread of COVID.

But lawmakers on both sides of the political aisle are increasingly raising questions about the high value-added contracts being quickly awarded in response to the pandemic. The vast majority of these pandemic-related contracts are paid for with federal COVID dollars, not state funds.

State Senator Todd Gardenhire, a Republican from Chattanooga who chairs the Legislative Assembly Budget Review Committee, made it clear earlier this month that he was investigating the state’s dependence on the regard to non-bidding contracts during the pandemic, stating “we just want to make sure everything is up and over and we understand why there are no competitive bids.

Governor Bill Lee defended these contracts in August. Calling non-competitive contracts “absolutely the right thing to do,” Lee told the Lookout “we’ve moved away from it when it wasn’t needed anymore.”

Senator Todd Gardenhire, R-Chattanooga, questions Gov. Bill Lee’s untendered contracts. (Photo: John Partipilo)

Two months later, on October 20, the state issued a formal request for proposals for contact tracing, for the first time inviting bidders to participate in a competitive process to select the state contractor for the to come up. The request outlines the one-year, $ 20 million contract, a cost that also includes vaccine awareness efforts, which are estimated to cost $ 20 million.

Five days after the publication of the RFP, Dr. Lisa Piercey, Commissioner of the Department of Health, signed a contract extension worth $ 20 million with Xtend until the end of January 2022.

When asked last week if Piercey was satisfied with the performance of Xtend, a spokesperson for the Department of Health said “the state is satisfied with the work of this supplier.”

The seller, however, has occasionally drawn criticism for its work in the event of a pandemic.

In November 2020, four Xtend contact tracer workers told WPLN – Nashville Public Radio of extended backups to reach patients until the end of their infectious periods – or after a quarantine period for close contacts.

And as the school year began for Tennessee public schools – coinciding with the rapid spread of the Delta variant – school officials and parents in Knoxville, Clarksville, Sumner County and elsewhere began to angrily criticize the failure of the schools. state contact tracing efforts to provide timely notifications of positive cases to schools and families. Parents said they learned of COVID cases in their students’ class on Facebook, in car lines and often days after a quarantine period expires. A spokesperson for the Department of Health said at the time that it was the responsibility of state health officials through their subcontractor Xtend to provide contact tracing in schools.

A spokesperson for Xtend told Tennessee Lookout in September that he was relying on the state’s health department to provide him with a list of contacts related to schools to call and joined state officials to criticize some school districts for their lack of cooperation.

“While many schools regularly share information – unfortunately some schools choose not to track contacts or share information with the health service,” said Paul Hartwick, a spokesperson for Xtend, in an e- September 22 mail.

“Xtend works on cases and / or contacts provided by the health service. Follow up on contacts or share information with the health department. In these cases, the lack of information prevents the health service from following up. “

Hartwick did not respond to Lookout’s request to answer additional questions about their contact tracing efforts last week.

Xtend has also encountered controversy over its pandemic contracts elsewhere.

New Jersey signed a $ 29.2 million contract for Xtend to staff a vaccine hotline to schedule appointments for residents who have been criticized for leaking confusing information or redirecting to others sources for appointments.

Xtend has been operating in Hendersonville since 2009, primarily providing patient billing services to hospitals. In 2015, it achieved sales of $ 70 million, according to a press release from Navient announcing the acquisition of the Tennessee company. In 2019, Xtend received a $ 150,000 FastTrack grant from the state in exchange for the pledge to create 200 jobs.

Senator Heidi Campbell, D-Nashville, said Governor Bill Lee "The tendency to award non-competitive contracts to unsavory companies is truly alarming." (Photo: John Partipilo)
Senator Heidi Campbell, D-Nashville, said “Governor Bill Lee’s model of non-competitive bidding to unsavory companies is truly alarming.” (Photo: John Partipilo)

Xtend’s contract in Tennessee helped the results of its parent company, Naviant, during a turbulent time as it came under increased scrutiny by Congress and government regulators over its federal service business. student loans. The company is facing multiple lawsuits from state attorneys general and the US Consumer Financial Protection Bureau over allegations of abusive lending practices related to the 5.6 million student loan accounts it holds.

He announced in September that he would withdraw from the federal student loan industry for good.

In October, as Navient reported millions in losses for its student loans division, it announced a “focus on growth opportunities,” including pandemic-related contracts with state governments. Revenue, according to Navient’s Q3 2021 presentation to investors, increased $ 32 million or 36% from a year ago, “primarily due to revenue generated from new contracts to support states in emergency services in the event of a pandemic “.

Senator Heidi Campbell, a Democrat from Nashville, said last week that “the model of awarding non-competitive contracts to unsavory companies is really alarming, especially at this unique time when we have more money. federal entering our state than we have ever had. Tax responsibility is not a partisan issue. We all want to know that our hard-earned taxes are being used responsibly for the benefit of our citizens. “

State health departments are starting to scale back their contact tracing efforts, as the pandemic subsides and vaccinations become available, according to Loren Lipworth, associate director of the epidemiology division at Vanderbilt University Medical Center.

“Whether there is still a cost-benefit to this really depends on the landscape of vaccination in a community,” Lipworth said. “But we, as a state, are not at a point where infection without contact tracing will not lead to an epidemic. There are still counties in Tennessee with very low vaccination rates. The role of contact tracing in these areas has not changed much. “


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