January 14, 2004
TO: ALL BIDDERS
REF: JOB NO. 03/0543
DUE DATE: January 26, 2004
All bidders are required to sign and attach a copy of this addendum with each proposal for Collection Services for Overdue
Patient Accounts (Primary and Secondary Placements) for the Harris County Hospital District. This addendum must be
received by the Purchasing Department no later than the above due date.
ADDENDUM NO. 1
The following information is being provided to clarify the requirements:
1. On page 8, under Evaluation Process: what is the anticipated date for making award selections? The anticipated
date for making selections is mid to late February What is the experience level of committee members
regarding working with collection agencies? Several committee members have previously worked with
collection agencies. May we respectfully suggest that oral presentations and/or site visits also be part of the
evaluation process? Oral presentations will be considered.
2. On page 16, under vendor performance: can you provide more information on the liquidation rates supplied? In
addition, to what extent are the desired recovery percentages determined by your awareness of (a) vendor
performance, (b) account age, (c) account type, (d) account balance, and/or (e) debtor demographics? Vendor
performance is purely a measurement of collections vs. placements.
3. On Page 18, the Residence Certification: is a signature and date required on the form, or only the company name?
A signature and date is not required.
4. Who are the current collection agencies?
Primary Accounts: Gulf Coast Collections, Inc., Argent Healthcare Financial Services, and Universal
Early out Accounts: Same as above
Secondary Accounts: Premium Assets Recovery Corp. and Gulf Coast Collections, Inc.
5. Which two (2) companies contracts are ending February 29, 2004? Universal Fidelity (primary) and Gulf
Coast Collections (secondary)
6. What are the current contingency rates? Inpatient and Outpatient carry the same rates.
Primary Accounts: 17.5%, 14.5%, 19%
Early out Accounts: 14%, 9.5%, 15%
Insurance or 3rd party payments: 8%, 6%, 8.5%
Secondary Accounts: 32%
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7. How are accounts placed utilizing three agencies, such as alpha split? An alpha split is used and can
vary depending on collection results.
8. The monthly volume of placements for the following is not readily available:
Primary/Secondary: Number of Accounts:_____ Dollar Volume:__________
9. Please provide the following information for the past year: This data is for a 9-month period.
Category No. of Accounts Dollars Placed Dollars Collected
Early Out 71,550 $100,852,442 $5,658,961
Primary Bad Debt 157,182 $134,777,699 $6,560,743
Secondary Bad Debt 84,269 $ 67,523,641 $2,430,198
10. What is the average monthly collection percentage? 5%
11. What is the average monthly Primary Bad Debt collection amount from the three agencies? 4.9%
12. Please provide the system used and the release level? Vendor performance reports are used to evaluate
performance and straightforward collections vs. placements for internal reports.
13. Is the agency working under the 1st party’s name (Hospital) for Early Out Accounts and then the 2nd party
name (agency) for Primary Bad Debt accounts? All work must be done under the agency’s name.
14. For the scope of this RFP, we assume that the Hospital District places a weekly file that includes an optical
record for each patient. This is what we call traditional collections. In addition to traditional collections,
our company offers a product that is customized for Early Out Self- Pay Collections. Phone calls are
placed in Harris County’s name and answered in the same. Is Harris County only looking for traditional
Early Out Self-Pay collections? Vendors are not allowed to work under the Harris County/Harris
County Hospital District name; therefore, traditional collection applies.
15. Can an alternative way to collect Self-Pay accounts, usually with a higher rate of return than traditional
Self-Pay accounts be proposed? Yes, the Hospital District would be interested in looking at alternative
methods of collection.
16. Can both the traditional and alternative method of collection be included in the proposal? Yes
17. RFP, Page 14, Item 5, states the vendor must have an employee that can key placements into the Districts
system. How many accounts a day/month? Are these accounts from the primary placements? If so, can
this be done with an electronic file? At this time, it is a manual process as most of the accounts need to
be reinstated in the Hospital District system prior to placement. These accounts are primary bad
debt cancelled and returned accounts. There are approximately 9,000 accounts per month.
18. RFP, Page 7, Vendor Instructions, Section V is missing. Does section VI become V and section VII
become VI? Yes
19. Will the vendors be able to receive the patient’s place of employment information via placement or upon
request? Yes, if the Hospital District has the information it will be in the placement information.
20. Will the vendors receive updates on Gold Card discounts or co-pays as they occur at the Hospital District?
They are reported electronically for Early-Out accounts and via fax for Bad Debt.
21. What process is in place to notify the vendors of payments made directly to the Hospital District? An Excel
spreadsheet is emailed twice a month for direct payments.
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22. Will the vendors be able to receive the emergency contact names and phone information via placement or
upon request? Yes
23. Will the vendors be able to request or print the HCFD 1500 or the UB92 (itemized statements)? They can
24. Will the vendor have access to the Hospital District’s system to determine what type of financial assistance
the patient applied for such as SSI, SSD, MCD, or VVC? Yes
25. For all applicable categories - Early Out, Primary and Secondary - please identify the percentage of dollars
and number of accounts to be placed that would be considered Third Party Identified. This information is
not tracked; however, it is a small percentage.
26. What is the Hospital District liquidation rate for each category (e.g., early out, 3 rd party identified, etc.)?
The Hospital District’s best performer: 8% on Early-Out, 6% on Bad Debt and 3% on Secondary.
The Hospital District does not track 3rd party identified separately at this time.
27. How are State for Crime accounts billed? The Hospital District has an active program for billing and
follow-up but a few accounts are turned over as Bad Debt.
28. What are installment accounts? Long-term payment arrangements.
29. What percentage of accounts are Charity Care accounts? The Hospital District tries not to place any
Charity accounts. Patients have 45 days after services to apply for Eligibility; therefore, some Early-
Out accounts convert.
30. How will vendors be selected for award (i.e., how is it determined who receives primary placements and
who receives secondary placements)? Will the 1st and 2nd place agencies be awarded the placements
according to rank? Or will separate criteria be evaluated for choosing the primary and secondary agencies
separately? Primary vs. Secondary will be considered separately.
31. RFP, Page 13, is the referenced estimated placement amounts per vendor or total? Total
32. What is the difference between Primary Bad Debt Placements and Early Out placements? Early-Out
accounts shall be soft-core collections for a period of 90 days to give the patients ample time to bring
forward any missed insurance and to make payment arrangements. Accounts are placed at 30 days
after final bill. Bad Debt accounts are aged 90 – 120 days and have received several billings.
33. Will the Hospital District provide the formats for the file interfaces? The Hospital District IT
Department will work with the agencies to get the file layouts set up.
34. RFP, Page 19, Bid Bonds, is revised as follows:
A. Individual bid bonds payable to Harris County for $15,000.00 (if submitting a proposal for
primary placements only), and $7,500.00 (if submitting a proposal for secondary placements). If
submitting a proposal for both primary and secondary placements only one (1) $15,000.00 bid
bond is required.
B. Bank cashier's check, payable to Harris County for $15,000.00 (if submitting a proposal for
primary placements only), and $7,500.00 (if submitting a proposal for secondary placements). If
submitting a proposal for both primary and secondary placements only one (1) $15,000.00 bank
cashier’s check is required.
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35. RFP, Cover Sheet; since the proposal is based on percentage of collections does the total dollar ($) amount
of proposal line apply? The total dollar amount does not apply. Contingency fees may be listed on
the Cover Sheet or note “Refer to Pricing Section”.
36. RFP, Page 4, Fiscal Funding: Has the Hospital District ever run out of funds for these types of programs
before? Occasionally, the Board of Managers must approve additional funding; however, a need for
additional funding means collections are good and that is a good thing.
37. Please clarify if it is the intent for vendors to answer the questionnaire OR have vendors respond to each
specification? Vendors must answer the questionnaire and address all other requirements of the RFP
that perhaps were not included in the questionnaire.
38. Evaluation Criteria #4; Will selected vendor be required to have a local office or will a Sales Executive,
Client Service representative and a local onsite employee meet this requirement? A local office is
39. Legal Documents: Please clarify this section as we typically do not provide a signed copy of our
agreement until we are awarded the contract. Can a sample of our standard agreement be provided? A
sample standard agreement is acceptable.
40. What is the Hospital Districts expected liquidation rate and over what period of time? The Hospital
District would like to see 10% on Early-out, 6% on Bad Debt and 3% on Secondary within 2 years.
41. What is the historical average age at time of placement for Early Out, Primary and Secondary accounts?
See RFP, Page 13.
42. Please clarify if it is the intent of Harris County to award both the Early out placements and the Primary
Bad Debt placements to one vendor and the secondary placements to another vendor? That is the
43. Will there be any negotiations on the amount of the listed $300,000 performance bond? No
44. Since the RFP requests pricing on Third Party Identified Placements, can an estimate or historical data on
volumes/dollars to be placed or identified be provided? For inpatient/outpatient commercial insurance, lien
and crime victim accounts? Placement of 3rd party accounts is not really significant.
45. Primary Bad Debt placements/ Early Out placements: Will the Hospital District be willing to negotiate the
7 and 15 day grace period? No
46. Are vendors allowed to re-type each question the way they are currently listed and then provide answers?
If re-typed, they must be typed in the same order presented in the Questionnaire.
47. RFP, Page 11, Financial Documents has been revised to read:
The vendor must be able to demonstrate a history of financial stability and should include in its
proposal, as a minimum, its annual report and audit by a nationally recognized certified public
accounting firm from 2003 or the most recent audited financial statements if the audit report for
2003 has not been finalized.
48. If a vendor uses a regionally recognized certified public accounting firm (versus nationally recognized) that
adheres to all accounting principles and practices, will that disqualify the vendor? No
49. Does the Guarantor Information provided to the agency include all insurance information where the
guarantor and/or patient have insurance benefits? Yes
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50. The RFP states that the Hospital District will not pay a fee on accounts designated as “Charity Care.” Does
this refer to accounts that are written off due to charity applications being completed by the debtor and the
agency is then notified to cancel the account due to that status? Or, accounts where charity funding is
available and payment is received through work effort of agency? Please clarify. On Early-Out accounts,
because they are placed at 30 days patients may complete the Eligibility process shortly after
placement. Those accounts must be cancelled and returned. On Bad Debt accounts it is sometimes,
although not often, that the patient informs the Hospital District after placement that they have
Eligibility for Charity Care. Those accounts are recalled. Charity Care eligibility must be completed
within 45 days from the date of service to apply to an account.
51. What is the lowest account balance that is referred to any agency, for Early Out, Primary Placement, and
Secondary Placement? $9.99 for outpatient and $24.99 for inpatient.
52. The Hospital District is requiring a local representative on site 5 days per week? Does the agency need to
provide equipment for this employee; or, will the Hospital District provide workstation and computer
system equipment and access. If the Hospital District provides, is there an obligation for the agency to
reimburse the Hospital District? Is it the intent of the Hospital District that this employee will provide the
required support functions to the agency; or, does the Hospital District have a scope of work that this
employee is required to perform for the Hospital District? A workstation and a PC are provided and
there is no reimbursement required. It is the intent that this person provides support for the agency.
53. Does the Hospital District want accounts reported to the 3 major bureaus or only one particular bureau?
The 3 major bureaus.
54. Secondary accounts are to be returned to the Hospital District after 3 years of no payment activity. Does
the Hospital District understand that at the time of return, the accounts need to be removed from the credit
bureau(s) files? Otherwise, the vendor incurs ongoing costs (for up to 7 years from delinquency date) of
dealing with disputes, verifications, etc. and would not be compensated in the event payment is generated
from that work effort. This issue has not previously been brought up as a concern, but will be taken
55. Does the Hospital District have any settlement guidelines in place and if so, what are those? The Director
of Patient Financial Services or designee must approve all settlements.
56. RFP states: Vendor shall provide staff that can key placements into the District's system? Would that be a
different person from the local representative that would be on site 5 days per week; or, is that part of the
work for that person? The same person can perform this task.
57. Should vendors provide additional references in another section of the proposal or NOT provide any more
than 3 references? Please limit to 3.
58. What is meant by "computerized acknowledgement of all accounts placed and processed?" An emailed
Excel spreadsheet is preferred, but a computer generated paper listing will be fine. What is the
frequency required for that acknowledgment listing and /or Status Report Listing? The Hospital District
would like a weekly acknowledgements listing, placements are weekly, and a quarterly status listing.
59. Does the Hospital District have a VPN in place for this function? (access to patient accounts system)
Agencies will have access to the Hospital Districts system.
60. Are the existing vendors achieving the guaranteed minimum gross recovery rates? Yes
61. During the individual primary and secondary “grace period’s”, the Hospital District does not pay
commission fees following placement. However, do the vendor(s) receive credit for the collection amount
during this period? Are payments processed at a zero percent fee on their monthly invoices? In essence,
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does the recovery count towards the guaranteed gross recovery rate expected? The recovery does count
towards guaranteed recovery and should be reported on weekly invoices as “no fee”.
62. Will the selected vendor receive Early-Out placements, which then roll to Primary Bad Debt as uncollected
Early-Out accounts convert to Bad Debt accounts with the same vendor? Yes. If so, does the Hospital
District prefer separate fee quotes for both categories? Yes Does HCHD also prefer separate fee quotes for
third party accounts placed in the Early-Out program? No
63. Does Harris County have a specific bid bond form? No
64. What performance bond amount is required? The primary agency is required to furnish a performance
bond in the amount of $300,000 and the secondary agency is required to furnish a performance bond
in the amount of $150,000 within ten (10) days of the award. The performance bond must remain in
effect for the duration of the agreements, including renewals. If a vendor is awarded both primary
and secondary placements both performance bonds must be provided, since, they are evaluated
65. Is a current vendor bidding on this project required to provide a performance bond? Yes
66. How many times has any vendors performance bond been exercised? None
67. A copy of Harris County’s performance bond form is attached for informational purposes only.
68. After the initial 6-month trial period, how will the Hospital district calculate the following 6-month
evaluation period in order to arrive at the 6-7% goal? This will be partly based on the monthly
performance reports provided by the agency.
//s// Jack R. McCown
Jack R. McCown, C.P.M.
________________________________ For ________________________________
Bidder's Signature Company Name
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Pursuant to Local Government Code 262.032.
STATE OF TEXAS
COUNTY OF HARRIS
KNOW ALL MEN BY THE PRESENTS:
That _________________, address: ___________________________________ phone: , hereinafter called the
Principal; and address: ______________________________________________________________
phone , a corporation; existing under and by virtue of the laws of the State of and authorized to do an
indemnifying business in the State of Texas, and whose principal office is located in the City of State
of ,whose registered agent residing in the State of Texas, authorized to accept service in all suits and actions brought
within said State, is (name): address: hereinafter called Surety, are held and firmly bound
unto the County of Harris, State of Texas, in the full sum of ____________________________Dollars ($ ) for the payment
whereof, the said Principal and Surety bind themselves, and their heirs, administrators executors successors and assigns, jointly and
severally, firmly by these presents.
WHEREAS, the Principal has entered into a certain written contract with the Obligee, dated the ___ day of ______________,
which contract is hereby referred to and made a part hereof as fully and to the same extent as fully and to the same extent as if copied at
The Principal and the Surety hereon each agree, bind and obligate himself and themselves to pay to the County of Harris, Texas,
all loss or damage to it occasioned by reason of failure of the Principal to comply strictly with each and every provision contained in said
contract and agreement, and further agree, bind and obligate themselves to save and keep harmless the County of Harris from any and all
damages expense and claims of every kind and character which the County of Harris may suffer directly or indirectly, as a result of the
execution of the contract herein secured.
If the said Principal shall fail to comply with any of the contract to such an extent that it shall be forfeited or abandoned by him,
or declared abandoned or suspended by the County, then said Surety shall have the right and privilege within five (5) days after the date
of notice of notice of such action from the County, to assume control of the contract and all work thereunder and to sublet or complete it
in strict conformity with the provisions of said contract; and provided, further, that failure on the part of the Surety to do so within said
five (5) days will work an immediate forfeiture of all right to thereafter assume control of the contract and the work thereunder. Failure of
the County to give the Surety notice of any default neglect, or omission of the Principal shall not diminish the obligations of the Surety in
PROVIDED, HOWEVER, that this bond is executed pursuant to the provisions of Local Government Code 262.032. and all
liabilities of this bond shall be determined in accordance with the provisions of said article to the same extent as if it were copied at length
IN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument this day of , 20
This contract was awarded on __________________________
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