AMENDMENT TO SERVICES AND LICENSE AGREEMENT
EXHIBIT
10.54
AMENDMENT
TO
SERVICES AND
LICENSE
AGREEMENT
AMENDMENT
TO
SERVICES AND
LICENSE
AGREEMENT made
as
of the 1st day of June 2006 (“Effective Date of Amendment”), by CareAdvantage,
Inc. (“CareAdvantage” or “CAI”), a Delaware corporation with its principal place
of business at ▇▇▇-▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and Blue
Cross
and Blue Shield of Texas, a division of the Health Care Service Corporation
(“BCBSTX”), with its principal place of business at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, BCBSTX
and CareAdvantage have entered into a Services and License Agreement as of
August 18, 2003 (the “Agreement”), which Agreement has from time-to-time been
modified to provide for Additional Services;
WHEREAS, the
parties desire to further amend the Agreement to provide for bi-monthly updates
of paid claims data, to clarify Portal availability, to provide for performance
guarantees, to provide for certain reports and the processing of data from
certain PBMs and to extend the term of the Agreement;
WHEREAS, the
parties also desire to amend the compensation payable under the Agreement;
NOW,
THEREFORE, in
consideration of the premises the parties agree as follows:
1. Bi-Monthly
Processing of Paid Claims Data.
Commencing as of the Effective Date of the Amendment, Attachment 1.2 of the
Agreement is amended in its entirety as provided in Attachment 1.2 attached
hereto.
2. Portal
Availability.
Commencing as of the Effective Date of the Amendment:
a. Section
2.7 of the Agreement is amended by adding to the heading, immediately prior
to
the period, the following: “;
Portal Access and Performance Guarantee”;
b. The
existing text of Section 2.7 (exclusive of the heading) is re-designated 2.7.1,
and immediately thereafter there is added new Sections 2.7.2 and 2.7.3 as
follows:
2.7.2
CareAdvantage will use commercially reasonable efforts to ensure that the Portal
is accessible for a minimum of 99% of scheduled uptime (the “Portal Service
Levels”). Scheduled uptime shall consist of 9:00 a.m. to 9:00 p.m. Eastern Time,
Monday through Friday. Access to the Portal generally will be available at
times
other than scheduled uptime, except when CareAdvantage is conducting
maintenance, but CareAdvantage cannot guarantee the extent to which the Portal
will be accessible at these other times. CareAdvantage will notify BCBSTX at
least five (5) days in advance of any maintenance that may be required during
scheduled uptime; provided, however, total down time for maintenance or other
reasons shall not exceed 1% of scheduled uptime. BCBSTX acknowledges and agrees
that access to the Internet is subject to unexpected outages due to equipment
failure that can occur through a variety of external causes, and which may
have
an affect on CareAdvantage’s ability to satisfy the Portal Service Levels.
BCBSTX agrees that CareAdvantage is not responsible for any unexpected outages
of the Portal caused by external circumstances beyond CareAdvantage’s control.
BCBSTX may contact CareAdvantage to report problems with Portal access anytime
twenty-four hours a day. CareAdvantage will use all commercially reasonable
efforts in restoring unscheduled outages of the Portal whenever they occur.
If
the Portal Service Levels fall below 99% of
scheduled uptime in one or more monthly periods, CareAdvantage will (i) use
all
reasonable efforts to diagnose the problem(s) causing the excessive downtime,
as
required, and (2) prepare and implement a remediation plan to resolve the
issues. If, notwithstanding CareAdvantage’s remediation efforts, Portal Service
Levels continue below 99% for a period of ninety (90) days or more, BCBSTX
may
terminate the Agreement for cause, providing no further cure period, and pursue
all of its available remedies at law and equity.
2.7.3 In
the
event that for any month the Portal Service Level is less than 99%, then during
the remainder of the term of this Agreement, if for any subsequent month the
Portal Service Level is again below 99%, the compensation payable pursuant
to
Section 4.1 for such subsequent month shall be reduced as follows:
| less than 99% but at least 96% |
2
|
% |
| less than 96% but at least 90% |
5
|
% |
| less than 90% but at least 80% |
10
|
% |
| less than 80% but at least 70% |
25
|
% |
| less than 70% |
100
|
% |
CareAdvantage
will monitor continuously during scheduled uptime network server availability
as
well as Portal Application availability. Monitoring Portal Application
availability encompasses testing the Portal for login success and a sample
data
query for backend database availability. CareAdvantage will maintain data logs
and will upon BCBSTX’s request provide it reports as to server availability and
Portal Application availability. In computing the Portal Service Level for
any
month, such data logs shall be conclusive as to the extent of network server
availability and Portal Application availability. No reduction in compensation
shall be made to the extent the Portal Service Level was affected by matters
beyond CareAdvantage’s control as provided by Section 8.10.
3. Term.
Commencing as of the Effective Date of the Amendment, Section 5.1 is amended
by
substituting “May 31, 2009” for “the third anniversary of the Effective
Date.”
4. Compensation.
Commencing
as of the Effective Date of the Amendment:
a. Section
4.1 of the Agreement is amended in its entirety as follows:
2
4.1. Generally.
BCBSTX
shall pay CareAdvantage for the services and license provided under this
Agreement, as amended, $* PMPM for each member in the Covered Population;
provided, however, that in the event BCBSTX, in accordance with Attachment
1.2,
provides CareAdvantage with Incremental claims data, then in lieu of the
foregoing the fee shall be $* PMPM for each member in the Covered Population.
Notwithstanding the foregoing, because BCBSTX intends to provide Incremental
claims data commencing August 2006, the parties have agreed that the payments
due June 1, July 1 and August 1, 2006, shall be computed at the Incremental
claims data rate of $* PMPM; provided, however, that in the event BCBSTX fails
to provide CareAdvantage with Incremental claims data for August 2006, then
the
amounts due for June, July and August 2006 shall be retroactively adjusted
to
the $* PMPM rate, and the resulting amount owing shall be paid with the amount
otherwise due on September 1, 2006. During the term of this Agreement,
compensation shall be payable without invoice monthly commencing on the 1st
day
of June 2006, and on the 1st
day of
each subsequent month; payment for the month commencing June 1, 2006, shall
be
$* (which assumes * members). Payments made pursuant to the foregoing sentence
shall be reconciled to the BCBSTX Data that BCBSTX makes available to
CareAdvantage pursuant to Attachment 1.2, and CareAdvantage shall pay any
reconciling adjustment to BCBSTX within thirty (30) days of its making a
determination that such adjustment is owing, and BCBSTX shall pay any
reconciling adjustment to CareAdvantage within thirty (30) days of
CareAdvantage’s notifying it in writing that such adjustment is owing.
b. Section
4.4.1 is amended in its entirety as follows:
4.4.1. On
Account of Changes in BCBSTX Covered Population. CareAdvantage’s
compensation under Section 4.1 has been determined by assuming that the Covered
Population contains at least 2,500,000 members but not more than 3,500,000
members. If the number of members in the Covered population falls below
2,500,000 members or increases beyond 3,500,000 members, then in lieu of the
amounts provided by Section 4.1, the rate shall be determined in accordance
with
Attachment 4.4.1.
c. Section
4.4.2 is amended by inserting “of the Amendment” immediately after “Effective
Date”.
d. Attachment
4.2 is amended in its entirety as attached hereto.
e. Attachment
4.4.1 is amended in its entirety as attached hereto.
5. Except
to
the extent set forth herein, the Agreement, as amended, shall remain in full
force and effect.
3
This
Amendment may be executed in several counterparts, each of which is an original
but all of which shall constitute one and the same instrument.
In
WITNESS
WHEREOF, the
parties have executed this Amendment as of the date set forth
above.
| CAREADVANTAGE,
INC.
|
BLUE
CROSS AND
BLUE
SHIELD OF
TEXAS,
A
DIVISION OF
HEALTH
CARE
SERVICE
CORPORATION
|
|
| BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
|
TITLE:
CEO
|
TITLE: Vice president, UMPS |
4
ATTACHMENT
1.2
RECURRING
SERVICES
Generally
During
the term of this Agreement, no later than the 15th day of June, August, October,
December, February, and April, BCBSTX will provide CareAdvantage with
“Incremental” or “Non-Incremental” claims data in accordance with the Claims
Data Specifications set forth in Attachment 1.2.1 for all claims in the Covered
Population. “Incremental” data are data for the Covered Population that includes
only data from the time that BCBSTX last provided CareAdvantage with its data;
“Non-Incremental” data are data for the Covered Population that are not
Incremental data. Upon CareAdvantage’s receipt of this data, CareAdvantage
will:
| · |
Load
data into data processing
environment
|
| · |
Conduct
technical and initial clinical review of data (review for
completeness)
|
| · |
Run
data through conversion program
|
| · |
Validate
data conversion
|
| · |
Prepare\run
data files though CRG algorithms
|
| · |
Validate
CRG assignments (validity check)
|
| · |
Program
reports to generate analyses with updated data
elements
|
| · |
Review
RPNavigator analyses results
|
| · |
Move
into production environment
|
| · |
Deliver
observations summary report (which would address significant changes
from
previous periods)
|
CareAdvantage
will conduct at least one day of on-site consulting two times per year,
including data analytical and operational integration reviews.
During
the term of this Agreement, CareAdvantage will maintain telephone support for
technical and clinical inquiries 9:00 a.m. through 9:00 p.m., Eastern Time,
Monday through Friday.
PBM
Data
BCBSTX
may include in the BCBSTX Data data from the following four external PBMs:
Merck-Medco, Express Scripts, PharmaCare and CareMark, and at BCBSTX’s option by
notifying CareAdvantage, Scriptcare and Rxedo, two additional external PBMs.
BCBSTX shall deliver data from such external PBMs in the form specified at
Attachment 1.2.1 at the same time it delivers the remaining BCBSTX Data. At
the
election of BCBSTX, in connection with any bi-monthly processing of BCBSTX
data,
CareAdvantage shall perform the data cleansing and formatting responsibilities
regarding data from such external PBMs; in such case, BCBSTX shall pay
CareAdvantage the sum of $* for each bi-monthly data cleansing and formatting
provided by CareAdvantage. In addition, for implementation services regarding
CareMark, BCBSTX shall make a one-time payment to CareAdvantage of $*within
30
days of the execution of this Amendment; and in the event BCBSTX opts to include
data from Scriptcare and/or Rxedo, BCBSTX shall make a one-time payment to
CareAdvantage of $* for each such additional PBM within 30 days of the date
it
notifies CareAdvantage of its intention to include data from such PBM.
Reports
At
the
request of BCBSTX, CareAdvantage will provide BCBSTX with up to fifteen (15)
custom reports for the Covered Population each twelve-month period commencing
on
the Effective Date of Amendment.
BCBSTX
shall pay CareAdvantage for the services regarding the custom reports in
accordance with Attachment 4.2.
* * *
5
(CareAdvantage
will provide its services in accordance with the Cycle Time Schedule set forth
in Attachment 1.2.2. Except as contemplated by the Claims Data Specifications
set forth in Attachment 1.2.1, the Cycle Time Schedule assumes (a) that there
has been no change in BCBSTX’s claims system(s) and business rules from those
provided by BCBSTX to CareAdvantage on or before August 18, 2003, and (b) that
there has been no change in the claims system(s) and business rules of the
four
external PBMs specified in this Attachment subsequent to CareAdvantage’s set-up
to receive data from such PBMs. In the event of any such change, that schedule
is subject to adjustment, and any additional services required by CareAdvantage
on account of such changes will be billed in accordance with Attachment
4.2.)
6
ATTACHMENT
1.2.1
CLAIMS
DATA SPECIFICATIONS
*
The
Claims Data Specifications have been deleted in their entirety
7
ATTACHMENT
1.2.2
CYCLE
TIME SCHEDULE
|
FILE
TYPE/ PROCESS STEP
|
STANDARD
CYCLE
TIME
BUSINESS
DAYS
|
DEPENDENCIES
&
NON STANDARD ISSUES
|
BCBSTX
CYCLE
TIME
BUSINESS
DAYS
|
|||
|
LOAD
DATA EXTRACT
|
1
Day
|
Upon
receipt of files from BCBSTX in accordance with BCBSTX’s schedule to send
data to CAI, as specified in Attachment 1.2, Recurring
Services.
If
all data files are not received on the same day, the process is delayed
until all data is received. >
|
Add
3-5 Days
|
|||
|
ASSESS
DATA EXTRACT
|
2
Days
|
<
Complete/valid data received
Note
missing files/data elements; advise client, delay start until data
rec’d
If
any issues >
|
Add
2-3 Days
|
|||
|
MEMBERSHIP
|
2
Days
|
Prepare
Membership Files before
processing
Eligibility/Claims
If
any issues >
|
Add
2-3 Days
|
|||
|
ELIGIBILITY
|
2
Days (simultaneous)
not
counted in Total
|
Process
Eligibility simultaneous
w/Claims
If
any issues >
|
Add
2-3 Days
|
|||
|
PHARMACY
CLAIMS
|
||||||
|
-
INTERNAL
|
5
Days
|
<
Prep Internal Rx Files
|
||||
|
-
EXTERNAL
|
Prep
External Rx Files >
|
Add
6-10 Days
#
of days depends on: -# of external files
-if
new PBM or update of prior external PBM
-#
of crosswalks
|
||||
|
All
Rx Claims must be prepped and internal/external combined before
CRxG Algorithm Processing
|
||||||
|
CRxG
ALGORITHM
|
10
Days (simultaneous)
not
counted in Total
|
Processing
time is affected by size of membership and # Analysis
Periods;
simultaneous
w/Med Claims-next
|
||||
|
MEDICAL
CLAIMS
|
||||||
|
-
INTERNAL
|
10-12
Days
|
<
Prep Internal Medical Files
|
||||
|
-
EXTERNAL
|
Prep
External Medical Files >
|
Add
5-6 Days
#
of days depends on:
-#
of external files
-if
new or update of previous files
-
#
of crosswalks
|
||||
|
All
Medical Claims must be prepped and internal/external combined before
CRG Algorithm Processing
|
||||||
|
PROVIDER
|
1
Day (simultaneous)
not
counted in Total
|
Prep/process
Files simultaneous
w/Claims
|
||||
|
CRG
GROUPER PROCESSING
|
3-4
Days
|
All
above steps must be completed before
proceeding to remaining steps below
|
||||
|
POST
GROUPER PROCESSING
|
2
Days
|
|||||
|
TABLE/APPL
LOADING
|
3-5
Days
|
|||||
|
CAI
UAT and Application Refinements
|
3
Days
|
UAT/Application
refinements can take longer; when RPNavigator calculations are
implausible, due to shortcomings in standard BCBSTX data extract,
rework/delays occur >
|
#
days delay depends on significance of data issues discovered; some
issues
cannot be identified until data is in RPNavigator
|
|||
|
BCBSTX
UAT
|
3
Days
|
|||||
|
PRODUCTION
LOAD/TEST
|
1
Day
|
|||||
|
TOTALS
|
35-40
Days
|
20-30
Additional days
|
8
Notwithstanding
any provision of this Attachment to the contrary, (a) in the event that BCBSTX
fails to deliver all data files within two (2) business days of the due date,
or
(b) in the event that BCBSTX fails to meet more than one of the dependencies
described above, then in lieu of the additional time for performance set forth
above, CareAdvantage will process the BCBSTX Data to completion as soon as
commercially possible given its contractual commitments to its other
clients.
In
the
event that for any scheduled data run the preceding paragraph does not apply
to
postpone CareAdvantage’s processing the BCBSTX Data because of BCBSTX’s timely
and complete performance, and in the further event that CareAdvantage fails
to
make the newly-processed BCBSTX Data available through RPNavigator within ten
(10) business days of the due date indicated by this Attachment, then
CareAdvantage shall pay BCBSTX the sum of $* (which amount shall be paid by
BCBSTX’s reducing the amount next due to be paid CareAdvantage under this
Agreement). The foregoing sentence, however, shall not apply to the first data
run in which BCBSTX provides Incremental claims data.
9
ATTACHMENT
4.2
FEES
FOR ADDITIONAL SERVICES
|
Consulting
Level
|
Daily
Rates
|
|
|
Analyst
|
$
*
|
|
|
Consultant
|
$
*
|
|
|
Sr.
Consultant
|
$
*
|
|
|
Manager
|
$
*
|
|
|
Sr.
Manager
|
$
*
|
|
|
Director
|
$
*
|
|
|
Sr.
Medical Director
|
$
*
|
|
|
Vice
President
|
$
*
|
|
|
VP,
National Medical Director
|
$
*
|
10
ATTACHMENT
4.4.1
PMPM
RATE SCHEDULE
FOR
SIGNIFICANT CHANGES IN THE COVERED POPULATION
|
Covered
Population
|
Incremental
Data PMPM Fees
|
Non-Incremental
Data PMPM Fees
|
||
|
|
|
|
||
|
100,000-199,999
|
$
*
|
$
*
|
||
|
200,000-299,999
|
$
*
|
$
*
|
||
|
300,000-399,999
|
$
*
|
$
*
|
||
|
400,000-499,999
|
$
*
|
$
*
|
||
|
500,000-599,999
|
$
*
|
$
*
|
||
|
600,000-699,999
|
$
*
|
$
*
|
||
|
700,000-799,999
|
$
*
|
$
*
|
||
|
800,000-899,999
|
$
*
|
$
*
|
||
|
900,000-999,999
|
$
*
|
$
*
|
||
|
1,000,000-1,499,999
|
$
*
|
$
*
|
||
|
1,500,000-1,999,999
|
$
*
|
$
*
|
||
|
2,000,000-2,499,999
|
$
*
|
$
*
|
||
|
2,500,000-3,500,000
|
$
*
|
$
*
|
||
|
3,500,000-4,500,000
|
$
*
|
$
*
|
||
|
>
4,500,000
|
$
*
|
$
*
|
11