Exhibit 10.11
Confidential portions of this document have been omitted and filed separately
with the Commission. The ommitted portions have been marked as follows:
"[**]". Portions of 3 pages have been omitted.
AMENDED AND RESTATED
BEHAVIORAL SERVICES AGREEMENT
Among
APS HEALTHCARE BETHESDA, INC.,
APS HEALTHCARE, INC.,
COVENTRY HEALTH CARE, INC.
and
THE LISTED HMO SUBSIDIARIES OF COVENTRY HEALTH CARE, INC.
December 17, 2001
TABLE OF CONTENTS
1. DEFINITIONS ............................................................. 2
2. COVERED PERSON ELIGIBILITY FOR MHSA SERVICES AND
COMPLIANCE WITH UNDERWRITING GUIDELINES ................................. 7
2.1. ELIGIBILITY OF MEMBERS ............................................ 7
2.2. COMPLIANCE WITH UNDERWRITING GUIDELINES ........................... 8
3. IDENTIFICATION OF MHSA SERVICES AND COMMUNICATION ....................... 8
3.1. MHSA SERVICES UNDER BENEFIT CONTRACTS ............................. 8
3.2. IDENTIFICATION OF MENTAL HEALTH AND/OR SUBSTANCE ABUSE SERVICES
UNDER BENEFIT CONTRACTS ........................................... 8
3.3. SERVICES UNDER THIS AGREEMENT ..................................... 9
3.4. MODIFICATIONS TO COVERED PRODUCTS ................................. 9
3.5. PROVIDER AND MEMBER COMMUNICATIONS ................................ 10
3.6. PARTICIPATING PROVIDER COMPLIANCE ................................. 10
4. APS SERVICES ............................................................ 11
4.1. TRANSITION OF MHSA SERVICES COMMENCED PRIOR TO COMMENCEMENT
DATE .............................................................. 11
4.2. NETWORK DEVELOPMENT AND MANAGEMENT ................................ 12
4.3. GEOGRAPHIC ACCESS ................................................. 12
4.4. APS TRIAGE OF CARE ................................................ 13
4.5. PROVISION OF MHSA SERVICES AND UM SERVICES ........................ 13
4.6. AVAILABILITY OF IN-NETWORK MHSA SERVICES .......................... 14
4.7. MIND SERVICES ..................................................... 15
4.8. PERFORMANCE STANDARDS ............................................. 15
5. QUALITY MANAGEMENT AND REPORTING REQUIREMENTS AND
MHSA LIAISON COMMITTEE .................................................. 17
5.1. QUALITY MANAGEMENT AND OTHER PROGRAMS ............................. 17
5.2. REPORTING REQUIREMENTS ............................................ 17
5.3. MHSA LIAISON COMMITTEE ............................................ 18
6. CLAIM ADMINISTRATION, BENEFIT ADMINISTRATION AND
COVERAGE DISPUTES ....................................................... 18
6.1. CLAIM ADMINISTRATION .............................................. 18
6.2. BENEFIT ADMINISTRATION ............................................ 19
6.3. MEMBER SERVICES ................................................... 20
6.4. COVERAGE DISPUTES WITH MEMBERS .................................... 20
6.5. COVERAGE DISPUTE BETWEEN APS, AN HMO SUBSIDIARY OR AN AFFILIATED
PAYOR REGARDING MEMBERS ........................................... 21
7. ADMINISTRATIVE SERVICES ONLY ............................................ 21
7.1. ASO BUSINESS GENERALLY ............................................ 21
7.2. ASO SERVICES ...................................................... 22
7.3. LIABILITY FOR CLAIM DECISIONS AND PAYMENT ......................... 22
8. GOVERNMENT PRODUCTS ..................................................... 22
8.1. GOVERNMENT PRODUCTS GENERALLY ..................................... 22
8.2. SPECIAL TERMS RELATING TO GOVERNMENTAL PROGRAMS ................... 23
9. PAYMENT ................................................................. 23
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9.1. PAYMENTS BY CHC TO APS ............................................ 23
9.2. PAYMENTS BY APS TO CHC ............................................ 24
9.3. ANNUAL ADJUSTMENTS FOR INFLATION .................................. 24
9.4. FINANCIAL LIABILITY FOR MHSA SERVICES ............................. 25
9.5. PAYMENT IN FULL ................................................... 25
9.6. MEMBER PROTECTION PROVISION ....................................... 25
9.7. COORDINATION OF BENEFITS AND SUBROGATION FOR CAPITATED MEMBERS .... 26
9.8. CAPITATION RATES FOR LARGE ACCOUNTS ............................... 26
9.9. ACTUARIAL SUPPORT FOR CAPITATION RATES ............................ 26
10. EXCLUSIVITY, NON-COMPETITION ............................................ 26
10.1. EXCLUSIVE ENGAGEMENT .............................................. 26
10.2. NON-COMPETITION ................................................... 29
10.3. NO SOLICITATION OF APS EMPLOYEES .................................. 29
10.4. NO SOLICITATION OF CHC OR HMO SUBSIDIARY EMPLOYEES ................ 29
10.5. HMO SUBSIDIARIES .................................................. 29
10.6. OPERATION OF BUSINESS ............................................. 30
11. INSURANCE AND INDEMNIFICATION ........................................... 30
11.1. INSURANCE ......................................................... 30
11.2. INDEMNIFICATION ................................................... 31
12. REGULATORY COMPLIANCE, FILING REQUIREMENTS AND NCQA
REQUIREMENTS ............................................................ 31
12.1. REGULATORY COMPLIANCE ............................................. 31
12.2. ERISA COMPLIANCE .................................................. 31
12.3. REGULATORY FILINGS ................................................ 32
12.4. NCQA ACCREDITATION COMPLIANCE ..................................... 32
13. BOOKS AND RECORDS ....................................................... 33
13.1. MAINTENANCE OF PATIENT RECORDS .................................... 33
13.2. PRIVACY OF RECORDS ................................................ 33
13.3. RELEASE OF RECORDS ................................................ 33
13.4. ACCESS TO THE OTHER PARTIES' RECORDS .............................. 34
14. ARBITRATION AND RENEGOTIATION OF AGREEMENT .............................. 34
14.1. ARBITRATION BETWEEN HMO SUBSIDIARIES OR CHC AND APS ............... 34
14.2. RENEGOTIATION OF THIS AGREEMENT DUE TO A SIGNIFICANT CHANGE OF
CIRCUMSTANCES ..................................................... 34
14.3. RENEGOTIATION PROCEDURE ........................................... 35
15. TERM; TERMINATION ....................................................... 35
15.1. TERM .............................................................. 35
15.2. TERMINATION ....................................................... 35
15.3. CAPITATED BENEFICIARY ADJUSTMENT .................................. 38
15.4. ARBITRATION IN CERTAIN EVENTS ..................................... 43
15.5. EFFECT OF TERMINATION ............................................. 43
16. OTHER AGREEMENTS ........................................................ 44
16.1. APSH GUARANTEE .................................................... 44
16.2. SERVICES .......................................................... 44
16.3. COMMISSION FOR NEW BUSINESS ....................................... 45
17. MISCELLANEOUS ........................................................... 45
ii
17.1. AMENDMENT ............................................................... 45
17.2. ASSIGNMENT .............................................................. 46
17.3. ENTIRE AGREEMENT ........................................................ 46
17.4. RELATIONSHIP BETWEEN THE PARTIES ........................................ 46
17.5. TERMINATION OF MEMBERS .................................................. 46
17.6 GOVERNING LAW ........................................................... 46
17.7. NOTICES ................................................................. 47
17.8. CONFIDENTIALITY OF PROPRIETARY INFORMATION .............................. 47
17.9. ANNOUNCEMENTS ........................................................... 48
17.10. ATTACHMENTS ............................................................. 48
17.11. HEADINGS; CERTAIN RULES OF CONSTRUCTION ................................. 48
17.12. NO WAIVER ............................................................... 48
17.13. COUNTERPARTS ............................................................ 49
17.14. OTHER DEFINITIONAL PROVISIONS ........................................... 49
17.15. AMENDMENT OF AGREEMENT TO REFLECT CHANGE IN MARYLAND LAW ................ 49
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ATTACHMENT REFERENCE
---------- ---------
A Original HMO Subsidiaries Preamble
B HMO Subsidiary Capitation Rates and ASO Fees ss. 1
C Exclusions From MHSA Services Addendum ss. 1
D Performance Standards ss. 1
E Mixed Services Addendum ss. 4.7
F Funding Procedures . ss. 6.1.3
G Governmental Programs ss. 8.1
H Materials Containing Name ss. 17.2.2
I Delegation Agreements
1. Agreement for Delegation of Credentialing Activities ss. 4.2.2
2. Agreement for Delegation of Utilization Management
Activities ss. 4.5.3
3. Agreement for Delegation of Quality Management Activities ss. 5.1
4. Agreement for Delegation of Member Services Activities ss. 6.3
J Fifth Amendment to Behavioral Health Services Agreement, dated ss. 17.15
January 1, 2001
K Original HMOs Subsidiaries and Operating Units ss. 15.3.1
L Capitated Beneficiary Adjustment ss. 15.3.4
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AMENDED AND RESTATED
BEHAVIORAL HEALTH SERVICES AGREEMENT
THIS AMENDED AND RESTATED BEHAVIORAL HEALTH SERVICES AGREEMENT (this
"AGREEMENT") is entered into as of December 17, 2001 and shall be effective as
of December 31, 2001 (the "EFFECTIVE DATE"), by and among APS Healthcare
Bethesda, Inc. (formerly known as American Psych Systems, Inc. which was
formerly known as, Principal Behavioral Health Care, Inc.) an Iowa corporation
("APS"), APS Healthcare, Inc. (formerly known as American Psych Systems, Inc.
which was formerly known as American Psych Systems, Inc.), a Delaware
corporation ("APSH"), Coventry Health Care Inc., Delaware corporation ("CHC"),
and each of CHC's health maintenance organization subsidiaries listed on
ATTACHMENT A (individually, an "ORIGINAL HMO SUBSIDIARY" and collectively,
"ORIGINAL HMO SUBSIDIARIES" or individually, a "CURRENT HMO SUBSIDIARY" and
collectively, "CURRENT HMO SUBSIDIARIES", as appropriate).
WHEREAS, the parties entered into a Behavioral Health Services Agreement
(the "Original Agreement", dated September 26, 1997 (the "COMMENCEMENT DATE"),
which Original Agreement replaces and supersedes the Mental Health Services
Agreement dated April 1, 1994 between APS (when it was a wholly owned subsidiary
of PHC) and PHC, as amended (the "PRIOR AGREEMENT") under which APS provided
capitated managed mental health care benefits to Capitated Members covered by
Benefit Contracts sponsored by the HMO Subsidiaries;
WHEREAS, the Original Agreement has been amended by that certain (i)
Addendum to Behavioral Health Services Agreement, dated March 30, 1998; (ii)
First Amendment to Behavioral Health Services Agreement, dated June 1, 1999;
(iii) Third Amendment to Behavioral Health Services Agreement, dated October 1,
1999; (iv) Fourth Amendment to Behavioral Health Services Agreement, dated April
28, 2000; (v) Fifth Amendment to Behavioral Health Services Agreement, dated
January 1, 2001; and (vi) Sixth Amendment to Behavioral Health Services
Agreement, dated April 1, 2001;
WHEREAS, CHC had provided APS and APSH with notice that it intended to
terminate this Agreement pursuant to Section 15.2.5 of the Original Agreement;
and
WHEREAS, in consideration of the payment by APS of $1,500,000 and the
amending and restating of this Agreement, CHC has agreed to extend this
Agreement on the terms set forth herein for an additional five (5) year term.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1
1. DEFINITIONS
"ACCREDITING BODIES" means health care accrediting bodies of nationally
recognized standing utilized by CHC or the HMO Subsidiaries and those
accrediting bodies required by applicable law.
"ADMINISTRATIVE SERVICES ONLY" or "ASO SERVICES" means the administrative
services that APS has agreed to perform under this Agreement with respect to ASO
Members. As contemplated in SECTION 7, ASO Services may include administration
of claims for MHSA Services, UM Services, and such other services as to which
APS and the applicable HMO Subsidiary have agreed.
"AFFILIATED PAYOR" means an entity or person (other than an HMO
Subsidiary) that (a) is financially responsible for payment of claims for MHSA
Services and (b) is authorized by an HMO Subsidiary to access ASO Services
pursuant to the terms of this Agreement.
"APS" includes "Principal Behavioral Health Care, Inc." and "PBHC."
"ASO CONTRACT" means the agreement between an Affiliated Payor and an HMO
Subsidiary pursuant to which Affiliated Payor retains financial responsibility
for Covered Services (including MHSA Services) and the HMO Subsidiary provides
Administrative Services Only.
"ASO FEES" means the per Member per month or other fee that an HMO
Subsidiary shall pay APS on behalf of the applicable Affiliated Payor for
providing ASO Services hereunder. The applicable ASO Fees shall be set forth in
ATTACHMENT B attached hereto or as provided in Section 7.1.
"ASO MEMBER" means a Member under a Benefit Contract where the Affiliated
Payor has retained financial responsibility for M}ISA Services and APS is
providing Administrative Services Only.
"BENEFIT CONTRACT" means (i) a written agreement between an HMO Subsidiary
and an Enrolling Unit or individual participant under which such HMO Subsidiary
provides for, or contracts to administer, health care services, including MHSA
Services, to Members or (ii) a written agreement between an Affiliated Payor and
the Affiliated Payor's employees or dependents under which the Affiliated Payor
agrees to arrange for the provision of health care services, including MHSA
Services, to such employees or dependents.
"BUSINESS VALUER" means an investment banking firm of internationally
recognized standing jointly selected by CHC and APSH, provided that if CHC and
APSH are unable to agree on the Business Valuer, then each of CHC and APSH shall
designate such an investment banking firm and the Business Valuer shall be an
investment bonding firm of internationally recognized standing jointly selected
by the investment banking firms so designated by each of CHC and APSH.
2
"CAPITATED BENEFICIARY ADJUSTMENT" or "CBA" means a payment made to APS as
set forth in Section 15.3 hereof, based on the formula set forth on Attachment
L.
"CAPITATED MEMBER" means a Member with respect to whom APS has assumed
financial responsibility for MHSA Services in accordance with the terms of this
Agreement. Capitated Members include Members in non-governmental Enrolling Units
as well as Medicare Members, Medicaid Members, and Members in other government
sponsored Enrolling Units.
"CAPITATION PAYMENT" means the amount that each HMO subsidiary shall pay
to APS per month for all Capitated Members of that HMO Subsidiary. The
Capitation Payment for an HMO Subsidiary for any month shall be equal to the
applicable Capitation Rate multiplied by the number of Capitated Members
enrolled during that month under Benefit Contracts issued by that HMO
Subsidiary.
"CAPITATION RATE" means the amount an HMO Subsidiary shall pay to APS for
each Capitated Member per month, as specified in ATTACHMENTS B1-13 or the
appropriate Product Identification Form, as the case may be. As specified on
ATTACHMENT B or PIF, the Capitation Rate shall vary depending on the design of
the applicable benefit plan (e.g., point-of-service option, level of Deductible
and Copayment).
"CHANGE OF CONTROL TRANSACTION" means, with respect to any Person (the
"Target"), any change of control, stock sale, asset sale, merger, consolidation,
sale of operations or lines of business or similar transaction, including, but
not limited to, any transaction in which any other Person or group (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
(other than any Person or group that beneficially owns, directly or indirectly,
in the aggregate more than 50.0% (or in the case of APSH 10.0%) of the Target
Common Stock (as defined herein) on the date hereof) shall have acquired
directly or indirectly (i) beneficial ownership (within the meaning of Rule 1
3d-3 promulgated by the Securities and Exchange Commission under such Act) or
more that 50% of the outstanding shares of capital stock of the Target entitled
to vote on the election of directors of the Target (the "Target Common Stock")),
or (ii) the power, by contract or otherwise, to elect a majority of the board of
directors of the Target or to direct the business operations of the Target.
"CHC" includes "Principal Health Care, Inc." and "PHC."
"CHC ACQUIRED PERSON" means any health maintenance organization, operating
unit of a health maintenance organization or a "book of business" consisting of
groups of members receiving mental health care coverage under benefit contracts,
in any case hereafter acquired by CHC or any direct or indirect subsidiary of
CHC, including any HMO Subsidiary.
"COINSURANCE" means the percentage amount a Member is required to pay for
certain MHSA Services in accordance with the Member's Benefit Contract.
"COMPLETED CLAIM" means a claim for payment for Covered Services submitted
by an MHSA Provider, a non-MHSA Provider when authorized by APS, or a Member (in
the case of
3
Out-of-Network Services) which is complete and accurate in all respects and
raises no issue with respect to responsibility for payment of the claim.
"COPAYMENT" means a fixed dollar payment made by a Member at the time MHSA
Services are rendered through an MHSA Provider in accordance with the terms of
the Member's Benefit Contract.
"COVERED PRODUCTS" means (i) Products involving MHSA Services covered by a
Benefit Contract on the Effective Date, (ii) Products involving MHSA Services
(other than those referred to in clause (i)) within the "commercial line of
business" of any HMO Subsidiary, such as traditional HMO and POS Plans (other
than those POS Plans constituting a New Line of Business), from time to time
offered after the Effective Date by any HMO Subsidiary, (iii) Products involving
MHSA Services which constitute a New Line of Business and which are incorporated
into this Agreement pursuant to SECTION 10.1.3 and (iv) modifications to any of
the Products referred to in clause (i), (ii) or (iii) incorporated into this
Agreement pursuant to SECTION 3.4.
"COVERED SERVICES" means those Medically Necessary health care services,
covered by the Member's Benefit Contract. APS acknowledges that Covered Services
are subject to amendment when the underlying Benefit Contracts are amended,
provided that any such amendments shall be subject to compliance with SECTION
3.4 and SECTION 14.3.
"DEDUCTIBLE" means the annual amount of charges for Covered Services, as
provided in the Member's Benefit Contract, which such Member is required to pay
in advance of any coverage for Covered Services.
"EMERGENCY" shall have the meaning ascribed to such term in the applicable
Benefit Contract or as otherwise required under applicable law.
"ENROLLING UNIT" means the employer or other group to whom an HMO
Subsidiary issued a Benefit Contract that covers Capitated Members.
"ERISA" means the Employee Retirement Income Security Act of 1974 and all
rules and regulations promulgated thereunder, each as amended or supplemented.
"GAAP" means generally accepted accounting principals set forth in the
opinions and pronouncements of the Accounting Principals Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board which are applicable to the
circumstances at the time or for the period in question.
"GOVERNMENTAL BODY" shall mean any United States or other national, state,
municipal or local government, domestic or foreign, any subdivision, agency,
entity, commission or authority thereof, or any quasi-governmental or private
body exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority.
4
"HMO SUBSIDIARY" means any Original HMO Subsidiary, and Current HMO
Subsidiary and any licensed health maintenance organization that hereafter
becomes a CHC Acquired Person and which becomes a party to this Agreement
pursuant to SECTION 10.5.2.
"IN-NETWORK MHSA SERVICES" means the MHSA Services that (i) are provided
to a Member in the Service Area by an MHSA Provider or by a non-MHSA Provider
upon referral authorized by APS in the event the MHSA Services are not available
from an MHSA Provider or (ii) are performed in an Emergency and for which APS is
financially liable pursuant to SECTION 4.5.4.
"MEDICAID MEMBER" means a Member under a state Medicaid program that has
contracted with an HMO Subsidiary to administer Covered Services under such
Medicaid program.
"MEDICAL DIRECTOR" means the physician Licensed to practice medicine who
is appointed by APS, CHC, or an HMO Subsidiary, as the case may be, to
coordinate and monitor quality assurance and utilization management
responsibilities.
"MEDICALLY NECESSARY" shall have the meaning ascribed to such term in the
applicable Benefit Contract or as otherwise required under applicable law.
"MEDICARE MEMBER" means a Member under the federal Medicare Program, that
has contracted with an HMO Subsidiary to administer Covered Services under such
Medicare program.
"MEMBER" means an individual or any of his/her eligible dependents who is
enrolled under a Benefit Contract. A Member may be a Capitated Member, an ASO
Member, a Medicaid Member or a Medicare Member.
"MHSA Provider" means a credentialed behavioral health care professional
or facility that has a Participation Agreement with APS in effect.
"MHSA SERVICES" means the Medically Necessary mental health and substance
abuse services and supplies that (i) are Covered Services under a Member's
Benefit Contract, (ii) are offered as part of Covered Products and (iii) are not
listed in ATTACHMENT C.
"NETWORK DEVELOPMENT AND MANAGEMENT" means a process of entering into or
obtaining access to agreements with MHSA Providers to provide services to
individuals, and continuing or terminating such agreements or access to such
agreements. Network Development and Management shall also include, among other
things, provider credentialing and training, quality management, risk
management, and oversight of services provided by MHSA Providers.
"NEW LINE OF BUSINESS" means new Products from time to time offered after
the Effective Date by any HMO Subsidiary (including any Operating Unit thereof),
including, without limitation, Governmental Programs (other than those
constituting Covered Products pursuant to clause (i) of the definition thereof)
and Products offered to individual participants
5
(other than COBRA or conversion policies), but excluding Products within the
commercial line of business of any such HMO Subsidiary.
"OPERATING UNIT" means a division or unit of an HMO Subsidiary, which
provides or arranges for Covered Services in a defined Service Area. For
example, CHC of Florida, Inc., a licensed health maintenance organization, has
five separately identified Operating Units as identified on ATTACHMENT A, that
provide or arrange for the provision of Covered Services to Members in separate
Service Areas.
"ORIGINAL OPERATING UNIT" means an Operating Unit identified on ATTACHMENT
K.
"ORIGINAL HMO SUBSIDIARY" and "ORIGINAL HMO SUBSIDIARIES" each shall have
the meaning ascribed to such terms in the preamble; provided that following any
Change of Control Transaction with respect to any Original HMO Subsidiary, such
Original HMO Subsidiary shall cease to be an Original HMO Subsidiary for any
purpose; provided further that, unless this Agreement is terminated as to such
HMO Subsidiary pursuant to Section 15.2.5(b) in connection with such Change of
Control Transaction, such Original HMO Subsidiary shall continue to be an HMO
Subsidiary for all purposes.
"OUT-OF-AREA MHSA SERVICES" means MHSA Services that are (a) provided to a
Member outside the Service Area of the HMO Subsidiary under which such Member is
covered, and (b) (i) provided in connection with an Emergency or other urgent
circumstance where access to an MHSA Provider is not reasonably possible or (ii)
are pre-approved by APS pursuant to SECTION 4.5.4.
"OUT-OF-NETWORK MHSA SERVICES" means MHSA Services that are (a) provided
to a Members who is covered under a Point-of-Service Plan, (b) Covered Services
under such Point-of-Service Plan, and (c) provided by a mental health and/or
substance abuse provider who is not an MHSA Provider (other than where a
non-MHSA Provider is specifically authorized by APS to provide Covered Services
as In-Network MHSA Services to such Member).
"OUT-OF-NETWORK PROVIDER" means a credentialed behavioral health care
professional or facility that is not an MHSA Provider.
"PARTICIPATING PROVIDER" means a health care professional or facility that
has a written agreement in effect with an HMO Subsidiary to provide health care
services to Members.
"PARTICIPATION AGREEMENT" means an agreement between APS and each MHSA
Provider pursuant to which such MHSA Provider has agreed to provide MHSA
Services to Members.
"PERFORMANCE STANDARDS" means the standards for performance of MHSA
Services and UM Services set forth in ATTACHMENTS D-1 AND D-2. The Performance
Standards consist of "Goal Performance Standards" as specified on ATTACHMENT D-1
and "Termination Standards" as specified on ATTACHMENT D-2.
6
"PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization, other entity or Governmental Body.
"POINT-OF-SERVICE PLAN" or "POS PLAN" means a Product that allows its
Members to self-refer to MHSA Providers or non-MHSA Providers without the
necessity of a referral from APS.
"PRE-COMMENCEMENT DATE IBNR" means amounts payable to or on behalf of
Members under any Benefit Contract for MHSA Services provided prior to the
Commencement Date.
"PRODUCT" means any contract, arrangement, governmental program, or other
Benefit Contract from time to time offered by an HMO Subsidiary to provide
Covered Services to Members, as such contract, arrangement, governmental
program, or other Benefit Contract may be amended from time to time subject to
SECTION 3.4 and SECTION 14.3.
"PRODUCT IDENTIFICATION FORM" or "PIF" means a schedule that has been
signed by CHC or the applicable HMO Subsidiary and APS and that identities for
each Product the applicable MHSA Services; and, for new and modified Products,
pursuant to SECTION 3.4, the applicable Capitation Rate.
"SERVICE AREA" means, as to an HMO Subsidiary, the geographic area for
that HMO Subsidiary that has been approved by the appropriate state licensing
agency and/or Department of Insurance for the purpose of marketing its Products.
"UTILIZATION MANAGEMENT SERVICES" or "UM SERVICES" means a system of
reviewing a Member's MHSA Services to facilitate the continuity, cost
effectiveness and appropriateness of care, including clinical triage, referral,
prior authorization, concurrent review and discharge planning. UM Services shall
be performed in a manner consistent with applicable Utilization Management
standards adopted by the HMO Subsidiary in which the Member is enrolled.
2. COVERED PERSON ELIGIBILITY FOR MHSA SERVICES AND COMPLIANCE WITH
UNDERWRITING GUIDELINES
2.1. ELIGIBILITY OF MEMBERS.
2.1.1 VERIFICATION OF ELIGIBILITY. Each HMO Subsidiary shall provide
APS with eligibility information regarding Members by either: (a) direct
computer linkage or dial-in access or (b) a computer tape or other mutually
acceptable electronic media provided (i) at least monthly showing information
regarding eligibility as to all Members and (ii) at least weekly showing
additions or deletions to such monthly reports. The eligibility information
shall be prepared and provided to APS at the applicable HMO Subsidiary's
expense. APS shall treat the information received under this Section as
confidential and shall not distribute or furnish such information to any other
person or entity, except as necessary, pursuant to APS's standard practices to
provide the services APS is required to provide under this Agreement.
7
2.1.2 IDENTIFICATION CARDS. In the event that an HMO Subsidiary or
other Affiliated Payor issues or arranges for the issuance of identification
cards, the applicable HMO Subsidiary or Affiliated Payor shall use commercially
reasonable efforts to ensure that the identification card states the toll-free
telephone number established by APS in accordance with SECTION 4.4.
2.1.3 RETROACTIVE ADJUSTMENTS OF ELIGIBILITY. APS acknowledges that
there will be retroactive adjustments to the eligibility of individuals as
Members and that the HMO Subsidiaries are not able to control such adjustments.
Notwithstanding the above, the parties agree that APS shall not be financially
liable for any claims for mental health and/or substance abuse services related
to such retroactive adjustments of greater than 90 days unless a longer period
is mandated by applicable state or federal law or the terms of the applicable
Benefit Contract. The maximum period for retroactive eligibility adjustments
with respect to MHSA Services shall be no longer than the retroactive enrollment
period for medical/surgical Covered Services, unless otherwise required by law,
If a retroactive deletion of greater than 90 days is permitted hereunder and
made with respect to any Member, APS shall reimburse the applicable HMO
Subsidiary for any Capitation Payments received by it with respect to periods
prior to such 90 days.
2.2. COMPLIANCE WITH UNDERWRITING GUIDELINES.
CHC or the applicable HMO Subsidiary, as the case may be, shall
notify APS of any material deviation from the HMO Subsidiary's underwriting
guidelines as applied to any Enrolling Unit's mental health and substance abuse
services. Any such deviation shall be subject to SECTION 3.4 and SECTION 14.3.
3. IDENTIFICATION OF MHSA SERVICES AND COMMUNICATION
3.1. MHSA SERVICES UNDER BENEFIT CONTRACTS.
The applicable Benefit Contract is the exclusive agreement between
the applicable HMO Subsidiary or other Affiliated Payor and Members regarding
the benefits, exclusions and other conditions for coverage for MHSA Services.
This Agreement is not intended nor shall it be deemed or construed to modify the
contractual obligations of any HMO Subsidiary or other Affiliated Payor to a
Member as established by an HMO Subsidiary's or the Affiliated Payor's Benefit
Contract.
3.2 IDENTIFICATION OF MENTAL HEALTH AND/OR SUBSTANCE ABUSE SERVICES
UNDER BENEFIT CONTRACTS.
3.2.1 Subject to SECTION 3.4 with respect to modifications of
existing Benefit Contracts, APS shall be responsible for administering MHSA
Services to Members in accordance with their respective Benefit Contracts. An
HMO Subsidiary or an Affiliated Payor may elect to provide coverage for mental
health and/or substance abuse services that are not MHSA Services, as defined in
this Agreement, in which ease the HMO Subsidiary or other
8
Affiliated Payor shall be financially responsible for such services pursuant to
SECTION 3.3. Any disputes as to coverage shall be resolved as provided in
SECTION 6.4 OR 6.5, as applicable.
3.2.2 CHC or an HMO Subsidiary may request APS's advice regarding
the mental health and substance abuse services which APS believes should be
covered or excluded under the Benefit Contracts and as to how the MHSA Services
and exclusion to Covered Services should be described, but the final
determination regarding the identification and description of the MHSA Services
shall be solely that of the applicable HMO Subsidiary. APS shall have the right
to review (but not to approve) any new description or revision of the
description of MHSA Services in the Benefit Contracts.
3.3. SERVICES UNDER THIS AGREEMENT.
3.3.1 This Agreement is the exclusive agreement between CHC, each
HMO Subsidiary and APS regarding the rights, responsibilities, and other
conditions for the provision and payment of MHSA Services, ASO Services, and/or
UM Services.
3.3.2 In the event an HMO Subsidiary or an Affiliated Payor,
pursuant to SECTION 3.2, elects to offer coverage for mental health and/or
substance abuse services that are not MHSA Services, for whatever reason,
including an HMO Subsidiary's or an Affiliated Payor's decision to provide
extra-contractual benefits, the HMO Subsidiary or the Affiliated Payor shall be
financially responsible for the cost of providing or arranging for such mental
health and/or substance abuse services. APS may provide or arrange for the
requested services and the HMO Subsidiary or Affiliated Payor shall pay APS
according to a mutually agreed upon fee schedule for services provided by MHSA
Providers or non-MHSA Providers for such services arranged for by APS.
3.4 MODIFICATIONS TO COVERED PRODUCTS.
Each HMO Subsidiary shall notify APS in writing as soon as
practicable but in no event later than 30 days prior to the effectiveness of any
modification to an existing Covered Product or the effectiveness of a new
Covered Product. In the event an HMO Subsidiary or an Affiliated Payor modifies
the terms of any of its Covered Products or develops a new Covered Product,
where such modification or new Covered Product is deemed by an HMO Subsidiary,
an Affiliated Payor or APS to be a material change to the obligations of APS
under this Agreement or the pricing assumptions used in establishing the
Capitation Rate (a "Material Change"), the provision of or arrangement for MHSA
Services and/or UM Services related to such modification may be included under
this Agreement in accordance with SECTION 14.3. Following successful negotiation
in accordance with SECTION 14.3, the applicable HMO Subsidiary shall prepare a
PIF and it shall be signed by an authorized representative of the HMO Subsidiary
and APS as soon as reasonably possible. Upon signature and delivery of the PIE,
the new or modified Covered Product shall be incorporated into this Agreement
without further compliance with SECTION 17.1. In the event an HMO Subsidiary or
an Affiliated Payor modifies the terms of any of its Covered Products or
develops a new Covered Product, where such modification or new Covered Product
is not deemed to result in a Material Change as aforesaid, the provision of or
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arrangement for MHSA Services and/or UM Services related thereto shall be
included under this Agreement without any further action of the parties hereto.
3.5. PROVIDER AND MEMBER COMMUNICATIONS.
3.5.1 MEMBERS. APS, with cooperation from CHC and the HMO
Subsidiaries, shall develop the content of materials regarding APS and MHSA
Services to be periodically sent to Members.
(a) CHC and/or the applicable HMO Subsidiary shall be responsible
for printing and distributing such materials, at their own expense, to Members
if (i) CHC requested APS to prepare such material or (ii) such material will be
incorporated in general Member materials the HMO Subsidiary will distribute to
Members.
(b) APS shall be responsible for printing and distributing such
materials, at APS's expense, to Members if APS requests or initiates the Member
communication separately from ordinary Member communications by the HMO
Subsidiaries and the materials relate only to MHSA Services. Such materials
shall be subject to the applicable HMO Subsidiary's approval (not to be
unreasonably withheld or delayed). Such materials, once developed, may be used
by the HMO Subsidiaries to communicate to Members, unless APS requests that they
cease being used.
3.5.2 PARTICIPATING PROVIDERS. The HMO Subsidiaries shall develop
materials regarding APS and MHSA Services to be periodically sent to
Participating Providers, which materials are subject to APS's approval (not to
be unreasonably withheld or delayed). Such materials, once developed, may be
used by the HMO Subsidiaries to communicate to Participating Providers and
Members, unless APS requests that they cease to be used. The respective HMO
Subsidiaries shall be responsible for producing and distributing, at their own
expense, such materials to Participating Providers and Members.
3.5.3 MHSA PROVIDERS. APS shall develop materials regarding MHSA
Services to be periodically sent to MHSA Providers, including, without
limitation, materials designed to provide Network Development and Management and
to support Member education and service, which materials are subject to CHC's
approval. APS shall be responsible for producing and distributing such materials
to MHSA Providers at APS's expense.
3.6 PARTICIPATING PROVIDER COMPLIANCE.
In an effort to support APS's efforts under this Agreement, each HMO
Subsidiary shall use their respective commercially reasonable efforts to cause
Participating Providers to cooperate with APS with respect to APS's roles and
responsibilities pursuant to this Agreement.
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4. APS SERVICES
4.1 TRANSITION OF MHSA SERVICES COMMENCED PRIOR TO COMMENCEMENT DATE.
4.1.1 TRANSITION GENERALLY. APS, CHC, and the HMO Subsidiaries agree
to work together in good faith to ensure a smooth and effective transition from
the Prior Agreement to this Agreement.
4.1.2 OUTPATIENT SERVICES. Capitated Members who have commenced a
treatment plan with or through APS prior to the Commencement Date, shall be
authorized by APS to continue the treatment plan with the same provider for a
specific number of sessions (not to exceed five sessions) in order to complete
the treatment or to move the provision of services to a MHSA Provider. APS shall
be financially responsible for MHSA Services provided to such capitated Members
on or after the Commencement Date. CHC shall arrange for APS to receive a list
of such Capitated Members (to the extent known to CHC) on or before the
Commencement Date.
4.1.3 INPATIENT SERVICES. APS shall be financially responsible for
providing, arranging for the provision of, or paying for mental health and/or
substance abuse services that a Member receives on a continuing inpatient basis
that commences on or after the Commencement Date of this Agreement. APS shall
not be financially responsible for providing, arranging for the provision of, or
paying for mental health and/or substance abuse services that a Member is
receiving on a continuing inpatient basis on the Commencement Date of this
Agreement. The applicable HMO Subsidiary or CHC, as the case may be, shall
retain financial responsibility for such cases until discharge to routine
outpatient care, following which APS shall be financially responsible for such
services in accordance with this Agreement. APS shall provide UM Services and
other ASO Services with respect to such inpatient care in accordance with the
terms and conditions of the applicable Member's Benefit Contract.
4.1.4 OUT-OF-NETWORK MHSA SERVICES. HMO Subsidiaries or CHC, as the
case may be, shall retain financial responsibility for Out-of-Network MHSA
Services provided to Capitated Members prior to the Initial Reset Date. CHC or
the applicable HMO Subsidiary shall fund any claims for Out-of-Network MHSA
Services incurred prior to the Initial Reset Date in the manner described in
SECTION 6.1.3 and ATTACHMENT F for funding claims payments under ASO Contract.
After the Initial Reset Date, financial responsibility for Out-of-Network MHSA
Services (including Louisiana Out-of-Network Services if a mutually agreeable
adjustment to the applicable Capitation Rate is made with respect to such
services) shall be borne by APS.
4.1.5 ADMINISTRATION OF PRE-COMMENCEMENT DATE IBNR. Under the terms
of the Stock Purchase Agreement, CHC has retained financial responsibility for
payment of Pre-Commencement Date IBNR claims, CHC may elect to administer the
Pre-Commencement Date IBNR internally. However, in the event that CHC decides
not to administer the Pre-Commencement IBNR, CHC will obtain at least two bids
from third party administrators for the administration of Pre-Commencement Date
IBNR claims. CHC shall offer APS an opportunity to perform such claims
administration for a fee equal to the lower of the two bids (taking into account
any set-up fees or similar charges included in the bid). APS shall then have 10
days to
11
accept such offer in writing, failing which APS may accept either of such two
bids and, in such case, shall have no further obligation hereunder to APS with
respect thereto.
4.2. NETWORK DEVELOPMENT AND MANAGEMENT.
4.2.1 MHSA PROVIDER NETWORK. APS shall contract with MHSA Providers
to provide MHSA Services to Members. APS shall arrange for MHSA Providers as may
be necessary to achieve the geographic access to MHSA Services required by
SECTION 4.3. APS shall use commercially reasonable efforts to align its network
of MHSA Providers with the networks of medical/surgical providers established by
the HMO Subsidiaries. An HMO Subsidiary may recommend to APS that certain
providers become MHSA Providers. In no case shall this provision be construed to
obligate APS to contract with or make use of any particular health care facility
or professional, or, other than as specified in the next sentence, restrict or
prevent APS from doing so. The appropriate HMO Subsidiary shall have the right
to approve new MHSA Providers and to prohibit a MHSA Provider from providing
MHSA Services to Members. APS makes no representations or guarantees regarding
the continued availability of any MHSA Provider. Upon request by an HMO
Subsidiary, APS shall provide the HMO Subsidiary with a copy of APS's then
current generic provider agreements.
4.2.2 PROVIDER CREDENTIALING. Each of the HMO Subsidiaries hereby
delegates to APS and APS hereby assumes responsibility for credentialing MHSA
Providers in accordance with credentialing protocols APS shall develop and to
which all professional MHSA Providers shall be subject. APS's credentialing
protocols shall be approved by CHC and the HMO Subsidiaries and shall comply
with the applicable requirements of the National Committee for Quality Assurance
("NCQA") or other Accrediting Bodies. Attachment I-I describes the agreement of
delegated credentialing.
4.2.3 SUBCAPITATION ARRANGEMENTS. APS acknowledges that the HMO
Subsidiaries may from time to time enter into subcapitation arrangements
covering health care services, including mental health and substance abuse
services, with provider sponsored networks ("Subcapitation Arrangements"). In
the event an HMO Subsidiary seeks to enter into a Subcapitation Arrangement, the
HMO Subsidiary shall notify APS at least 90 days prior to the proposed effective
date of such arrangement and shall use commercially reasonable efforts to offer,
on terms reasonably acceptable to the applicable HMO Subsidiary and provider
sponsored networks, APS an opportunity to provide or administer the mental
health/substance abuse component under such arrangement. APS may accept or
reject any such offer in its sole discretion. If APS is not engaged to provide
or administer the behavioral health component under any such Subcapitation
Arrangement, the applicable HMO Subsidiary may nevertheless enter into such
Subcapitation Arrangement and terminate this Agreement with respect to the
Capitated Members covered thereunder.
4.3. GEOGRAPHIC ACCESS.
4.3.1 NETWORK CONFIGURATION. APS shall configure its network of MHSA
Providers as required by applicable law. Upon request by an HMO Subsidiary, APS
shall provide each HMO Subsidiary with current directories of MHSA Providers in
that HMO Subsidiary's
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Service Area. In the event an HMO Subsidiary reasonably determines that there
are not sufficient MHSA Providers to provide MHSA Services to Members, an HMO
Subsidiary shall notify APS of the alleged deficiency and within 30 days, the
HMO Subsidiary and APS shall meet to assess the alleged deficiency, and if
appropriate, develop a mutually satisfactory plan of correction. The adequacy of
APS' network of MHSA Providers and Members' accessibility to MHSA Providers
shall be measured in accordance with Section 4.8.3 of this Agreement and the
Provider Availability and Provider Accessibility Standards set forth in
Attachment D-1, Goal Performance Standards to the Agreement.
4.3.2 SERVICE AREA MODIFICATION. HMO Subsidiary shall notify APS in
writing as soon as practicable but in no event later than 30 days prior to any
modification to its Service Area. In the event of any expansion to the Service
Area, APS shall arrange, as required under this Agreement, for MHSA Providers in
proportion to reasonably anticipated enrollment in such expanded Service Area
within 90 days of receiving notice of such Service Area expansion, at which time
the definition of Service Area in this Agreement shall include such expansion
without further compliance with SECTION 17.1. Notwithstanding the foregoing, the
adequacy of APS' network of MHSA Providers and Members' accessibility to MHSA
Providers shall be measured in accordance with the actual results reported
pursuant to Section 4.8.3 as compared to the Provider Availability and Provider
Accessibility Standards set forth in Attachment D-1, Goal Performance Standards.
Nothing in this Section 4.3.2 shall be deemed or construed as relieving HMO
Subsidiaries' of their respective obligations to notify APS of their active
Service Areas pursuant to Exhibit 1 to Attachment D-1, Goal Performance
Standards.
4.4. APS TRIAGE OF CARE.
A 24-hour toll-free telephone line shall be available for Members.
During regular business hours, services provided through such phone line shall
include referral of Members for required MHSA Services, and responding to Member
inquiries and questions regarding MHSA Services. Outside of regular business
hours, services provided through such phone line shall include crisis
intervention and referrals for Emergency MHSA Services. The services of an
appropriately qualified behavioral health care professional shall be available
through such telephone line.
4.5. PROVISION OF MHSA SERVICES AND UM SERVICES.
4.5.1 GENERALLY. APS shall provide or arrange for the provision of
MHSA Services and UM Services to Members pursuant to this Agreement beginning on
the Effective Date.
4.5.2 REVIEW OF MEDICAL NECESSITY. APS shall develop and apply
standards of Medical Necessity, appropriateness and efficiency which reflect
patterns of care found in established managed behavioral health care
environments and that are consistent with the applicable Benefit Contract. APS
shall involve an appropriately licensed behavioral health care professional
whenever rendering a recommendation that mental health and/or substance abuse
services that have been requested or for which payment has been requested are
not Medically Necessary consistent with the applicable Benefit Contract. In the
event of a dispute regarding
13
whether requested services are Medically Necessary, such dispute shall be
resolved pursuant to SECTION 6.4. OR 6.5, as applicable.
4.5.3 UM SERVICES GENERALLY. Each of the HMO Subsidiaries hereby
delegates to APS and APS hereby assumes responsibility for UM Services. APS
shall conduct such UM Services in accordance with protocols APS develops, which
protocols shall be approved by CHC and the HMO Subsidiaries. APS's protocols for
the provision of UM Services shall also comply with the applicable requirements
of NCQA or other Accrediting Bodies. Attachment 1-2 describes the agreement for
delegated UM Services.
4.5.4 AUTHORIZATION OF MHSA SERVICES. APS shall have the right to
determine, consistent with the applicable Benefit Contract, the level and extent
of MHSA Services which are appropriate for the treatment of Members, including
whether MHSA Services shall be rendered on an inpatient or an outpatient basis.
APS shall have the right to require Members to receive In-Network MHSA Services
from MHSA Providers when such care can be provided consistent with the standards
of practice set forth in this SECTION 4.5, the applicable Benefit Contract and
the Performance Standards set forth in SECTION 4.8 and ATTACHMENT D. Except in
the case of MHSA Services rendered in an Emergency, or as otherwise required
under this Agreement or as agreed to by APS in writing, APS shall not in any way
be financially or otherwise responsible for providing, arranging or paying for
any mental health and/or substance abuse services APS has not authorized (unless
such lack of authorization resulted from an MHSA Provider not adhering to the
referral and authorization requirements of APS), provided, however, that in the
event of an Emergency APS shall not be liable for any continued MHSA Services
unless APS is notified within the period specified in the applicable Benefit
Contract after the Emergency MHSA Services were commenced and APS authorizes
continued MHSA Services.
4.5.5 EFFECT OF UM SERVICES. APS shall use reasonable efforts to
advise MHSA Providers that its utilization management is a recommendation of
Medical Necessity only and not a confirmation of eligibility and/or benefit
coverage.
4.6. AVAILABILITY OF IN-NETWORK MHSA SERVICES.
APS shall use commercially reasonable efforts to comply with the
following standards in arranging for the provision of In-Network MHSA Services:
a. Emergency In-Network MHSA Services shall be made available
to a Member immediately in the applicable Service Area.
b. Urgent In-Network MHSA Services shall be made available to
a Member in the applicable Service Area within 48 hours of the time
the MHSA Services are requested.
c. Non-Emergency and non-urgent In-Network MHSA Services shall
be made available in the applicable Service Area to a Member within
10 working days of the time the MHSA Services are requested.
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d. APS shall use commercially reasonable efforts to make
Out-of-Area MHSA Services available to Members outside their home
Service Area but within another Service Area where APS has
contracted with MHSA Providers.
APS shall be deemed to be in compliance with the requirements of
this SECTION 4.6 if an appointment at two geographically appropriate MHSA
Providers is offered as available to a Member within the time period specified,
notwithstanding the Member's preference or availability for other appointment
times.
4.7. MIXED SERVICES.
When a Member has a condition or illness that requires MHSA Services
and other Covered Services, APS shall be responsible for arranging and paying
for only the MHSA Covered Services and for coordinating referrals and
authorizations for non-MHSA Services with the applicable HMO Subsidiary. The HMO
Subsidiaries, the Affiliated Payor or the Member, as the case may be, shall be
responsible for payment of any non-MHSA Covered Services. In determining whether
certain services shall be considered MHSA Services or non-MHSA Covered Services,
APS and the applicable HMO Subsidiary shall refer to ATTACHMENT E.
4.8. PERFORMANCE STANDARDS.
4.8.1 GENERALLY. APS shall use commercially reasonable efforts to
meet or exceed the Performance Standards set forth in ATTACHMENTS D-L AND D-2
HERETO with respect to each HMO Subsidiary and Operating Unit. The Performance
Standards are not applicable to any administration of Pre-Commencement Date IBNR
pursuant to SECTION 4.1.5. As specified in ATTACHMENTS D-L AND D-2, the
Performance Standards are divided into Goal Standards, the attainment of which
represents optimal performance and Termination Standards, which reflect the
level of performance which will provide a basis for termination of this
Agreement.
4.8.2. REVIEW OF PERFORMANCE STANDARDS. The Performance Standards
are intended to reflect prevailing performance standards and other criteria by
which clients measure performance of the managed behavioral health care
component of the health maintenance organization industry. Accordingly, the
parties shall review the Performance Standards periodically after January 1,
2001 and if appropriate, modify them to reflect prevailing industry standards.
If the parties are unable to agree on such modifications, they will submit the
dispute to arbitration pursuant to SECTION 14.1.
4.8.3 PERFORMANCE STANDARD REPORTING. APS shall deliver the reports
listed below to CHC and each of the HMO Subsidiaries showing APS's actual
performance during the applicable period compared with the Performance
Standards. APS shall prepare separate reports for each HMO Subsidiary and
Operating Unit showing actual performance for that HMO Subsidiary or Operating
Unit with respect to Performance Standards that can reasonably be measured
separately.
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(a) MONTHLY REPORTS. The monthly reports shall show actual
performance compared to those Performance Standards that are
designated on ATTACHMENTS D-1 AND D-2 as being measured on a monthly
basis. The monthly reports shall be delivered within 25 days after
the end of the month (unless a shorter time period is required by an
Enrolling Unit) to which they relate with the first report for the
month of September, 1997 being due on October 25, 1998. Monthly
reports for the last month of a quarter shall be incorporated in the
quarterly report for such quarter and shall be due on the due date
for such reports;
(b) QUARTERLY REPORTS. The quarterly reports shall show actual
performance compared to those Performance Standards that are
designated on ATTACHMENTS D-1 AND D-2 as being measured on a
quarterly basis as well as monthly Performance Standards for the
last month of the quarter. The quarterly reports shall be delivered
within 30 days after the end of the quarter to which they relate
with the first report for the quarter ended September, 1997 being
due on October 30, 1998. The report for the second and fourth
quarters of each year shall include data with respect to Performance
Standards, if any, designated as being measured on a semi-annual
basis.
(c) ANNUAL REPORTS. The annual reports shall show actual
performance compared to those Performance Standards that are
designated on ATTACHMENTS D-1 AND D-2 as being measured on an annual
basis. The annual reports shall be delivered within 45 days after
the end of the year to which they relate with the first report for
the year 1997 being due on February 14, 1998. Notwithstanding the
foregoing, annual reports due for 1999 and each annual period
thereafter shall be due on February 15.
If the due date for a report falls on a weekend or holiday,
then the report shall be due on the next business day. For purposes
of the annual report, the period reported on shall be the calendar
year commencing January 1 and ending December 31.
4.8.4 PLAN OF CORRECTION. If a report shows that APS has failed to
perform at or above the applicable Performance Standard for any HMO Subsidiary
or Operating Unit, CHC may, by written notice, request that APS prepare a plan
to correct such non-attainment as rapidly as practicable but In no event later
than the end of the "Deficiency Response Time" designated on ATTACHMENT D-1 OR
D-2, as applicable.
4.8.5 PENALTY FOR NON-ATTAINMENT OF GOAL PERFORMANCE STANDARD. If,
after the expiration of the applicable cure period described in Attachment D-1,
"Goal Performance Standards," APS has failed to attain the Goal Performance
Standard, then APS shall pay CHC the penalty provided for in Attachment D-1.
Such payment from APS shall be due within thirty (30) days from the end of the
applicable cure period. In calculating the amount of the penalty, the number of
Members shall be based on the number of Members APS received Capitation Payments
for during the applicable reporting period. The penalty shall be calculated from
the first day of the cure period until the standard has been met by APS.
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4.8.6 PERFORMANCE DEFAULT BEYOND APS' CONTROL. In the event the
operations of APS or any substantial portion thereof are interrupted by war,
fire, insurrection, labor/provider contract troubles, riots, the elements,
earthquakes, acts of God, or similar circumstance that is beyond APS control,
the provisions of this Agreement (or such portions hereof as APS is thereby
rendered incapable of performing), including CHC's obligation to compensate APS
for any services which APS is incapable of performing, shall be suspended for
the duration of such interruption. Such suspension shall not be deemed or
construed as a breach of this Agreement by APS or the failure by APS to comply
with a Goal Performance Standard.
5. QUALITY MANAGEMENT AND REPORTING REQUIREMENTS AND MHSA LIAISON COMMITTEE
5.1. QUALITY MANAGEMENT AND OTHER PROGRAMS.
APS shall establish and maintain its own quality management program
and shall cooperate with any such reasonable and similar programs established or
required by an HMO Subsidiary or the applicable Benefit Contract with respect to
MHSA Services and/or UM Services. Each of the HMO Subsidiaries hereby delegates
to APS and APS hereby assumes quality improvement activities, including, but not
limited to: (i) monitoring and evaluating clinical issues related to MHSA
Services provided by MHSA Providers; (ii) developing practice guidelines for use
by MHSA Providers; (iii) establishing availability and access standards for MHSA
Providers; and (iv) monitoring and evaluating the availability and access
standards for MHSA Services provided by MHSA Providers. APS's quality management
program shall comply with the applicable requirements of NCQA or other
Accrediting Bodies. Attachment 1-3 describes the agreement for delegated quality
management.
5.2. REPORTING REQUIREMENTS.
APS shall provide to each HMO Subsidiary the reports identified
below regarding the MHSA Services authorized by APS pursuant to this Agreement.
APS shall provide such reports to an HMO Subsidiary in a format mutually agreed
upon by the parties, no later than 30 days after the end of each mouth or
calendar quarter, as appropriate, in the case of monthly or quarterly reports
and no later than 45 days after the end of each year in the case of annual
reports (unless, in any such case, a shorter period of time is otherwise
required by an Enrolling Unit).
5.2.1 STANDARD PERIODIC REPORTING. APS shall provide to each HMO
Subsidiary standard monthly, quarterly, and annual cumulative reports.
5.2.2 NCQA REPORTING. APS shall provide to each HMO Subsidiary APS's
standard reports to comply with the applicable requirements of the NCQA or other
Accrediting Bodies, as more specifically addressed in SECTION 12.4.
5.2.3 HEDIS REPORTING. APS shall provide to each HMO Subsidiary
HEDIS reports as required by applicable law or as an HMO Subsidiary may
reasonably request. APS
17
shall maintain records as necessary to support such HEDIS reports and shall make
such records available to the HMO Subsidiaries for audit.
5.2.4 CHANCES IN REPORTING REQUIREMENTS. APS shall use commercially
reasonable efforts CHC during the term of this Agreement to provide CHC and the
HMO Subsidiaries with reports that conform with industry standards. The parties
recognize that if industry standards with respect to reporting (including NCQA
reporting standards or the standards of other Accrediting Bodies) increase
substantially above current levels, such increase will constitute a significant
change of circumstance as contemplated in SECTION 14.2.
5.2.5 SPECIALIZED REPORTING. Upon agreement of the parties and for
an additional fee, APS shall provide, within a time period mutually agreed to by
the parties, specialized reporting of data regarding MHSA Services provided or
authorized by APS. The fee for specialized reporting shall be mutually agreed
upon (not to exceed $75 per hour of APS staff time) plus out-of-pocket expenses,
subject to adjustment for inflation pursuant to SECTION 9.2.
5.3. MHSA LIAISON COMMITTEE.
Each HMO Subsidiary and Operating Unit, as applicable, and APS shall
establish Liaison Committees comprised of two persons; one person designated by
APS and one person designated by the HMO Subsidiary or Operating Unit, as
applicable. The MHSA Liaison Committees shall meet no less frequently than once
every six months. Specifically, but not by way of limitation, the MHSA Liaison
Committees shall:
(a) Review complaints by Members, Participating Providers and/or
MHSA Providers;
(b) Review cases selected by APS or an HMO Subsidiary;
(c) Discuss operational issues that arise under this Agreement;
and
(d) Review APS's performance with respect to complying with
SECTION 12.4.
In the event of a dispute among the members of the Liaison
Committee, such dispute shall be resolved pursuant to the dispute resolution
procedures in SECTION 6.5.
6. CLAIM ADMINISTRATION, BENEFIT ADMINISTRATION AND COVERAGE DISPUTES
6.1. CLAIM ADMINISTRATION.
6.1.1 GENERALLY. APS shall process and pay claims for MHSA Services,
APS shall arrange for MHSA Providers to submit claims for MHSA Services to APS
Claims shall be paid in accordance with the terms and conditions of the Benefit
Contract and this Agreement and, with respect to MHSA Providers, the agreements
with the MHSA Providers.
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6.1.2 CAPITATED CLAIMS. APS shall be financially responsible for and
shall pay from its own funds, claims for MHSA Services provided to Capitated
Members, subject to applicable Coinsurance, Copayments, and Deductibles.
6.1.3 ASO CLAIMS. APS shall not be financially responsible for
Pre-Commencement Date IBNR claims or claims for MHSA Services provided to ASO
Members or other Members under arrangements where APS is not financially at risk
for utilization of MHSA Services. CHC or the applicable HMO Subsidiary or
Affiliated Payor shall be financially responsible for and shall fund payment of
such claims, and APS shall process payment for such claims, in accordance with
the funding procedures set forth on ATTACHMENT F hereto.
6.1.4 IBNR Reserve. No later than September 25, 1998, APS shall
establish an escrow account (the "IBNR RESERVE") with a commercial bank having
capital and remained earnings of at least $250,000,000 or another financial
institution reasonably acceptable to CHC to be maintained as security for APS's
obligations under this Agreement to pay claims for MHSA Services, including any
subrogation claims of CHC or any HMO Subsidiary arising from its payment of any
such claim for MHSA Services on behalf of APS. The IBNR Reserve shall be
established pursuant to an Escrow Agreement in form and substance reasonably
acceptable to CHC and APS. Commencing on October 1, 1998 and continuing on the
first day of every month thereafter until the funds on deposit in the IBNR
Reserve aggregate at least $2,000,000, APS shall deposit into the IBNR Reserve
the following amounts: $22,000 on the first day of each mouth during the period
October 1, 1999 through September 30, 1999, $44,000 on the first day of each
month during the period October 1, 1998 through September 30, 2000 and $50,000
on the first day of each month thereafter; provided, however, that APS shall
have no further obligation to deposit amounts into the IBNR Reserve, and the
contents of the IBNR Reserve shall be delivered to APS, at such time as APS
demonstrates to CHC's reasonable satisfaction that APSH has a consolidated net
worth (determined in accordance with GAAP based upon the then most recently
prepared consolidated financial statements of APSH) of at least $2,500,000;
provided further, that if at any time thereafter the consolidated net worth of
APSH (as so determined) falls below $2,500,000, APSH shall again be obligated to
maintain the IBNR Reserve as provided in this SECTION 6.1.4. Any failure by APS
(i) to establish the IBNR Reserve on or before September 25, 1998 or (ii) to
deposit into the IBNR Reserve any amount required to be deposited pursuant
hereto shall be deemed to be a material breach by APS of a material term of this
Agreement and shall entitle CHC or any HMO Subsidiary to terminate this
Agreement in accordance with SECTION 15.2.1.
6.2. BENEFIT ADMINISTRATION.
APS shall make initial determinations whether services and/or
supplies requested by or on behalf of a Member or for which a Member has
requested reimbursement are MHSA Services covered by a Member's Benefit
Contract. If a determination is made that the requested services and/or supplies
are not MHSA Services, the Member shall be advised of the determination
regarding the lack of coverage and the Member's rights under the Benefit
Contract to appeal a denial of coverage as required by the Benefit Contract and
applicable law, including ERISA.
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6.3 MEMBER SERVICES
Each HMO Subsidiary hereby delegates to APS and APS hereby assumes
the following enrollee MHSA Services activities; (i) responding to Member
inquiries and complaints; (ii) administration of Member surveys; and (iii)
managing first level grievance procedures (collectively, "MEMBER SERVICES"). APS
shall develop protocols for Member Services, which protocols shall be approved
by CHC and the HMO Subsidiaries. APS shall ensure that the Member Services
protocols comply with the applicable provisions of the NCQA or other Accrediting
Bodies. Attachment 1-4 describes the agreement for delegated Member Services.
6.4. COVERAGE DISPUTES WITH MEMBERS.
6.4.1 APS'S INTERNAL APPEAL PROCESS. In the event of a dispute with
a Member or provider regarding coverage of MHSA Services, APS shall attempt to
resolve the coverage dispute within 30 days but no less than 45 days (subject to
the requirements of applicable law and the applicable Benefit Contract). If APS
is not able to resolve the coverage dispute, APS shall refer the Member to the
applicable HMO Subsidiary's or Affiliated Payor's grievance process (2nd level
appeal). The HMO Subsidiary or Affiliated Payor must make an attempt to resolve
the matter within 30 days but no later than 45 days following referral of the
dispute from APS. The HMO Subsidiary's or Affiliated Payor's decision shall be
binding unless the Member appeals. If the Member appeals the decision of the HMO
Subsidiary or Affiliated Payor, then the appeal shall be referred to the
appropriate state regulatory agency (or appropriate plan representative if the
Member's claim is subject to ERISA) for resolution. Such decision shall be
binding. The foregoing shall not be deemed or construed as limiting or otherwise
restricting APS's rights under Section 14.1.
6.4.2 HMO SUBSIDIARY'S OR AFFILIATED PAYOR'S GRIEVANCE PROCESS. APS
SHALL maintain a complaint register as required by applicable law and shall
provide the applicable HMO Subsidiary in a timely manner with a copy of any
grievance or complaint it receives related to MHSA Services. APS shall cooperate
with an HMO Subsidiary's or Affiliated Payor's grievance process as provided in
the Member's Benefit Contract. The result of the grievance process shall be
binding on APS, unless APS disagrees in good faith with such result, in which
case, the HMO Subsidiary or Affiliated Payor may authorize coverage and assume
financial responsibility for the provision of the services and/or supplies in
dispute, and the parties shall proceed with the dispute resolution procedure
pursuant to SECTION 6.5.
6.4.3 ARBITRATION OR LITIGATION. APS shall timely notify the
applicable HMO Subsidiary of any coverage disputes with Members involving mental
health and substance abuse services that result in actual or threatened
arbitration or litigation against APS and/or the HMO Subsidiary or the
Affiliated Payor ("DISPUTE"). The applicable parties shall fully cooperate with
the other parties in resolving the Dispute. An HMO Subsidiary shall, or shall
advise the Affiliated Payor to, cooperate with APS in the defense of the
Dispute, unless the HMO Subsidiary, or the Affiliated Payor and/or APS elects to
settle the Dispute, provided that no Dispute may be settled by APS without the
written consent of the applicable HMO Subsidiary or
20
Affiliated Payor, unless the applicable HMO Subsidiary or Affiliated Payor, as
the case may be, are not liable under such settlement and are released
unconditionally from all liability with respect to such Dispute. In the event an
HMO Subsidiary or the Affiliated Payor and APS, as the case may be, agree
regarding the terms and conditions of a settlement of the Dispute, the parties
shall perform their respective obligations under the terms of the settlement. in
the event an HMO Subsidiary or the Affiliated Payor at any time elects to scale
the Dispute and APS does not agree with the terms of the settlement, the HMO
Subsidiary or the Affiliated Payor shall pay for the provision of the services
and/or supplies in dispute, and the parties shall proceed with the dispute
resolution procedure described in SECTION 6.5. Each party shall indemnify the
other(s) in accordance with SECTION 11.2.
6.5. COVERAGE DISPUTE BETWEEN APS, AN HMO SUBSIDIARY OR AN AFFILIATED
PAYOR REGARDING MEMBERS.
In the event of a dispute between APS and an HMO Subsidiary or an
Affiliated Payor regarding whether particular services and/or supplies for a
Member are MHSA Services for which APS had or will have financial responsibility
or if an HMO Subsidiary or the Affiliated Payor enters into a settlement
agreement with a Member as a result of an actual or threatened grievance
arbitration or litigation and APS and the HMO Subsidiary or Affiliated Payor do
not agree on financial liability for such services ("COVERAGE DISPUTE"), the
respective parties shall comply with the following Coverage Dispute Resolution
Procedure.
(a) The Coverage Dispute shall be submitted to the respective HMO
Subsidiary's Medical Director and APS's Medical Director for review;
(b) The Medical Directors shall issue their determination in a
timely manner in accordance with law and the applicable Benefit Contract.
In the event there continues to be a Coverage Dispute after review by the
Medical Directors, the parties shall submit the Coverage Dispute to the
MHSA Liaison Committee described in SECTION 5.3 for consideration at the
next or at a special meeting of the MHSA Liaison Committee;
(c) The MHSA Liaison Committee shall review the Coverage Dispute. In
the event the parties' representatives on the Liaison Committee agree on a
resolution of the Coverage Dispute, such resolution shall be binding on
the parties. Otherwise the Coverage Dispute shall be referred to binding
arbitration pursuant to SECTION 14.1. Alternatively, the parties may elect
to, or where required by state law, shall refer the Coverage Dispute to an
outside panel of community representatives selected by mutual agreement
and subject to instructions and procedures mutually agreed to by the
parties in advance.
7. ADMINISTRATIVE SERVICES ONLY
7.1. ASO BUSINESS GENERALLY.
APS shall provide ASO Services to the HMO Subsidiaries with respect
to Covered Products, Enrolling Units and Members with respect to which APS is
engaged to
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provide ASO Services. The ASO Fees payable to APS for existing ASO Services
shall be set forth in ATTACHMENT B and the applicable HMO Subsidiary shall pay
such ASO Fees in accordance with SECTION 9 below. To the extent that any HMO
Subsidiary desires to engage APS after the date hereof to provide ASO Services
for such HMO Subsidiary or any Affiliated Payor (other than those ASO Services
constituting a New Line of Business), the ASO Fees payable with respect thereto
shall be negotiated by the parties in a manner consistent with that provided in
SECTION 3.4 hereto with respect to modifications to Covered Products.
7.2 ASO SERVICES.
Unless otherwise specifically agreed to in writing between APS and
an HMO Subsidiary, the ASO Services to be provided by APS shall include, but not
be limited to, the following:
(a) Network Development and Management including provider
credentialing and monitoring as described in SECTION 4.2
(b) Telephone support for Members as described in SECTION 4.4
(c) Utilization Management Services as described in SECTION 4.5
(d) Quality management as described in SECTION 5.1
(e) Reporting as described in SECTION 5.2
(f) Claim and benefit administration as described in SECTIONS 6.1
AND 6.2 and
(g) Member services as described in SECTION 6.3.
Additional ASO Services or combinations of ASO Services may be
provided as mutually agreed to in writing by APS and the applicable HMO
Subsidiary.
7.3. LIABILITY FOR CLAIM DECISIONS AND PAYMENT.
APS shall not be responsible or liable for any claims decisions or
for any payments of any claims submitted by Participating Providers, MHSA
Providers, or other providers with respect to Covered Services provided to ASO
Members.
8. GOVERNMENT PRODUCTS
8.1. GOVERNMENT PRODUCTS GENERALLY.
Subject to the provisions of SECTION 10.1.3., APS may provide MI-ISA
Services, UM Services, and/or ASO Services to CHC and the HMO Subsidiaries in
connection with Products sponsored by governmental agencies or programs such as
the federal Medicare program, state Medicaid programs, or state or federal
employee programs (collectively
22
"Governmental Programs"). The Capitation Rates, ASO Fees or other fees to be
paid to APS for services provided in connection with Governmental Programs
existing on the date hereof or included in this Agreement in accordance with
SECTION 10.1.3 shall be set forth in ATTACHMENT B and/or ATTACHMENT G, which
attachments shall be amended with respect to Government Programs included in
this Agreement pursuant to SECTION 10.1.3.
8.2. SPECIAL TERMS RELATING TO GOVERNMENTAL PROGRAMS.
In the event that, pursuant to SECTION 10.1.3, the parties agree on
special terms with respect to MHSA Services to be provided in connection with
one or more Governmental Programs, or if special terms are required by such
program, the parties will develop an addendum to this Agreement containing such
terms and attach it hereto as part of ATTACHMENT G hereto. The special terms
relating to MHSA Services in connection with the Delaware Medicaid program
(known as DelawareCare) are attached hereto as ATTACHMENT G-1 and the special
terms relating to MHSA Services in connection with the CHC of Florida, Inc.
Jacksonville's contact with the U.S. HealthCare Financing Administration are
attached hereto as ATTACHMENT G-2.
The special terms relating to MHSA Services in connection with the
Medicare+Choice Program, Operational Policy Letter (OPL98.077), and other
Medicare laws implemented by the U.S. Health Care Financing Administration are
attached hereto as ATTACHMENT G-3.
9. PAYMENT
9.1. PAYMENTS BY CHC TO APS.
9.1.1 CAPITATION PAYMENT; INITIAL RATE RESET. Each HMO Subsidiary
shall pay APS the applicable monthly Capitation Payment and other payments
pursuant to ATTACHMENTS B 1-11, as amended from time to time in accordance with
this Agreement, and the applicable PIF. The Capitation Rates in effect from the
date hereof through December 31, 1997 as reflected in ATTACHMENTS B1-11 shall
be, in the aggregate, no greater than the Capitation Rates under the Prior
Agreement. Effective on January 1, 1998 (the "INITIAL RATE RESET"), the
Capitation Rates shall be adjusted to the rates specified on ATTACHMENTS B1-11
less a reduction of S.06 per Member per month (the "$.06 PMPM RATE REDUCTION").
The Capitation Payment with respect to each month shall be based on the then
current information available to the HMO Subsidiary regarding the number of
Members for that month. This payment shall be reconciled for retroactive
adjustments of eligibility for previous months, subject to SECTION 2.1.3. Such
retroactive adjustments shall be made monthly.
9.1.2 COPAYMENT EXPENSES. Neither CHC nor any HMO Subsidiary shall
have any liability if APS incurs any expense due to a Member exceeding his or
her out-of-pocket Copayment maximum, even if APS is required to reimburse an
MHSA Provider for such amounts pursuant to the terms of that MHSA Provider's
Participation Agreement.
9.1.3 PAYMENT OF ASO FEES. Each HMO Subsidiary shall pay APS the
applicable ASO Fee per ASO Member, if any, pursuant to ATTACHMENTS B1-11, as
amended from time to time in accordance with this Agreement, and the applicable
PIF. Such payments shall be
23
made each month and shall be based on the then current information available to
the HMO Subsidiary regarding the number of ASO Members for that month.
9.1.4 TIMING OF PAYMENTS. THE HMO Subsidiaries shall pay APS the
Capitation Payments and ASO Fees no later than the 15th of the month for which
such payment is due; provided that the payments due with respect to the last 5
days of September, 1998 are being made by wire transfer simultaneously with the
execution and delivery of this Agreement. Payments may be made directly by an
HMO Subsidiary or by CHC on behalf of any or all of the HMO Subsidiaries.
9.1.5 LATE PAYMENT PENALTIES. In the event any payment due hereunder
is more than five days past due, APS may deliver a late notice to the HMO
Subsidiary responsible for such payment. In the event an aggregate past due
amount of $100,000 or more remains unpaid five days after such late notice, the
applicable HMO Subsidiary(ies) shall pay APS interest on such past due amount
from the due date through the date of payment at a rate equal to the prime rate
of a major money center bank in the City of New York reasonably selected by APS
on the date such money first became due, as reported by the Wall Street Journal,
plus 2%.
9.1.6 CHC GUARANTEE. CHC hereby guarantees the prompt payment of all
amounts due hereunder from the HMO Subsidiaries to APS, provided that, with
respect to each HMO Subsidiary, such guarantee shall cease immediately (without
any action by any party hereto) and shall no longer be effective as to any
amounts thereafter payable under this Agreement upon the occurrence of a Change
of Control Transaction with respect to such HMO Subsidiary.
9.1.7 SEVERAL PAYMENTS. The payment and other obligations of each
HMO Subsidiary hereunder shall be several and not joint, and each HMO Subsidiary
shall be liable solely for its own obligations hereunder.
9.2. PAYMENTS BY APS TO CHC.
Commencing on January 1, 2002 and continuing for twelve (12) consecutive
months thereafter, within five (5) days of APS' receipt of each monthly
Capitation Payment, APS shall pay to CFIC One Hundred Sixty-six Thousand, Six
Hundred Sixty-six and 67/100 dollars ($166,666.67) (which monthly payments will
total Two Million dollars ($2,000,000).
9.3. ANNUAL ADJUSTMENTS FOR INFLATION.
Beginning on January 1, 2004, and annually thereafter on the first (1st)
day of each January of the term hereof, the Capitation Rates shall be increased
by an inflationary adjustment of 4.5%. Such inflationary adjustment shall be
automatically applied and paid by CHC without notice or demand by APS.
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9.4 FINANCIAL LIABILITY FOR MHSA SERVICES.
APS acknowledges that it is financially liable for MHSA Services
provided to Capitated Members and any other Members for which it is financially
responsible under this Agreement. However, if any HMO Subsidiary shall fail to
pay APS any monthly Capitation Payment required pursuant to SECTION 9.1.1. by
the last day of any month, upon five (5) days prior written notice given to CHC
and such HMO Subsidiary, APS shall cease to have any financial responsibility
for any MHSA Services provided to Capitated Members of such HMO Subsidiary
thereafter, until all such Capitation Payments for which any such notice has
been given and all other Capitation Payments then due hereunder from such HMO
Subsidiary shall have been paid to APS, it being understood that in no event may
APS withhold any services prior to the effective date of any termination of this
Agreement. In the event an Affiliated Payor does not pay an HMO Subsidiary
amounts due under the terms of its agreement with the HMO Subsidiary, the HMO
Subsidiary shall nevertheless remain liable to APS pursuant to the terms of this
Agreement.
9.5. PAYMENT IN FULL.
APS shall accept and shall require MHSA Providers to accept as
payment in full for MHSA Services provided to Members such amounts as are paid
pursuant to the agreements with the MI-ISA Providers. MI-ISA Providers may
collect from the Member Copayments, Deductibles or charges for services not
covered as provided under the Member's Benefit Contract.
9.6. MEMBER PROTECTION PROVISION.
9.6.1 This Section applies when any applicable Benefit Contract,
statute or regulation requires that the Member be held harmless from any and all
costs which are the legal obligation of an HMO Subsidiary or the Affiliated
Payor.
9.6.2 In no event, including, but not limited to, non-payment for
MHSA Services provided to Members; insolvency of an HMO Subsidiary, the
Affiliated Payor or, in the case of MHSA Providers, APS; or breath by an HMO
Subsidiary of any term or condition of this Agreement or breach by APS of any
term or condition of the agreement with the MHSA Provider, shall APS or the MHSA
Provider xxxx, charge, collect a deposit from, seek compensation, remuneration
or reimbursement from, or have any recourse against any Member or persons acting
on behalf of the Member for MI-ISA Services eligible for coverage or
reimbursement under this Agreement and the applicable Benefit Contract.
9.6.3 The provisions of this Section shall: (a) apply to all MHSA
Services provided while this Agreement is in force; (b) with respect to MHSA
Services provided while this Agreement is in force, survive the termination of
this Agreement regardless of the cause of termination; (c) be construed to be
for the benefit of the Members; and (d) supersede any oral or written agreement,
existing or subsequently entered into, between an HMO Subsidiary and a Member or
person acting on a Member's behalf, that requires the Member to pay for such
MI-ISA Services.
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9.7 COORDINATION OF BENEFITS AND SUBROGATION FOR CAPITALIZED MEMBERS.
Each HMO Subsidiary shall not seek coordination of benefits or
subrogation for MHSA Services provided to Capitated Members. APS shall seek
coordination of benefits or subrogation for MHSA Services provided to Members
and APS shall (i) retain all amounts APS recovers for MHSA Services provided to
Capitated Member through the coordination of benefits or subrogation and (ii)
promptly pay over to the applicable HMO Subsidiary all amounts APS recovers for
MHSA Services provided to Members other than Capitated Members through the
coordination of benefits or subrogation. When a Member has a condition or
illness that requires MHSA Services and non-MHSA Services, APS, each HMO
Subsidiary and CHC shall cooperate with each other in subrogation and
coordination of benefits actions.
9.8. CAPITATION RATES FOR LARGE ACCOUNTS.
Notwithstanding the Capitation Rates set forth in ATTACHMENTS B1-11
or anything to the contrary contained in this Agreement, new accounts that are
contracted by or proposed to be contracted by an HMO Subsidiary after the
Effective Date and that have 1,000 or more employees (not including dependents)
shall, at the option of the HMO Subsidiary, either be included in this Agreement
at the Capitation Rates set forth on ATTACHMENT B or be treated as if such
accounts were a CHC Acquired Person under SECTION 10.5.2.
9.9. ACTUARIAL SUPPORT FOR CAPITATION RATES.
APS shall provide actuarial support for the Capitation Rates as
reasonably requested by CHC or the HMO Subsidiaries in connection with
regulatory filings, pricing of proposals, or other business needs.
10. EXCLUSIVITY, NON-COMPETITION
10.1. EXCLUSIVE ENGAGEMENT.
10.1.1 EXCLUSIVITY. Except as provided in SECTION 10.1.2, CHC and
each HMO Subsidiary hereby engage APS during the term of this Agreement as their
exclusive provider of the managed behavioral health care services contemplated
in this Agreement with respect to the Covered Products. Except as otherwise
provided herein, none of CHC or the HMO Subsidiaries, shall engage or otherwise
contract with any party other than APS to perform any such services during the
term of this Agreement.
10.1.2 EXCEPTIONS TO EXCLUSIVITY AND NON-COMPETITION. The
exclusivity requirements in this SECTION 10.1 and the non-competition provisions
in SECTION 10.2 shall not apply to the following:
(a) The performance by the HMO Subsidiaries of their
obligations under existing third party service agreements that have been
disclosed to APSH in writing prior to the Commencement Date.
26
(b) Any mental health and substance abuse service agreements
to which any CHC Acquired Person is a party as of the time of becoming a
CHC Acquired Person.
(c) (i) Subject to CHC's compliance with clause (ii) below,
any Competing Services (as defined in SECTION 10.2) provided directly or
indirectly by a CHC Acquired Person as long as such Competing Services are
provided primarily through or for the benefit of such CFIC Acquired Person
or its affiliates as part of their managed care products and not as
stand-alone carve out behavioral health care products offered
independently.
ii) (A) If a CHC Acquired Person, as of the time of
becoming a CHC Acquired Person, provides any Competing Services (other
than those permitted under clause (i) above), CHC shall, and shall cause
its subsidiaries to, comply with the provisions of this clause (ii).
(B) CHC and APSH shall negotiate in good faith and
in a commercially reasonable manner the amount in cash (the "CASH PURCHASE
PRICE") a willing third party purchaser that is similarly situated to APSH
would pay for the business segment of such CHC Acquired Person that
provides the Competing Services (the "Competing Business Segment"). If,
after 30 days of such negotiations, CHC and APSH are unable to agree upon
a Cash Purchase Price for the Competing Business Segment, CHC and APSH
shall engage a Business Valuer to determine in a commercially reasonable
manner the Cash Purchase Price in respect of such Competing Business
Segment. The Business Valuer shall deliver its determination of the Cash
Purchase Price for the Competing Business Segment to CHC and APSH in
writing no later than 60 days following its appointment as Business
Valuer. The costs and expenses associated with such Business Valuer shall
be borne equally between CHC and APSH.
(C) Once the Cash Purchase Price for the Competing
Business Segment has been established pursuant to clause (B) above, CHC,
within 10 days following such date, shall deliver a written notice (the
"COMPETING BUSINESS SEGMENT NOTICE") to APSH offering to sell the
Competing Business Segment to APSFI for the Cash Purchase Price and on
other customary terms and conditions. For a period of 30 days following
receipt of the Competing Business Segment Notice, APSH shall have the
exclusive and nontransferable right to purchase, or to cause any
wholly-owned direct or indirect subsidiary to purchase, the Competing
Business Segment from CHC on the terms and conditions specified in the
Competing Business Segment Notice. If APSH elects to purchase (directly or
indirectly) the Competing Business Segment on such terms and conditions,
it shall so notify CHC in writing within such 30-day period, and APSFI and
CHC shall exercise commercially reasonable efforts to consummate such
purchase as soon as practicable thereafter. If APSH declines to elect to
purchase the Competing Business Segment within such 30-day period, CFIC,
or the subsidiary of CHC which acquired the CHC Acquired Person, may
retain its interest in and operate the Competing
27
Business Segment without any further obligation to APSH or any other
person hereunder with respect thereto.
(d) A Subcapitation Arrangement permitted under SECTION 4.2.3.
(e) The provision of or arranging for the provision of managed
health care services by or for an HMO Subsidiary or Operating Unit in
respect of a New Line of Business if such services are not incorporated
into this Agreement.
(f) The provision of or arranging for the provision of managed
health care services by or for a CHC Acquired Person that does not become
a party to this Agreement.
10.1.3 NEW LINE OF BUSINESS. APS recognizes that when an HMO
Subsidiary offers a New Line of Business, price and quality of the MI-ISA
Services to be provided in connection therewith must be competitive.
Accordingly, in the event that any HMO Subsidiary chooses during the term of
this Agreement to offer a New Line of Business to its customers, including in
the event such HMO Subsidiary responds to Requests for Proposals ("RFP") for new
Governmental Programs, such HMO Subsidiary shall offer APS the first opportunity
to provide such MHSA Services. APS shall have 10 business days (or, in the case
of an RFP, such shorter period of time as the applicable HMO Subsidiary shall
prescribe to allow it to timely respond to such RFP) of receiving notice and the
relevant information regarding the New Line of Business to make a proposal as to
the terms on which it will provide such MHSA Services. If such proposal is
reasonably acceptable to the applicable HMO Subsidiary, the Products which
comprise such New Line of Business shall become Covered Products hereunder and
APS shall provide such MHSA Services in accordance with the terms of such
proposal; provided that if the proposal is made in connection with an HMO
Subsidiary's response to an RFP, such proposal shall be incorporated into such
response. If APS's proposal with respect to such MHSA Services is not reasonably
acceptable to such HMO Subsidiary, the HMO Subsidiary may solicit proposals from
other national managed behavioral health companies to provide such services,
provided that such proposals must be at a level of service quality comparable to
APS's proposal. Before accepting any such proposal from a third party managed
behavioral health company, the HMO Subsidiary shall offer APS an opportunity to
match such proposal. If APS notifies the HMO Subsidiary in writing within 5
business days of receiving notice and relevant information as to such proposal
(or within such earlier deadline as required to allow such HMO Subsidiary to
timely respond to an RFP) that APS will match the proposal, (a) the Products
which comprise such New Line of Business shall become Covered Products hereunder
and APS shall provide such MHSA Services in accordance with the terms of such
proposal (provided that if the proposal is made in connection with an HMO
Subsidiary's response to an RFP, such proposal shall be incorporated into such
response) and (b) notwithstanding anything to the contrary contained in SECTION
16.3.1, CHC shall not be entitled to any Commission based on such New Company
Business. If APS does not so match the proposal, (i) the HMO Subsidiary may
accept such proposal from such third party managed behavioral health company and
(ii) neither CHC nor the applicable HMO Subsidiary shall have any further
obligation to APS under this Agreement with respect to such New Line of
Business.
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10.2. NON-COMPETITION.
Except as provided in SECTION 10.1.2, without APS's prior written
consent, CHC and each HMO Subsidiary agree that neither they nor their
respective subsidiaries shall, directly or indirectly (whether in conjunction
with a third party or otherwise), during the term of this Agreement provide any
managed behavioral health care services within the Service Area in a manner that
competes directly with the managed behavioral health care and administrative
services APS offers or performs, including, without limitation, the managed
health care services provided under this Agreement ("COMPETING SERVICES").
10.3. NO SOLICITATION OF APS EMPLOYEES.
During the term of this Agreement and for a period of one year
following the termination of this Agreement, none of the HMO Subsidiaries or CHC
shall, without the prior consent of APS, directly or indirectly, solicit, employ
or engage any employee of APS. The foregoing obligations shall not apply to
employees who are terminated or given notice thereof by APS or who terminate
their employment for cause.
10.4. NO SOLICITATION OF CHC OR HMO SUBSIDIARY EMPLOYEES.
During the term of this Agreement and for a period of one year
following the termination of this Agreement, neither APSH or APS shall, without
the prior consent of CHC or an HMO Subsidiary, as applicable, directly or
indirectly solicit, employ or engage any employee of CHC or an HMO Subsidiary.
The foregoing obligations shall not apply to employees of CHC or any HMO
Subsidiary who are terminated or given notice thereof by CHC or such HMO
Subsidiary or who terminate their employment for cause.
10.5. HMO SUBSIDIARIES.
10.5.1. CURRENT HMO SUBSIDIARIES. The Current HMO Subsidiaries shall
be bound by this Agreement as of the Effective Date and this Agreement shall be
binding upon any successor of an HMO Subsidiary in a Change of Control
Transaction unless terminated pursuant to SECTION 15.2.5(B).
10.5.2. CHC ACQUIRED PERSONS. If CHC or any direct or indirect
subsidiary thereof, including any HMO Subsidiary, acquires any CHC Acquired
Person during the term of this Agreement (i) the acquiror or such CHC Acquired
Person may honor such CHC Acquired Person's existing managed behavioral health
contracts for the duration of the terms thereof and (ii) upon consummation of
the acquisition or, if such CHC Acquired Person has such an existing contract,
upon termination thereof, the acquiror shall offer APS the first opportunity to
provide MI-ISA Services in respect of such CHC Acquired Person. APS shall have
10 business days of receiving notice and the relevant information regarding the
CHC Acquired Business to make a proposal as to the terms on which it will
provide such MI-ISA Services. If such proposal is reasonably acceptable to the
acquiror, such acquiror shall (if not already a party hereto) become a party to
this Agreement, and APS shall provide such MHSA Services with respect to such
CHC Acquired Person in accordance with the terms of such proposal. If APS's
proposal with respect
29
to such MHSA Services is not reasonably acceptable to such acquiror, such
acquiror may solicit and accept proposals from other national managed behavioral
health companies to provide such services, provided that such proposal must be
at a level of service quality comparable to APS's proposal. Before accepting any
such proposal from a third party managed behavioral health company, such
acquiror shall offer APS an opportunity to match such proposal. If APS notifies
such acquiror in writing within 5 business days of receiving notice and relevant
information as to such proposal that APS will match the proposal, (a) such
acquiror shall (if not already a party hereto) become a party to this Agreement,
and APS shall provide such MHSA Services with respect to such CHC Acquired
Person in accordance with the terms of such proposal and (b) notwithstanding
anything to the contrary contained in SECTION 16.3.1, CHC shall not be entitled
to any Commission based the New Company Business consisting of such MHSA
Services. If APS does not so match the proposal, (i) the acquiror may accept
such proposal from such third party managed behavioral health company and (ii)
neither CHC nor such acquiror shall have any further obligation to APS under
this Agreement with respect to such CHC Acquired Business.
10.6. OPERATION OF BUSINESS.
Nothing contained in this Agreement shall be deemed to (1) require
any HMO Subsidiary to enter into any Benefit Contract with any Enrolling Unit or
to renew any such Benefit Contract, (ii) preclude any HMO Subsidiary from
terminating any such Benefit Contract, (iii) require any HMO Subsidiary to
maintain any minimum amount of Members at any time, (iv) prevent any HMO
Subsidiary from ceasing at any time to operate as a licensed health maintenance
organization or (v) otherwise impose any limitations or restrictions in respect
of the manner in which any HMO Subsidiary operates its business.
11. INSURANCE AND INDEMNIFICATION
11.1. INSURANCE.
11.1.1 APS. APS shall procure and maintain, at its own sole expense,
professional and general liability insurance and other insurance as may be
necessary to protect itself and its employees, agents, or representatives
against any claims, liabilities, damages or judgments that arise out of services
provided by or to be provided by itself or its employees, agents or
representatives in the discharge of its or their responsibilities under this
Agreement. APS shall provide proof of such insurance to CHC and an HMO
Subsidiary upon request and shall notify CHC and the HMO Subsidiaries if such
insurance coverage is terminated. APS's agreements with MHSA Providers shall
require MHSA Providers to procure and maintain, at their sole expense,
professional and general liability insurance.
11.1.2 HMO SUBSIDIARIES. Each HMO Subsidiary shall procure and
maintain, at its own expense, professional and general liability insurance and
other insurance as may be necessary to protect itself and its employees, agents,
or representatives (other than APS) against any claims, liabilities, damages or
judgments that arise out of services provided by or to be provided by itself or
its employees, agents or representatives (other than APS) in the discharge of
its of their responsibilities under this Agreement. Each HMO Subsidiary shall
provide proof of
30
such insurance to APS upon request and shall notify APS if such insurance
coverage is terminated.
11.2. INDEMNIFICATION.
11.2.1 BY APS. APS shall defend, hold harmless and indemnify each
HMO Subsidiary and CHC and their respective affiliates, officers, directors,
employees, agents. successors and assigns from actual and direct claims,
liabilities, damages or judgments asserted against, imposed upon or incurred by
any such indemnified person that arise out of APS's gross negligence,
intentional wrongdoing, or breach, in the discharge of APS's responsibilities to
a Member or APS's responsibilities under this Agreement. The indemnification
granted under this Section expressly includes indemnification with respect to
expense costs, legal fees, defense costs, court costs and amounts paid in
settlement or in satisfaction of any judgment or award.
11.2.2 BY CHC AND THE HMO SUBSIDIARIES. Each HMO Subsidiary and CHC
agree to defend, hold harmless, and indemnify APS and its affiliates, officers,
directors, employees, agents, successors and assigns from actual and direct
claims, liabilities, damages or judgments asserted against, imposed upon or
incurred by any such indemnified person that arise out of an HMO Subsidiary's or
CHC's gross negligence, intentional wrongdoing, or breach, in the discharge of
an HMO Subsidiary's or CHC's responsibilities to a Member or an HMO Subsidiary's
or CHC's responsibilities under this Agreement. The indemnification granted
under this Section expressly includes indemnification with respect to expense
costs, legal fees, defense costs, court costs and amounts paid in settlement or
in satisfaction of any judgment or award.
12. REGULATORY COMPLIANCE, FILING REQUIREMENTS AND NCQA REQUIREMENTS
12.1. REGULATORY COMPLIANCE.
Each HMO Subsidiary and Affiliated Payors shall be solely
responsible for ensuring that their activities are in compliance with all
applicable federal, state or local laws and regulations. APS shall be solely
responsible for ensuring that the services it provides or arranges under this
Agreement comply with any such applicable laws and regulations. The parties
shall reasonably cooperate with the other in their respective efforts to achieve
and/or maintain regulatory compliance. APS shall have and maintain during the
term of this Agreement all licenses, permits or certificates required under
applicable federal or state law or regulations for the operation of its
business.
12.2. ERISA COMPLIANCE.
In the event any Benefit Contract is subject to ERISA, APS shall not
be identified as or understood to be the "Plan Administrator" or a "Named
Fiduciary" of the plan, as those terms are used in ERISA. APS has no
responsibility for the preparation or distribution of the "Plan Document" or
"Summary Plan Descriptions", as those terms are used in ERISA, or for the
Provision of any notices or for the filing of any reports or information
required to be filed in regard to the Benefit Contract.
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12.3 REGULATORY FILINGS
Each HMO Subsidiary shall be responsible for filing this Agreement
with federal, state and local agencies to the extent it is required to do so by
any applicable law or regulation. APS shall file this Agreement with any
federal, state or local agencies to the extent it is required to do so by any
applicable law or regulation. In the event any federal, state or local agency
requires a change to this Agreement which APS or an HMO Subsidiary reasonably
anticipates would affect the risk assumed by APS under this Agreement, the
parties shall follow the procedures established under SECTION 14.3.
12.4. NCQA ACCREDITATION COMPLIANCE.
12.4.1 COMPLIANCE. APS shall establish and maintain processes and
programs for MHSA Provider credentialing, recredentialing, utilization
management and quality assessment/improvement which are described in SECTIONS
4.2, 4.4 AND 5.1, respectively. With respect to such activities, APS shall meet
applicable NCQA accreditation standards as described in the most recent revision
of NCQA's publication, STANDARDS FOR MANAGED CARE ORGANIZATIONS. APS shall
submit its policies and procedures on credentialing, recredentialing,
utilization management and quality assessment/improvement to the HMO
Subsidiaries for review and approval.
12.4.2 REPORTS. APS shall submit to the HMO Subsidiaries standard
reports in a form and frequency of delivery mutually acceptable to the parties
with respect to the following categories of information:
(a) Credentialing/recredentialing reports
(b) Quarterly MHSA Provider sanction reports
(c) Quarterly MI-ISA Services utilization reports
(d) Quarterly quality management report
12.4.3 AUDIT. An HMO Subsidiary or CHC may, pursuant to SECTION 13.4
audit APS's records regarding the reports listed in SECTION 12.4.2 or otherwise
with respect to APS's compliance with its obligations under this Agreement;
provided that without APS's consents which consent will not be unreasonably
withheld, so long as APS's performance is above the Rate Reduction Threshold
with respect to all HMO Subsidiaries and Operating Units, there shall be no more
than two such audits during any calendar year. At least annually, each HMO
Subsidiary shall provide written feedback to APS regarding the results of the
HMO Subsidiary's review of APS's reports and records to the extent reviewed.
Each HMO Subsidiary shall provide written feedback to APS 30 days following any
audit activities, in the event an HMO Subsidiary or CHC reasonably determines,
including pursuant to any audit, that APS does not meet the NCQA accreditation
standards, the HMO Subsidiary or CHC shall notify APS of the alleged
32
deficiency and, within 30 days, the HMO Subsidiary or CHC and APS shall meet to
assess the alleged deficiency and, if appropriate, develop a mutually
satisfactory plan of correction.
12.4.4 DEFICIENCIES. In the event of a plan of correction, APS shall
submit regular reports to CHC and the HMO Subsidiary documenting progress on the
plan of correction until the corrective action plan has been completed. The HMO
Subsidiaries and APS shall also exchange information about, and the HMO
Subsidiaries shall give APS regular feedback on, MHSA Provider credentialing,
recredentialing, utilization management and quality assessment/improvement
processes and programs at the regularly scheduled MHSA Liaison Committee
meetings.
12.4.5 CHANGES IN NCQA COMPLIANCE. If NCQA standards or prevailing
industry standards change substantially after the Effective Date and such change
has the effect of substantially increasing or decreasing APS's reasonably
anticipated operating costs, such change shall be considered a significant
change of circumstances as contemplated in SECTION 14.2.
13. BOOKS AND RECORDS
13.1. MAINTENANCE OF PATIENT RECORDS.
APS shall cause to be maintained medical histories, chart and
records for each Member who seeks and receives MHSA Services from a MI-ISA
Provider. Any such records shall remain the property of APS, subject to any
rights of the Member. Upon request of an HMO Subsidiary or a referring and/or
attending physician, subject to compliance with applicable law, and if the
Member appropriately consents to such disclosure, APS shall provide copies of
the Members' medical records to the Member's referring and/or attending
physician. APS, CHC and each HMO Subsidiary shall endeavor to promote
communication to such referring and/or attending physician regarding the
Member's referral, subject to restrictions arising under state or federal law.
13.2. PRIVACY OF RECORDS.
APS and the HMO Subsidiaries shall maintain the confidentiality of
all information regarding Members in accordance with any applicable statutes and
regulations, including the federal regulations governing Confidentiality of
Alcohol and Drug Abuse Patient Records, 42 CFR part 2. If the provisions of 42
CFR part 2 are applicable, APS and the applicable HMO Subsidiary shall undertake
to resist in judicial proceedings any effort to obtain access to information
pertaining to Members otherwise than as expressly provided for in such federal
confidentiality regulations.
13.3. RELEASE OF RECORDS.
Upon request by an HMO Subsidiary or CHC, APS shall be responsible
for obtaining and releasing to the HMO Subsidiary or CHC all information and
records or copies of records regarding MHSA Services and/or UM Services provided
to a Member. Such information shall be provided to an HMO Subsidiary or CHC at
no charge or at the charge paid by APS for
33
such information, within 30 days from the date of such request or such earlier
period as is required to allow CHC or such HMO Subsidiary to comply with
applicable law.
13.4. ACCESS TO THE OTHER PARTIES' RECORDS.
During regular business hours and upon reasonable notice and demand,
the HMO Subsidiaries or CFIC, on the one hand, and APS, on the other, shall have
access to information and records or copies of records held by the other party,
which are reasonably related to its obligations under this Agreement, excluding
information that a party is prohibited by law from disclosing. The party
conducting the audit or inspection shall pay for the other party's personnel's
time in excess of 16 hours and the cost of the copies of any records which it
requests. All records maintained by either party relating to their
responsibilities under this Agreement shall be retained for at least six years
after the date the records were created. No third party may be allowed or
designated to conduct an audit or inspection without the prior written consent
(which consent will not be unreasonable withheld) of the party whose records are
being audited or inspected.
14. ARBITRATION AND RENEGOTIATION OF AGREEMENT
14.1. ARBITRATION BETWEEN HMO SUBSIDIARIES OR CHC AND APS.
Subject to SECTION 15.3, in the event a dispute between APS and an
HMO Subsidiary or CHC arises out of or is related to this Agreement, APS and the
applicable HMO Subsidiary or CHC, as the case may be, shall meet and negotiate
in good faith to attempt to resolve the dispute. In the event the dispute is not
resolved within 30 days of the date one of the parties sent written notice of
the dispute to the other party, and if one of the parties wishes to pursue the
dispute, it shall be submitted to binding arbitration in accordance with the
rules of the American Arbitration Association. In no event may arbitration be
initiated more than one year following the sending of written notice of the
dispute. Any arbitration proceeding under this Agreement shall be conducted in
the State of Maryland. The arbitrators shall have no authority to award any
punitive or exemplary damages or to vary or ignore the terms of this Agreement
and shall be bound by controlling law.
14.2. RENEGOTIATION OF THIS AGREEMENT DUE TO A SIGNIFICANT CHANGE OF
CIRCUMSTANCES.
In the event a significant change of circumstances occurs during the
term of this Agreement, which presents a fundamental departure from the
assumptions and the intent of the parties in entering into this Agreement, and,
as a result thereof, the Capitation Rates for the services to be provided by APS
thereafter no longer reflect prevailing rates in the managed behavioral health
market for such services, then the parties shall, upon the request of CHC or
APS, adjust such Capitation Rates in accordance with the process set forth in
SECTION 9.3 hereof. A significant change of circumstances shall include, but is
not limited to, (a) a significant change in law or an order for compliance
issued by a government authority having competent jurisdiction; and/or (b)
significant changes in NCQA standards applicable to managed behavioral health
organizations or in prevailing industry standards with respect to NCQA
compliance. Any
34
adjustment to the Capitation Rates pursuant to this SECTION 14.2 shall be
retroactive to the first day of the month following the month in which the
request to adjust the Capitation Rates was made.
14.3. RENEGOTIATION PROCEDURE.
If SECTION 3.4 provides for renegotiation of this Agreement pursuant
to this SECTION 14.3, the parties shall engage in good faith negotiations with
the intent and goal of reaching a consensus which will preserve each party's
anticipated benefit and respective rights and obligations under this Agreement
and avoid default of this Agreement. Failure to agree upon renegotiated amounts
pursuant to SECTION 3.4 within 75 days after request for renegotiation shall be
submitted to arbitration pursuant to SECTION 14.1. When an event occurs which
allows for renegotiation of the amounts to be paid to APS under this Agreement,
the HMO Subsidiaries shall pay the amounts specified in SECTION 9.1 until final
resolution of the dispute. Any adjustments to the amounts paid to APS that are
subsequently agreed to by the parties shall be retroactive to the effective date
of the event which allowed for such renegotiation.
15. TERM; TERMINATION
15.1. TERM.
This Agreement shall be effective on the Commencement Date and shall
continue for a period often years until September 27, 2007, unless terminated as
provided in this Agreement.
15.2. TERMINATION.
This Agreement may be terminated as follows:
15.2.1 BREACH BY APS. By CHC or any HMO Subsidiary (as to such HMO
Subsidiary or any of its Operating Units) upon 90 days (30 days in the case of a
termination by reason of a breach of SECTION 6.1.4) prior written notice in the
event of a material breach by APS of any material term of this Agreement (other
than a breach covered by Performance Standards). The written notice shall
specify the precise nature of the breach. In the event that APS cures the breach
within 90 days (30 days in the case of a termination by reason of a breach of
SECTION 6.1.4) after the non-breaching party's written notice, this Agreement
shall not terminate.
15.2.2 BREACH BY CHC OR AN HMO SUBSIDIARY. By APS upon 90 days (30
days in the case of a termination by reason of a breach of SECTION 9.1.4) prior
written notice in the event of a material breach by CHC or any HMO Subsidiary or
Operating Unit of any material term of this Agreement. The written notice shall
specify the precise nature of the breach. In the event that CHC or the breaching
HMO Subsidiary or Operating Unit cures the breach within 90 days (30 days in the
case of a termination by reason of a breach of SECTION 9.1.4) after the APS's
written notice, this Agreement shall not terminate.
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15.2.3 PERFORMANCE BELOW TERMINATION STANDARDS
(a) TERMINATION STANDARDS. By any HMO Subsidiary (as to such HMO
Subsidiary or any of its Operating Units) at any time if (i) APS fails,
with respect to such HMO Subsidiary or any such Operating Unit, to perform
at a level above the Termination Standards in three or more categories
designated "ATTACHMENT D-2, Termination Standards" (the "Termination
Threshold") and does not correct such failure within the period specified
in the Termination Standards and (ii) such failure is continuing at the
time notice of such termination is delivered to APS. Such termination
shall be effective upon 30 days written notice.
(b) HMO LICENSURE. By any HMO Subsidiary (as to such HMO Subsidiary
or any of its Operating Units) if APS fails to perform at a level above
the Termination Standards in any category designated on ATTACHMENT D-2,
Termination Standards and either (i) such failure causes the HMO
Subsidiary or any such Operating Unit to lose its state licensure or
presents an imminent threat of such loss or (ii) as a primary result
thereof, one or more Large Accounts terminates or elects not to renew its
Benefit Contract with such HMO Subsidiary or any such Operating Unit. Such
termination shall be effective upon 30 days written notice.
15.2.4 TERMINATION FOR INADEQUATE PERFORMANCE.
By CHC with respect to itself and all HMO Subsidiaries and Operating
Units at any time in the event that five (5) or more HMO Subsidiaries or
Operating Units have previously terminated this Agreement pursuant to
Section 15.2.3(a) or (b). Such termination shall be effective upon thirty
(30) days written notice.
15.2.5 TERMINATION ON CHANGE OF CONTROL TRANSACTIONS.
(a) CHC. By CHC with respect to itself and all HMO Subsidiaries and
Operating units in the event that CHC undergoes a Change of Control
Transaction. Such termination right must be exercised within 30 days after
the effective date of such Change of Control Transaction by giving written
notice to APS. Such termination shall be effective 90 days after such
written notice.
(b) HMO SUBSIDIARY OR OPERATING UNIT. By any HMO Subsidiary (as to
such HMO Subsidiary or any of its Operating units) in the event that such
HMO Subsidiary or any such Operating Unit undergoes a Change of Control
Transaction. Such termination right must be exercised within 30 days after
the effective date of such Change of Control Transaction by giving written
notice to APS, Such termination shall be effective 60 days after such
written notice.
(c) APSH. By CHC at any time as to itself and all HMO Subsidiaries
and Operating Units in the event that, prior to the initial public
offering of MSH stock, APSH or, at any time, APS undergoes a Change of
Control Transaction. Such termination right must be exercised within 30
days after CHC is given written notice of such Change
36
of Control Transaction by giving written notice to APS. Such termination
shall be effective 60 days after such written notice. APSH shall promptly
give written notice to CHC of any such Change of Control Transaction.
15.2.6 TERMINATION FOR PARTIAL CAUSE.
Any HMO Subsidiary shall have the right to terminate this Agreement
with respect to that HMO Subsidiary pursuant to the terms set forth below
by providing thirty (30) days written notice and paying the associated
partial CBA payment as set forth in Section 15.3 hereof:
(a) During any consecutive twelve (12) month period, more than
twenty percent (20%) of any HMO Subsidiary's Members are required to seek
alternative MHSA Providers from an Out-of-Network Provider due to MHSA
Providers terminating their Participation Agreements with APS; and APS is
unable to provide an alternative network of MHSA Providers which
reasonably satisfies the majority of the dislocated Members. Such
alternative network of MHSA Providers must be provided by APS within forty
five (45) days of APS' receipt of written notice from the applicable HMO
Subsidiary of the 20% threshold referenced above being exceeded. Further,
any Members who have out-of-network benefits will not be counted for
purposes of the above-referenced 20% threshold; or
(b) There are pervasive documented MHSA Provider or Member
complaints to regulators or Governmental Bodies which establish a
significant risk to that HMO Subsidiary and thus results in any one of the
following:
(i) Suspension or revocation of the HMO Subsidiary's license or
certificate of authority; or
(ii) A sanction, fine or public censure of the HMO Subsidiary by a
Governmental Body due to APS' failure to perform its obligations
under this Agreement and for which such failure to perform is
significant. In order to terminate the contract based on this
Section 15.2(b)(ii), the HMO Subsidiary shall have provided APS with
45 days prior written notice of the failure to perform and APS shall
have failed to cure its nonperformance within such period. Payment
by any HMO Subsidiary of a fine or sanction equal to or exceeding
$50,000 due to APS' actions shall be evidence of a significant
failure to perform by APS; or
(iii) The limitation by a Governmental Body of a HMO Subsidiary's
ability to enroll Members; or
(iv) Legal action is instituted in state or federal court by a
Governmental Body against a HMO Subsidiary seeking legal, equitable
or statutory remedies based upon APS' performance or nonperformance
of its obligations hereunder; or
37
(v) In a legal action instituted in state or federal court by a
Governmental Body against a HMO Subsidiary based upon APS'
performance or nonperformance its obligations hereunder, a final
judgment is entered against a health plan awarding legal, equitable
or statutory damages. Notwithstanding the foregoing, a HMO
Subsidiary shall notify APS in writing within 10 days of that HMO
Subsidiary's receipt of notice that a legal action has been
instituted and shall provide APS with the opportunity to negotiate a
settlement of the action to avoid the entering of a final judgment.
15.2.7 SCOPE OF TERMINATION. APS's termination of this Agreement
pursuant to SECTION 15.2.2 as to any HMO Subsidiary shall be effective only as
to that HMO Subsidiary and its constituent Operating Unit, if any, and its
termination of this Agreement pursuant to SECTION 15.2.2 as to any Operating
Unit shall be effective only as to that Operating Unit, and, in either such
case, this Agreement shall remain in effect as to the remaining parties. Any HMO
Subsidiary's termination of this Agreement pursuant to SECTION 15.2.1, 15.2.3.
15.2.4 OR 15.2.5(B) shall be effective only as to that HMO Subsidiary and its
constituent Operating Units, if any, and this Agreement shall remain in full
force and effect as to the remaining HMO Subsidiaries and Operating Units.
15.2.8. PAYMENT OF CAPITATED BENEFICIARY ADJUSTMENT. Notwithstanding
anything to the contrary set forth in this Agreement, no termination pursuant so
this SECTION 15.2 shall be effective unless and until the payment of the
Capitated Beneficiary Adjustment, if any, as set forth in SECTION 15.3 below,
has been made to APSH; provided, however, that in the event CFIC or any HMO
Subsidiary seeks to terminate this Agreement pursuant to this SECTION 15.2 and,
in connection therewith, pays the Capitated Beneficiary Adjustment that CHC or
such HMO Subsidiary believes in good faith is required by such SECTION 15.3 in
respect of such termination, such termination shall be deemed effective upon
such payment, regardless of whether APS or APSH disputes the amount of such
payment, and the sole right of CHC and APSH shall be to seek arbitration
pursuant to SECTION 15.4 regarding the amount of such payment.
15.3. CAPITATED BENEFICIARY ADJUSTMENT.
15.3.1 CAPITATED BENEFICIARY ADJUSTMENT Subject to Sections 15.3.2,
15.3.3 and 15.3.4 hereof:
(a) If this Agreement is terminated with respect to any HMO
Subsidiary or Operating Unit pursuant to SECTION 15.2.3 or 15.2.6(b)(i) or
15.2.6(b)(v) hereof, no CBA payment shall be due or payable by CHC with
respect to such termination.
(b) If this Agreement is terminated pursuant to SECTION 15.2.4 or
15.2.6(b)(i) hereof CHC shall pay APSH 50% OF THE CBA with respect to the
number of Capitated Members set forth on ATTACHMENT K hereto opposite the
names of the Original HMO Subsidiaries that are parties to this Agreement
immediately prior to such termination.
(c) If this Agreement is terminated pursuant to SECTION 15.2.5(a) or
15.2.5(c) hereof, CHC shall pay APSH 100% of the CBA with respect to the
number of Capitated
38
Members set forth on ATTACHMENT K hereto opposite the names of the
Original HMO Subsidiaries that are parties to this Agreement immediately
prior to such termination.
(d) If this Agreement is terminated with respect to any Original HMO
Subsidiary or Original Operating Unit pursuant to SECTION 15.2.5(b)
hereof, CHC shall pay APSH 100% of the CBA with respect to the number of
Capitated Members set forth on ATTACHMENT K hereto opposite the name of
such Original HMO Subsidiary or Original Operating Unit; provided,
however, that if, contemporaneously with any such. termination (i) the
acquiror offers to enter into (or to cause such Original HMO Subsidiary to
enter into) a service agreement with APSH or APS with respect to the
Capitated Members of such Original HMO Subsidiary or Original Operating
Unit as to whom this Agreement is then being terminated, on terms
substantially identical to those contained in this Agreement relating to
such Capitated Members, then no CRA shall be payable by CHC with respect
to such termination or (ii) the acquiror or such Original HMO Subsidiary
enters into a service agreement (the "NEW SERVICE AGREEMENT") with APSH or
APS with respect to any or all of the Capitated Members of such Original
HMO Subsidiary or Original Operating Unit as to whom this Agreement is
then being terminated and such New Service Agreement involves services to
be provided by APSH or APS comparable to those services provided by APS
under this Agreement in respect of such Capitated Members, then (x) if the
monthly capitation payments payable under the New Service Agreement with
respect to such Capitated Members (the "NEW CAPITATION PAYMENTS") equal or
exceed the monthly Capitation Payments payable under this Agreement with
respect to such Capitated Members (the "OLD CAPITATION PAYMENTS"), no CBA
shall be due or payable by CHC with respect to such termination and (y) if
the New Capitation Payments are less than the Old Capitation Payments, CHC
shall pay APSH an amount equal to the lesser of (A) the CBA payment
provided for above in this clause (d) with respect to such termination,
(B) if the number of such Capitated Members covered by the New Service
Agreement is equal to or less than the number of Capitated Members set
forth on ATTACHMENT K hereto opposite the name of such Original HMO
Subsidiary or Original Operating Unit, the excess of the then present
value (calculated using a interest rate of 10% per annum compounded
quarterly) of the aggregate Capitation Payments that would have been
payable under this Agreement over its remaining term with respect to such
Capitated Members over the then present value (calculated in the same
manner) of the aggregate capitation payments payable under the New Service
Agreement over the same period with respect to such Capitated Members
(such excess being hereinafter referred to as the "EXCESS PRESENT VALUE")
and (C) if the number of such Capitated Members covered by the New Service
Agreement is more than the number of Capitated Members set forth on
ATTACHMENT K hereto opposite the name of such Original HMO Subsidiary or
Original Operating Unit, an amount equal to the product of the Excess
Present Value multiplied by a fraction, the numerator of which is equal to
the number of Capitated Members so set forth on ATTACHMENT K hereto and
the denominator of which is equal to the number of Capitated Members so
covered by the New Service Agreement.
(e) If this Agreement is terminated pursuant to SECTION 15.2.6(a)
hereof, CHC shall pay APSH 62.5% of the CBA with respect to the number of
Capitated Members set
39
forth on ATTACHMENT K hereto opposite the name of such Original HMO
Subsidiary or Original Operating Unit.
(f) If (i) this Agreement is terminated with respect to any or all
of the Capitated Members of any Original HMO Subsidiary pursuant to
SECTION 4.2.3 hereof; (ii) such Original HMO Subsidiary does not enter
into a Subcapitation Arrangement in connection therewith in which either
APS or APSH or any Affiliate of either thereof is engaged to provide or
administer behavioral health services, and (iii) the number of Capitated
Members of such Original HMO Subsidiary covered by this Agreement
immediately after giving effect to such termination (the "REMAINING
CAPITATED MEMBERS") is less than the number of Capitated Members set forth
on ATTACHMENT K hereto opposite the name of such Original HMO Subsidiary,
then CHC shall pay APSH 100% of the CBA with respect to a portion of the
number of Capitated Members set forth on ATTACHMENT K hereto opposite the
name of such Original HMO Subsidiary equal to the product of such number
of Capitated Members multiplied by a fraction, the numerator of which is
equal to the lesser of (A) the excess of (x) the number of Capitated
Members set forth on ATTACHMENT K hereto opposite the name of such
Original HMO Subsidiary over (y) the number of Remaining Capitated Members
and (B) the number of Capitated Members of such Original HMO Subsidiary as
to whom this Agreement is then being terminated and the denominator of
which is the number of Capitated Members set forth on ATTACHMENT K hereto
opposite the name of such Original HMO Subsidiary.
(g) If this Agreement is terminated with respect to any Original HMO
Subsidiary or Original Operating Unit pursuant to SECTION 15.2.2 hereof,
CHC shall pay APSH 125% of the CBA with respect to the number of Capitated
Members set forth on ATTACHMENT K hereto opposite the name of such
Original HMO Subsidiary or Original Operating Unit.
(h) If this Agreement is terminated pursuant to SECTION
15.2.6(b)(iv) hereof, CFIC shall pay APSH 75% of the CBA with respect to
the number of Capitated Members set forth on ATTACHMENT K hereto opposite
the name of such Original HMO Subsidiary or Original Operating Unit.
(i) If this Agreement is terminated pursuant to SECTION
15.2.6(b)(iii) hereof, CHC shall pay APSH 25% of the CBA with respect to
the number of Capitated Members set forth on ATTACHMENT K hereto opposite
the name of such Original HMO Subsidiary or Original Operating Unit.
(j) Except as specifically provided herein, in the event of a
termination of this Agreement, neither CHC nor any HMO Subsidiary or
Operating Unit shall have any obligation or responsibility to pay any
Capitated Beneficiary Adjustment.
15.3.2 OFFSET FOR NEW ENROLLMENT. Notwithstanding anything to the
contrary set forth in this Agreement, if (a) this Agreement is terminated with
respect to any Original HMO Subsidiary (or part thereof) or Original Operating
Unit pursuant to SECTION 15.2.5(b) OR SECTION 4.2.3 hereof and any amounts would
(but for this SECTION 15.3.2) be payable or have been paid pursuant to SECTION
15.3.1(d) or (f) hereof in respect of such termination and (b) any
40
New Company Business (as defined in Section 16.3.1 hereof) within the meaning of
clause (X) of the definition thereof has been or is acquired by CHC or any HMO
Subsidiary within one year before or after such termination, then any Capitated
Beneficiary Adjustment that was paid, or THAT WOULD OTHERWISE BE PAYABLE,
PURSUANT TO SECTION 15.3.1(d) OR (f) hereof (the "TERMINATION PAYMENT") in
respect of such termination shall be repaid by APSH to CHC or, to the extent not
theretofore paid, shall be reduced, in each case in an amount (not to exceed the
amount of the Termination Payment) equal to the product of the Termination
Payment multiplied by a fraction, the numerator of which shall be the number of
Capitated Members added to this Agreement as a result of such New Company
Business who have not yet been deemed to be Capitated Members included on
ATTACHMENT K hereto (the "NEW CAPITATED MEMBERS") and the denominator of which
shall be (i) in the case of a termination under SECTION 15.2.5(b) of this
Agreement, the number of Capitated Members set forth on ATTACHMENT K hereto
opposite the name of such Original HMO Subsidiary or Original Operating Unit and
(ii) in the case of a termination under SECTION 4.2.3 of this Agreement, the
number of Capitated Members as to whom the CBA payment was or (but for this
SECTION 15.3.2) would be made pursuant to SECTION 15.3.1(f) hereof; provided
that if any such New Company Business is not acquired until more than ninety
(90) days after the date of any such termination of this Agreement, the amount
to be repaid by APSH to CHC shall be reduced by an amount equal to 10% of the
Capitation Payments that would have been payable under this Agreement (had the
termination not taken place) with respect to a number of Capitated Members equal
to the number of Capitated Members as to whom the CBA payment was then made
pursuant to SECTION 15.3.1(f) in respect of the period commencing on the ninety
first (1st) day following such termination and ending on the date of such
acquisition of New Company Business. If any CBA payment is reduced or repaid
pursuant to this SECTION 15.3.2 and (x) the New Company Business was acquired by
any Original HMO Subsidiary, the number of Capitated Members set forth on
ATTACHMENT K hereto opposite the name of such Original HMO Subsidiary shall be
increased by an amount equal to the number of New Capitated Members applicable
to such reduction or repayment and (y) the New Company Business was acquired by
a person or entity other than an Original HMO Subsidiary, such person or entity
shall be deemed to be an Original HMO Subsidiary having a number of Capitated
Members equal to the number of New Capitated Members applicable to such
reduction or repayment. New Capitated Members used to offset the Capitated
Beneficiary Adjustment as contemplated hereunder shall not constitute New
Company Business with respect to which APSH is required to pay a Commission
pursuant to SECTION 16.3.1 of this Agreement and in the event such a Commission
was previously paid, CHC shall return such Commission. Any repayment of CBA by
APSH to CHC required pursuant to this SECTION 15.3.2 shall be made within ten
(10) days following the acquisition of the New Company Business giving rise to
such repayment. Notwithstanding anything to the contrary contained herein, in
the event that the ASO Members (as defined in this Agreement) of Coventry Health
Care of the Carolinas, Inc. ("CHC-CAROLINA") become Capitated Members within one
year before or after a Termination Payment was paid or would otherwise be
payable, then at CHC's option, such Capitated Members shall be deemed to be New
Capitated Members, in which case (A) the amount by which such Termination
Payment (the "CHC-CAROLINA TERMINATION PAYMENT") would otherwise be repaid or
reduced pursuant to this SECTION 15.3.2, shall itself be reduced proportionately
to reflect the difference between ASO Fees that had been payable for the ASO
Members of CHC-Carolina immediately prior to their becoming Capitated Members
and the Capitation Rate payable for the Capitated Members of CHC-Carolina
immediately thereafter, and (B) in the event any CBA
41
payment ever becomes payable for any reason pursuant to SECTION 15.3 in respect
of such Capitated Members of CHC-Carolina, the amount of such CBA payment shall
be reduced to reflect the fact that the CHC-Carolina Termination Payment was
reduced as provided herein.
15.3.3 EFFECT OF CERTAIN TERMINATIONS Notwithstanding anything to
the contrary set forth in this Agreement (i) if this Agreement is terminated as
to any Original HMO Subsidiary, no separate payment shall be required under
SECTION 15.3.1 hereof with respect to any Original Operating Units that are part
of such Original HMO Subsidiary, (ii) upon any termination of this Agreement as
to less than all of the Capitated Members of any Original HMO Subsidiary or
Original Operating Unit (including, without limitation, a termination pursuant
to SECTION 4.2.3 hereof), the number of Capitated Members set forth on
ATTACHMENT K hereto opposite the name of such Original HMO Subsidiary or
Original Operating Unit shall be appropriately reduced to reflect the number of
such Capitated Members with respect to whom this Agreement is then being
terminated (it being understood that if this Agreement is terminated as to all
of the Capitated Members of any Original Operating Unit but not as to all of the
remaining Capitated Members of the Original HMO Subsidiary of which such
Original Operating Unit is a part, the number of Capitated Members set forth on
ATTACHMENT K hereto opposite the name of such HMO Subsidiary shall be reduced by
the number of Capitated Members set forth on ATTACHMENT K hereto opposite the
name of such Original Operating Unit), (iii) upon termination of this Agreement
as to any Original HMO Subsidiary or Original Operating Unit, such Original HMO
Subsidiary or Original Operating Unit, as applicable, shall cease to be an
Original HMO Subsidiary or Original Operating Unit for any purpose and (iv)
following any Change of Control Transaction with respect to any Original HMO
Subsidiary or Original Operating Unit, such Original HMO Subsidiary or Original
Operating Unit, as applicable, shall cease to be an Original HMO Subsidiary or
Original Operating Unit for any purpose.
15.3.4 PAYMENT OF CAPITATED BENEFICIARY ADJUSTMENT PAYMENT OF ANY
Capitated Beneficiary Adjustment required under SECTION 15.3.1 hereof shall be
made on and as of the effective date of the applicable termination of this
Agreement in a combination of cash and shares of APSH Common Stock as provided
in ATTACHMENT L hereto; provided, however, that in no event will CHC ever be
required in the aggregate to deliver to APSFI more than 2,705,182 shares of APSH
Common Stock (subject to appropriate adjustment in the event of any stock split,
stock dividend or other subdivision or combination of the outstanding shares of
APSH Common Stock). For purposes of calculating the value of APSH Common Stock
to be delivered by CHC to APSH as part of the Capitated Beneficiary Adjustment,
the following provisions shall apply:
(i) if a Current Market Price exists with respect to the APSH Common
Stock for each trading thy in the period beginning on the date that is 30
days prior to the date on which CHC first receives notice of the
applicable termination and ending on the date that is 20 days prior to
such date (the "CALCULATION PERIOD"), then each share of such APSH Common
Stock shall be valued for purposes of such delivery at the average Current
Market Price during such Calculation Period; and
(ii) if clause (i) does not apply with respect to a particular
delivery of APSH Common Stock, each share of such APSH Common Stock shall
be valued by a business
42
Valuer at its fair market value as of the date immediately prior to the
date of the applicable termination (which valuation shall, other than in
the case of a termination pursuant to SECTION 15.2.1 or 15.2.5(A) of this
Agreement, assume such termination shall not occur and that this Agreement
shall otherwise remain in full force and effect until the expiration of
its term).
If CHC shall have sold, transferred or otherwise disposed of any shares of
APSH Common Stock (the "TRANSFERRED SHARES") in lieu of delivering such
Transferred Shares pursuant to the provisions of ATTACHMENT L hereto, CHC may
deliver to APSH cash in an amount equal to $1.44 per share (subject to
appropriate adjustment in the event of any stock split, stock dividend or other
subdivision or combination of the outstanding shares of APSH Common Stock) of
such Transferred Shares and, upon such payments CHC shall be deemed to have
delivered such Transferred Shares to APSH for all purposes hereof.
15.4. ARBITRATION IN CERTAIN EVENTS.
Any disputes over whether a party is entitled to terminate this
Agreement pursuant to SECTION 15.2.1. 15.2.2 OR 15.2.3(b) shall, at any party's
request, be submitted to arbitration in accordance with SECTION 14.1 and during
the pendency of any such arbitration proceeding, this Agreement shall remain in
full force and effect, subject to the following sentence. Any disputes over
whether a party is entitled to terminate this Agreement pursuant to SECTION
15.2.3(a), 15.2.4, 15.2.5 OR 15.2.6 shall not prevent the termination of this
Agreement as otherwise specified herein, provided that the foregoing shall not
preclude a party from thereafter seeking arbitration to assess damages in
respect of a wrongful termination of this Agreement by the other party. Any
disputes as to whether the correct amount of Capitated Beneficiary Adjustment
has been paid to APSH in connection with a particular termination of this
Agreement shall not prevent the termination of this Agreement as otherwise
specified herein, provided that the foregoing shall not preclude APSH or APS
from thereafter seeking arbitration to determine whether an incorrect payment
was made.
15.5. EFFECT OF TERMINATION.
15.5.1 Immediately upon termination of this Agreement as to any HMO
Subsidiary, such HMO Subsidiary shall notify Members subject to this Agreement
of such termination.
15.5.2 APS shall cooperate with an HMO Subsidiary as to which this
Agreement has been terminated or such HMO Subsidiary's new mental health and
substance abuse vendor ("Vendor") in transitioning the care and management of
Members in treatment on the date of such termination. The HMO Subsidiary shall
or shall require Vendor to take and maintain the records in APS's possession
upon such terms and conditions as are agreed to an HMO Subsidiary, Vendor and
APS, but which grant APS subsequent access to such records.
15.5.3 With respect to MHSA Services after the effective date of
termination of this Agreement:
43
a. OUTPATIENT MHSA SERVICES. APS has no obligation to provide or
arrange for the provision of outpatient MHSA Services after the
effective date of termination of this Agreement.
b. INPATIENT MHSA SERVICES. In the event a Member was admitted to a
hospital pursuant to the terms of this Agreement prior to the
effective date of termination, APS shall continue to provide and
arrange for the provision of inpatient MHSA Services after the
effective date of termination until the earlier of the date of the
Member's discharge or the date on which APS recommends discharge or
the date on which Member's coverage ceases under a Benefit Contract,
provided, however, that CHC shall be financially liable for the
payment of such inpatient MBSA Services.
15.5.4 Termination of this Agreement by CHC or any HMO Subsidiary
pursuant to SECTION 15.2.3 OR 15.2.4 shall be deemed to be a termination for
breach of this Agreement by APS. In the event of a termination of this Agreement
pursuant to SECTION 15.2.1. 15.2.3 OR 15.2.4, the terminating party shall retain
all of its respective rights and remedies in respect of any breach of this
Agreement arising prior to such termination, including, without limitation, its
right to recover damages. Notwithstanding anything to the contrary contained in
this Agreement, if at any time APS terminates this Agreement pursuant to SECTION
15.2.2 as to CHC, any HMO Subsidiary or any Operating Unit, (i) APS' s sole and
exclusive remedy in respect of such termination shall be for APSFI to receive,
as liquidated damages for such termination, the Capitated Beneficiary
Adjustment, if any, payable in respect of such termination pursuant to Section
______ hereof and (ii) neither APSH nor APS shall have any other rights or
claims against CHC or any HMO Subsidiary or Operating Unit in respect of such
termination or any breach of this Agreement giving rise thereto (other than a
breach committed in bad faith); provided, however, that this sentence shall not
prevent APS from recovering any payments due and owing under this Agreement in
respect of any period prior to the effective date of such termination.
16. OTHER AGREEMENTS
16.1. APSH GUARANTEE.
APSH hereby unconditionally guarantees to CHC and the HMO
Subsidiaries the prompt payment of all amounts due hereunder from APS and the
prompt performance by APS of all of its obligations hereunder, including,
without limitation, APS's obligations to pay claims pursuant to SECTION 6.1
hereof.
16.2. SERVICES.
If APSH, directly or indirectly through any subsidiary or affiliate, shall
desire to provide or arrange for the provision of mental health and substance
abuse services to any person or entity other than pursuant to this Agreement, it
shall do so only in one of the following manners: (I) APSFI OR APS shall provide
or arrange FOR THE provision of such services; or (ii) a wholly owned direct or
indirect subsidiary of APSFI or APS shall provide or arrange for the provision
of such
44
services, provided that such subsidiary guarantees the obligations of APS
hereunder to the same extent as the APSH guarantee set forth in SECTION 16.1
pursuant to an agreement reasonably acceptable to CHC.
16.3. COMMISSION FOR NEW BUSINESS.
16.3.1. COMMISSION. As an incentive for CHC and its affiliates to
increase the number of Members covered under this Agreement or participating in
managed behavioral health care plans and products or Employee Assistance Plans
("EAP") administered by APS, APS shall pay CHC a commission (the "Commission")
based on New Company Business obtained during the term of this Agreement. The
Commission shall be paid in cash during the term of this Agreement on an annual
basis no later than one hundred and twenty (120) days after the end of the
calendar year to which the Commission relates. The Commission for each item of
New Company Business shall equal (A) three percent (3 %) of direct annual
revenues recognized by APS for such item for the calendar year in which such
item of New Company Business commences, (B) one and one-half percent (1.5%) of
such direct annual revenues recognized by APS in the following calendar year,
and (C) one-half percent (.5%) of such direct annual revenues recognized by APS
in the next following calendar year. The aggregate annual Commission in any year
shall equal the sum of Commissions accrued during such year with respect to
revenue recognized during such year from each item of New Company Business. For
purposes of this SECTION 16.3.1, "NEW COMPANY BUSINESS" shall mean new business
of APS arising from (X) the addition of a CHC Acquired Person that becomes a
party or subject to this Agreement or (Y) the addition of any new customer of
any affiliate of CHC (other than any HMO Subsidiary) as a new managed behavioral
health care or EAP client of APS, in each case other than (i) non-commercial new
business such as Medicare, Medicaid, or CHAMPUS business or (ii) new business
sold by CHC's Healthcare Network Sales Unit ("HNS").
16.3.2. AGREEMENT WITH HNS. After the Commencement Date, APSH and
APS shall negotiate in good faith with CHC with respect to an agreement to be
entered into between APS and CHC pursuant to which HNS would sell EAP and
managed behavioral health care products offered or administered by APS OR BY
APSFI (directly or indirectly (other than through APS)). Such agreement would
provide, among other things, that CHC would receive compensation appropriate to
cover a portion of HNS overhead costs plus incentive compensation costs
associated with the sale of such products by HNS, which compensation would be
negotiated by the parties in good faith.
17. MISCELLANEOUS
17.1. AMENDMENT.
This Agreement may be amended only in writing and the amendment must be
executed by all parties to be bound by the amendment. If an amendment is to
apply only to one or more specified HMO Subsidiaries, it need only be signed by
such HMO Subsidiary or Subsidiaries and by APS, APSH and CHC.
45
17.2. ASSIGNMENT
17.2.1. GENERALLY. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective successors and
permitted assigns. None of APS, APSH, CHC or any HMO Subsidiary may assign any
of its rights and responsibilities under this Agreement to any person or entity
without the prior written consent of the other parties which consent shall not
be unreasonably withheld; provided, however, that (i) CHC may assign all of its
rights and obligations under this Agreement to any affiliate of CHC that has a
net worth (determined in accordance with GAAP based upon the most recently
prepared financial statements of such affiliate) of at least $100,000,000
immediately before giving effect to such assignment, in which case CHC shall be
released from all liabilities and obligations under this Agreement and (ii) APS,
CHC or any HMO Subsidiary may assign all of its rights and obligations under
this Agreement to its successor in a Change of Control Transaction relating to
such party.
17.2.2. APS CHANGE OF NAME. The parties acknowledge that APS will
change its corporate name as soon as practicable after the Commencement Date.
For a period of three months after the Commencement Date, APS shall have the
right to continue to use the existing printed materials listed on ATTACHMENT H
containing the names "APS" and "Principal Behavioral Health Care," for purposes
of distribution to Members.
17.3. ENTIRE AGREEMENT.
This Agreement, including the Attachments hereto, constitutes the entire
agreement among the parties hereto in regard to its subject matter and
supersedes all prior understandings, agreements, negotiations and discussions,
whether oral or written, with respect thereto.
17.4. RELATIONSHIP BETWEEN THE PARTIES.
The relationship among APS, APSH, CHC and the HMO Subsidiaries is solely
that of independent contractors, and nothing in this Agreement or otherwise
shall be construed or deemed to create any other relationship, including one of
employment, agency or joint venture.
17.5. TERMINATION OF MEMBERS.
Subject to any restrictions in the Benefit Contracts, each HMO Subsidiary
shall act promptly to disenroll Members who meet criteria for termination.
17.6 GOVERNING LAW.
This Agreement shall be governed and construed in accordance with the laws
of the State of Maryland, without regard to conflict of laws principles thereof.
46
17.7 NOTICES.
Any notice under this Agreement shall be in writing and hand-delivered or
sent by prepaid, first class mail to the addresses and addressees identified
below, except as otherwise provided in the Agreement. The addresses and
addressees to which notices are sent for either party may be changed by proper
notice.
if to CHC:
Coventry Health Care, Inc.
0000 Xxxxxxxxx Xx. Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Corporate Counsel
Telephone: 000-000-0000
Telecopier: ________
If to APS or APSH:
APS Healthcare, Inc.
One Democracy Plan
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, M.D.
Telephone: 000-000-0000
Telecopier: 000-000-0000
With a copy (which shall not constitute notice) to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
00000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxx, Esq.
Telephone: 000-000-0000
Telecopier:703-464-4895
If to an HMO Subsidiary, to the address listed on the signature
page.
17.8. CONFIDENTIALITY OF PROPRIETARY INFORMATION.
The parties acknowledge that in the course of the operations of this
Agreement, information of each party may be disclosed which reflects its
expertise regarding the management, programming, or delivery of services
("Proprietary Information"). Such information shall be deemed Proprietary
information if so identified by the disclosing party. The parties agree not to
use or disclose to any other person, firm, organization or company any
47
Proprietary Information of the other party, without the prior written consent of
the disclosing party, except to the extent required by applicable law.
17.9. ANNOUNCEMENTS.
No news release or other public disclosure of the matters covered by this
Agreement (including notification as to the change of APS's name or other
communications to Members or MHSA Providers or Participating Providers regarding
the sale of APS to APSH) shall be made by or on behalf of any party hereto
without the express written consent of the other party hereto, which consent
shall not be unreasonably withheld. The parties shall consult with one another
in advance concerning the form and substance of any press release or other
public disclosure of the matters covered by this Agreement (including those
referred to above) and shall make a diligent effort to prohibit shareholders,
members, directors, officers, partners, employees or advisors from granting
press interviews or engaging in similar actions that would result in public
disclosure of such matters. Notwithstanding anything to the contrary contained
herein, either party may make any disclosure to which the parties agree in
writing or which such party deems necessary or advisable in order to fulfill
such party's disclosure obligations required by applicable law or regulations.
The party making such announcement shall give written notice of such disclosure
to the other party promptly after such disclosure.
17.10. ATTACHMENTS.
The Attachments to this Agreement shall be construed with and as integral
parts of this Agreement to the same extent as if they were set forth verbatim
herein; PROVIDED, HOWEVER, that in the event of any conflict between any such
Attachment and this Agreement, this Agreement shall control.
17.11. HEADINGS; CERTAIN RULES OF CONSTRUCTION.
The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement. The terms "herein," "hereof," "hereunder" and any similar terms
used In this Agreement refer to this Agreement as a whole and not to any
particular Section or other provision hereof. The terms "including" or "include"
shall mean "including, without limitation," or "include, without limitation," as
the case may be.
17.12. NO WAIVER.
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement shall impair any such right,
power or privilege or be constitute as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be valid
against any party hereto unless made in writing and signed by the party against
whom enforcement of such waiver is sought and then only to the extent expressly
specified therein.
48
17.13. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be considered an original, but all of which together shall constitute one
and the same instrument.
17.14. OTHER DEFINITIONAL PROVISIONS.
References to "Sections" shall be to Sections of this Agreement unless
otherwise specifically provided. Any of the terms defined in this Agreement may,
unless the context otherwise requires, be used in the singular or the plural,
depending on the reference. Any reference herein to any agreement, document or
instrument, including, without limitation, this Agreement, and any Attachments
hereto, unless expressly noted otherwise, shall be a reference to each such
agreement, document or instrument as the same may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
hereunder.
17.15. AMENDMENT OF AGREEMENT TO REFLECT CHANGE IN MARYLAND LAW
In connection with certain changes enacted to the Maryland Health General
Code by the Maryland Legislature in its 2000 legislature session, the parties
hereto have entered into that certain Fifth Amendment to the Behavioral Health
Services Agreement, dated as of January 1, 2001, a copy of which is attached
hereto as ATTACHMENT J and is incorporated herein by reference.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE ENFORCED BY
THE PARTIES.
49
IN WITNESS WHEREOF, the parties have cause this Behavioral Health
Services Agreement to be executed on their behalf as of the date set forth
above.
COVENTRY HEALTH CARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: Chief Operating Officer
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
APS HEALTHCARE BETHESDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------
Title: CEO
------------------------------
APS HEALTHCARE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------
Title: CEO
------------------------------
HMO SUBSIDIARIES
EXECUTED ON ATTACHED SIGNATURE PAGE
50
WITH RESPECT TO ATTACHMENT B:
COVENTRY HEALTH CARE OF DELAWARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
COVENTRY HEALTH CARE OF LOUISIANA, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
COVENTRY HEALTH CARE OF NEBRASKA, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
COVENTRY HEALTH CARE OF GEORGIA, I C.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
COVENTRY HEALTH CARE OF IOWA, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
COVENTRY HEALTH CARE OF KANSAS, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
51
COVENTRY HEALTH CARE OF THE CAROLINAS, INC.
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------
Name: Xxxxxx XxXxxxxxx
-------------------------------
Title: COO
------------------------------
52
ATTACHMENT A
ORIGINAL HMO SUBSIDIARIES
Coventry Health Care of the Mid-Atlantic, Inc.
Coventry Health Care of Delaware, Inc.
Coventry Health Care of Florida, Inc.
o Jacksonville
o Orlando
o Pensacola
o South Florida
o Tampa
Coventry Health Care of Louisiana, Inc.
Coventry Health Care of Nebraska, Inc.
Coventry Health Care of Illinois, Inc.
o St. Louis
Coventry Health Care of Indiana, Inc.
Coventry Health Care of Georgia, Inc.
Coventry Health Care of Iowa, Inc.
Coventry Health Care of Kansas City, Inc.
o Kansas City
o Wichita
o St. Louis
Coventry Health Care of St. Louis, Inc.
Coventry Health Care of North Carolina, Inc.
Coventry Health Care of Kansas, Inc.
A-1
ATTACHMENT A (cont)
CURRENT HMO SUBSIDIARIES
Coventry Health Care of Delaware, Inc.
Coventry Health Care of Louisiana, Inc.
Coventry Health Care of Nebraska, Inc.
Coventry Health Care of Georgia, Inc.
Coventry Health Care of Iowa, Inc.
Coventry Health Care of Kansas, Inc.
o Kansas City
o Wichita
Coventry Health Care of the Carolinas, Inc.
A-2
ATTACHMENT B
See Attached Schedule
Coventry Contract Rates (All Changes Effective 1/1/03)
-----------------------------------------------------------------------------------------------------------
-11.14% 4.50%
$[**] MILL INCREASE
CURRENT REDUCTION EFFECTIVE
PLAN PRODUCT RATES JAN-03 JAN 03
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of
Delaware, Inc.
HMO LARGE GROUP
Delaware Gold $ [**] $ [**] $ [**]
Delaware Gold 10 $ [**] $ [**] $ [**]
Delaware Green 10 $ [**] $ [**] $ [**]
Delaware Green 15 $ [**] $ [**] $ [**]
Delaware Secure I $ [**] $ [**] $ [**]
Delaware Secure II $ [**] $ [**] $ [**]
Delaware Secure 15 $ [**] $ [**] $ [**]
Delaware Select $ [**] $ [**] $ [**]
Delaware Select 10 $ [**] $ [**] $ [**]
Delaware Silver $ [**] $ [**] $ [**]
Delaware Silver 10 $ [**] $ [**] $ [**]
National Gold $ [**] $ [**] $ [**]
HMO SMALL GROUP
Delaware SG Standard $ [**] $ [**] $ [**]
DELAWARE MAX CHOICE PLANS
Z-1 & Z-7 $ [**] $ [**] $ [**]
Z-12 $ [**] $ [**] $ [**]
Z-13 $ [**] $ [**] $ [**]
Z-19 $ [**] $ [**] $ [**]
Z-24 $ [**] $ [**] $ [**]
Non Serious Mental Health 80% (1) $ [**] $ [**] $ [**]
Non Serious Mental Health 50% (1) $ [**] $ [**] $ [**]
Substance Abuse 80% (1) $ [**] $ [**] $ [**]
Substance Abuse 50% (1) $ [**] $ [**] $ [**]
Advantra $ [**] $ [**] $ [**]
MARYLAND EMPLOYER GROUPS
Maryland Employer Group Hi Benefit $ [**] $ [**] $ [**]
Maryland Employer Group Low Benefit $ [**] $ [**] $ [**]
MEDICAID
Medicaid AFDC $ [**] $ [**] $ [**]
Medicaid-SSI $ [**] $ [**] $ [**]
STATE EMPLOYEES
State $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
Omitted portions are denoted by [**] and have been filed separately with the
Commission.
B-1
Coventry Contract Rates (All Changes Effective 1/1/03)
-----------------------------------------------------------------------------------------------------------
-11.14% 4.50%
$[**] MILL INCREASE
CURRENT REDUCTION EFFECTIVE
PLAN PRODUCT RATES JAN-03 JAN 03
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of Georgia,
Inc. Base MHSA $ [**] $ [**] $ [**]
High Option (2) $ [**] $ [**] $ [**]
Low Option (2) $ [**] $ [**] $ [**]
Wellstar $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of Iowa,
Inc. Hi $ [**] $ [**] $ [**]
LO $ [**] $ [**] $ [**]
Fed Emp $ [**] $ [**] $ [**]
ASO $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of Kansas,
Inc.
KANSAS CITY (INCLUDING KAISER)
HMO $ [**] $ [**] $ [**]
P0S-Hi $ [**] $ [**] $ [**]
POS-Lo $ [**] $ [**] $ [**]
Kaiser Non Med $ [**] $ [**] $ [**]
Kaiser Federal $ [**] $ [**] $ [**]
Kaiser Med + Choice $ [**] $ [**] $ [**]
KaiserMed+Choice < 65 $ [**] $ [**] $ [**]
ASO $ [**] $ [**] $ [**]
WICHITA
HMO $ [**] $ [**] $ [**]
POS $ [**] $ [**] $ [**]
Raytheon-HMO $ [**]
Raytheon-Phone $ [**]
ASO $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
Omitted portions are denoted by [**] and have been filed separately with the
Commission.
B-2
Coventry Contract Rates (All Changes effective 1/1/03)
-----------------------------------------------------------------------------------------------------------
-11.14% 4.50%
$[**] Mill Increase
Current Reduction Effective
Plan Product Rates Jan-03 Jan 03
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of
Louisiana, Inc. Hi $ [**] $ [**] $ [**]
Hi w/Out of Network $ [**] $ [**] $ [**]
Lo $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of
Nebraska, Inc. Hi $ [**] $ [**] $ [**]
LO $ [**] $ [**] $ [**]
ASO $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Coventry Health Care of
North Carolina, Inc. $ [**] $ [**] $ [**]
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
PFG $ -- $ --
-----------------------------------------------------------------------------------------------------------
*Does not include rate adjustment for Parity
1 - Plan shall pay provider the capitated per member per month rate set forth
above for employer groups domiciled in the state of Delaware. Plan shall compute
the capitation rate based on the following formula:
Serious Mental Health capitation rate (based on the group's standard benefit
plan)
+
Non-Serious Mental Health Illness Capitation Rate (based on the group's mental
health rider)
+
Substance Abuse Capitation Rate (based upon the group's mental health rider)
In the event the group has not selected non-serious mental health illness and
Substance Abuse Coverage; Plan shall pay Provider only for Serious Mental Health
coverage. If the group has coverage with another mental health vendor besides
Provider, Plan shall make no capitation payments to Provider.
2 - If these options are elected, these rates shall be added to the Base MHSA.
Note: Any other products or rates in existence and effective as of December 31,
2001 but not listed on this Attachment B, will, as of January 1, 2003, go down
by 11.14% and then go up by 4.5%.
Omitted portions are denoted by [**] and have been filed separately with the
Commission.
B-3
ATTACHMENT C
EXCLUSIONS FROM MHSA SERVICES ADDENDUM
The following do not constitute MHSA Services. Provision of these services shall
remain the sole responsibility of Company or the Sponsor to the extent that they
are Covered Services under a Enrollee's Benefit Contract.
1. Treatment rendered in connection with illnesses classified in ICD-9-CM and in
DSM-111R as delineated in the table below. Provided, however, initial assessment
and/or differential diagnosis of the illnesses listed below, and treatment for
Enrollees who have additional diagnoses that can be treated separately from the
primary diagnosis shall not be excluded.
DISEASE CATEGORY ICD-9 CM DSM-111-R
Dementias and other Organic 290.0 - 200.9, 291.2, 290.0 - 290.43,
Disorders 292.82, 293 - 294.9, 291.20, 292.82, 293
310 - 310.9 294.80, 310.10
Nicotine and Caffeine Use
Problems 305.1 305.10, 305.90
Neurological Disorders 299 - 299.9, 307.23, 299, 299.8,
315 - 319.9, 317 - 319 307.23, 315 - 315.9,
317 - 319
Conduct and Impulse Control 312-312.9, 313.81, 312 - 312.34,
Disorders 314.2 312.90, 313.81
Antisocial Personality Disorder 301.7 301.7
Paraphilias 302 - 301.53, 302.8 - 302.20 - 302.50,
302.84, 302.89 302.81 - 302.84,
302.89
Insomnia and Other Sleep
Disorders 780.5 - 700.59 307.4 - 307.47,
780.5,780.54
2. Conditions not subject to favorable Modification according of psychiatric
care. to generally accepted standards
3. Relationship, marriage, academic and other counseling when not attributable
to a mental disorder (eg: V-Codes).
C-1
4. Treatment for pain with physiological origins, unless APS determines such
pain has psychological or psychosomatic components.
5. Psychiatric or psychological examinations, testing, or treatments for
purposes of school evaluations; marriage; adoption; medical research; obtaining
or maintaining employment, a License, insurance or other official document; or
solely relating to judicial or administrative proceedings.
6. Services and treatment provided in connection with or to comply with
involuntary commitments, police detentions and other similar arrangements,
unless authorized by APS as Medically Necessary MHSA Services.
7. Treatment of Enrollees who are out of the Service Area, except for Emergency
MHSA Services.
8. Experimental, investigational, controversial or unproven services,
treatments, devices, or pharmacological regimens as determined by APS, including
services utilizing methadone treatment, L.A.A.M., Cyclazocine or their
equivalents.
9. Prescription medications, speech therapy, radiology fees and laboratory fees
for outpatient treatment. MHSA Providers will utilize HMO Subsidiary
participating laboratories and will authorize radiology services through the
applicable HMO Subsidiary.
10. Services for Enrollees who are consciously and deliberately non-compliant
with APS recommended treatment, when such noncompliance is not a direct result
of a psychiatric illness.
11. Transportation, by Ambulance or other means, except for inter-hospital
transportation authorized by APS.
X-0
XXXXXXXXXX X-0
GOAL PERFORMANCE STANDARDS
----------------------------------------------------------------------------------------------
A. CUSTOMER/CLIENT
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
SERVICE STANDARDS FREQ BY HMO PENALTY DEFICIENT
MEASURES STANDARD RESPONSE
----------------------------------------------------------------------------------------------
1. Executive >= 85% based on 5 point Y Yes $.004pmpm 90 day cure
Director Likert scale of period
Satisfaction satisfaction and
including top three
categories of
satisfaction.
----------------------------------------------------------------------------------------------
2. HEDIS APS to provide CHC with: Y Yes $.004pmpm 30 day cure
Data A. Applicable MH/SA period
monthly encounter
data, and
B. HEDIS hybrid method
data for Ambulatory
Follow-up measure
annually by June 1.
CHC to provide APS with
discharge data for
conducting hybrid method
for ambulatory follow-up
annually by April 15.
----------------------------------------------------------------------------------------------
3. Customer Monthly and quarterly Q Yes $.004pmpm 30 day cure
Reporting report by period
applicable due date
(within 30 or
45 days as required)
----------------------------------------------------------------------------------------------
4. NCQA: Provide support of plan N/A Yes $.004pmpm 30 day cure
Support to NCQA accreditation surveys: period
HMO plans X. XX, XX, XX, XX, XX
going for Policies and
NCQA Procedures
survey B. Delegation agreements
C. One MIHISA related
Quality Improvement
Activity annually
Note: Plan must give
APS 6 months prior
notice of upcoming
survey.
----------------------------------------------------------------------------------------------
5. NCQA or APS gains MBHO Y No $.004pmpm 90 day cure
Appropriate accreditation or completes period
MBHO annual mock accreditation
Accrediting review as MBHO by
Body mutually agreed upon
Readiness independent consultant,
obtains a score of 60,
and shares results
with CHC.
----------------------------------------------------------------------------------------------
D-1
----------------------------------------------------------------------------------------------------
B. MHSA PROVIDERS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
SERVICE STANDARDS FREQ BY HMO PENALTY DEFICIENT
MEASURES STANDARD RESPONSE
----------------------------------------------------------------------------------------------------
1. Provider >= 85% Compliance based on Every No $.004pmpm N/A
Satisfaction responses to two questions: two (Not
Survey satisfaction with overall years applicable
services and satisfaction for 1999)
with UM process.
Top three categories of
satisfaction, based on 5
point Likert scale, to be
included in
"satisfied" category.
----------------------------------------------------------------------------------------------------
2. Telephone < = 60 seconds M No $.004pmpm 30 day cure
Answer Speed period:
(telephone
response)
----------------------------------------------------------------------------------------------------
3. Telephone < = 10% Rounded to whole M No $.004pmpm 30 day care
Abandonment number (Excluded < = 10 period
Rate seconds)
----------------------------------------------------------------------------------------------------
4. Claims 95% processed < = 30 days M Yes $.004pmpm 30 day cure
Processed or per applicable state period.
Timely law
----------------------------------------------------------------------------------------------------
5. Claims Paid < = 98% of 10% sample Q No $.004pmpm 30 day cure
Accurately (By period
(processing Audit)
quality)
----------------------------------------------------------------------------------------------------
6. Complaint A. 80% in 5 working days M Yes A. $.002 30 day cure
Response B. 100% in 30 calendar pmpm period
days or applicable B. $.002
state law pmpm
Financial
penalty
for this
measure
equally split
between two
measures.
----------------------------------------------------------------------------------------------------
7. Provider A. Report that demonstrates Y Yes A. $.002 A. None
Panel: that 100% of the APS pmpm
Credentialing provider network is
and credentialed or B. $.002 B. 90 day
Recredentialing recredentialed. pmpm cure
Status B. CHC will conduct, an Financial period
annual provider file penalty
audit to determine for this
compliance measure
with NCQA standards. equally
If APS does not obtain split
a "significant" level of between
compliance with this two
audit, will be given a 3 measures.
month cure period before
re-audit, if still not
at a "significant" APS
will have financial
penalty.
----------------------------------------------------------------------------------------------------
D-2
----------------------------------------------------------------------------------------------------
C. MEMBERS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
SERVICE STANDARDS FREQ BY HMO PENALTY DEFICIENT
MEASURES STANDARD RESPONSE
----------------------------------------------------------------------------------------------------
1. Member >= 85% Survey conducted using Y No $.004pmpm N/A
Satisfaction HEDIS protocols and NCQA (Not
Survey approved vendor. Compliance applicable
(annual) based on responses to two for 1999)
questions; overall
satisfaction with APS
services and satisfaction
with the UM process. Scoring
to include top three
categories of 5 point Likert
scale.
----------------------------------------------------------------------------------------------------
2. Telephone < = 30 seconds M No $.004pmpm 30 day cure
Answer Speed period
(telephone
response)
----------------------------------------------------------------------------------------------------
3. Telephone < = 5% rounded to whole M No $.004pmpm 30 day cure
Abandonment number (Excluded < = 10 period
Rate seconds)
----------------------------------------------------------------------------------------------------
4. Complaint A. 80% in 5 workings days. M Yes A. $.002 30 day cure
Response B. 100% in 30 calendar pmpm period
days or applicable state B. $.002
law pmpm
Financial
penalty
for this
measure
equally
split
between two
----------------------------------------------------------------------------------------------------
5. Provider A. 98% non-life-threatening SY Yes A. $.00l3 90 day cure
Availability emergency seen w/in 6 hrs; pmpm period
B. 98% urgent need w/in B. $.0013
48 hrs; pmpm
C. $.0013
C. 95% routine office pmpm
visits w/in 10 business Financial
days penalty for
this measure
equally split
between three
measures
----------------------------------------------------------------------------------------------------
D-3
----------------------------------------------------------------------------------------------------
C. MEMBERS
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
SERVICE STANDARDS FREQ BY HMO PENALTY DEFICIENT
MEASURES STANDARD RESPONSE
----------------------------------------------------------------------------------------------------
6. Provider A. 95% MD-30 miles in Y Yes A. $.0013 90 day cure
Accessibility area pmpm period
B. 95% Hospital-30 miles B. $.00l3
in area pmpm
C. 95% PhD/Masters-30 miles C. $.0013
in area or pmpm
applicable state law Financial
penalty for
this measure
equally split
between three
measures.
----------------------------------------------------------------------------------------------------
7. Initial Annual standard based on Y Yes $.004 pmpm 90 day cure
Ambulatory previous year result plus 7%. period
Follow-up When get to 95%, then
Visit previous year result
Scheduled plus 2%.
within 30
days of
hospital
discharge
----------------------------------------------------------------------------------------------------
LEGEND
Y = Annual
Q = Quarterly
M = Monthly
SY = Semi-annual
D-4
EXHIBIT 1 TO ATTACHMENT D-1
GOAL-PERFORMANCE STANDARDS
DEFINITIONS
This Exhibit 1 shall govern the implementation of Goal Performance Standards set
forth in Attachment D- 1. In the event of conflict between this Exhibit 1 and
Attachment D-1, this Exhibit shall control
A. CUSTOMER/CLIENT
1) HMO SUBSIDIARY EXECUTIVE DIRECTOR ("ED") SATISFACTION SURVEY:
GOAL PERFORMANCE STANDARD: >=85% based on 5 point Likert scale of
satisfaction and including top three categories of satisfaction.
DEFINITION: ED satisfaction will be measured annually within 10-14 months
of the previous year's survey (conducted in June) and be based on
responses to questions regarding ED satisfaction with APS services.
Responses to questions #3 and #5 and scoring in the top three categories
of a five point Likert scale will be used in calculating the results.
Should the denominator (# of responses to survey) be less than five (5)
after two reminder phone calls to the ED, the standard does not apply.
REPORTING CONSTITUTES: Annual report of percentage, including numerator
and denominator, of EDs who rate themselves as satisfied with APS services
based on survey questions agreed to by the parties.
REPORTING DATE: Results reported annually in 2nd quarter report for the
previous 12 months.
CURE PERIOD: 90 days commencing with the first day following the end of
the applicable reporting period.
2) HEDIS DATA
GOAL PERFORMANCE STANDARD: Provide CHC with applicable MHSA data by CHC
due date.
DEFINITION: APS will provide PHC/Coventry with: 1) Monthly encounter data
via CD Rom, and 2) HEDIS Hybrid method collected data regarding Ambulatory
Follow-up rate data by June 1. CHC will annually provide APS with data
regarding discharges from inpatient stays for collecting Hybrid method
ambulatory follow-up data at least 6 weeks prior to June 1.
REPORTING CONSTITUTES: Annual report that APS has delivered HEDIS data,
including Hybrid method data.
REPORTING DATE: Results reported annually in 2nd quarter report of data
due to CHC by June 1st. EXCEPTION IS FOR CHC DELAWARE THAT NEEDS DATA ONE
WEEK PRIOR TO JUNE 1 IN ORDER TO MEET STATE REGULATIONS.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
3) CUSTOMER REPORTING
GOAL PERFORMANCE STANDARD: Monthly and quarterly report by applicable due
date as described in Section 4.8.3 of the Agreement.
DEFINITION: Submit complete quarterly and monthly reports to CHC by
applicable due date of mutually agreed upon Performance Standards. Final
grid format and content to be approved by CHC and APS.
REPORTING CONSTITUTES: Agreed upon Performance Standards grid sent by
Fed-Ex on applicable due date.
REPORTING DATES: February 15 (annual), February 25 (January report), March
25 (February report), April 30 (1st quarter report), May 25 (April
report), June 25 (May report), July 30 (2nd quarter report), August 25
(July report), September 25 (August report), October 30 (3rd quarter
report),
D-5
November 25 (October report), December 25 (November report).
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
4) NCQA SUPPORT TO PLANS GOING THROUGH SURVEY
GOAL PERFORMANCE STANDARD: Provide support of HMO Subsidiary in NCQA
accreditation surveys:
A. XX, XX, XX, XX, XX Policies and Procedures
B. Delegation agreements
C. One MHSA related Quality Improvement Activity annually
NOTE: HMO Subsidiary must give APS 6 months prior notice of upcoming
survey.
DEFINITION: Provide Policies and Procedures for delegated NCQA standards,
Delegation Agreements, one completed MH/SA-related clinical Quality
Improvement Activity three months prior to survey. HMO Subsidiary must
give APS 6 months prior notice of survey.
REPORTING CONSTITUTES: APS to report monthly status of notification by
Health Plan of upcoming NCQA survey. In the event a HMO Subsidiary
notifies APS of an upcoming survey, APS will report provision of
documentation described in the standard in the monthly report.
REPORTING DATE: N/A
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
5) NCQA OR APPROPRIATE MBHO ACCREDITING BODY READINESS
GOAL PERFORMANCE STANDARD: APS gains MBHO accreditation or completes
annual mock accreditation review as MBHO by mutually agreed upon
independent consultant, obtains a score of 60 on the mock review, and
shares results with CHC.
DEFINITION: APS gains MBHO accreditation or completes annual mock
accreditation review as MBHO by mutually agreed upon independent
consultant, obtains a score of 60 on the mock review, and shares results
with CHC.
REPORTING CONSTITUTES: APS submits results of annual mock accreditation
review, including score, to CHC QI Director or designee.
REPORTING DATE: Results reported annually in annual report.
CURE PERIOD: 90 days commencing with the first day following the end of
the applicable reporting period.
D-6
B. PROVIDERS
1) PROVIDER SATISFACTION SURVEY
GOAL PERFORMANCE STANDARD: >=85% Satisfaction Rate
Compliance based on responses to two questions: satisfaction with overall
services and satisfaction with UM process. Top three categories of
satisfaction, based on 5 point Likert scale, to be included in "satisfied"
category.
DEFINITION: Provider Satisfaction Survey conducted every two years.
REPORTING CONSTITUTES: Percentage that results from the following:
NUMERATOR: Number of providers who express satisfaction (including top
three categories of five point Likert scale) on both of the following
survey questions:
o Overall satisfaction with APS services, and
o Satisfaction with the UM process
DENOMINATOR: Total number of providers who respond to the survey question.
REPORTING DATE: Results reported every two years in the annual report
beginning on February 15, 2000 for provider satisfaction survey conducted
in 1999. Survey questions shall be agreed to by the parties.
CURE PERIOD: N/A
PLEASE NOTE: Results for 1999 are not subject to penalty.
2) TELEPHONE ANSWER SPEED
GOAL PERFORMANCE STANDARD: < = 60 seconds average speed to answer.
DEFINITION: Monthly report of average speed to answer of provider lines.
REPORTING CONSTITUTES: Average number of seconds for a live APS staff
member to answer provider calls.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
3) TELEPHONE ABANDONMENT RATE
GOAL PERFORMANCE STANDARD: < = 10% abandoned calls rounded to whole
number (Excluding calls of < = 10 seconds)
DEFINITION: Monthly report of percentage of provider calls abandoned
excluding those abandoned in the first 10 seconds.
REPORTING CONSTITUTES: Provider calls abandoned/Provider calls incurred
over the month.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
4) CLAIMS PROCESSED TIMELY
GOAL PERFORMANCE STANDARD: 95% of claims processed < = 30 days or per
applicable state law
DEFINITION: Monthly report of percentage of all claims processed in
< = 30 days. Date of receipt to date processed is < = 30 days or as per
applicable state law.
REPORTING CONSTITUTES: Percentage of all claims processed in < = 30 days
or as per applicable state law.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
D-7
5. CLAIMS PAID ACCURATELY
GOAL PERFORMANCE STANDARD: > = 98% accuracy rate based on 10% sample
DEFINITION: Quarterly report of percentage of claims, based on an internal
audit of a sample of all claims, that are paid accurately.
REPORTING CONSTITUTES: Percentage that results from the following: Number
of accurately paid claims/Number of claims sampled.
REPORTING DATE: Results reported quarterly on due date of quarterly or
annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
6) COMPLAINT RESPONSE
GOAL PERFORMANCE STANDARD:
A. 80% complaint response rate in 5 working days
B. 100% complaint response rate in 30 calendar days or applicable state
law
DEFINITION: Complaint response is defined as a response to the provider
(if they request that they receive a response; some members/providers do
not wish to be called back and this is documented) regarding the
disposition of the complaint following the investigation of the complaint.
Measure to be reported monthly.
REPORTING CONSTITUTES: Percentage (including and numerator and
denominator) that results from the following: Number of provider
complaints responded to within 5 working and 30 calendar days/ Total
number of provider complaints responded to within the month.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
7) PROVIDER PANEL: CREDENTIALING AND RECREDENTIALING STATUS
GOAL PERFORMANCE STANDARD:
A. Report that demonstrates that 100% of the APS provider network is
credentialed or recredentialed.
B. CHC will conduct, an annual provider file audit to determine compliance
with NCQA standards. If APS does not obtain a "significant" level of
compliance with this audit, APS will be given a 3 month cure period before
re-audit. If still not at a "significant" APS will have financial penalty.
DEFINITION:
A. Annual report of the Re/Credentialing status of all MHSA providers
consists of the following:
Total # of Practitioners/Providers
# of Practitioners/Providers Recredentialed Previous Year (i.e., All
1998)
# of Practitioners/Providers Recredentialed Current Year (i.e., All
1999)
# of Practitioners/Providers Credentialed Current Year (i.e., All
1999)
Total # of Practitioners as of 1/1/00
B. Additionally, CHC will conduct an annual provider file audit in order
to assess APS compliance with NCQA credentialing and recredentialing
standards. IF APS does not obtain a score of "significant" (as defined by
NCQA) on the file audit section of this measure, APS will have three
months in which to "cure" this deficiency. If APS fails to cure this
deficiency within three months, a financial penalty will be incurred.
REPORTING CONSTITUTES:
A. See contents of report described in definition A above.
B. No reporting required.
REPORTING DATE:
A. Results reported annually in annual report.
B. No reporting required.
D-8
CURE PERIOD:
A. None
B. 90 days commencing with the first day following the end of the
applicable reporting period.
D-9
C. MEMBERS
1) MEMBER SATISFACTION SURVEY
GOAL PERFORMANCE STANDARD: >=85% Member satisfaction rate.
Survey conducted using HEDIS protocols and NCQA approved vendor.
Compliance based on responses to two questions; overall satisfaction with
APS services and satisfaction with the UM process. Scoring to include top
three categories of 5 point Likert scale.
DEFINITION: Member Satisfaction survey conducted annually using HEDIS
protocol and conducted by NCQA certified organization.
REPORTING CONSTITUTES: Percentage that results from the following:
NUMERATOR: Number of members who express satisfaction (including the top
three categories of response of the five point Likert scale)on both of the
following survey questions:
o Overall satisfaction with APS services, and
o Satisfaction with the UM process
DENOMINATOR: Total number of members who respond to the survey question.
REPORTING DATE: Results reported annually in the annual report. Survey
questions to be agreed to by parties.
CURE PERIOD: N/A
PLEASE NOTE: Results for 1999 are not subject to penalty.
2) TELEPHONE ANSWER SPEED
GOAL PERFORMANCE STANDARD: < = 30 seconds average speed to answer.
DEFINITION: Monthly report of average speed to answer of member lines.
REPORTING CONSTITUTES: Average number of seconds for a live APS staff
member to answer member calls
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
3) TELEPHONE ABANDONMENT RATE
GOAL PERFORMANCE STANDARD: < = 5% abandoned calls rounded to whole number
(Excluding calls of < = 10 seconds)
DEFINITION: Monthly report of percentage of member calls abandoned
excluding calls abandoned in the first 10 seconds.
REPORTING CONSTITUTES: Member calls abandoned/Member calls incurred over
the month.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
4) COMPLAINT RESPONSE
GOAL PERFORMANCE STANDARD:
A. 80% complaint response in 5 working days,
B. 100% complaint response in 30 calendar days or applicable state law
DEFINITION: Complaint response is defined as a response to the member (if
they request that they receive a response; some members do not wish to be
called back and this is documented) regarding the disposition of the
complaint following the investigation of the complaint. Measure reported
monthly.
REPORTING CONSTITUTES: Percentage (including and numerator and
denominator) that results from the following: Number of member complaints
responded to within 5 working and 30 calendar days/ Total number of member
complaints responded to within the month
D-10
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
CURE PERIOD: 30 days commencing with the first day following the end of
the applicable reporting period.
5) PROVIDER AVAILABILITY
GOAL PERFORMANCE STANDARD:
A. 98% non-life-threatening emergency seen w/in 6 hrs;
B. 98% urgent need w/in 48 hrs;
C. 95% routine office visits w/in 10 business days
DEFINITION: Semi-yearly report of percentage of members for whom care is
offered within the timeliness standards for the following levels of
treatment urgency:
o Non-Life Threatening Emergencies
o Urgent
o Routine
REPORTING CONSTITUTES: Percentage that results from the following: Number
of Members who were offered an appointment within the timeliness standard
for that level of treatment urgency/ Number of Members who were triaged as
requiring that level of treatment urgency.
REPORTING DATE: Results reported in 2nd quarter report and annual report.
CURE PERIOD: 90 days commencing with the first day following the end of
the applicable reporting period.
6) PROVIDER ACCESSIBILITY GOAL PERFORMANCE STANDARD:
A. 95% MD-30 miles in area
B. 95% Hospital-30 miles in area
C. 95% PhD/Masters-30 miles in area or applicable state law
DEFINITION: Annual report of the percentage of members who have a provider
located within 30 miles. Geo-access will be reported by HMO Subsidiary and
based on the active service area for each HMO Subsidiary, excluding
membership where providers do not exist. Plan will be required to annually
submit a listing of counties in the active service area by August 1st for
the purpose of running the geo-access reports.
REPORTING CONSTITUTES: Percentage that results from the following: The
number of members who have access to a hospital, an MD, and a PhD/MSW
located within 30 miles, excluding membership where the plan has failed to
report the service area by August 1st. Reported annually within the 4th
quarter report.
REPORTING DATE: Results reported annually in annual report.
CURE PERIOD: 90 days commencing with the first day following the end of
the applicable reporting period.
7) INITIAL AMBULATORY FOLLOW-UP VISIT SCHEDULED WITHIN 30 DAYS OF HOSPITAL
DISCHARGE
GOAL PERFORMANCE STANDARD: Annual standard based on previous year result
plus 7%. When get to 95%, then previous year result plus 2%.
DEFINITION: Annual report of the percentage of patients who were
hospitalized who had a documented follow-up visit scheduled with a
behavioral healthcare practitioner/provider within 30 days of discharge.
REPORTING CONSTITUTES: Percentage that results from the following: The
number of those patients who had an ambulatory follow-up visit
scheduled/The number of patients who were hospitalized.
REPORTING DATE: Results reported annually in annual report.
CURE PERIOD: 90 days commencing with the first day following the end of
the applicable reporting period.
D-11
ATTACHMENT D-2
TERMINATION STANDARDS
--------------------------------------------------------------------------------
A. CUSTOMER/CLIENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SERVICE MEASURES MINIMUM STANDARD
--------------------------------------------------------------------------------
2. HEDIS data Failure to deliver the applicable MH/SA
data to CHC by June 1, annually
--------------------------------------------------------------------------------
*5. NCQA or Appropriate MBHO Failure to obtain MBHO accreditation or
Accrediting Body Readiness receive score of 60 from annual mock
MBHO accreditation review completed by a
mutually agreed upon independent
consultant. The results are shared with
CHC.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B. PROVIDERS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SERVICE MEASURES MINIMUM STANDARD
--------------------------------------------------------------------------------
2. telephone Answer Speed > = 2 minutes for 3 consecutive months.
(telephone response)
--------------------------------------------------------------------------------
3. Telephone Abandonment Rate > = 20% for 4 consecutive months;
(Excluded < = 10 seconds)
--------------------------------------------------------------------------------
4. Claims Processed Timely > = 45 calendar days for 3 consecutive
months or out of compliance with state
law
--------------------------------------------------------------------------------
6. Complaint Response < = 70% in 5 working days and < = 80% in
30 calendar days; both in any three
consecutive months or applicable state
law.
--------------------------------------------------------------------------------
7. Provider Panel: Credentialing A. < = 90% of the APS provider network is
and Recredentialing Status credentialed or recredentialed.
B. CHC will conduct an annual provider
file audit to determine compliance with
NCQA standards. If APS does not obtain a
"significant" level of compliance with
this audit, will be given a 3-month cure
period before re-audit. If still not at
a "significant" APS will have financial
penalty. Cure period of 90 days.
--------------------------------------------------------------------------------
*Termination Standard not applicable until 2001.
D-12
--------------------------------------------------------------------------------
C. MEMBERS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SERVICE MEASURES MINIMUM STANDARD
--------------------------------------------------------------------------------
2. Telephone Answer Speed > = 45 seconds for 3 consecutive months
(telephone response)
--------------------------------------------------------------------------------
3. Telephone Abandonment Rate > = 20% for 3 consecutive months;
(Excluded < = 10 seconds)
--------------------------------------------------------------------------------
6. Complaint Response < = 70% in 5 working days and < = 80% in
30 calendar days - both in any three
consecutive months or applicable state
law.
--------------------------------------------------------------------------------
7. Initial Ambulatory < = 50% are scheduled for one (1) year
Follow-up Visit Scheduled within period
30 days of hospital discharge.
--------------------------------------------------------------------------------
*Termination Standard not applicable until 2001.
D-13
EXHIBIT 1 TO ATTACHMENT D-2
TERMINATION STANDARDS
DEFINITIONS
This Exhibit 1 shall govern the implementation of the Termination Standards set
forth in Attachment D-2. In the event of conflict between this Exhibit 1 and
Attachment D-2, this Exhibit 1 shall control. Set forth below arc the Goal
Performance Standards identified on Attachment D- 1 that are subject to
Termination Standards. The Termination Standards are identified by cross
reference to the applicable Goal Performance Standards.
A. CUSTOMER/CLIENT
2) HEDIS DATA
DEFINITION: Failure to deliver the applicable MWSA data to CHC by June 1,
annually, given that CHC provides the discharge data to APS by April 15.
REPORTING CONSTITUTES: Annual report that APS has delivered HEDIS data,
including Hybrid method data.
REPORTING DATE: Results reported annually in 2nd quarter report of data
due to CHC by June 1st.
5) NCQA OR APPROPRIATE MBHO ACCREDITING BODY READINESS
DEFINITION: Failure to obtain MBHO accreditation or receive score of 60
from annual mock MBHO accreditation review completed by a mutually agreed
upon independent consultant. The results are shared with CHC.
REPORTING CONSTITUTES: APS submits results of annual mock accreditation
review, including score, to Coventry QI Director or designee.
REPORTING DATE: Results reported annually in annual report.
CURE PERIOD: 180 days following the cure period identified in Attachment
D-1, Exhibit 1.
B. PROVIDERS
2) TELEPHONE ANSWER SPEED
DEFINITION: > = 2 minutes for 3 consecutive months.
REPORTING CONSTITUTES: Average number of seconds for a live APS staff
member to answer provider calls.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
3) TELEPHONE ABANDONMENT RATE
DEFINITION: > 20% for 4 consecutive months; (Excluded < 10 seconds).
REPORTING CONSTITUTES: Provider calls abandoned/Provider calls incurred
over the month.
D-14
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
4) CLAIMS PROCESSED TIMELY
DEFINITION: > = 45 calendar days for 3 consecutive months or out of
compliance with state law.
REPORTING CONSTITUTES: Reported monthly in the following format:
o # of claims processed in < = 30 days/ Total # of claims
received that month, yielding %
o # of claims processed in < = 45 days/ Total # of claims
received that month, yielding %
o # of claims processed in > = 45 days/ Total # of claims
received that month, yielding %
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
6) COMPLAINT RESPONSE
DEFINITION: < = 70% in 5 working days and < = 80% in 30 calendar days;
both in any three consecutive months or applicable state law.
REPORTING CONSTITUTES: Percentage (including and numerator and
denominator) that results from the following: Number of provider
complaints responded to within 5 working and 30 calendar days/ Total
number of provider complaints responded to within the month
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
7) PROVIDER PANEL: CREDENTIALING AND RECREDENTIALING STATUS
DEFINITION:
A. < = 90% of the APS provider network is credentialed or recredentialed.
B. CHC will conduct an annual provider file audit to determine compliance
with NCQA standards. If APS does not obtain a "significant" level of
compliance with this audit, will be given a 3-month cure period before
re-audit. If still not at a "significant" APS will have financial penalty.
Cure period of 90 days following the cure period identified in Attachment
D-1, Exhibit 1.
REPORTING CONSTITUTES:
A. See contents of report described in definition A above.
B. No reporting required.
REPORTING DATE:
A. Results reported annually in annual report.
B. No reporting required.
CURE PERIOD:
A. None
B. 90 days following the cure period identified in Attachment D-l, Exhibit
1
D-15
C. MEMBERS
2) TELEPHONE ANSWER SPEED
DEFINITION: > = 45 seconds for 3 consecutive months.
REPORTING CONSTITUTES: Average number of seconds for a live APS staff
member to answer member calls
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
3) TELEPHONE ABANDONMENT RATE
DEFINITION: > 20% for 3 consecutive months; (Excluded < 10 seconds).
REPORTING CONSTITUTES: Member calls abandoned / Member calls incurred over
the month.
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
4) COMPLAINT RESPONSE
DEFINITION: < = 70% in 5 working days, and < = 80% in 30 calendar days;
both in any three consecutive months or applicable state law.
REPORTING CONSTITUTES: Percentage (including and numerator and
denominator) that results from the following: Number of member complaints
responded to within 5 working and 30 calendar days/ Total number of member
complaints responded to within the month
REPORTING DATE: Results reported monthly on due date of monthly,
quarterly, or annual report.
7) INITIAL AMBULATORY FOLLOW-UP VISIT SCHEDULED WITHIN 30 DAYS OF HOSPITAL
DISCHARGE
DEFINITION: < = 50% are scheduled for one (1) year period.
REPORTING CONSTITUTES: Percentage that results from the following: The
number of those patients who had an ambulatory follow-up visit scheduled /
The number of patients who were hospitalized.
REPORTING DATE: Results reported annually in annual report.
D-16
ATTACHMENT E
MIXED SERVICES
MEDICAL VS PSYCH CLAIMS PAYING RESPONSIBILITY
A. HOSPITAL
The intent of this policy statement is to establish guidelines to help
determine responsibility for medically necessary care provided to clients. APS
Healthcare Bethesda, Inc. ("APS") will certify care when the primary treatment
is psychiatric or substance abuse and being provided by a psychiatrist. Coventry
Health Care, Inc. or its individual health plans ("CHC") will certify when the
primary treatment is medical or surgical and being provided by a
non-psychiatrist physician. Individual physician charges and charges for
diagnostics and therapeutics which the physician orders (or causes to be
ordered) will be the responsibility of the review agency to which the physician
belongs, i.e., APS when the physician is a psychiatrist; CHC when the physician
is a non-psychiatrist medical attending.
The following guidelines will be used in utilization review and in
processing claims when the services rendered include a combination of mental
health and medical care:
1. When a patient is admitted for the treatment of a medical problem and
there is a concomitant psychiatric problem, the medical care rendered will
be certified by CHC. If the patient is medically cleared and transferred
to a psych unit, APS will assume responsibility at that point. For
example, if a patient ingests a toxic substance in a suicide attempt and
requires medical care in a ICU, CHC will be responsible for certifying the
patient's care until the patient is medically cleared and transferred to a
psych unit.
2. When a patient is admitted with multiple diagnoses associated with
substance abuse including both mental and medical diagnosis, CHC and APS
will be responsible for certifying their respective portions of the
hospitalization. For example, if a patient is primarily being admitted and
treated for alcoholic hepatitis or pneumonia with a secondary diagnosis of
alcohol withdrawal, the care rendered by a non-psychiatrist physician will
be ceded by CHC. If the patient is admitted to a designated detox unit or
psych unit for detox EVEN IF ATTENDED BY A NON-PSYCHIATRIST PHYSICIAN, APS
will be responsible for review. If multiple diagnoses are present, the
most critical care should be given, patient stabilized and then
transferred to the other service with review being done by each APS and
CHC for their respective areas.
E-1
3. If a patient is admitted for a medical complaint, but the medical
evaluation does not lead to a medical diagnosis and a psychiatric
diagnosis is then assigned to the case, subsequent care will be certified
by APS. When the patient is transferred to a psych unit and the primary
care giver is a psychiatrist, APS will be responsible. For example, if a
patient is admitted for evaluation of pain of unknown etiology, but no
organic etiology is identified and the patient is then given a diagnosis
of psychogenic pain, the care rendered will be reviewed by CHC. If the
patient is then transferred to a psych unit, the care will become the
certification responsibility of APS.
4. Each party will make reasonable efforts to ensure that the hospitalized
patient will receive necessary and appropriate treatment in a facility
participating in the Network of the party certifying the primary treatment
taking into account appropriate continuity and quality of care.
5. If psych consults are requested by a non-psychiatrist physician, CHC will
authorize such consultants. If med/surg consults are requested by a
psychiatrist attending, APS will authorize such consultations. The psych
consultation will be the financial responsibility of APS and the med/surg
consultation will be the financial responsibility of CHC.
6. When a patient is admitted for medical or neurologic problem, but is
placed on a psych unit because the patient is a management problem, care
will be certified by CHC. For example, in the case where a patient with
organic brain syndrome housed on a psych unit for management purposes CHC
will review regardless, as to whether the patient is attended by a
psychiatrist or a non-psychiatrist physician.
7. On occasion, psychiatric patient will be admitted by a psychiatrist to a
Med/Sug unit of a rural hospital without a psych unit. Such
hospitalization will be reviewed by APS. CHC providers are not
credentialed to provide psych care and will only manage care medically
until a credentialed psychiatrist is available.
B. NEUROPSYCHOLOGICAL SCREENING VS. ASSESSMENT
Neuropsychological SCREENING can be done by most testing psychologist and
is considered a part of standard psychological testing, which is certified by
APS. Neuropsychological ASSESSMENT is a time consuming, expensive, series of
testing procedures directed at determining special neurological deficits.
Neuropsychological assessment is one of several diagnostic procedures used to
determine organic brain disease or deficit. Neurologist are in the best position
to assess whether such testing would be useful as compared to an EMI scan, EEG,
etc. APS recommends that such testing only be approved after neuropsychological
consultation and certified by whichever agency is already reviewing the patient
care plan irrespective of whether such testing is done on an inpatient or
outpatient basis.
E-2
C. CHRONIC PAIN
APS' position on pain management is that there are two types of chronic
pain patients and two types of chronic pain programs developed to meet the
different needs of each type of patient.
TYPE A: TRUE CHRONIC PAIN PATIENT
The distinguishing characteristic of this group of patients is that chronic pain
is primary and substance dependence is secondary and often iatrogenic. Other
distinguishing characteristics sometimes found are listed below.
1. Such patients usually have a relatively benign premorbid history and
family history.
2. Such patients often have an objectively verifiable cause for pain and
usually a clear-cut single diagnosis.
3. The dependence of such patients on narcotic analgesics develops when no
other approach appears to work (or is even tried).
4. "Chronic pain" treatment programs for these patients are generally
directed by neurosurgeons, neurologists, physiatrist, or psychiatrists.
Treatment approaches range from psychosurgery and cordotomy to
transcutaneous nerve stimulation and acupuncture to biofeedback, hypnosis,
transcendental medication/yoga, and specific exercise techniques. The
primary responsibility for Type A patients is medical (i.e., CHC's).
Psychiatric involvement is usually to identify and intervene with Type B
patients (see below).
TYPE B: PSEUDO CHRONIC PAIN PATIENT
The distinguishing characteristic of this group of patients is that they are
psychiatrically-disturbed patients who are substance abusers (or potential
substance abusers) whose complaints of pain appear secondary to their
psychiatric problems. Other distinguishing characteristics are listed below.
1. Such patients usually have a premorbid history of previous substance abuse
and often a family history of substance abuse.
2. Such patients often do not have pain which is objectively verifiable and
their diagnoses are often unclear. Such patients often present multiple
pain-related diagnoses to justify the use of narcotic analgesics.
E-3
3. Such patients are usually resistant to trying other forms of pain relief,
such as those described in the previous section, and sometimes say they
will be "forced" into using street drugs unless their physician prescribes
narcotic analgesics.
4. Treatment programs (also often called "chronic pain" centers or clinics)
are usually under the direction of psychologists or psychiatrists.
Although some alternative pain relief treatment modalities may be
available, the objective of such programs is generally to help the patient
confront his/her substance abuse and addictive personality. Intensive
group and individual counseling, urine monitoring and methadone
maintenance are used in treatment.
Type A patients should have access to the appropriate form of treatment
available for their chronic pain through the Plan and should be reviewed by CHC.
Type B patients are the review responsibility of APS.
D. BIOFEEDBACK
Biofeedback is not covered as a primary treatment modality under the
mental health benefits. However, an APS provider may use biofeedback as an
adjunctive modality (like one might use hypnosis) in the course of an otherwise
approved treatment modality in the course of treating a patient with a DSM-III
diagnosis, i.e., when biofeedback is used in the treatment of selected patients
with anxiety, panic or phobic disorders.
Biofeedback has been demonstrated to be effective in the treatment of
conditions which are primarily medical in nature, such as migraine or tension
headache, Raynaud's disease, chronic pain, etc. Although APS endorses the use of
biofeedback in such treatment, CHC must review for medical necessity if a
nonpsychiatric physician is the prescribing physician.
E. NON-PSYCHIATRIC PHYSICIANS TREATING DSM III R DIAGNOSES
Not uncommonly non-psychiatric physicians will treat a patient for a DSM
III R diagnosis. Ordinarily such care will occur on an outpatient basis and
review will be the responsibility of CHC. On occasion a patient will be admitted
for a DSM III R diagnosis to a primary care unit, E.G., eating disorders,
chronic pain, substance abuse withdrawal. For example, when a pediatrician is
treating an anorexic teenager on a pediatric unit when the patient is in no
immediate medical danger, the case will be reviewed by a CHC reviewer who can
assess the limits of the pediatrician's competence in treating the primary
diagnosis of anorexia nervosa and judge the need for continued hospitalization.
Should CHC determine the need for transfer to a Child Psychiatrist, APS will
review the treatment plan and approve care.
E-4
ATTACHMENT F
ASO CLAIMS FUNDING PROCEDURES
I. ASO CLAIMS
Commencing on the Effective Date, APS shall provide ASO Services for
Coventry Health Care of North Carolina, Inc. ("CHC-NC") and Coventry Health Care
of Kansas, Inc. ("CHC of KS") (CHC-NC and CHC of KS are collectively referred to
herein as the "ASO Parties"). APS may provide ASO Services to other HMO
Subsidiaries as contemplated in Section 7.1 of the Agreement. Claims for MHSA
Services provided to each of the ASO Party ASO Members shall be funded as
follows:
(a) Every two weeks, APS shall deliver to CHC a detailed disbursement
instruction containing information reasonably necessary for CHC to
process payments for MHSA Services provided to ASO Members.
(b) After receipt of such disbursement instruction, CHC shall produce
and mail checks drawn on each of the ASO Parties' bank account
payable to the order and in the amounts as specified in the
disbursement instruction.
(c) APS shall deliver a detailed disbursement report to each of the ASO
Parties.
(d) Each of the ASO parties shall be responsible for reconciling its own
bank account with respect to payments for ASO claims as described
above.
(e) APS shall not be responsible for complying with any Performance
Standards relating to payment of claims to the extent CHC is
responsible, by virtue of its payment administration
responsibilities hereunder, for the activities covered by such
Performance Standards.
II. OUT-OF-NETWORK CLAIMS
A. Prior to Initial Reset Date.
As provided in SECTION 4.1.4 of the Agreement, the applicable HMO
Subsidiary or CHC, as the case may be, shall retain financial liability for
Out-of-Network MHSA Services provided to Capitated Members prior to the Initial
Reset Date.
B. After the Initial Reset Date.
As provided in SECTION 4.1.4 of the Agreement, APS shall assume financial
responsibility for Out-of Network MHSA Services provided to Capitated Members
after the Initial Reset Date except for Out-of-Network MHSA Services provided to
Capitated Members enrolled in Principal Health Care of Louisiana, Inc.
("CHC-LA") for which CHC-LA shall retain arrival liability.
F-1
C. Funding of Out-of-Network Claims.
APS shall adjudicate all claims for Out-of-Network MHSA Services for which
CHC as an HMO Subsidiary is financially responsible ("POS Claims") and such
claims shall be funded as follows:
(1) APS shall pay POS Claims in the ordinary course along with other
claims for MHSA Services.
2) Each month APS will submit to CHC or the financially responsible
HMO Subsidiary a xxxx for POS Claims incurred during such month.
3) CHC as the applicable HMO Subsidiary, shall reimburse APS for POS
Claims within 14 days of APS's submission of the xxxx for such
claims.
F-2
ATTACHMENT G-1
COVENTRY HEALTH CARE, INC.
DELAWARECARE AMENDMENT TO
BEHAVIORAL HEALTH AGREEMENT AMONG
COVENTRY HEALTH CARE, INC.,
THE HMO SUBSIDIARIES NAMED THEREIN, AND
AND
APS HEALTHCARE BETHESDA, INC.
This DelawareCare Amendment to Mental Health Services Agreement ("Amendment") is
attached to and made a part of that certain Behavioral Health Services Agreement
(the "Agreement") by and among Coventry Health Care, Inc. ("CHC"), the HMO
Subsidiaries of CHC named therein (the "HMO Subsidiaries") and APS Healthcare
Bethesda, Inc., ("APS").
WHEREAS, CHC, the HMO Subsidiaries and APS are entering into the Agreement
pursuant to which APS has agreed to arrange for the provision of certain mental
health and substance abuse services to Members of the HMO Subsidiaries; and
WHEREAS, Coventry Health Care of Delaware, Inc. (hereinafter referred to as "CHC
of Delaware") is an HMO Subsidiary for whom APS has agreed, under the terms of
the Agreement, to arrange for access to mental health and substance abuse
services to Members of CHC of Delaware; and
WHEREAS, CHC of Delaware has contracted with the Delaware Department of Health
and Social Services ("DHSS") to provide Medicaid Covered Services to Medicaid
Members; and
WHEREAS, APS desires to participate in DelawareCare; and
WHEREAS, CHC and APS mutually and respectively desire to amend their existing
Agreement to allow for the provision of Medicaid Covered Services to Medicaid
Members.
NOW THEREFORE, in consideration of the mutual promises of the parties, the
sufficiency of which is hereby acknowledged, the parties agree as follows:
G-1-1
I. ADDITIONAL DEFINITIONS
The following terms, in addition to the terms set forth in the Agreement,
shall be used for purposes of this Amendment:
1.1 "CMS" is the Centers for Medicare and Medicaid Services, an
administrative agency of the United States Government.
1.2 "Customary Charge" means the reasonable and customary fees
Affiliated Provider charge that do not exceed the fees Affiliated
Provider would charge any other person regardless of whether the
person is a Medicaid Member.
1.3 "DelawareCare" means the health care services plan and the health
maintenance organization program established under contract between
CHC of Delaware and DHSS for individuals eligible for medical
assistance and related programs administered by the State of
Delaware.
1.4 "Medicaid Capitation Payment" means a pre-negotiated monthly payment
described in Exhibit 1 of this Amendment that CHC of Delaware shall
make to APS for each Medicaid Member.
1.5 "Medicaid Covered Services" means those mental health and substance
abuse services and benefits described in the Member Handbook and to
which Medicaid Members are entitled under the terms of DelawareCare.
1.6 Medicaid Member" means a person who is enrolled in DelawareCare.
1.7 "Member Handbook" refers to the written document which: a) explains
the services and benefits covered under DelawareCare; and b) defines
the rights and responsibilities of Medicaid Members and CHC of
Delaware.
II. OBLIGATIONS OF APS
2.1 Provision of Medicaid Covered Services
APS shall arrange for the provision of Medicaid Covered Services to
Medicaid Members. APS further agrees that it shall require its Affiliated
Providers not to differentiate or discriminate in the treatment of
Medicaid Members on the basis of race, sex, age, religion, place of
residence, health status or source of payment.
G-1-2
2.2 Compliance
2.2.1 APS agrees to require its Affiliated Providers to maintain
such records and provide such information to CHC of Delaware, DHSS, and
the State of Delaware as may be necessary for all rules and regulations
adopted pursuant thereto; the Affiliated Providers shall retain such
records for such time as appropriate regulations require.
2.2.2 APS agrees to require its Affiliated Providers not to
surcharge Medicaid Members. A surcharge is any additional fee which is
charged to a Medicaid Member for Medicaid Covered Services.
2.2.3 APS agrees to cooperate with and be bound by, and to require
its Affiliated Providers to cooperate with and be bound by, all of the
provisions of the rules and regulations of CHC of Delaware with respect to
DelawareCare, including but not limited to CHC of Delaware's quality
assurance program, member grievance system, or utilization management
program.
2.2.4 APS shall arrange for each of its Affiliated Providers to
comply with the terms and conditions of this Amendment applicable to the
delivery of Medicaid Covered Services to Medicaid Members.
2.3 Collection of Charges from Medicaid Members
APS shall require its Affiliated Providers not to charge, collect,
or receive any payment from any Medicaid Member for Medicaid Covered
Services provided pursuant to this Amendment. Upon discovery of collection
activity, CHC of Delaware shall give 10 days notice to APS and APS shall
in turn notify its Affiliated Provider to cease such collection activity.
If an Affiliated Provider fails to cease such activity during that time,
APS will terminate its Participation Agreement with such Affiliated
Provider specific to DelawareCare and take all other appropriate action
consistent with the terms of this Amendment to eliminate such other
appropriate action consistent with the terms of this Amendment to
eliminate such collections, including requiring Affiliated Providers to
return to Medicaid Members all sums collected. The parties agree that
Affiliated Providers shall not maintain any action at law or equity
against a Medicaid Member to collect any sums owed by CHC of Delaware.
Nothing in this Amendment, however, shall be construed to prevent an
Affiliated Provider from providing non-Medicaid Covered Services on usual
and customary fee-for-service basis to Medicaid Members.
G-1-3
2.4 Coordination of Benefits
APS shall cooperate with the coordination of benefits and
subrogation procedures of CHC of Delaware and/or DHSS, in instances where
either party determines that the Medicaid Member has dual health insurance
coverage, or may be entitled to recover the cost of health services from a
third party through workers compensation, liability insurance or other
sources.
2.5 Required Notifications
2.5.1 APS shall require its Affiliated Providers to notify APS of
any action to revoke, restrict, or suspend such Affiliated Provider's
license.
2.5.2 APS agrees to provide CHC of Delaware with a minimum of 10
days advance notice in the event of termination, cancellation, or
reduction of the professional liability cover of Affiliated Providers
required pursuant to the terms of the Agreement.
2.5.3 APS shall require its Affiliated Providers to immediately
notify APS in the event an Affiliated Provider's medical staff membership
and/or clinical privileges are modified, suspended, or revoked, regardless
of whether such action occurs at a Participating Provider hospital or
non-Participating Provider hospital.
2.6 Documentation
APS shall require its Affiliated Providers to maintain medical
records, for each Medicaid Member, which shall document the existence of
any advance directive in accordance with the Patient Self -Determination
Act, as amended from time to time.
2.7 Procedures
APS agrees to provide policies and procedures to Affiliated
Providers for such Affiliated Provider's participation in DelawareCare.
Further, APS shall provide its Affiliated Providers with prior written
notice in the event of any changes to said procedures.
G-1-4
2.8 Subcontracts
APS agrees to maintain its books, records, Participation Agreements,
and other documentation of Medicaid Covered Services rendered to Medicaid
Members at APS's principal place of business in the State of Maryland.
Further, upon request by CHC of Delaware or CHC and within 20 days of such
request, APS agrees to provide CHC and/or CHC of Delaware access to any
Participation Agreement entered into by and between APS and its Affiliated
Providers.
2.9 Reporting
APS shall provide CHC of Delaware with periodic reports concerning
utilization of Medicaid Covered Services and claims paid by APS for
Medicaid Members. Such reports shall be provided to CHC and CHC of
Delaware in a mutually agreeable format, and shall allow CHC of Delaware
to monitor the appropriateness of payments made and Medicaid Covered
Services Medicaid Members receive. Further, APS agrees that said reports
shall meet any applicable DHSS requirements.
2.10 Performance Standards
APS agrees to adhere to the Performance Standards described in
Exhibit 2, attached hereto and incorporated herein.
III. OBLIGATIONS OF HMO
3.1 Identification Cards and Verification of Eligibility
CHC of Delaware shall provide appropriate identification cards for
Medicaid Members. The cards will provide Affiliated Providers with a
toll-free telephone number for verification of eligibility and Utilization
Review requirements. CHC of Delaware shall include APS's phone number on
identification cards for Medicaid Members and shall include instructions
for Medicaid Member to contact APS in order to access mental health and
substance abuse services.
3.2 Procedures
3.2.1 CHC of Delaware shall provide APS with a provider manual which
describes the operational policies and procedures which APS and its
Affiliated Providers must comply as a condition of participation in
DelawareCare. Further, CHC of Delaware shall provide APS with prior
written notice in the event of any changes to said procedures, including
but not limited to changes in the benefits covered under DelawareCare.
G-1-5
3.2.2 CHC of Delaware shall provide APS with any policies and/or
procedures regarding the investigation and resolution of grievances and/or
appeals filed by Medicaid Members.
3.3 Copy of Member Handbook
CHC of Delaware shall periodically provide APS with a sample Member
Handbook, which shall describe Medicaid Covered Services.
3.4 Changes in DelawareCare Program
CHC of Delaware shall notify APS in the event of any material
changes in DelawareCare, or in the event of any material changes in the
agreement between DHSS and CHC of Delaware which affect APS.
IV. COMPENSATION
4.1 Medicaid Capitation Payment
CHC of Delaware shall remit to APS the Medicaid Capitation Payment
amount set forth in Exhibit 1 of this Amendment on or before the 15th day
of each calendar month for each Medicaid Member. Further, APS agrees to
accept payment from CHC of Delaware as payment in full for Medicaid
Covered Services and shall not xxxx Medicaid Members.
4.2 Retroactive Adjustments
CHC of Delaware reserves the right to offset and/or deduct amounts
CHC of Delaware paid in error from any future amounts payable to APS.
Further, all payments made hereunder shall be subject to adjustment based
on DHSS eligibility determinations. Retroactive eligibility determinations
shall account for any Medicaid Member's termination, change, or addition
of coverage. CHC of Delaware shall include a description of the basis for
such Medicaid Capitation Payment adjustments with CHC of Delaware's
Medicaid Capitation Payment remittance.
4.3 Hold Harmless and Continuation of Benefits
4.3.1 APS agrees, and shall require its Affiliated Providers to
agree, that in no event, including but not limited to CFIC of Delaware's
nonpayment, insolvency of CHC of Delaware or breach of the Agreement,
shall APS or an Affiliated Provider xxxx, charge, collect a deposit from,
seek compensation, remuneration or reimbursement from, or have any
recourse against A subscriber, a Medicaid Member or persons (other than
CHC of Delaware) acting on his/their behalf for services provided pursuant
to the Agreement. This provision does not prohibit APS or an Affiliated
Provider from collecting fees for non-Medicaid Covered Services delivered
on a fee-for-service basis to Medicaid Members.
G-1-6
4.3.2 APS agrees that in the event of the CHC of Delaware's
insolvency or other cessation of operations benefits to Medicaid Members
will continue through the period for which DHSS has paid CHC of Delaware,
and benefits to Medicaid Members confined in an inpatient facility on the
date of insolvency or other cessation of operations will continue until
their discharge.
4.3.3 APS agrees that the provisions of Section 4.3 shall survive
the termination of this Amendment regardless of the reason for
termination, including CHC of Delaware's insolvency, and shall be
construed to be for the benefit of Medicaid Members.
4.3.4 APS agrees that these provisions supersede any oral or written
contrary agreement now existing or hereafter entered into between the APS
and subscribers or Medicaid Members or persons acting on their behalf
insofar as such contrary agreement relates to liability for payment for,
or continuation of Medicaid Covered Services provided under the terms and
conditions of these clauses.
V. TERM AND TERMINATION OF THIS AMENDMENT
5.1 Term of this Amendment
When executed by both parties, this Amendment shall become effective as of
the Effective Date noted in the Agreement and shall continue for the term set
forth in the Agreement ("Initial Term").
5.2 Renewal of this Amendment
After the Initial Term, this Amendment shall be renewed pursuant to the
terms of the Agreement.
5.3 Termination of this Amendment This Amendment may be terminated:
a) without cause by either party upon 90 days prior written notice to the
other party.
b) automatically and immediately in the event that the DHSS' contract with
CHC of Delaware is terminated.
G-1-7
5.4 Termination of this Amendment for Material Breach
Either party may terminate this Amendment by providing the other
party with a minimum of 60 days prior written notice in the event the
other party commits a material breach of any provision of this Amendment.
Said notice must specify the nature of said material breach. The breaching
party shall have 30 days from the date of the breaching party's receipt of
the foregoing notice to cure said material breach to the reasonable
satisfaction of the non-breaching party. In the event the breaching party
fails to cure the material breach within said 30 day period, this
Amendment shall automatically terminate upon expiration of the 60 day
notice period.
5.5 Obligations Following Termination of this Amendment
If this Amendment is terminated pursuant to Article V of this
Amendment, or in the event of CHC of Delaware's insolvency, the rights of
each party shall terminate, provided, however, that such action shall not
release APS or CHC of Delaware of their obligations with respect to:
a) payments accrued to the APS prior to termination;
b) APS and its Affiliated Providers' agreement not to seek
compensation from Medicaid Members for Medicaid Covered Services
provided prior to termination or insolvency;
c) completion of treatment of Medicaid Members then receiving care
until CHC of Delaware can arrange for the continuation of the
Medicaid Members' care; and
d) completion, in the case of insolvency, of Medicaid Covered
Services for the premium-paid period for which a Medicaid Member has
made prepayment, or on whose behalf prepayment has been made.
For Medicaid Covered Services provided by Affiliated Provider after
the date of termination pursuant to this Section, CHC of Delaware shall
reimburse APS pursuant to the terms of the Participation Agreement between
APS and Affiliated Provider. Further, for administrative services provided
by APS and authorized by CHC of Delaware after the date of termination
pursuant to this Section, CHC of Delaware shall provide APS a
reimbursement amount mutually agreed upon between CHC of Delaware and APS
in writing.
G-1-8
5.6 Effect of Termination of Amendment
In the event this Amendment is terminated pursuant to this Article
V, such termination shall not cause the Agreement to terminate. Further,
the Agreement shall remain in full force and effect unless terminated in
accordance with the terms set forth in the Agreement.
VI. GENERAL PROVISIONS
6.1 Grievances and Complaints
APS shall comply with CHC of Delaware's and DHSS' policies and
procedures regarding the investigation and resolution of grievances and/or
appeals filed by Medicaid Members. Further, if any claim determination
made by CHC of Delaware and/or APS is reviewed by DHSS, both CHC of
Delaware and APS shall be bound by the DHSS determination.
6.2 Roster
APS agrees to allow references to its status as a participating
vendor in marketing and other materials of CHC of Delaware as it relates
to DelawareCare.
6.3 Dispute Resolution and Arbitration
The parties agree to meet and confer in good faith to resolve any
disputes arising during the term of this Amendment through informal
discussions between the parties. If the parties are unable to resolve the
dispute through such discussions, either party may submit a written
complaint to the other party describing and proposing a manner of
resolving that dispute. The party receiving that complaint shall respond
by accepting, rejecting, or modifying that proposal, in writing, within 30
days of the date that it receives the complaint. In the event the parties
are still unable to resolve the dispute, either party may submit the
dispute to final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, to the extent
such rules are not inconsistent with the Agreement. Any award rendered by
the arbitrators shall be final and binding upon the parties hereto, and
judgment upon any such award may be entered in any court having
jurisdiction thereof. The fees and expenses of the arbitrators shall be
borne equally by the parties. Each party shall pay its own fees and costs
relating to any arbitral proceedings, including attorney's fees.
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6.4 Headings
The heading of paragraphs contained in this Amendment are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.5 Successors and Assigns
Neither party may assign or transfer any of its rights or
obligations under this Amendment without the prior written consent of the
other. Further, this Amendment shall be binding upon the parties, their
successors and assigns.
6.7 Access for Government Programs
APS agrees that the Secretary of the Department of Health and Human
Services, CMS, and the Comptroller General of the United States (or their
authorized representatives), until the expiration of 5 years after the
termination of this Amendment, shall have access to and the right to
examine any directly pertinent books, documents, papers, and records
involving the provision of services under this Amendment.
6.8 Applicability
All terms, conditions and requirements pertain solely to the
delivery of Medicaid Covered Services to Medicaid Members. Further, all
terms, conditions and requirements of the Agreement shall be applicable to
the provision of services covered by the Agreement except as otherwise
provided herein. Any conflicts between the provisions of this Amendment
and the provisions of the Agreement are to be resolved in favor of the
terms of this Agreement, with respect to the provision of health care
services to Medicaid Enrollees.
G-1-10
EXHIBIT 1
MEDICAID CAPITATION PAYMENT SCHEDULE
I. MEDICAID CAPITATION PAYMENT AMOUNTS
The Medicaid Capitation Payment CHC of Delaware shall pay APS shall be as
set forth on ATTACHMENT B-2 to the Agreement.
G-1-11
EXHIBIT 2
PERFORMANCE STANDARDS
APS agrees to meet the following performance standards:
a. 100% of initial evaluations must be completed within 24 hours of
contact for emergency cases. 48 hours of contact for urgent cases,
and 7 days of contact for routine cases. Reporting is to be provided
monthly.
b. The call abandonment rate must be less than 5%. Reporting is to be
provided monthly.
c. 100% of emergency calls must be responded to within 5 minutes.
Reporting is to be provided monthly.
d. 100% of Medicaid Member complaints must be resolved within 72 hours.
All Medicaid Member complaints are to be reported monthly.
e. All formal grievances filed by Medicaid Members are to be tracked
and reported monthly.
f. All inpatient re-admissions within 90 days of a previous admission
are to be reported monthly.
g. All appeals are to be tracked and reported monthly.
h: 100% of clean claims must be paid within 15 days. Reporting is to be
provided monthly.
i. Notification to Primary Care Physicians regarding behavioral health
services received by their Medicaid Members must be completed with
100% of Primary Care Physicians for whom Medicaid Member has signed
a valid Consent to Release Information.
j. APS will maintain a network that provides access to Medicaid Members
with access to Participating Providers within 30 miles and 30
minutes of their place of residence, as long as services are
available within the community.
X-0-00
XXX DELAWARE MEDICAID
2/26/99
-------------------------------------------------------------------------------------
PERFORMANCE GUARANTEE DISCUSSION ACTIONS MEASUREMENT RESPONSIBLE
-------------------------------------------------------------------------------------
1. 100% Initial Track via
Evaluations completed Provider Access
within 24 hours of Log. Need
contact for Emergency. drop down table
that breaks out
Delaware Medicaid
members.
-------------------------------------------------------------------------------------
2. Urgent cases
completed within 48
hours.
-------------------------------------------------------------------------------------
3. Routine cases
completed within 7 days
of contact.
-------------------------------------------------------------------------------------
4. Call abandonment Rate
< 5% (Monthly Reporting)
-------------------------------------------------------------------------------------
5. 100% Emergency calls
responded to within 5
minutes (Monthly
Reporting)
-------------------------------------------------------------------------------------
6. 100% Medicaid member
complaints resolved
within 72 hours.
(Reported monthly)
-------------------------------------------------------------------------------------
7. Formal grievances
tracked and reported
monthly.
-------------------------------------------------------------------------------------
8. Inpatient
readmissions within 90
days of a previous
admission reported
monthly.
-------------------------------------------------------------------------------------
9. Appeals tracked and
reported monthly.
-------------------------------------------------------------------------------------
10. 100% Clean claims
paid within 15 days.
Reporting monthly.
-------------------------------------------------------------------------------------
11. Notification to
Primary care Physicians
regarding behavioral
health services received
must be completed with
100% of PCPs for whom
member has signed a valid
consent to release
information.
-------------------------------------------------------------------------------------
12. Provider access to
medicaid members of
participating provider
within 30 miles and 30
minutes of place of
residence, as long as
services are available
within the community.
-------------------------------------------------------------------------------------
G-1-13
ATTACHMENT G-2
AMENDMENT TO
BEHAVIORAL HEALTH SERVICES AGREEMENT
This AMENDMENT TO BEHAVIORAL HEALTH SERVICES AGREEMENT (the "Amendment") is
attached to and made a part of that certain Behavioral Health Services Agreement
effective as of the date hereof (the "Agreement") by and among Coventry Health
Care, Inc. ("CHC"), the health maintenance organization subsidiaries of CHC
including Coventry Health Care of Florida, Inc. (the "HMO Subsidiaries" and
"HMO," respectively), APS Healthcare Bethesda, Inc. ("APS"), and APS Healthcare,
Inc. ("APSH").
WHEREAS, CHC, HMO and APS are currently bound by the Agreement; and
WHEREAS, HMO is an HMO Subsidiary (as defined in the Agreement) of CHC for whom
APS has agreed, under the terms of the Agreement, to arrange for access to
mental health and substance abuse services for HMO Members; and
WHEREAS, HMO has contracted with the United States Department of Health and
Human Services to provide Medicare MHSA Covered Services (as hereinafter
defined) to Medicare Members (as hereinafter defined); and
WHEREAS, APS desires to participate in HMO's Medicare Program; and
WHEREAS, HMO and APS mutually and respectively desire to amend the Agreement to
allow for APS's provision of Medicare MHSA Covered Services to Medicare Members.
NOW THEREFORE, in consideration of the mutual promises of the parties, the
sufficiency of which is hereby acknowledged, the parties agree as follows:
1 ADDITIONAL DEFINITIONS
The following terms, in addition to the terms set forth in the Agreement,
shall he used for purposes of this Amendment:
1.1 "CMS" is the Centers for Medicare and Medicaid Services, an
administrative agency of the United States Government.
1.2 "Copayment" means the payment a Medicare Member makes at the time
Medicare Covered Services are rendered in accordance with the terms
of a Medicare Member's Evidence of Coverage.
1.3 "Evidence of Coverage" refers to the written document that:
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a) explains the services and benefits the Medicare Program
covers; and
b) defines the rights and responsibilities of Medicare Members
and HMO.
The term "Benefit Contract" as used in the Agreement shall include
the Evidence of Coverage.
1.4 "Medicare Capitation Payment" means a pre-negotiated monthly payment
described in ATTACHMENT B-3 (designated therein as "Jacksonville
Medicare") of the Agreement that HMO shall make to APS for each
Medicare Member. The term "Capitation Payment" as used in the
Agreement shall include a Medicare Capitation Payment.
1.5 "Medicare Covered Services" means those health care services
described in the Evidence of Coverage and to which Medicare Members
are entitled under the terms of the Medicare Program.
1.6 "Medicare Member" means a person who is enrolled in HMO's Medicare
Program. The term "Member" as used in the Agreement shall include a
Medicare Member.
1.7 "Medicare MHSA Services" means those mental health and substance
abuse services and benefits described in the Evidence of Coverage
and to which Medicare Members are entitled under the terms of the
Medicare Program.
1.8 "Medicare Program" means the health care services plan and the
health maintenance organization program HMO established in
accordance with Section 1876 of Title XVIII of the Social Security
Act, as amended.
X-0-0
0 XXXXXXXXXXX XX XXX
2.1 Provision of Medicare MHSA Covered Services
APS shall arrange for the provision of Medicare MHSA Covered
Services to Medicare Members. APS further agrees that it shall
require its MHSA Providers not to differentiate or discriminate in
the treatment of Medicare Members on the basis of race, sex, age,
religion, place of residence, health status or source of payment.
2.2 Compliance
2.2.1 APS agrees to use its best efforts to require MHSA Providers
to maintain such records and provide such information to HMO,
CMS, and the state of Florida as may be necessary to comply
with all rules and regulations adopted thereby. APS shall use
its best efforts to cause the MHSA Provider to retain such
records for such time as is required by appropriate
regulations.
2.2.2 APS agrees to use its best efforts to require MHSA Providers
not to surcharge Medicare Members. A surcharge is any
additional fee, other than the applicable Copayments, that is
charged to a Medicare Member for Medicare Covered Services.
2.2.3 APS agrees to cooperate with and be bound by, and to use its
best efforts to require MHSA Providers to cooperate with and
be bound by, all of the rules and regulations of the HMO with
respect to the Medicare Program, including, but not limited
to, HMO's quality assurance program, member grievance system,
utilization management program, or Medicare appeals program.
2.2.4 APS shall use its best efforts to cause each MHSA Provider to
comply with the terms and conditions of this Amendment
applicable to the delivery of Medicare MHSA Covered Services
to Medicare Members.
2.3 Collection of Charges from Medicare Members
APS shall require MHSA Providers to collect applicable Copayments
from Medicare Members upon the rendering of service. With the
exception of Copayments, APS shall require MHSA Providers not to
charge, collect, or receive payment from any Medicare Member for
Medicare MHSA Covered Services provided pursuant to this Amendment.
Upon discovery of collection activity, HMO shall give 10 days notice
to APS and APS shall in turn notify the applicable
G-2-3
MHSA Provider to cease such collection activity. If an MHSA Provider
fails to cease such activity during that time, APS will terminate
its Participation Agreement with such MHSA Provider specific to the
Medicare Program and take all other appropriate action consistent
with the terms of this Amendment to eliminate such collections,
including requiring MHSA Providers to return to Medicare Members all
sums collected. The parties agree that MHSA Providers shall not
maintain any action at law or equity against a Medicare Member to
collect any sums owed by HMO, including in the event of HMO's
insolvency. Nothing in this Amendment, however, shall be construed
to prevent an MHSA Provider from providing non-Medicare Covered
Services on usual and customary fee-for-service basis to Medicare
Members provided the Medicare Member has agreed in writing to be
financially liable for such non-Covered Services prior to the
rendering of the non-Covered Services.
2.4 Collection of Payment from Third Party Where Medicare is not the
Primary Payor
Medicare is not the primary payor for Medicare MHSA Covered Services
where the Medicare Member is entitled to benefits under a state or
federal worker's compensation law, an automobile medical or no-fault
insurance policy, or an employer group health plan. In such
instances, the HMO may charge the insurance carrier, employer or
other entity that is liable for such services or the Medicare
Member, to the extent that the Medicare Member has received, or may
be eligible to receive, compensation for such services. APS agrees
to cooperate with HMO in collecting any third party payments payable
to HMO. If Medicare is not the primary payor, collection of payment
will be handled as a Coordination of Benefits pursuant to the
Agreement and HMO policies.
2.5 Required Notifications
2.5.1 APS shall require MHSA Providers to notify APS of any action
to revoke, restrict, or suspend such MHSA Provider's license.
2.5.2 APS agrees to provide CHC and HMO with a minimum of 10 days
advance notice in the event of termination, cancellation, or
reduction of the professional liability coverage required
pursuant to the terms of this Amendment.
2.5.3 APS shall require MHSA Providers to immediately notify APS in
the event an MHSA Provider's medical staff membership and/or
clinical privileges are modified, suspended, or revoked,
regardless of whether such action occurs at a Participating
Provider hospital or non-Participating Provider hospital.
G-2-4
2.6 Documentation
APS shall require MHSA Providers to maintain medical records, for
each Medicare Member, which records shall document the existence of
any advance directive in accordance with the Patient Self
Determination Act, as amended from time to time.
2.7 Procedures
APS agrees to provide policies and procedures to MHSA Providers for
such MHSA Provider's participation in HMO's Medicare Program.
Further, APS shall provide MHSA Providers with prior written notice
in the event of any changes to such procedures.
2.8 Subcontracts
APS agrees to maintain its books, records, Participation Agreements,
and other documentation of Medicare MHSA Covered Services rendered
to Medicare Members at APS's principal place of business in the
State of Maryland. Further, upon HMO's or CHC's request and within
20 days of such request, APS agrees to provide CHC and/or HMO access
to any Participation Agreement entered into by and between APS and
MHSA Providers.
2.9 Utilization Data Reports
APS shall provide HMO with periodic reports concerning utilization
of Medicare MHSA Covered Services and claims paid by APS for
Medicare Members. Such reports shall be provided to CHC and HMO in a
mutually agreeable format, and shall allow HMO to monitor the
appropriateness of payments made and Medicare MHSA Covered Services
received by Medicare Members.
G-2-5
3. OBLIGATIONS OF HMO
3.1 Identification Cards and Verification of Eligibility
HMO shall provide appropriate identification cards for Medicare
Members. The cards will assist APS and MHSA Providers in determining
the level of Copayments to be collected from a Medicare Member, as
well as a toll-free telephone number for verification of eligibility
and Utilization Review requirements. HMO agrees to use its
commercially reasonable efforts to include APS's phone number on
identification cards for Medicare Members and to use its
commercially reasonable efforts to include instructions for Medicare
Members to contact APS in order to access Medicare MHSA Covered
Services.
3.2 Procedures
HMO shall provide APS with a provider manual which describes the
operational policies and procedures that APS and MHSA Providers must
comply with as a condition of participation in HMO's Medicare
Program. Further, HMO shall provide APS with prior written notice in
the event of any changes to the procedures, including, but not
limited to, changes in the benefits covered under a Medicare
Member's Evidence of Coverage.
3.3 Notification of Benefit Changes
Prior to the effective date of this Amendment and any renewal term
of this Amendment, HMO shall provide Copies of Medicare Member's
Evidence of Coverage to APS, which shall describe Medicare Covered
Services.
4 COMPENSATION
4.1 Capitation Payment
HMO shall remit to APS the Medicare Capitation Payment amount set
forth on ATTACHMENT B-3 of the Agreement pursuant to the terms of
the Agreement and this Amendment. Further, APS agrees to accept
payment from HMO as payment in full for Medicare MHSA Covered
Services and shall not xxxx Medicare Members except as set forth in
SECTION 4.2 of this Amendment.
G-2-6
4.2 Hold Harmless and Continuation of Benefits
4.2.1 APS agrees, and shall require MHSA Providers to agree, that in
no event, including but not limited to, HMO's nonpayment,
HMO's insolvency, or a breach of this Agreement, shall APS or
an MHSA Provider xxxx, charge, collect a deposit from, seek
compensation, remuneration or reimbursement from, or have any
recourse against, a Medicare Member or persons (other than the
HMO) acting on his/their behalf for services provided pursuant
to this Amendment. This provision does not prohibit APS or an
MHSA Provider from collecting Copayments, as specifically
provided in the Evidence of Coverage, or fees for non-Medicare
covered Services delivered o a fee-for-service basis to
Medicare Members provided the Medicare Member has agreed in
writing to be financially liable for such non-Covered Services
prior to the rendering of the non-Covered Services.
4.2.2 APS agrees that in the event of the HMO's insolvency or other
cessation of operations benefits to Medicare Members will
continue through the period for which premium has been paid,
and that benefits to Medicare Members confined in an inpatient
facility on the date of insolvency or other cessation of
operations will continue until the Medicare Member's
discharge.
4.2.3 APS agrees that this SECTION 4.2 shall survive the termination
of this Amendment regardless of the reason for termination,
including HMO's or APS's insolvency, and shall be construed to
be for the benefit of the Medicare Members.
4.2.4 APS agrees that this SECTION 4.2 supersedes any oral or
written contrary agreement now existing or hereafter entered
into between the APS and Medicare Members or persons acting on
their behalf insofar as such contrary agreement relates to
liability for payment for, or continuation of Medicare MHSA
Covered Services provided under the terms and conditions of
this Amendment.
4.2.5 HMO shall not make any modifications, additions, or deletions
to the provisions of this SECTION 4.2 without prior written
approval of the Secretary of Health and Human Services or
his/her designee.
X-0-0
0 XXXX XXX XXXXXXXXXXX OF THIS AMENDMENT
5.1 Term of this Amendment
When executed by both parties, this Amendment shall become effective
as of the Effective Date noted in the Agreement and shall run
contemporaneously with the Agreement ("Initial Term").
5.2 Renewal of this Amendment
This Amendment shall be renewed pursuant to the terms of the Agreement.
5.3 Termination of this Amendment
This Amendment may be terminated:
a) immediately upon written notice by CHC in the event that APS's
good standing in the federal Medicare program is revoked,
suspended, or restricted; or
b) automatically and immediately in the event that the CMS's
contract with HMO is terminated.
5.4 Obligations Following Termination of this Amendment
If this Amendment is terminated pursuant to SECTION 5.3 of this
Amendment, or in the event of HMO's insolvency, the rights of each
party shall terminate, provided, however, that such action shall not
release APS or HMO of their obligations with respect to:
a) payments accrued to the APS prior to termination;
b) APS and MHSA Providers' agreement not to seek compensation
from Medicare Members for Medicare MHSA Covered Services
provided prior to termination or insolvency;
c) completion of treatment of Medicare Members then receiving
care until continuation of the Medicare Members' care can be
arranged by HMO; and
d) completion, in the case of insolvency, of Medicare MHSA
Covered Services for the premium-paid period for which a
Medicare Member has made prepayment, or on whose behalf
prepayment has been made.
G-2-8
For Medicare MHSA Covered Services provided by an MHSA Provider
after the date of termination pursuant to this SECTION 5, HMO shall
reimburse APS pursuant to the terms of the Participation Agreement
between APS and MHSA Provider. Further, for administrative services
provided by APS after the date of termination pursuant to this
Section, HMO shall provide APS a reimbursement amount mutually
agreed upon between HMO and APS in writing.
5.5 Effect of Termination of Amendment
In the event this Amendment is terminated pursuant to this SECTION
5, such termination shall not cause the Agreement to terminate.
Further, the Agreement shall remain in full force and effect unless
terminated in accordance with the terms set forth in the Agreement.
6 GENERAL PROVISIONS
6.1 CMS Grievance Determination
If any claim determination made by HMO is reviewed by CMS, both HMO
and APS shall be bound by the CMS determination.
6.2 Headings
The heading of paragraphs contained in this Amendment are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Amendment.
6.3 Third Party Beneficiary
CHC and APS agree that HMO is a third party beneficiary to this
Amendment and maintain rights as third party beneficiaries as
described in this Amendment. This Amendment shall not relieve HMO
from its statutory responsibility to assess and oversee the
provision of health care services to Medicare Members and Members.
6.4 Applicability
All terms, conditions and requirements in this Amendment pertain
solely to the delivery of Medicare MHSA Covered Services to Medicare
Members. Further, all terms, conditions and requirements of the
Agreement shall be applicable to the provision of Medicare MHSA
Covered Services except as otherwise provided herein. Any conflicts
between the provisions of this Amendment and the provisions of the
Agreement are to be resolved in favor of the terms of this
Amendment, with respect to the provision of Medicare MHSA Covered
Services to Medicare Members.
G-2-9
ATTACHMENT G-3
SPECIAL TERMS RELATING TO MHSA SERVICES
RELATING TO THE MEDICARE+CHOICE PROGRAM
1. GOVERNMENT RIGHT TO INSPECT. APS shall give the U. S. Department of
Health and Human Services (HHS) and U. S. General Accounting Office (GAO), and
their authorized designees, the right to audit, evaluate and inspect all books,
contracts, medical records, patient care documentation and other records of APS
relating to this Agreement with CHC and to services furnished to the
Medicare+Choice Program ("M+C") Members and other Medicare Members (hereinafter
"Advantra Members") during the term of the Agreement and for a period of 6 years
following termination or expiration of the Agreement for any reason, or until
completion of an audit, whichever is later, unless such time frame is extended
pursuant to 42 C. F. R. ss. 422.502(e)(4) (such as in the event of fraud). This
provision shall survive termination of the Agreement.
2. PRIVACY/CONFIDENTIALITY. APS agrees to safeguard the privacy of any
information that identifies a particular Advantra Member in accordance with
federal and state laws and Plan policy; and maintain all "Advantra" Members'
records in an accurate and timely manner.
3. NON-DISCRIMINATION BASED ON HEALTH STATUS. APS shall not deny, limit or
condition coverage or the furnishing of health care services or benefits to
Advantra Members based on health factors, such as medical condition (including
mental as well as physical illness), claims experience, receipt of health care,
medical history, genetic information, evidence of insurability (including
conditions arising out of acts of domestic violence), and disability. See also
APS' non-discrimination obligations as set forth in Section 13 below.
4. IDENTIFICATION OF ADVANTRA MEMBERS WITH COMPLEX OR SERIOUS MEDICAL
CONDITIONS. APS shall cooperate with CHC's procedures for identifying, assessing
and establishing a treatment plan for Advantra Members with complex or serious
medical conditions.
5. ACCESS TO BENEFITS. APS shall arrange for MHSA Services to Advantra
Members consistent with requirements of the M+C Program statutes, regulations,
CMS pronouncements and CHC's policies.
6. HEALTH ASSESSMENT. APS shall cooperate with CHC in furnishing a health
assessment of all new Advantra Members within 90 days of the effective date of
enrollment of each such person.
7. PROFESSIONALLY RECOGNIZED STANDARDS. APS shall arrange for Covered
Services to Advantra Members in a manner consistent with professionally
recognized standards of health care.
8. HOLD HARMLESS/MEMBER INDEMNIFICATION. APS and APSH agree to look solely
to CHC for payment for services furnished to Advantra Members unless explicitly
notified by CHC for reason of coordination of benefits or subrogation. APS and
APSH shall not xxxx, charge, collect a deposit from, seek compensation,
remuneration or reimbursement from, or have claim or recourse against an
Advantra Member or anyone acting on behalf of an Advantra Member, under any
circumstance unless explicitly approved for reason of coordination of benefits
or subrogation. This provision shall not prohibit collection of copayments on
the HMO Subsidiaries' or Operating Units' behalf made in accordance with the
terms of the applicable Evidence of Coverage between the HMO Subsidiary or
Operating Unit and the Member. In addition, APS and APSH agree to seek no
recourse for payment from any Advantra Member for the reason of plan insolvency.
APS and APSH
G-3-1
acknowledge that Advantra Members are third party beneficiaries to this clause.
APS and APSH further agree that-this paragraph shall survive the termination (or
expiration) of this Agreement regardless of cause of such termination, and that
they have not, and will not, enter into any agreement with an Advantra Member or
any other party contrary to this paragraph. This provision shall not prohibit
collection of charges for services which are not Covered Services as defined in
the relevant Evidence of Coverage provided that the Covered Person has been
informed in advance of delivery of such services that such services are not
covered and the Covered Person patient has agreed in writing, in a form
substantially similar to the one attached hereto, to accept responsibility for
payment for such services. Nor shall this provision prohibit payment for any
Covered Services delivered after expiration of benefits under the relevant
Evidence of Coverage. APS and/or APSH shall require MHSA Providers to submit to
CHC any Advantra Member's written acknowledgement to accept responsibility for
non-covered services provided by MHSA Providers.
Any modifications, additions or deletions to the provisions of this
section shall become effective on a date no earlier than fifteen days after the
Commissioner of Insurance of the relevant state of has received written notice
of such proposed changes.
9. CONTINUATION OF BENEFITS. APS shall continue to arrange for and provide
Covered Services to Advantra Members who are hospitalized on the date that
Plan's M+C contract with CMS terminates or expires, or if the HMO Subsidiary
becomes insolvent, through the date of each such Member's discharge or for the
remainder of the period for which the Advantra Member's Medicare premium has
been paid, and such continuation of services shall be made in accordance with
the terms and conditions of the Agreement as it may be amended and in effect at
the time, including but not limited to the compensation rates and terms set
forth therein. This paragraph shall survive termination of the Agreement.
10. DELEGATION. If CHC in a separate contract has delegated to APS certain
of CHC's M+C obligations, APS shall perform such obligations as set forth
between the parties and in compliance with all applicable Medicare and other
federal laws, regulations and Governmental pronouncements and the terms of this
Amendment. In the event that CHC, an HMO Subsidiary, an Operating Unit or CMS
determine that such delegated functions have not been performed satisfactorily,
or if requisite reporting and disclosure requirements are not otherwise fully
met in a timely manner, CHC may initiate one or all of the following remedial
measures to effectuate CHC's ultimate responsibility to its HMO Subsidiaries and
Operating Units for the performance of all M+C requirements:
a. APS shall develop written action plans to describe how APS shall
correct the standards which do not meet compliance requirements within two weeks
of receipt of written notice of non-compliance by CHC. APS shall maintain its
right to demonstrate its compliance with such standards. In the event of a
dispute between APS and CHC regarding the achievement of such compliance, either
party may refer to the CMS regulations and interpretation, and request a formal
written clarification from CMS.
b. Written action plans shall include specific timeframes for completion,
and shall identify APS staff members responsible for ensuring compliance with
such standards.
c. CHC may re-audit APS on site or via paper documentation in order to
ensure compliance with action plans. CHC must give APS at least two weeks notice
prior to an on-site audit.
G-3-2
d. CHC may revoke delegation of activities to APS at any time, in the
event there is a finding that APS is not conducting such activities in
compliance with CHC's reasonable expectations, or NCQA or CMS standards.
If the Agreement or another written agreement between CHC and APS
delegates to APS the responsibility for selection and/or credentialing of
providers, the HMO Subsidiaries and Operating Units nonetheless retain the right
to approve, suspend, or terminate any individual provider selected or
credentialed by APS. APS' credentialing process shall be subject at all times to
review and approval by HMO Subsidiaries or Operating Units. CHC shall also have
the right to audit APS' credentialing process from time to time as CHC deems
necessary and appropriate.
11. PHYSICIAN INCENTIVE PLANS. APS must include in all contracts with MHSA
Providers and "downstream" entities a description of all payment and incentive
arrangements between such parties. APS must comply, and shall require that all
MHSA Providers and "downstream" entities with which APS contracts, accurately
disclose(s) such payment and incentive arrangements to CHC and CMS upon request
(and in the format requested). APS agrees to require that all such payment and
incentive arrangements shall be structured consistent with the physician
incentive plan requirements and limitations imposed by the Medicare+Choice
Program as set forth in 42 C. F. R. xx.xx. 422.208 and 422.210.
12. PROMPT PAYMENT. APS agrees to use reasonable efforts to adjudicate
CHC's clean claims within sixty (60) days from the date APS receives the claim
as long as the claims are for services (a) authorized by CHC; (b) provided to an
eligible Advantra Member; (c) billed according to arrangements set forth in this
Agreement and CHC policy; and (d) have no third party involvement.
13. COMPLIANCE WITH FEDERAL AND STATE LAWS. APS agrees to comply, and to
require all MHSA Providers and "downstream" entities with which APS contracts to
comply, with all laws applicable to individuals and entities receiving Federal
funds and all other applicable Federal and State laws, regulations and
governmental issuances, including but not limited to those governing
participation in the Medicare+Choice Program, Title VI of the Civil Rights Act
of 1964, the Age Discrimination Act of 1975, the Americans with Disabilities
Act, and the Rehabilitation Act of 1973.
14. SUBMISSION OF ENCOUNTER DATA. APS shall, and shall require all MHSA
Providers and "downstream" entities with which APS contracts to, submit to CHC
in the form prescribed by CHC, all data, including medical records data,
required to be submitted in accordance with 42 C. F. R. 422.502(a)(8), 422.257,
and 422.502(l)(3). APS and APSH hereby certify, and shall require that each MHSA
Provider and "downstream" entity with which APS contracts certifies, as to the
completeness, truthfulness and accuracy of such data submitted to CHC by APS or
such MHSA Provider or "downstream" entity.
15. EXTERNAL REVIEW. APS agrees to cooperate, and to require all MHSA
Providers and "downstream" entities with which APS contracts to cooperate, with
all independent quality review and improvement organization activities required
by CMS and or CHC pertaining to the provision of services for Advantra Members.
G-3-3
16. COMPLIANCE WITH MEDICAL MANAGEMENT. APS agrees to comply, and shall
require all MHSA Providers and "downstream" entities with which APS contracts to
comply, with CHC's and its HMO Subsidiaries and Operating Units' medical
policies, QA programs and medical management programs.
17. TERMINATION WITHOUT CAUSE. In the event that APS and/or APSR or CHC
seeks to terminate the Agreement other than for "cause" as defined in the
Agreement, such party seeking to terminate shall provide the other party with at
least 60 days advance written notice. The foregoing shall not be deemed or
construed as affording CHC a right to terminate the Agreement other than
pursuant to Section 15 of the Agreement, as it may be amended from time to time.
18. EXCLUSION OF CERTAIN PERSONS. APS and APSH shall not; and shall
require that no MHSA Provider or "downstream" entity with which APS contracts
shall, employ or contract for the provision of health care, utilization review,
medical social work or administrative services with any individual excluded from
participation in Medicare under Section 1128 or 1128A of the Social Security
Act. APS and APSH hereby certify that no such excluded person currently is
employed by or under contract with APS and/or APSR or with any MHSA Provider or
"downstream" entity with which APS contracts relating to the furnishing of these
services to Advantra Members.
19. COMPLIANCE WITH APPEALS PROCEDURES REQUIREMENTS. APS shall, and shall
require that all MHSA Providers and "downstream" entities with which APS
contracts to cooperate and comply with all requirements of Medicare, the HMO
Subsidiaries and Operating Units regarding the processing of Advantra Member
appeals, including the obligation to provide information (including medical
record and other pertinent information) to Plan within the time frame reasonably
requested for such purpose. Information requested from APS for purposes of
processing a Member's request for immediate PRO review of noncoverage of
inpatient hospital care shall be provided to HMO Subsidiaries or Operating Units
within one (1) full business day immediately following the day such HMO
subsidiary or Operating Unit makes the request.
20. EFFECTIVENESS OF CONTRACTS AND AMENDMENTS. No new contract with APS
and/or APSH, or provider or "downstream" entity with which APS and/or APSR
contracts, shall be effective unless signed and dated by the relevant parties.
The foregoing shall not apply to amendments to existing contracts which shall be
signed and dated by APS or APSH, as applicable. The parties agree to comply with
the laws, regulations and other requirements related to the Medicare+Choice
Program. The parties further agree to meet and discuss in good faith any change
or amendment to this Agreement that is required due to a change in law,
regulation or other requirement relating to the Medicare+Choice Program. The
parties shall use their best efforts to reach agreement on an amendment within
thirty (30) days of commencing negotiation, or by the effective date of the
change in the Medicare+Choice Program that necessitated the amendment if later.
However, no modification or amendment to this Agreement shall be effective
unless reduced to writing and agreed to by APS, APSH and CHC.
21. COMPLIANCE WITH POLICIES, PROCEDURES AND MANUALS. APS and MSR agree,
and shall require all MHSA Providers and "downstream" entities with which APS
contracts to agree, to comply with all applicable CHC policies, procedures and
manual provisions, which specifically include but are not limited to, where
applicable, CHC's policies governing notice of noncoverage.
G-3-4
22. CLAIMS FOR PAYMENT. As required by 42 C. F. R. ss.1001.952(m)(l)(i),
in the case of services furnished to Advantra Members, APS and/or MSR shall not
claim payment in any form from CMS or from any other agency of the United States
or from any state for items and services furnished in accordance with this
Agreement, except as may be approved by CMS or a State agency, nor shall APS
and/or APSH otherwise engage in any shifting of costs or seek increased payments
from the Medicare+Choice Program or any State health care program as a result of
furnishing such services to Advantra Members.
23. Y2K COMPLIANCE. APS and APSH shall ensure, and shall require for all
MHSA Providers and "downstream" entities with which APS contracts, that all
necessary actions and system changes to internal mission-critical systems have
been made and tested so that they are Year 2000 compliant. Year 2000 compliant
means that APS and/or APSH's information technology accurately processes date
and time data (including, but not limited to, calculating, comparing, and
sequencing) from, into, and between the nineteenth, twentieth and twenty-first
centuries, and the years 1999 and 2000 and leap year calculations. Further, Year
2000 compliant information technology, when used in combination with other
information technology, must accurately process date and time data if the other
information technology property exchanges date and time data with it.
Mission-critical systems are defined as those systems and interfaces which
materially affect APS' and/or APSH's accurate and timely performance of the
functions under the Agreement.
24. HEALTHCARE INTEGRITY AND PROTECTION DATA. APS shall require MHSA
Providers to report in writing to CHC within thirty (30) calendar days of the
MRSA Provider's knowledge any and all civil judgments and "other adjudicated
actions or decisions" against the MHSA Provider related to the delivery of any
health care item or service (regardless of whether the civil judgment or other
adjudicated action or decision is the subject of a pending appeal).
"Other adjudicated actions or decisions" means any action taken by a
governmental entity or a health plan against a health care provider, supplier or
practitioner based on acts or omissions that affect or could significantly
affect the delivery or payment of a health care item or service. An action taken
following adequate notice and hearing requirement that meets the standards of
due process set out in section 412(b) of the Health Care Quality Improvement Act
(42 U. S. C. ss. 11112(b)) also would qualify as a reportable action under this
definition. The fact that the MHSA Provider elects not to use the due process
mechanism provided by the authority bringing the action is immaterial, as long
as such a process is available to the subject before the adjudicated action or
decision is made final.
In compliance with CHC's policy on the reporting of Health Care Integrity
and Protection Data, APS and/or APSH shall report to CHC in writing within
thirty (30) calendar days of APS and/or APSR's knowledge the information set
forth in the CHC Manual.
25. INCONSISTENCIES. In the event of any inconsistencies between this
Attachment G-3 and any provision of the Agreement with respect to Advantra
Members, the provisions of this Attachment shall govern.
26. SUBCONTRACTS AND "DOWNSTREAM" ENTITIES. APS shall ensure that all of
the requirements set forth in this Attachment that are applicable to MHSA
Providers and/or "downstream" entities with whom APS contracts or any downstream
entity to whom APS delegates any of its obligations under the Agreement (as
authorized pursuant to this Agreement with CHC) shall be incorporated into APS'
contract with such provider or entity. APS shall enforce those provisions in its
contracts to the fullest extent of the law.
G-3-5
[PLAN NAME:
ADVANTRA MEMBER AUTHORIZATION TO PERFORM NON-COVERED SERVICES
I have requested that my provider, _____________, furnish me with the following
(Name)
services:
My provider has informed me that the services listed above are not covered under
my [PLAN NAME] Advantra Evidence of Coverage. My signature below indicates that
I agree to accept responsibility for payment for such non-covered services and
hold harmless [PLAN NAME] for such payment.
---------------------------- --------------------------
SIGNATURE OF PATIENT DATE
----------------------------
PRINTED NAME OF PATIENT
G-3-6
ATTACHMENT H
PRINTED MATERIALS
See attached EAP Inventory.
6J97
EAP Inventory
Form #Form Name Quantity Available
--------------------------------------------------------------------------------
PH 848-1 EE Brochure 605295
PH 1003 Stuffer-Legal 409028
PH 1004 Stuffer-Parenting 409320
PH 1005 Stuffer-Alcohol 316713
PH 1006 Stuffer-Relationships 325226
PH 1289 Stuffer-Childcare 20946 1
PH 1290 Stuffer-Eldercare 2098
PH 1613 Stuffer-Parenting 154
PH 1614 Stuffer-Alcohol 189
PH 1639 ER Question Letter 97382
PH 1827 ER Brochure-Nippon 3787
PH 1829 EE Brochure Raytheon Wichita XXX XXXXX, PHC, WICHITA
PH 1830 EE Brochure Raytheon Phone Only XXXXX XXXXXXX, PBHC PH
0000 XX Xxxxxxxx Xxxxxxx < 200 16999
PH 1946 EAP Brochure (revised PH 848-I) 847150
PH 1948 Over-extended brochure 849989
(revised PH 1003)
PH 1949 Trapped Brochure (revised PH 1005) 849998
PH 1950 Stranger Brochure (revised PH 1004) 99990
PH 1951 No 2 Alike Brochure (revised PH 1006) 99990
PH 1952 Juggling Brochure (revised PH 1289) 99924
PH 1953 Squeezed Brochure (revised PH 1290) 24000
PH 1962 Over-extended Brochure Raytheon 24848
PH 1964 Stranger Brochure Raytheon 12481
PH 1966 Trapped Brochure Raytheon 25024
PH 1968 No 2 Alike Brochure Raytheon 24990
PH 1970 Juggling Brochure Raytheon 10903
PH 1972 Squeezed Brochure Raytheon 28189
If the whole order was sent to CHC, it will not be listed at the R/S Center.
H-1
ATTACHMENT I-1
AGREEMENT FOR THE DELEGATION OF CREDENTIALING ACTIVITIES
COVENTRY HEALTH CARE, INC.
AND
APS HEALTHCARE BETHESDA, INC.
This Delegation of Credentialing Activities Agreement ("Delegation Agreement")
is made and entered into by and between Coventry Health Care, Inc. ("CHC") and
APS Healthcare Bethesda, Inc. ("APS") as of the Effective Date set forth below.
I. RECITALS
1.1 WHEREAS, CHC and APS are currently bound by a Behavioral Health
Services Agreement (hereinafter referred to as "Agreement") effective September
26, 1997 under which APS has agreed to provide mental health and substance abuse
services for CHC's HMO Subsidiaries;
1.2 WHEREAS, APS has expertise in the credentialing of mental health and
substance abuse providers;
1.3 WHEREAS, those HMO Subsidiaries participating under the Agreement
desire to delegate credentialing activities to APS as set forth herein; and
1.4 WHEREAS, CHC and APS mutually and respectively desire to amend the
Agreement to allow for the provision of Credentialing Services to such HMO
Subsidiaries.
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein and other good value and consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties have mutually covenanted and agreed as
follows:
II. DEFINITIONS
In addition to those definitions set forth in the Agreement, the following
definitions shall have the meaning ascribed hereto:
2.1 "Effective Date" means the date upon which CHC has notified APS in
writing of CHC's approval of APS's Credentialing Activities pursuant to the
terms of Section 3.2 of this Delegation Agreement or / March 30, 1998, whichever
is later.
2.2 "Credentialing Criteria" means the standards and processes for
credentialing and/or recredentialing Affiliated Providers, as described in APS's
Credentialing Activities, required for the accreditation of managed care
organizations by NCQA or other recognized accrediting entity.
2.3 "Credentialing Activities" means the methods and processes whereby APS
determines whether Affiliated Providers meet the Credentialing Criteria, both
initially and on a continuing basis.
2.4 "Credentialing Services" means those services provided by APS to each
HMO Subsidiary pursuant to APS's Credentialing Activities as set forth in
Article IV of this Delegation Agreement.
I-1-1
2.5 "NCQA" means the National Committee for Quality Assurance.
III. DELEGATION AND CREDENTIALING ACTIVITIES APPROVAL
3.1 Delegated Activities
As of the Effective Date, the parties have agreed that the following
Credentialing Services shall be delegated by each HMO Subsidiary to APS for
those Affiliated Providers who render Covered Services to the Members of said
HMO Subsidiary:
a) Primary Source Verification.
b) Request for Information from recognized licensing and
monitoring organizations.
c) Query of the National Practitioner Data Bank.
d) Obtain and review completed application.
e) Site review to all high volume Affiliated Providers.
f) Quality assessment of health delivery organizations including,
but not limited to, hospitals, home health agencies, and
ambulatory care facilities.
3.2 Submission of Credentialing Activities to CHC.
3.2.1 APS represents and warrants that its Credentialing Criteria
shall meet or exceed all regulatory and accrediting body requirements
including those of the NCQA and CHC.
3.2.2 APS agrees to permit an audit of its Credentialing Activities
prior to, or on the Effective Date of this Delegation Agreement and
annually thereafter. CHC agrees to review and notify APS of its approval
or disapproval of APS's Credentialing Activities within thirty (30) days
of CHC's review of such activities.
3.2.3 It is understood and agreed that the delegated activities set
forth in Section 3.1 of this Delegation Agreement shall not be effective
until CHC has notified APS in writing of CHC's approval of APS's
Credentialing Activities. Once approved, APS will implement the
Credentialing Activities and will submit the Credentialing Activities for
review on each annual anniversary of the Effective Date of this Delegation
Agreement.
IV. CREDENTIALING SERVICES
4.1 Credentialing Activities
APS agrees to review all Affiliated Providers using the Credentialing Criteria
prior to the effective date of such Affiliated Provider's Participation
Agreement with APS. Thereafter, APS shall recredential all Affiliated Providers
using the Credentialing Criteria at two-year intervals.
4.2 APS Reports to CHC
APS agrees to submit quarterly reports to CHC, for each HMO Subsidiary, which
describe the size of the network,
I-1-2
number of Affiliated Providers who have joined and/or terminated in the previous
quarter, and other such information as may be agreed upon by the parties. In the
event that the information contained in such quarterly reports indicates areas
requiring corrective action, APS will describe the planned corrective action and
the results of any previous corrective action taken. If the corrective action
plan described in APS's quarterly report is not acceptable to CHC, the parties
agree to meet and confer to determine a mutually acceptable corrective action
plan. Further, within thirty (30) days of each annual anniversary of the
Effective Date of this Delegation Agreement, APS agrees to submit a summary
report to CHC, describing Credentialing Services provided to the HMO
Subsidiaries during the previous year which may be included in the annual
Quality Improvement evaluation.
4.3 Incorporation of Quality Management Program of HMO Subsidiaries
CHC agrees to provide APS with appropriate information regarding Affiliated
Providers, as may be obtained from each HMO Subsidiary's quality management
activities. APS shall incorporate said information into APS's recredentialing
activities pursuant to APS's Credentialing Activities. Such information shall
include but not be limited to, data from Member complaints, utilization
management, grievances, and Member satisfaction surveys.
4.4 Annual Audit of Credentialing Files
On an annual basis, CHC shall conduct an audit of the lesser of five percent
(5%) or fifty (50) of the credentialing files for the Affiliated Providers
associated with the HMO Subsidiaries. The written results of such audit will
xxxx. submitted to APS and the applicable HMO Subsidiary within sixty (60) days
of the date of such audit ("Audit Report").
4.5 Corrective Action Plan
In the event CHC identifies any issues requiring correction in the Audit Report,
APS shall provide CHC with a corrective action plan acceptable to CHC. APS shall
submit progress reports on its ongoing action plans to correct any deficiency
identified by CHC in the Audit Report in a mutually agreed upon time frame. Such
progress report(s) shall be submitted no later than. thirty (30) days following
APS's receipt of the annual Audit Report. APS's corrective action plans shall
include, but not be limited to, all areas identified by CHC for focused review
by APS and changes in data collection or reporting procedures.
4.6 Approval of Affiliated Providers
The appropriate HMO Subsidiary shall have the right to approve new MHSA
Providers and to prohibit a MHSA Provider from providing MHSA Services to
Members.
V. TERM AND TERMINATION OF THIS DELEGATION AGREEMENT
5.1 Term of this Delegation Agreement
This Delegation Agreement shall begin on the Effective Date and shall continue
in effect until the end of the following calendar year. Thereafter, this
Delegation Agreement will automatically renew for successive one year periods,
unless otherwise terminated in accordance with the terms of this Delegation
Agreement.
5.2 Termination of this Delegation Agreement
This Delegation Agreement may be terminated in its entirety, or with respect to
the participation of individual HMO Subsidiaries, as follows:
a) without cause by either party upon ninety (90) days prior written
notice to the other party.
I-1-3
b) by CHC, at any time after the Effective Date, upon thirty (30)
days prior written notice to APS in the event CHC withdraws its
approval of APS's Credentialing Activities; provided however, that
CHC shall provide APS with the opportunity for reconsideration of
said withdrawal. In the event that CHC reinstates its approval of
APS's Credentialing Activities, this Delegation Agreement shall
continue in full force and effect.
5.3 Termination of this Delegation Agreement for Material Breach
Either party may terminate this Delegation Agreement by providing the other
party with a minimum of sixty (60) days prior written notice in the event the
other party commits a material breach of any provision of this Delegation
Agreement. Said notice must specify the nature of said material breach. The
breaching party shall have thirty (30) days from the date of the breaching
party's receipt of the foregoing notice to cure said material breach to the
reasonable satisfaction of the non-breaching party. In the event the breaching
party fails to cure the material breach within said thirty (30) day period, this
Delegation Agreement shall automatically terminate upon expiration of the sixty
(60) day notice period.
5.4 Effect of Termination of this Delegation Agreement
Termination of this Delegation Agreement shall have no effect upon the
Agreement, which shall remain in full force and effect following any termination
of this Delegation Agreement.
VI. GENERAL PROVISIONS
6.1 Applicability
All terms, conditions and requirements of this Delegation Agreement pertain
solely to the delivery of Credentialing Services to the HMO Subsidiaries.
Further, all terms, conditions and requirements of the Agreement shall be
applicable to the provision of services covered by the Agreement except as
otherwise provided herein. Any conflicts between the provisions of this
Delegation Agreement and the provisions of the Agreement are to be resolved in
favor of the terms of this Delegation Agreement, with respect to Credentialing
Services provided to HMO Subsidiaries by APS.
6.2 Headings
The heading of paragraphs contained in this Delegation Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Delegation Agreement.
6.3 Successors and Assigns
APS may not assign or transfer any of its rights or obligations under this
Delegation Agreement without the prior written consent of CHC. This Delegation
Agreement shall be binding upon the parties, their successors and permitted
assigns.
6.4 Subcontracts
APS shall not delegate or subcontract its duties or obligations under this
Delegation Agreement without the prior written consent of CHC. Further, in
conjunction with APS's submission of its Credentialing Activities to CHC
pursuant to Section 3.2 of this Delegation Agreement, APS shall provide CHC with
a list, including names, addresses and tax identification numbers, of
subcontractors who may be used to provide Credentialing Services to the HMO
Subsidiaries and will provide timely written notice of any changes in a
subcontractor's status.
I-1-4
IN WITNESS WHEREOF, the parties hereto have executed this Delegation Agreement
as of the day and year first set forth above.
COVENTRY HEALTH CARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
-------------------------------
Title: Chief Operating Officer
----------------------------
Date: 12/17/01
-----------------------------
APS HEALTHCARE BETHESDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Title:
----------------------------
Date:
-----------------------------
I-1-5
ATTACHMENT I-2
AGREEMENT FOR THE DELEGATION OF UTILIZATION MANAGEMENT ACTIVITIES
COVENTRY HEALTH CARE, INC.
AND
APS HEALTHCARE BETHESDA, INC.
This Delegation of Utilization Management Activities Agreement ("Delegation
Agreement") is made and entered into by and between Coventry Health Care, Inc.
("CHC") and APS Healthcare Bethesda, Inc. ("APS") as of the Effective Date set
forth below.
I. RECITALS
1.1 WHEREAS, CHC and APS are currently bound by a Behavioral Health
Services Agreement (hereinafter referred to as "Agreement") effective September
26, 1997 under which APS has agreed to provide mental health and substance abuse
services for CHC's HMO Subsidiaries;
1.2 WHEREAS, APS has expertise in utilization management activities under
mental health and substance abuse benefit programs;
1.3 WHEREAS, those HMO Subsidiaries participating under the Agreement
desire to delegate utilization management activities to APS as set forth herein;
and
1.4 WHEREAS, CHC and APS mutually and respectively desire to amend the
Agreement to allow for the provision of Utilization Management Services to such
HMO Subsidiaries.
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein and other good value and consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties have mutually covenanted and agreed as
follows:
II. DEFINITIONS
In addition to those definitions set forth in the Agreement, the following
definitions shall have the meaning ascribed hereto for the purposes of this
Delegation Agreement:
2.1 "Effective Date" means the date upon which CHC has notified APS in
writing of CHC's approval of APS's Utilization Management Program pursuant to
the terms of Section 3.2 of this Delegation Agreement or March 30, 1998,
whichever is later.
2.2 "NCQA" means the National Committee for Quality Assurance.
2.3 "Utilization Management Program" means the policies, procedures, and
processes whereby APS conducts Utilization Review, as required for the
accreditation of managed care organizations by NCQA or other recognized
accrediting entity.
2.4 "Utilization Management Services" means those services provided by APS
to each HMO Subsidiary pursuant to APS's Utilization Management Program, as set
forth in Article IV of this
I-2-1
Delegation Agreement.
III. DELEGATION AND UTILIZATION MANAGEMENT PROGRAM APPROVAL
3.1 Delegated Activities
As of the Effective Date, the parties have agreed that the following Utilization
Management Services shall be delegated by each HMO Subsidiary:
a) Referral Management
b) Certification of Inpatient Services
c) Certification of Outpatient/Ambulatory Services
d) Concurrent Review
e) First Level Appeals Process
f) Second Level Appeals Process. APS will allow for the
participation of Coventry Health Care's senior management or
medical director as voting members on the second level appeal
committee.
3.2 Submission of Utilization Management Program to CHC
3.2.1 APS represents and warrants that its Utilization Management
Program shall meet or exceed all regulatory and accrediting body
requirements including those of the NCQA and CHC.
3.2.2 APS agrees to permit an audit of its Utilization Management
Program prior to, or on the Effective Date of this Delegation Agreement
and annually thereafter. CHC agrees to review and notify APS of its
approval or disapproval of APS's Utilization Management Program within
thirty (30) days of CHC's review of such program.
3.2.3 It is understood and agreed the delegated activities set forth
in Section 3.1 of this Delegation Agreement shall not be effective until
CHC has notified APS in writing of CHC's approval of APS's Utilization
Management Program. Once approved, APS will implement the Utilization
Management Program and will submit the Utilization Management Program for
review on each annual anniversary of the Effective Date of this Delegation
Agreement.
IV. UTILIZATION MANAGEMENT SERVICES
4.1 Utilization Management Activities
APS agrees to perform all Utilization Management Services as described in
Section 3.1 for all HMO Subsidiaries.
4.2 APS Reports to CHC
APS agrees to submit quarterly reports to CHC, for each HMO Subsidiary, which
describe the referral management, certification and review data. In the event
that the data and/or information contained in such quarterly reports indicates
areas requiring corrective action, APS will describe the planned corrective
action and the results of any previous corrective action taken. If the
corrective action plan described in
I-2-2
APS's quarterly report is not acceptable to CHC, the parties agree to meet and
confer to determine a mutually acceptable corrective action plan. Further,
within thirty (30) days of each annual anniversary of the Effective Date of this
Delegation Agreement, APS agrees to submit an annual Utilization Management
Program evaluation.
4.3 Annual Audit of Utilization Management Files
On an annual basis, CHC shall conduct an audit of the Utilization Management
Program. Such audit shall include, but not be limited to, a review of
Utilization Review policies and procedures and actual cases managed on behalf of
the HMO Subsidiaries. The written results of such audit will be submitted to APS
and the applicable HMO Subsidiary within sixty (60)days of the date of such
audit ("Audit Report").
4.4 Corrective Action Plan
In the event CHC identifies any issues requiring correction in the Audit Report,
APS shall provide CHC with a corrective action plan acceptable to CHC. APS shall
submit progress reports on its ongoing action plans to correct any deficiency
identified by CHC in the Audit Report. Such progress report(s) shall be
submitted no later than thirty (30) days following APS's receipt of the annual
Audit Report in a mutually agreed upon time frame. APS's corrective action plans
shall include, but not be limited to, all areas identified by CHC for focused
review by APS and changes in Utilization Review criteria and management
procedures.
V. TERM AND TERMINATION OF THIS DELEGATION AGREEMENT
5.1 Term of this Delegation Agreement
This Delegation Agreement shall begin on the Effective Date and shall continue
in effect until the end of the following calendar year. Thereafter, this
Delegation Agreement will automatically renew for successive one year periods,
unless otherwise terminated in accordance with the terms of this Delegation
Agreement.
5.2 Termination of this Delegation Agreement
This Delegation Agreement may be terminated in its entirety, or with respect to
the participation of individual HMO Subsidiaries, as follows:
a) without cause by either party upon ninety (90) days prior written
notice to the other party.
b) by CHC, at any time after the Effective Date, upon thirty (30) days
prior written notice to APS in the event CHC withdraws its approval of
APS's Utilization Management; provided however, that CHC shall provide APS
with the opportunity for reconsideration of said withdrawal. In the event
CHC reinstates its approval of APS's Utilization Management Program, this
Delegation Agreement shall continue in full force and effect.
5.3 Termination of this Delegation Agreement for Material Breach
Either party may terminate this Delegation Agreement by providing the other
party with a minimum of sixty (60) days prior written notice in the event the
other party commits a material breach of any provision of this Delegation
Agreement. Said notice must specify the nature of said material breach. The
breaching party shall have thirty (30) days from the date of the breaching.
party's receipt of the foregoing notice to cure said material breach to the
reasonable satisfaction of the non-breaching party. In the event the breaching
party fails to cure the material breach within said thirty (30) day period, this
Delegation Agreement shall automatically terminate upon expiration of the sixty
(60) day notice period.
I-2-3
5.4 Effect of Termination of this Delegation Agreement
Termination of this Delegation Agreement shall have no effect upon the
Agreement, which shall remain in full force and effect following any termination
of this Delegation Agreement.
VI. GENERAL PROVISIONS
6.1 Applicability
All terms, conditions and requirements of this Delegation Agreement pertain
solely to the delivery of Utilization Management Services to the HMO
Subsidiaries. Further, all terms, conditions and requirements of the Agreement
shall be applicable to the prevision of services covered by the Agreement except
as otherwise provided herein. Any conflicts between the provisions of this
Delegation Agreement and the provisions of the Agreement are to be resolved in
favor of the terms of this Delegation Agreement, with respect to Utilization
Management Services provided to HMO Subsidiaries by APS.
6.2 Headings
The heading of paragraphs contained in this Delegation Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Delegation Agreement.
6.3 Successors and Assigns
APS may not assign or transfer any of its rights or obligations under this
Delegation Agreement without the prior written consent of CHC. This Delegation
Agreement shall be binding upon the parties, their successors and permitted
assigns.
6.4 Subcontracts
APS shall not delegate or subcontract its duties or obligations under this
Delegation Agreement without the prior written consent of CHC. Further, in
conjunction with APS's submission of its Utilization Management Program to CHC
pursuant to Section 3.2 of this Delegation Agreement, APS shall provide CHC with
a list, including names, addresses and tax identification numbers, of
subcontractors who may be used to provide Utilization Management Services to the
HMO Subsidiaries and will provide timely written notice of any changes in a
subcontractor's status.
IN WITNESS WHEREOF, the parties hereto have executed this Delegation Agreement
as of the day and year first set forth above.
COVENTRY HEALTH CARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
------------------------- -------------------
Title: Xxxxxx XxXxxxxxx
---------------------- -------------------
Date: 12/17/01
----------------------- -------------------
I-2-4
APS HEALTHCARE BETHESDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title:
----------------------
Date:
-----------------------
I-2-5
ATTACHMENT I-3
AGREEMENT FOR THE DELEGATION OF QUALITY IMPROVEMENT ACTIVITIES
COVENTRY HEALTH CARE, INC.
AND
APS HEALTHCARE BETHESDA, INC.
This Delegation of Quality Improvement Activities Agreement ("Delegation
Agreement") is made and entered into by and between Coventry Health Care, Inc.
("CHC") and APS Healthcare Bethesda, Inc. ("APS") as of the Effective Date set
forth below.
1. RECITALS
1.1 WHEREAS, CHC and APS are currently bound by a Behavioral Health
Services Agreement (hereinafter referred to as "Agreement") effective September
26, 1997 under which APS has agreed to provide mental health and substance abuse
services for CHC's HMO Subsidiaries;
1.2 WHEREAS, APS has expertise in providing quality improvement activities
under mental health and substance abuse benefit programs;
1.3 WHEREAS, those HMO Subsidiaries participating under the Agreement
desire to delegate quality improvement activities to APS as set forth herein;
and
1.4 WHEREAS, CHC and APS mutually and respectively desire to amend the
Agreement to allow for the provision of Quality Improvement Services to such HMO
Subsidiaries.
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein and other good value and consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties have mutually covenanted and agreed as
follows:
II. DEFINITIONS
In addition to those definitions set forth in the Agreement, the following
definitions shall have the meaning ascribed hereto for the purposes of this
Delegation Agreement:
2.1 "Effective Date" means the date upon which CHC has notified APS in
writing of CHC's approval of APS's Quality Improvement Program pursuant to the
terms of Section 3.2 of this Delegation Agreement or March 30, 1998, whichever
is later.
2.2 "NCQA" means the National Committee for Quality Assurance.
2.3 "Quality Improvement Program" means the actions, policies, procedures,
and processes for providing Quality Improvement Services to each HMO Subsidiary,
as required for the accreditation of managed care organizations by NCQA or other
recognized accrediting entity.
2.4 "Quality Improvement Services" means those services provided by APS to
each HMO Subsidiary pursuant to APS's Quality Improvement Program, as set forth
in Article IV of this Delegation Agreement.
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III. DELEGATION AND QUALITY IMPROVEMENT PROGRAM APPROVAL
3.1 Delegated Activities
As of the Effective Date, the parties have agreed that the following Quality
Improvement Services shall be delegated by each HMO Subsidiary to APS:
a) Monitoring of clinical issues surrounding the membership of an
HMO Subsidiary.
b) Monitoring and evaluation of clinical issues provided by
Affiliated Providers.
c) Development of practice guidelines that are based on reasonable
scientific evidence and review by Affiliated Providers.
d) Establishment of availability and access standards for Affiliated
Providers.
e) Monitoring and evaluating the availability and access standards
for Covered Services provided by Affiliated Provider.
3.2 Submission of Quality Improvement Program to CHC
3.2.1 APS represents and warrants that its Quality Improvement
Program shall meet or exceed all regulatory and accrediting body
requirements including those of the NCQA and CHC.
3.2.2 APS agrees to permit an audit of its Quality Improvement
Program prior to, or on the Effective Date of this Delegation Agreement
and annually thereafter. CHC agrees to review and notify APS of its
approval or disapproval of APS's Quality Improvement Program within thirty
(30) days of CHC's review of such program.
3.2.3 It is understood and agreed the delegated activities set forth
in Section 3.1 of this Delegation Agreement shall not be effective until
CHC has notified APS in writing of CHC's approval of APS's Quality
Improvement Program. Once approved, APS will implement the Quality
Improvement Program and will submit the Quality Improvement Program for
review on each annual anniversary of the Effective Date of this Delegation
Agreement.
IV. QUALITY IMPROVEMENT SERVICES
4.1 Quality Improvement Activities
APS agrees to perform all Quality Improvement Services as described in Section
3.1 of this Delegation Agreement for all HMO Subsidiaries.
4.2 APS Reports to CHC
APS agrees to submit quarterly reports to CHC, for each HMO Subsidiary, which
describe the performance measures and results of studies pursuant to APS's
Quality Improvement Program. In the event that the information contained in such
quarterly reports indicates areas requiring corrective action, APS will describe
the planned corrective action and the results of any previous corrective action
taken. If the corrective action plan described in APS's quarterly report is not
acceptable to CHC, the parties agree to meet and confer to determine a mutually
acceptable corrective action plan. Further, within thirty (30) days of each
annual anniversary of the Effective Date of this Delegation Agreement, APS
agrees to submit an annual Quality Improvement Program evaluation.
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4.3 Annual Audit of Quality Improvement Services
On an annual basis, CHC shall conduct an audit of APS's Quality Improvement
Program. Such audit shall include, but not be limited to, a review of committee
minutes, review and periodic validation of quality monitors, study data
collection and analysis procedures, and a review of corrective action plans for
all Quality Improvement Services performed on behalf of the HMO Subsidiaries.
The written results of such audit will be submitted to APS and the applicable
CHC HMO Subsidiary within sixty (60) days of the date of such audit ("Audit
Report").
4.4 Corrective Action Plan
In the event CHC identifies any issues requiring correction in the Audit Report,
APS shall provide CHC with a corrective action plan acceptable to CHC. APS shall
submit progress reports on its ongoing action plans to correct any deficiency
identified by CHC in the Audit Report in a mutually agreed upon time frame. Such
progress report(s) shall be submitted no later than thirty (30) days following
APS's receipt of the annual Audit Report. APS's corrective action plans shall
include, but not be limited to, all areas identified by CHC for focused review
by APS and changes in data collection or reporting procedures.
V. TERM AND TERMINATION OF THIS DELEGATION AGREEMENT
5.1 Term of this Delegation Agreement
This Delegation Agreement shall begin on the Effective Date and shall continue
in effect until the end of the following calendar year. Thereafter, this
Delegation Agreement will automatically renew for successive one year periods,
unless otherwise terminated in accordance with the terms of this Delegation
Agreement.
5.2 Termination of this Delegation Agreement
This Delegation Agreement may be terminated in its entirety, or with respect to
the participation of individual HMO Subsidiaries, as follows:
a) without cause by either party upon ninety (90) days prior written
notice to the other party
b) by CHC, at any time after the Effective Date, upon thirty (30)
days prior written notice to APS in the event CHC withdraws its
approval of APS's Quality Improvement Program; provided however,
that CHC shall provide APS with the opportunity for reconsideration
of said withdrawal. In the event CHC reinstates its approval of
APS's Quality Improvement Program, this Delegation Agreement shall
continue in full force and effect.
5.3 Termination of this Delegation Agreement for Material Breach
Either party may terminate this Delegation Agreement by providing the other
party with a minimum of sixty (60) days prior written notice in the event the
other party commits a material breach of any provision of this Delegation
Agreement. Said notice must specify the nature of said material breach. The
breaching party shall have thirty (30) days from the date of the breaching
party's receipt of the foregoing notice to cure said material breach to the
reasonable satisfaction of the non-breaching party. In the event the breaching
party fails to cure the material breach within said thirty (30) day period, this
Delegation Agreement shall automatically terminate upon expiration of the sixty
(60) day notice period.
5.4 Effect of Termination of this Delegation Agreement
I-3-3
Termination of this Delegation Agreement shall have no effect upon the
Agreement, which shall remain in full force and effect following any termination
of this Delegation Agreement.
VI. GENERAL PROVISIONS
6.1 Applicability
All terms, conditions and requirements of this Delegation Agreement pertain
solely to the delivery of Quality Improvement Services to the HMO Subsidiaries.
Further, all terms, conditions and requirements of the Agreement shall be
applicable to the provision of services covered by the Agreement except as
otherwise provided herein. Any conflicts between the provisions of this
Delegation Agreement and the provisions of the Agreement are to be resolved in
favor of the terms of this Delegation Agreement, with respect to the Quality
Improvement Services provided by APS to HMO Subsidiaries.
6.2 Headings
The heading of paragraphs contained in this Delegation Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Delegation Agreement.
6.3 Successors and Assigns
APS may not assign or transfer any of its rights or obligations under this
Delegation Agreement without the prior written consent of CHC. This Delegation
Agreement shall be binding upon the parties, their successors and permitted
assigns.
6.4 Subcontracts
APS shall not delegate or subcontract its duties or obligations under this
Delegation Agreement without the prior written consent of CHC. Further, in
conjunction with APS's submission of its Quality Improvement Program to CHC
pursuant to Section 3.2 of this Delegation Agreement, APS shall provide CHC with
a list, including names, addressed and tax identification numbers, of
subcontractors who may be used to provide Quality Improvement Services to the
HMO Subsidiaries and will provide timely written notice of any changes in a
subcontractor's status.
IN WITNESS WHEREOF, the parties hereto have executed this Delegation Agreement
as of the day and year first set forth above.
COVENTRY HEALTH CARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
------------------------- -------------------
Title: Xxxxxx XxXxxxxxx
---------------------- -------------------
Date: 12/17/01
----------------------- -------------------
I-3-4
APS HEALTHCARE BETHESDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title:
----------------------
Date:
-----------------------
I-3-5
ATTACHMENT I-4
AGREEMENT FOR THE DELEGATION OF QUALITY IMPROVEMENT ACTIVITIES
COVENTRY HEALTH CARE, INC.
AND
APS HEALTHCARE BETHESDA, INC.
This Delegation of Quality Improvement Activities Agreement ("Delegation
Agreement") is made and entered into by and between Coventry Health Care, Inc.
("CHC") and APS Healthcare Bethesda, Inc. ("APS") as of the Effective Date set
forth below.
1. RECITALS
1.1 WHEREAS, CHC and APS are currently bound by a Behavioral Health
Services Agreement (hereinafter referred to as "Agreement") effective September
26, 1997 under which APS has agreed to provide mental health and substance abuse
services for CHC's HMO Subsidiaries;
1.2 WHEREAS, APS has expertise in providing quality improvement activities
under mental health and substance abuse benefit programs;
1.3 WHEREAS, those HMO Subsidiaries participating under the Agreement
desire to delegate quality improvement activities to APS as set forth herein;
and
1.4 WHEREAS, CHC and APS mutually and respectively desire to amend the
Agreement to allow for the provision of Quality Improvement Services to such HMO
Subsidiaries.
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein and other good value and consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties have mutually covenanted and agreed as
follows:
II. DEFINITIONS
In addition to those definitions set forth in the Agreement, the following
definitions shall have the meaning ascribed hereto for the purposes of this
Delegation Agreement:
2.1 "Effective Date" means the date upon which CHC has notified APS in
writing of CHC's approval of APS's Member Services Program pursuant to the terms
of Section 3.2 of this Delegation Agreement or March 30, 1998, whichever is
later.
2.2 "Member Services Activities" means the policies, procedures, and
processes for providing Member Services to Members, as required for the
accreditation of managed care organizations by NCQA or other recognized
accrediting entity.
2.3 "Member Services" means those services provided by APS to each HMO
Subsidiary pursuant to APS's Member Services Program, as set forth in Article IV
of this Delegation Agreement.
2.4 "NCQA" means the National Committee for Quality Assurance.
I-4-1
III. DELEGATION AND MEMBER SERVICES ACTIVITIES APPROVAL
3.1 Delegated Activities
As of the Effective Date, the parties have agreed that the following Member
Services shall be delegated by each HMO Subsidiary to APS for those Members of
said HMO Subsidiary:
a) Responding to Member Inquiries and Complaints whether written or
verbal
b) Administration of Member Surveys
c) Managing First Level Complaint/Grievance Process
3.2 Submission of Member Services Activities to CHC
3.2.1 APS represents and warrants that its Member Services
Activities shall meet or exceed all regulatory and accrediting body
requirements including those of the NCQA and CHC.
3.2.2 APS agrees to permit an audit of its Member Services
Activities prior to, or on the Effective Date of this Delegation Agreement
and annually thereafter. CHC agrees to review and notify APS of its
approval or disapproval of APS's Member Services Activities within thirty
(30) days of CHC's review of such activities.
3.2.3 It is understood and agreed the delegated activities set forth
in Section 3.1 of this Delegation Agreement shall not be effective until
CHC has notified APS in writing of CHC's approval of APS's Member Services
Activities. Once approved, APS will implement the Member Services
Activities and will submit the Member Services Activities for review on
each annual anniversary of the Effective Date of this Delegation
Agreement.
IV. MEMBER SERVICES FUNCTIONS
4.1 Member Services Activities
APS agrees to perform all Member Services functions as described in Section 3.1
of this Delegation Agreement for all HMO Subsidiaries.
4.2 APS Reports to CHC
APS agrees to submit quarterly reports to CHC, for each HMO Subsidiary, which
provide data and other related information on Member inquiries, complaints
and/or grievances, Member surveys, and other indicators of Member satisfaction.
In the event that the data and/or information contained in such quarterly
reports indicates areas requiring corrective action, APS will describe the
planned corrective action and the results of any previous corrective action
taken. If the corrective action plan described in APS's quarterly report is not
acceptable to CHC, the parties agree to meet and confer to determine a mutually
acceptable corrective action plan. Further, within thirty (30) days of each
annual anniversary of the Effective Date of this Delegation Agreement, APS
agrees to submit a summary report to CHC, describing Member Services functions
provided to the HMO Subsidiaries during the previous year which may be included
in the annual Quality Improvement evaluation.
4.3 Annual Audit of Member Services Functions
On an annual basis, CHC shall conduct an audit of APS's Member Services
Activities. Such audit shall
I-4-2
include, but not be limited to, a review of a random sampling of actual Member
Services cases handled by APS on behalf of the HMO Subsidiaries. The written
results of such audit will be submitted to APS and the applicable HMO Subsidiary
within sixty (60) days of the date of such audit ("Audit Report").
4.4 Corrective Action Plan
In the event CHC identifies any issues requiring correction in the Audit Report,
APS shall provide CHC with a corrective action plan acceptable to CHC. APS shall
submit progress reports detailing the ongoing action plans to correct any
deficiency identified by CHC in the Audit Report in a mutually agreed upon time
frame. Such progress report(s) shall be submitted no later than thirty (30) days
following APS's receipt of the annual Audit Report. APS's corrective action
plans shall include, but not be limited to, all areas identified by CHC for
focused review by APS and changes in data collection or reporting procedures.
V. TERM AND TERMINATION OF THIS DELEGATION AGREEMENT
5.1 Term of this Delegation Agreement
This Delegation Agreement shall begin on the Effective Date and shall continue
in effect until the end of the following calendar year. Thereafter, this
Delegation Agreement will automatically renew for successive one year periods,
unless otherwise terminated in accordance with the terms of this Delegation
Agreement.
5.2 Termination of this Delegation Agreement
This Delegation Agreement may be terminated in its entirety, or with respect to
the participation of individual HMO Subsidiaries, as follows:
a) without cause by either party upon ninety (90) days prior written
notice to the other party.
b) by CHC, at any time after the Effective Date, upon thirty (30)
days prior written notice to APS in the event CHC withdraws its
approval of APS's Member Services Activities; provided however, that
CHC shall provide APS with the opportunity for reconsideration of
said withdrawal. In the event CHC reinstates its approval of APS's
Member Services Activities, this Delegation Agreement shall continue
in full force and effect.
5.3 Termination of this Delegation Agreement for Material Breach
Either party may terminate this Delegation Agreement by providing the other
party with a minimum of sixty (60) days prior written notice in the event the
other party commits a material breach of any provision of this Delegation
Agreement. Said notice must specify the nature of said material breach. The
breaching party shall have thirty (30) days from the date of the breaching
party's receipt of the foregoing notice to cure said material breach to the
reasonable satisfaction of the non-breaching party. In the event the breaching
party fails to cure the material breach within said thirty (30) day period, this
Delegation Agreement shall automatically terminate upon expiration of the sixty
(60) thy notice period.
5.4 Effect of Termination of this Delegation Agreement
Termination of this Delegation Agreement shall have no effect upon the
Agreement, which shall remain in full force and effect following any termination
of this Delegation Agreement.
I-4-3
VI. GENERAL PROVISIONS
6.1 Applicability
All terms, conditions and requirements of this Delegation Agreement pertain
solely to the delivery of Member Services to the HMO Subsidiaries. Further, all
terms, conditions and requirements of the Agreement shall be applicable to the
provision of services covered by the Agreement except as otherwise provided
herein. Any conflicts between the provisions of this Delegation Agreement and
the provisions of the Agreement are to be resolved in favor of the terms of this
Delegation Agreement, with respect to the Member Services provided to HMO
Subsidiaries by APS.
6.2 Headings
The heading of paragraphs contained in this Delegation Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Delegation Agreement.
6.3 Successors and Assigns
APS may not assign or transfer any of its rights or obligations under this
Delegation Agreement without the prior written consent of CHC. This Delegation
Agreement shall be binding upon the parties, their successors and permitted
assigns.
6.4 Subcontracts
APS shall not delegate or subcontract its duties or obligations under this
Delegation Agreement without the prior written consent of CHC. Further, in
conjunction with APS's submission of its Member Services Activities to CHC
pursuant to Section 3.2 of this Delegation Agreement, APS shall provide CHC with
a list, including names, addressed and tax identification numbers, of
subcontractors who may be used to provide Member Services to the HMO
Subsidiaries and will provide timely written notice of any changes in a
subcontractor's status.
IN WITNESS WHEREOF, the parties hereto have executed this Delegation Agreement
as of the day and year first set forth above.
COVENTRY HEALTH CARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
------------------------- -------------------
Title: Chief Operating Officer
---------------------- -------------------
Date: 12/17/01
----------------------- -------------------
APS HEALTHCARE BETHESDA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title:
----------------------
Date:
-----------------------
I-4-4
ATTACHMENT J
FIFTH AMENDMENT TO THE
BEHAVIORAL HEALTH SERVICES AGREEMENT
Between
Coventry Health Care, Inc.
and
APS Healthcare Bethesda, Inc.
This Fifth Amendment ("Amendment") to the Behavioral Health Services Agreement
(the "Agreement"), effective September 26, 1997, among Coventry Health Care,
Inc. ("Health Plan" or "Coventry") and the Original HMO Subsidiaries as defined
therein, and APS Healthcare Bethesda, Inc., formerly American Psych Systems,
Inc., ("APS"), is hereby entered into as of the 1st day of January, 2001.
Capitalized terms used herein and not defined have the meanings ascribed to them
in the Agreement, as amended.
WHEREAS, the Agreement is an Administrative Service Provider Contract,
as defined by Section 19-713.2 of the Maryland Health General Code; and
WHEREAS, APS is a Contracting Provider, as defined by Section 19-713.2
of the Maryland Health General Code; and
WHEREAS, the Maryland legislature, in its 2000 legislative session,
created new obligations and requirements to be met by health maintenance
organizations and Contracting Providers pertaining to the assumption of
financial risk for certain providers engaged in relationships with Contracting
Providers involving the provision of healthcare services to health maintenance
organization members; and
WHEREAS, Contracting Provider and Health Plan desire to amend the
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties hereto agree to the
following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ADMINISTRATIVE SERVICE PROVIDER CONTRACT means a contract or capitation
agreement between a health maintenance organization and a Contracting
Provider in which 1) the Contracting Provider accepts payments from a
health maintenance organization for health care services to be provided
to members of the health maintenance organization that the Contracting
Provider arranges to be provided by external providers, and 2) the
Contracting Provider administers payments pursuant to the contract with
the health maintenance organization for the health care services to the
external providers. In the context of the Agreement, the term
Administrative Service Provider Contract is
J-1
equivalent to "Agreement".
1.2 COMMISSIONER means the Commissioner of Insurance for the State of
Maryland.
1.3 CONTRACTING PROVIDER means a person or entity that enters into an
administrative service provider contract with a health maintenance
organization. In the context of the Agreement, the term Contracting
Provider is equivalent to "APS".
1.4 EXTERNAL PROVIDER means a health care provider who is affiliated with
Contracting Provider for the provision of health care services to health
maintenance organization members, and who is not 1) a Contracting
Provider, or 2) an employee, shareholder, or partner of a Contracting
Provider.
1.5 PLAN means the terms and conditions of the Administrative Service
Provider Contract, addressing the creation and maintenance of a
Segregated Fund sufficient to meet the Contracting Provider's
obligations to its External Providers, and which must be approved by the
Insurance Commissioner of the State of Maryland.
1.6 SEGREGATED FUND means an amount of money which may be in the form of
withheld funds, escrow accounts, letters of credit, or similar
arrangements that is sufficient to satisfy a Contracting Provider's
obligations to External Providers for services rendered to qualifying
members of Health Plan. The amount and form of the Fund are subject to
approval of the Commissioner.
ARTICLE II
THE PLAN
2.1 Obligations of Provider:
2.1.a. Contracting Provider shall provide Health Plan with monthly
reports, within thirty (30) days of the end of the month
reported, that identify payments made or owed to External
Providers in sufficient detail to determine if the payments are
being made in compliance with the law. The format of the monthly
report is hereto attached to this Amendment as Attachment A.
2.1.b. Contracting Provider shall provide Health Plan with its audited,
annual financial statements within ninety (90) days of the end
of the year reported.
2.1.c. Contracting Provider shall submit to Health Plan, according to
the terms of Attachment B to this Amendment, a letter of credit,
surety bond, escrow fund or other approved device, for the
creation of the Segregated Fund in an amount sufficient to
satisfy Contracting Provider's obligations to External Providers
for services rendered to members of Health Plan.
2.1.d. Contracting Provider shall, upon request by Health Plan, submit
documentation to Health Plan that demonstrates, to the
satisfaction of Health Plan's representatives, the sufficiency
of the amount calculated in the establishment of
J-2
the Segregated Fund. Such documentation shall include, but not
be limited to, a list of all providers with whom Contracting
Provider affiliates for the provision of healthcare services to
Health Plan members, indicating the providers' legal
relationship to Contracting Provider and the percentage of
Health Plan business to whom they render services.
2.1.e. Contracting Provider shall, at least quarterly, permit Health
Plan representatives, with prior notification from Health Plan,
to review and inspect Provider's books, records and operations
relevant to Provider's Agreement for the purpose of determining
Provider's compliance with the Plan.
2.1.f. Contracting Provider shall at all times comply with the terms
and conditions of the Agreement, and shall remit payment to
External Providers as required by state law and by the terms of
the Agreement.
2.1.g. Contracting Provider agrees that at all times during the term of
the Agreement with Health Plan, it shall maintain an active and
approved Contracting Provider Registration with the Maryland
Insurance Administration.
2.2 Obligations of Health Plan
2.2.a Health Plan shall establish and maintain a Segregated Fund, the
form and amount of which is subject to approval by the
Commissioner, pursuant to Article II and Attachment B of this
Amendment.
2.2.b Coventry Health Care of Delaware shall review and inspect
Contracting Provider's book, records and operations relevant to
the Agreement in order to determine Provider's compliance with
the Plan. Such review and inspection shall be performed no less
than quarterly.
2.2.c. Health Plan shall at all times comply with the terms and
conditions of the Agreement.
ARTICLE III
SEGREGATED FUND
3.1 Health Plan shall hold the Segregated Fund in trust for payment to
External Providers.
3.2 Contracting Provider shall at no time consider or record the Segregated
Fund as an asset or an account belonging to Contracting Provider for the
purpose of determining the assets and accounts of Contracting Provider
in bankruptcy proceedings.
3.3 The amount and form of the Segregated Fund shall be according to the
formula and terms as stated in Attachment B to this Agreement.
3.4 The amount of the Segregated Fund is subject to revision according to
changes in membership and other circumstances that may result in a
change in the financial
J-3
obligations of Contracting Provider to its External Providers. Such
other circumstances include, but are not limited to, an adjustment to
the rate at which Health Plan compensates Contracting Provider, or
substantive changes in the percentage of Health Plan services rendered
by External Providers. Contracting Provider agrees to notify Health
Plan, in writing, within thirty (30) days of any event that may result
in a substantive change in its obligation to External Providers in the
rendering of healthcare services to Health Plan members. Revisions to
the Segregated Fund are at the discretion of Health Plan and upon review
of the appropriate books and records.
ARTICLE IV
MONITORING
4.1 Health Plan shall monitor Contracting Provider to ensure compliance with
the Plan.
4.2 Health Plan shall file with the Commissioner the results of each
quarterly review required under Section 2.2.b. above.
4.3 Health Plan shall notify Contracting Provider, in writing, in the event
that Health Plan reviews Contracting Provider's books and records and
determines that Contracting Provider has failed to comply with the Plan,
The notice will describe the nature of the failure and will give
Contracting Provider a thirty (30) day period in which to cure such
failure. Should Contracting Provider fail to cure within thirty (30)
days, pursuant to the notice, Health Plan may elect to terminate the
Agreement immediately.
4.4 Health Plan shall notify the Commissioner, in writing, of Provider's
failure to comply with the Plan, or in the event that the Agreement is
terminated for any reason.
4.5 If the Agreement is terminated for a reason other than non-compliance
with the Segregated Fund requirements as stated in this Amendment, then
Health Plan shall return the Segregated Funds to Contracting Provider.
4.6 If the Agreement is terminated for non-compliance with the Segregated
Fund requirements, Health Plan shall assume the administration of
payments due from Contracting Provider to External Providers for health
care services rendered to Health Plan members through the date of
termination of the Agreement as required under Sections 19-712 and
19-713.2 of the Maryland Health General Code.
ARTICLE V
OTHER
5.1 Confidentiality: Both parties agree that the terms and conditions of the
Plan, the Segregated Fund, and all supporting documentation are
confidential and proprietary, and may not be disclosed to another party,
except for the Commissioner, or as required by law.
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5.2 Administrative Costs: Each party shall assume the liability for its own
administrative costs in the implementation and maintenance of the Plan.
5.3 Penalties: Should Contracting Provider fail to comply with the Plan or
with the Agreement, the Commissioner may exercise the right to impose a
fine up to $125,000 or suspend or revoke the registration of Contracting
Provider.
IN WITNESS WHEREOF the parties hereto have cause this Fifth Amendment to be duly
executed and delivered as of the effective date above written:
HEALTH PLAN: APS HEALTHCARE BETHESDA, INC.:
By: /s/ Xxxxxx XxXxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------- --------------------------
Title: Chief Operating Officer Title:
----------------------- -----------------------
Date: 12/17/01 Date:
------------------------ ------------------------
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ATTACHMENT A
To the
January 1, 2001 Amendment to the Behavioral Health Services Agreement
Between Health Plan
and
APS Healthcare Bethesda, Inc.
FORMAT OF MONTHLY REPORTING
Contracting Provider shall submit to Health Plan, pursuant to Section 2.1.a of
this Amendment, reports in an electronic format that contain the following data
elements:
FOR SERVICES AUTHORIZED AND FOR ALL CLAIMS ACTIVITY DURING THE MONTH OF
____.
Member Name -Last Name, First Name
Member's Health Plan Identification Number
Provider Name
Internal or External Provider Designation
Category of Service Provided
Place of Service
Date Service was Rendered
Invoice Date
Date Claim was Received by Contracting Provider
Billing Code
Units Billed
Denial or Pended Reason (if applicable)
Payment Type (Contract Rate, Non-Participating Provider Rate, Adjustment)
Amount Paid (if applicable)
Date Paid, Denied, or Pended
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ATTACHMENT B
To the
January 1, 2001 Amendment to the Behavioral Health Services Agreement
Between Health Plan and APS Healthcare Bethesda, Inc.
FORM AND AMOUNT OF SEGREGATED FUND
Subject to review and approval by the Commissioner, Contracting Provider shall
provide to Health Plan an amount equal to ninety (90) days of financial
reserves, as determined below. This amount shall be in the form of a surety
bond. Health Plan shall maintain this in the Segregated Fund, pursuant to the
terms of this Amendment.
Amount of Segregated Fund: $85,000
o APS shall submit a surety bond to Health Plan in the amount of
$85,000 by March 31, 2001.
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ATTACHMENT K
ORIGINAL HMO SUBSIDIARIES
AND OPERATING UNITS
ORIGINAL HMO SUBSIDIARY NUMBER OF CAPITATED
OR OPERATING UNIT MEMBERS
----------------- -------
CHC of Delaware, Inc.
Commercial 40,437
State 45,681
Medicaid 11,601
-------
97,719
CHC of Georgia, Inc. 12,252
CHC of Illinois, Inc. 15,502
CHC of Indiana, Inc. 31,667
CHC of Iowa, Inc. 94,693
CHC of Florida, Inc.
Jacksonville (OPERATING UNIT) 44,872
Commercial 1,959
-------
Medicare 46,831
Orlando (OPERATING UNIT) 9,018
Pensacola (OPERATING UNIT) 14,970
South Florida (OPERATING UNIT) 34,131
Tampa (OPERATING UNIT) 21,733
CHC of Kansas City, Inc.
Kansas City (OPERATING UNIT) 57,542
Wichita (OPERATING UNIT) 31,555
CHC of Louisiana, Inc. 34,877
CHC of Nebraska, Inc. 26,262
CHC of St. Louis, Inc. 46,666
-------
575,418
=======
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ATTACHMENT L
CAPITATED BENEFICIARY ADJUSTMENT
Subject to Section 15.3, the Capitated Beneficiary Adjustment shall equal the
following:
Cash payment = (X/Y)*Z*T
Stock delivery = (X/Y)*S*T
Where:
X = the number of Capitated Members set forth opposite the name of the
relevant Original HMO Subsidiary or Original Operating Unit on
Attachment K
Y = 575,418, representing the aggregate number of Capitated Members of
all of the Original HMO Subsidiaries as of August 31, 1997
Z = $7,000,000
S = $3,895,462
T = a fraction, the numerator of which equals 120 minus the aggregate
number of months (including partial months) from the Closing Date
through the date of determination of the amount of the relevant
Capitated Beneficiary Adjustment, and the denominator of which
equals 120.
As provided in Section 15.3:
(i) stock to be delivered as part of a Capitated Beneficiary Adjustment
shall be valued at the Current Market Price, as determined pursuant
to Section 15.3.4;
(ii) if CHC shall have sold, transferred or otherwise disposed of any
shares of APSH Common Stock, then in lieu of delivering such shares
as part of the Capitated Beneficiary Adjustment, CHC may deliver
cash in an amount equal to $1.44 per share (subject to appropriate
adjustment in the event of any stock split, stock dividend or other
subdivision or combination of the outstanding shares of APSH Common
Stock) for each such shares; and
(iii) in no event will CHC ever be required to deliver to APSH more than
2,705,182 shares of APSH Common Stock in the aggregate (subject to appropriate
adjustment in the event of any stock split, stock dividend or other subdivision
or combination of the outstanding shares of APSH Common Stock).
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