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EXHIBIT 10.4(b)
CLAIM ADMINISTRATION AGREEMENT
THIS AGREEMENT made as of November 1, 1989 by and between The
Travelers Insurance Company, a corporation organized under the laws of
the State of Connecticut, and Consolidated Group Claims, Inc., a
corporation organized under the laws of the State of Massachusetts.
WITNESSETH
WHEREAS, The Travelers Insurance Company (hereinafter, "The
Travelers") is the underwriter of the Group Policies listed in
Schedule A (such policies hereinafter referred to as the "Policy"),
which is attached to and forms a part of this Agreement;
WHEREAS, Consolidated Group Claims, Inc., (hereinafter "Claims
Administrator") wishes to act as said claims administrator and to
perform all "administrative services", as are hereinafter described.
NOW THEREFORE, in consideration of these premises, the parties hereto mutually
agree as follows:
SECTION I: INDEPENDENT CONTRACTOR
The relationship of the Claim's Administrator to The travelers with
respect to administrative services is that of an independent
contractor and nothing in this Agreement will be construed as creating
any other relationship. The Travelers assumes no liability of any
nature or kind for personal or property damages arising out of the
Claims Administrator's performance of this Agreement.
SECTION II: OBLIGATIONS OF CLAIMS ADMINISTRATOR
2.1 - Administrative Services
During the term of this Agreement, the Claims Administrator will be
responsible for the expeditious and competent processing of claims
under the Policy. The Claims Administrator shall continue to process
claims on those accounts for which it paid claims prior to November 1,
1989, as well as for all new business written November 1, 1989 or
later. It shall perform services including but not limited to the
following:
(a) receive notices of claims;
(b) verify the eligibility of claimants;
(c) calculate the amount of the benefits payable in accordance
with the Policy;
(d) refer claims for amounts in excess of $40,000 to The Travelers
for review and approval prior to payment, if requested in
writing by The Travelers;
(e) decline non-covered claims;
(f) issue benefit checks;
(g) make determinations to collect any overpayments and implement
the collection of such overpayments;
(h) administer cost containment measures, as approved by The
Travelers, including but not limited to coordination of
benefits;
(i) produce a monthly report showing the number of claims reviewed
for cost containment and the amount of savings produced; and
(j) provide assistance as requested by The Travelers to research
and resolve aged outstanding checks including but not limited
to making inquiries of claimants.
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(k) refer requests for review of denied claims which involve the
alleged application of state mandated benefit requirements to
The Travelers for review prior to response.
(l) identify in a fashion acceptable to The Travelers those Claims
Incurred prior to November 1, 1989 as defined by the
Assumption Agreement between The Travelers Insurance Company,
The Hartford Life Insurance Company, and The Hartford Life and
Accident Insurance Company (hereinafter "The Hartford"), which
were processed by the Claims Administrator. Said Assumption
Agreement is attached to and forms a part of this Claims
Administration Agreement.
2.2 - Maintenance of Records and Reporting to The Travelers
a) The Claims Administrator will maintain all claim records for the
period required by the Employee Retirement Income Security Act of
1974, as from time to time amended. All such records will remain the
property of The Travelers and shall be returned to The Travelers
following the termination of this Agreement.
b) The Claims Administrator will submit reports and data on its
activities in a form, medium, and time frame agreed upon by The
Travelers and The Claims Administrator. The reports shall include but
not be limited those details, as specified by The Travelers, of each
check issued, within one (1) week of its issuance.
If The Travelers notifies the Claims Administrator that the report
data is unacceptable, the Claims Administrator will make every effort
to resubmit the data within 24 hours of the notice. If The Travelers
changes its required format for data reporting, the Claims
Administrator will exercise reasonable efforts to comply with such
changes upon notification from The Travelers, provided that such
changes do no result in unreasonable costs. The Claims Administrator
shall also respond to such other request for reports and data as The
Travelers shall reasonably request.
c) Upon reasonable notice The Claims Administrator will permit
representatives of The Travelers to inspect and audit the Claims
Administrator's files, check control procedures, and check stock on
request during normal business hours. The Claims Administrator shall
exercise best efforts to cooperate to the fullest extent in such
audits.
d) Each month, the Claims Administrator will conduct a quality assurance
review, in accordance with the criteria specified by The Travelers,
and prepare a report of the results of the review by the 15th day of
each month. The number of claims reviewed and reported shall be no
less than 10 claims per claims processor assigned to process claims
under this Agreement. The claims reviewed shall represent a normal
cross section of the claims processed.
2.3 - Handling of Checks
a) The Claims Administrator shall make payments for claims using checks
drawn on The Travelers bank account established at the Connecticut
National Bank. The Claims Administrator shall begin using Travelers
checkstock for automated claims on December 1, 1989. The Claims
Administrator shall begin using Travelers checkstock for weekly
indemnity claims on January 1, 1990 and begin using Travelers
checkstock for manually paid medical claims on March 1, 1990. The
Claims Administrator shall designate in writing to The Travelers the
names of those persons authorized to sign the checks and provide
sample signatures. The Claims Administrator shall promptly notify The
Travelers of any changes in the list of persons so designated. The
Claims Administrator shall also notify The Travelers of the names of
those persons responsible for the security of checkstock and the
signature plate, if applicable. The Travelers shall have the right to
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approve or, at any time, disapprove persons authorized by the Claims
Administrator to sign checks.
b) The Travelers will be responsible for determining the banking
specifications, printing specifications and instrument numbering.
Check printing and testing will be the responsibility of The
Travelers. However, subject to the approval of The Travelers, the
Claims Administrator may arrange to have the checks printed by another
check printing vendor, at the expense of The Travelers. All checks,
regardless of vendor, shall be tested and approved by The Travelers.
c) The maximum dollar amount of a check for each claim which may be drawn
by the Claims Administrator without review and approval of The
Travelers shall be $40,000. A supervisory level employee of the
Claims Administrator shall review and approve any check in excess of
$10,000. The Claims Administrator shall not draw multiple checks for
the same claim or expense for the purpose of avoiding this limitation.
d) The Claims Administrator shall employ security procedures which meet
with the approval of The Travelers with respect to the handling of
checks and drafts. The Claims Administrator shall immediately report
to The Travelers any loss or destruction of checks or any unauthorized
use of checks.
e) In addition to any bond required by paragraph 2.6, the Claims
Administrator shall maintain fidelity coverage, including bonding of
employees, in a reasonable amount and by a carrier satisfactory to The
Travelers. The Claims Administrator shall furnish a certificate of
insurance naming The Travelers as a certificateholder. Said policy
shall provide that it cannot be canceled or modified except on ninety
(90) days prior written notice to The Travelers as of the effective
date of this Agreement, or more frequently if The Travelers deems that
there is a significant change in the total amount of funds handled.
If the insurance is canceled, substitute coverage shall be obtained.
The Claims Administrator shall also obtain from a company acceptable
to The Travelers, an errors and omissions liability policy in a
reasonable amount and by a carrier satisfactory to The Travelers
providing for indemnification of The Travelers to cover any loss
arising as a result of any real or alleged negligence on the part of
the Claims Administrator, its agents or employees in any aspect of the
performance of the Claims Administrator's duties under this Agreement.
The Claims Administrator shall cause the issuer of said policy to
deliver to The Travelers evidence of the existence of such policy
which provides protection to The Travelers and shall cause the insurer
to give The Travelers ninety (90) days written notice prior to the
cancellation of, or any material change in, the policy. If the
insurance is canceled, substitute coverage shall be obtained.
2.4 - Standard of Performance
The Claims Administrator represents to The Traveler that it is
experienced in the field of claims administration, that it will
perform its obligation as claims administrator hereunder in a prudent
manner and that it will exercise professional standards of diligence
in the determination of the proper benefits payable thereunder and the
settlement of disputes with insureds concerning the foregoing.
2.5 - Indemnification
a) The Claims Administrator agrees to indemnify and hold The Travelers
harmless from any and all liability, loss, damage, fines, punitive
damages, penalties and costs, including expenses and attorneys fees,
which result from any gross negligence, or criminal, fraudulent, or
willful misconduct in carrying out its responsibilities in accordance
with the standard set forth in this Agreement, or which result from
any action which exceeds its authority under this Agreement.
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The Travelers agrees to indemnify and hold the Claims Administrator
harmless from any and all liability, loss, damage, fines, punitive
damages, penalties and costs, including expenses and attorneys fees,
which result from any gross negligence, or criminal, fraudulent, or
willful misconduct in carrying out its responsibilities in accordance
with the standard set forth in this Agreement, or which result from
any action which exceeds its authority under this Agreement.
b) The Travelers will indemnify the Claims Administrator against any and
all loss, damage, liability, judgment, awards and expense, including
court costs and attorneys fees resulting from any act of any officer
or employee of the Claims Administrator which is performed strictly in
accordance with the instructions, manuals or guidelines furnished or
agreed to by The Travelers and which is performed in good faith and
without willful misconduct.
c) In the event that the Claims Administrator is named as a defendant in
a suit arising out of the administration of the Policy, The Travelers
agrees to defend and hold harmless the Claims Administrator form the
judgment, the costs, and the defense expenses of such litigation,
provided that the Claims Administrator was acting strictly in
accordance with the provisions of this Agreement or the instructions,
manuals, or guidelines of The Travelers.
2.6 - Regulatory Authorities
In the conduct of its business and in the performance of its
obligations under this Agreement, the Claims Administrator shall
comply with all applicable statutes, ordinances, rules, and
regulations of any and all federal, state, and municipal regulatory
authorities. If required by state law, the Claims Administrator shall
hold a certificate of registration as a Third Party Administrator
issued by the Department of Insurance or other regulatory body and
post any bond required by any such regulatory body.
The Claims Administrator will promptly notify The Travelers of any
complaint filed against The Travelers with a state regulatory body
received by the Claims Administrator which is related to or arises
from any interpretation of the contract by immediately forwarding such
complaint to The Travelers, Xxx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attention: Employee Benefits Department, Claim Division.
SECTION III - OBLIGATIONS OF THE TRAVELERS
3.1 - Services
The Travelers shall make available to the Claims Administrator such
services of its underwriting and medical departments as shall jointly
be deemed necessary or advisable in connection with the performance of
the Claims Administrator's services hereunder. The Travelers agrees
to provide the Claim Administrator claim and compliance support, in a
format agreeable to the parties. The Claims Administrator may presume
that its claim payment practices are acceptable to The Travelers
unless and until written notice is received from The Travelers. Upon
such written notice, the Claims Administrator shall adhere to claim
payment practices which are acceptable to The Travelers.
The Travelers will send to the Claim Administrator copies of all claim
correspondence which shall be necessary for the Claims Administrator
to perform its obligations under this Agreement, and which have been
sent to Travelers Claims offices.
The Claims Administrator will refer all claims which contain evidence
of misrepresentation which may be grounds for rescission of coverage
to The Travelers. Such information shall be accompanied by
appropriate documentation. The Travelers shall have sole authority to
exercise
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any and all rescission rights under the Policy, and shall be
responsible for notification of rescissions to the claimants and the
Claims Administrator.
The Travelers will be responsible for the cost of the claim form used
for claims paid by The Travelers claim office. The Travelers is also
responsible for the cost of its own claim check stock.
The Travelers will be responsible for the cost of the Patient Advocate
Program or any substitute used at the direction of The Travelers in
its stead.
3.2 - Notices and Correspondence
The Travelers will promptly, on days on which it is open for business,
forward to the Claims Administrator all notices of claims and other
relevant correspondence from policyholders which The Travelers may
receive during the term of this Agreement.
3.3 Claim Reports
The Travelers shall produce claim reports based upon data relating to
claim transactions obtained by direct feed from the Claims
Administrator as provided in paragraph 2.2 of this Agreement.
3.4 - Compensation
The Travelers agrees to pay the Claims Administrator in accordance
with the terms specified in Schedule C, which is attached to and forms
a part of this Agreement.
SECTION IV - CONFIDENTIAL INFORMATION AND CONFLICTS OF INTEREST
The Claims Administrator warrants and represents that no trade secrets
or other confidential information of The Travelers, will be wrongfully
disclosed by the Claims Administrator in connection with any of the
services which are to be provided under this Agreement. The Claims
Administrator further warrants and represents that none of the
provisions of this Agreement, nor the services which will be performed
by the Claims Administrator contravene or conflict with any agreement
of the Claims Administrator with, or obligation to, any other person,
firm, or corporation, including agreements, disclosure agreements or
agreements for assignment of inventions, discoveries, or ideas of
improvement.
All records and other material pertaining to claims made under the
Policy, as provided by this Agreement, shall be held by the Claims
Administrator in strict confidence, and, except as may be authorized
by the claimant in writing, the Claims Administrator shall not
disclose to any person (other than The Travelers) such confidential
information at any time, either during the term of this Agreement or
thereafter.
The provisions of this section shall survive any termination or
expiration of this Agreement.
SECTION V - OWNERSHIP OF MATERIALS
Except for any software ownership rights created prior to this
Agreement, any computer software produced by the Claims Administrator
in connection with the performance of its services hereunder, shall be
the sole property of the Claims Administrator and shall remain the
property of the Claims Administrator following the termination of this
Agreement. The Travelers shall have access, by direct feed from the
Claims Administrator, to all data relating to claim
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transactions which may be stored on the software; this right of access
shall survive the termination or expiration of this Agreement. All
materials and records furnished by The Travelers to the Claims
Administrator are to be and remain the sole property of The Travelers
and are to be returned to The Travelers within ninety (90) days after
the termination or expiration of this Agreement.
SECTION VI - ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
express written consent of the other party. Any such approval shall
not be unreasonably withheld. Any assignee will be bound by the terms
of this Agreement.
SECTION VII - TERMINATION
This Agreement shall terminate on the occurrence of any of the
following events:
(a) By mutual consent of the parties.
(b) Twelve (12) months following written notice of
termination given by any party to this Agreement to
all other parties. The notice shall be mailed, by
certified mail, to the other parties at their last
known address.
(c) Fraud or embezzlement on the part of the Claims
Administrator, its agents or servants or negligence
or omissions uncorrected after notice.
(d) Material breach of this Agreement.
Either party may terminate this Agreement without cause upon twelve
(12) months written notice to the other party. Both parties agree to
provide twelve (12) months notice of cancellation of the group policy.
The parties agree there will be no announcement or disclosure of
cancellation of the group policy until 8 months following the date
notice of cancellation has been given.
Should either party become aware of a material breach of this
Agreement, that party must notify the breaching party of the breach
and provide thirty (30) days to correct such breach. Should the
breach remain uncured at the end of the thirty (30) days, the
breaching party shall have an additional thirty (30) days to correct
the breach, provided a reasonable effort was made during the initial
thirty (30) day period to correct the breach.
Upon termination or expiration of this Agreement, The Travelers shall
have access to all records representing Travelers insureds and The
Travelers shall be entitled to receive copies of any and all such
records, as long as the cost to the Trust Administrator does not
exceed $10,000.
SECTION VIII - ENTIRE AGREEMENT; MODIFICATION
This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes all prior
agreements, whether oral or in writing, with respect to such subject
matter. This Agreement may not be amended except pursuant to an
agreement in writing signed by both parties.
SECTION IX - INTERPRETATION AND CONSTRUCTION
This Agreement will be governed by, and construed in accordance with,
the laws of the State of Connecticut. The title designations of the
numbered sections are for convenience only and will not affect the
interpretation or construction of it.
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SECTION X - USE OF INFORMATION
Any information, including but not limited to, data, business
information, technical information, forms, computer programs and
documentation, written, oral or otherwise (hereinafter "Information")
owned and furnished by either party (hereinafter "Furnishing Party")
to the other party hereunder or in contemplation hereof shall remain
the property of the Furnishing Party. All copies of such Information
in written, graphic, or other tangible form, including computer system
discs and tapes, shall be returned to the Furnishing Party upon the
termination of this Agreement, or upon request at anytime, or shall be
otherwise disposed of as directed by the Furnishing Party. Unless
such Information was previously known to be free of any obligation to
keep it confidential by the party furnished such Information, and
shall be used only upon such terms as may be agreed upon in writing by
the Furnishing Party.
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IN WITNESS THEREOF, the parties hereto have signed this Agreement as of the
date first above written.
THE TRAVELERS INSURANCE COMPANY
Date Feb. 27, 1991 By /Illegible/
---------------------------- ----------------------------------
(Claims Administrator)
----------------------------------
Date Feb. 27, 1991 By Xxxxxx X. Xxxxxxx
---------------------------- ----------------------------------
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SCHEDULE C
TO
AGREEMENT
BETWEEN
CONSOLIDATED GROUP CLAIMS, INC.
And
THE TRAVELERS INSURANCE COMPANY
Compensation shall be paid to the Claims Administrator for the
performance of duties under this Agreement in the amount of 3.5% of
net paid premium. Such compensation shall not be returned to The
Travelers should premiums be returned to participating employers as a
result of any rescission action
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SCHEDULE A
----------
POLICIES
--------
1-4 LIVES 5-14 LIVES XXXXXX TAKOVER NON-NY
--------- ---------- ---------------------
GL-D-15760-15766 GL-F15760-15766 GL-22736-22742
GRH-D-15760-15766 GRH-F-15760-15766 GRH-22736-22742
1-14 LIVES 15-99 LIVES 10-35 LIVES
---------- ----------- -----------
ADD-6120-6126 GL-L-15760-15766 GL-E-15760-15766
GRH-L-15760-15766 GRH-E-15760-15766
XXX-X-0000-0000
XXXXX XXXX ANCHORPLAN
----- ---- ----------
GL-TX-19874-19880 GL-15961-15989 GL-19874-19880
GRH-TX019874019880 GRH-15961-15989 GRH-19874-19880
ADD-TX-6127-6133 ADD-6134-6162 ADD-6127-6133
GL-32238 - 32266
GRH-32238 - 32266
XXXXXX TAKEOVER-NY HARTFORD LIFE FLORIDA
------------------ ------------- -------
GRH-14653-14659 GL-14484-14490 GL-23027-23052
GRH-14484-14490 GRH-23027-23052
XXX-0000-0000
XXX XXXX XXXXXXXX, XXXXXXX, XXXXXXXX, XXXXXXXXX
-------- --------------------------------------
GL -204039-204045 GL-32231 - 32237
GRH-204039-204045 GRH-32231 -32237
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AMENDMENT NO. 2
The Terms and Conditions of the License Agreement for the Practice
Review System, effective August 1, 1991 by and between Value Health
Services, Inc., and The Travelers Insurance Company, as amended. (The
"Agreement") is hereby further amended as follows:
Section 2.1 of the Agreement shall be amended by adding after the
first sentence the following:
"In addition, VHS hereby grants to Consolidated Group Claims,
Inc. Of 00 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
("C.G.C.") a non-exclusive, non-transferable license to use the system
solely to process information related to Traveler's business. No
other rights are granted hereby and C.G.C. shall have no access to the
source code. C.G.C. agrees that its use of the system shall be
subject to the terms and conditions of the Agreement including, but
not limited to, the confidentiality provisions.
This document shall be referred to as Amendment No. 2. The
terms of the Agreement, the Amendment signed April of 1992 and this
Amendment No. 2 shall be construed so as to be consistent with one
another. In the event of a conflict, this Amendment No. 2 shall
control with respect to the subject matter hereof. All provision of
the Agreement remain in full force and effect.
VALUE HEALTH SERVICES THE TRAVELERS INSURANCE COMPANY
NAME: /Illegible/ NAME: Unsigned
------------------------------ --------------------------------
TITLE: TITLE:
----------------------------- -------------------------------
DATE: DATE:
------------------------------ --------------------------------
CONSOLIDATED GROUP CLAIMS, INC.
NAME: /Xxxxxx X. Xxxxxxx/
------------------------------
TITLE: President
-----------------------------
DATE: 5/3/93
------------------------------
