<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED NOVEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 0-19393
MANAGED CARE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3338328
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification No.)
7600 NORTH 16TH STREET
SUITE 150
PHOENIX, ARIZONA 85020
(Address of principal executive offices)
(Zip Code)
602-331-5100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _______
There were 4,594,000 shares of common stock outstanding as of January 9, 1998.
<PAGE>
TABLE OF CONTENTS
PAGE
Part I FINANCIAL INFORMATION
Item 1.Financial Statements
Consolidated Balance Sheets.......................................3
Consolidated Statements of Operations.............................4
Consolidated Statements of Cash Flows.............................5
Notes to Unaudited Consolidated Financial Statements..............6
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................7-10
Part II OTHER INFORMATION
Item 6.Exhibits and Reports on Form 8-K................................10
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MANAGED CARE SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1997 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents, including restricted
cash of $6,676,000 and $5,304,000 $ 9,367,000 $ 7,212,000
Short-term investments 1,502,000 1,503,000
Accounts and notes receivable and unbilled
services, net 2,736,000 3,998,000
Related party accounts and notes receivable 16,000 26,000
Prepaid expenses and other current assets 370,000 1,735,000
Deferred income taxes, net 1,140,000 971,000
------------ ------------
Total current assets 15,131,000 15,445,000
Notes receivable - 315,000
Related party notes receivable 676,000 941,000
Property and equipment, net 4,221,000 3,723,000
Performance bonds 3,791,000 3,737,000
Goodwill, net 3,009,000 3,191,000
Other assets 818,000 665,000
------------ ------------
$ 27,646,000 $ 28,017,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 211,000 $ 350,000
Accrued medical claims 6,659,000 7,080,000
Risk pool payable 1,326,000 2,035,000
Related party risk pool payable 208,000 301,000
Accrued expenses 3,251,000 2,668,000
Current portion of long-term debt 167,000 200,000
------------ ------------
Total current liabilities 11,822,000 12,634,000
Long-term debt - 67,000
Related party long-term debt 3,796,000 3,643,000
Deferred income taxes, net 203,000 203,000
------------ ------------
Total liabilities 15,821,000 16,547,000
------------ ------------
Commitments - -
Stockholders' Equity:
Voting preferred stock, $1,000 par value
Authorized, issued and outstanding - 6.85 shares 7,000 7,000
Common stock, $0.01 par value
Authorized - 10,000,000 shares
Issued and outstanding - 4,394,000 and 4,394,000
shares 44,000 44,000
Capital in excess of par value 14,497,000 14,497,000
Accumulated deficit (2,723,000) (3,078,000)
------------ ------------
Total stockholders' equity 11,825,000 11,470,000
------------ ------------
$ 27,646,000 $ 28,017,000
============ ============
</TABLE>
3
The accompanying notes are an integral part of these statements.
<PAGE>
MANAGED CARE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 16,103,000 $ 17,566,000 $ 30,845,000 $ 35,101,000
------------ ------------ ------------ ------------
Direct cost of operations 12,867,000 14,621,000 24,647,000 28,699,000
Marketing, sales and administrative 3,120,000 3,431,000 5,877,000 7,963,000
------------ ------------ ------------ ------------
Total costs and expenses 15,987,000 18,052,000 30,524,000 36,662,000
------------ ------------ ------------ ------------
Operating income (loss) 116,000 (486,000) 321,000 (1,561,000)
------------ ------------ ------------ ------------
Interest income 213,000 166,000 404,000 235,000
Interest expense (102,000) (95,000) (193,000) (131,000)
------------ ------------ ------------ ------------
Net interest income 111,000 71,000 211,000 104,000
------------ ------------ ------------ ------------
Income (loss) before income taxes 227,000 (415,000) 532,000 (1,457,000)
Provision (benefit) for income taxes 60,000 - 177,000 (50,000)
------------ ------------ ------------ ------------
Net income (loss) $ 167,000 $ (415,000) $ 355,000 $ (1,407,000)
============ ============ ============ ============
Net Income (loss) per share $ 0.04 $ (.09) $ .08 $ (0.32)
============ ============ ============ ============
Weighted Average Common and Common
Equivalent Shares Outstanding 4,457,000 4,368,000 4,479,000 4,368,000
============ ============ ============ ============
</TABLE>
4
The accompanying notes are an integral part of these statements.
<PAGE>
MANAGED CARE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
NOVEMBER 30, NOVEMBER 30,
1997 1996
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 355,000 $(1,407,000)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Bad debt expense 23,000 764,000
Depreciation and amortization 887,000 893,000
Loss on sale of property and equipment 18,000 -
Deferred income taxes (169,000) -
Changes in assets and liabilities:
Accounts receivable and unbilled services 1,309,000 (1,856,000)
Prepaid expenses and other current assets 1,365,000 (731,000)
Accounts payable (139,000) 431,000
Accrued medical claims (421,000) 1,869,000
Risk pool payable (709,000) 785,000
Related party risk pool payable (93,000) 45,000
Accrued expenses 583,000 462,000
Loss contract reserve - (510,000)
Other assets (153,000) -
----------- -----------
Net cash provided by operating activities 2,856,000 745,000
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (1,225,000) (1,285,000)
Proceeds from sale of property and equipment 4,000 -
Purchase of short-term investments - (1,210,000)
Proceeds from maturity/sale of short-term
investments 1,000 1,919,000
Proceeds from related party notes receivable 275,000 1,782,000
Proceeds from notes receivable 245,000 -
Increases in assets securing performance bond (54,000) (114,000)
----------- -----------
Net cash provided by (used in)investing activities (754,000) 1,092,000
----------- -----------
Cash flows from financing activities:
Due to Medicus Systems Corporation - (453,000)
Net increase in long-term debt 53,000 1,539,000
Issuance of stock warrants - 230,000
----------- -----------
Net cash provided by financing activities 53,000 1,316,000
----------- -----------
Net increase in cash and cash equivalents 2,155,000 3,153,000
Cash and cash equivalents, beginning of period 7,212,000 3,804,000
----------- -----------
Cash and cash equivalents, end of period $ 9,367,000 $ 6,957,000
=========== ===========
</TABLE>
5
The accompanying notes are an integral part of these statements.
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MANAGED CARE SOLUTIONS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS
In management's opinion, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) considered necessary for a fair statement of the results for the
interim periods presented. The results of operations for the period ended
November 30, 1997 are not necessarily indicative of the results to be expected
for the full year. The interim consolidated financial statements should be read
in conjunction with Managed Care Solutions, Inc. ("MCS" or "Company")
consolidated financial statements and notes thereto included in the Company's
Form 10-K for the year ended May 31, 1997.
NOTE 2 - NET INCOME PER SHARE
Net income (loss) per common share has been computed by dividing net income
(loss) by the weighted average common equivalent shares outstanding during the
period. Common stock equivalents include shares issuable on the exercise of
stock options and warrants when dilutive, using the treasury stock method from
date of grant.
The following is the computation of the reconciliation of the numerators and
denominators of net income per common share and net income per common share,
assuming dilution in accordance with Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" ("SFAS 128"). SFAS 128 was issued in February 1997
and is effective for financial statements for both interim and annual periods
ending after December 15, 1997.
Supplemental earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------------
NOVEMBER 30, 1997 NOVEMBER 30, 1996
--------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income Shares Per Share Income Shares Per Share
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
Net income (loss) per common share:
Income available to common $167,000 4,394,000 $0.04 $(415,000) 4,368,000 $(0.09)
stockholders
Effect of dilutive securities:
Stock options and warrants - 63,000 - -
-------- --------- -------- ---------
Net income (loss) per common
share, assuming dilution:
Income (loss) available to
common stockholders and
assumed conversions $167,000 4,457,000 $0.04 $(415,000) 4,368,000 $(0.09)
======== ========= ===== ========= ========= ======
6
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------------------------------------------------------
NOVEMBER 30, 1997 NOVEMBER 30, 1996
--------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income Shares Per Share Income Shares Per Share
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
Net income (loss) per common share:
Income available to common $355,000 4,394,000 $0.08 $(1,407,000) 4,368,000 $(0.32)
stockholders
Effect of dilutive securities:
Stock options and warrants - 89,000 - -
-------- --------- ----------- ---------
Net income (loss) per common
share, assuming dilution:
Income (loss) available to
common stockholders and
assumed conversions $355,000 4,483,000 $0.08 $(1,407,000) 4,368,000 $(0.32)
======== ========= ===== =========== ========= ======
</TABLE>
NOTE 3 - RESTRICTIONS ON FUND TRANSFERS
Certain of the Company's operating subsidiaries are subject to state
regulations, which require compliance with certain net worth, reserve and
deposit requirements. To the extent the operating subsidiaries must comply with
these regulations, they may not have the financial flexibility to transfer funds
to the parent organization, MCS. Net assets of subsidiaries (after inter-company
eliminations) which, at November 30, 1997, may not be transferred to MCS by
subsidiaries in the form of loans, advances or cash dividends without the
consent of a third party are referred to as "Restricted Net Assets". Total
Restricted Net Assets of these operating subsidiaries were $8,784,000 at
November 30, 1997, with deposit and reserve requirements (performance bonds)
representing $3,791,000 of the Restricted Net Assets and net worth requirements,
in excess of deposit and reserve requirements, representing the remaining
$4,993,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
Managed Care Solutions, Inc. ("MCS" or the "Company") is involved in a variety
of health care programs, many of which serve indigent and Medicaid populations.
The Company's operations include a long-term care Arizona based health
maintenance organization ("HMO") subsidiary, Ventana Health Systems ("Ventana");
an Arizona based primary and acute care HMO subsidiary, Arizona Health Concepts
("AHC"); management contracts pursuant to which the Company administers
privately owned HMOs located in Hawaii, Michigan, New Mexico, and Texas; the
management of healthcare services for an indigent population for the County of
San Diego; a contractual arrangement with the State of Indiana Medicaid Agency;
a subsidiary providing home healthcare and community worker services to Ventana;
and an Ancillary Services Division which manages arrangements in which hospitals
deliver clinical services on-site at nursing homes.
7
<PAGE>
RESULTS OF OPERATIONS
Revenues decreased $1,463,000 and $4,256,000 for the three and six-month periods
ended November 30, 1997, respectively, to $16,103,000 and $30,845,000,
respectively, as compared to the same periods of the prior year. For the three
and six month periods ended November 30, 1997, $6,211,000 and $11,646,000
related to fees received for management of health plans not owned by the
Company. Management fee revenue increased 13% for the three months ended
November 30, 1997 as compared to the same period of the prior year. For the six
months ended November 30, 1997, management fee revenue increased 8% over the
comparable period of the prior year. The increase in management fee revenue is
primarily due to the Lovelace Health Plan located in New Mexico transitioning
from the pre-operational phase to the member acceptance phase on October 1, 1997
and increased membership in the AlohaCare health plan located in Hawaii.
Capitation revenue received by both Ventana and AHC decreased $2,177,000 and
$5,122,000 for the three and six-month periods ended November 30, 1997,
respectively, to $9,892,000 and $19,199,000, respectively. The majority of the
decline is the result of a decrease in AHC revenues of $2,292,000 and $4,931,000
for the three and six-month periods ended November 30, 1997, respectively, due
to the transition of members in Maricopa County to a different plan on
December 1, 1996.
Direct costs of operations decreased to $12,867,000 and $24,647,000 for the
three and six-month periods ended November 30, 1997, respectively, from
$14,621,000 and $28,699,000 for the three and six-month periods ended
November 30, 1996, respectively. For the three and six month periods ended
November 30, 1997, direct costs of operations consisted of $4,278,000 and
$8,216,000, respectively, related to fees generated from management of health
plans not owned by the Company and $8,589,000 and $16,431,000, respectively,from
combined operating expenses of Ventana and AHC. The direct cost of operations to
manage plans as a percentage of revenue decreased to 69% from 92% for the three-
month periods ended November 30, 1997 and 1996, respectively. The reason for the
significant decrease is primarily due to the termination of unprofitable
contracts during the second quarter of fiscal year 1997 and a reduction in
workforce in July 1996. For the six month period ended November 30, 1997 direct
costs of operations to manage plans as a percentage of revenue was 71% versus
63% in the comparable period of the prior year. The increase is the result of
increased costs related to the pre-operational phase of the STAR+PLUS program in
Houston, which begins accepting members January 1, 1998.
The direct costs of operations as a percentage of revenue was 84% for both the
three and six month periods ended November 30, 1997 for Ventana, and 92% and 89%
during the respective periods for AHC.
Marketing, sales and administrative expenses decreased from $3,431,000 and
$7,963,000 for the three and six months ended November 30, 1996, respectively,
to $3,120,000 and $5,877,000 for the three and six-month periods ended
November 30, 1997, respectively. The decrease is primarily due to termination of
unprofitable contracts during the second quarter of fiscal year 1997, the
workforce reduction plan implemented in July 1996 and efforts to reduce
operating costs.
The effective income tax rate was 33% for the six-month period ended
November 30, 1997 versus 3% for the comparable period of the prior fiscal year.
The lower rate in fiscal year 1997 reflects nondeductible goodwill amortization
and the valuation allowances for the net operating losses of the subsidiaries.
Net interest income for the three and six-month periods ended November 30, 1997
was $111,000 and $211,000, respectively, versus $71,000 and $104,000 for the
comparable periods of the prior year. Net interest income is primarily related
to investments held by Ventana and AHC, partially offset by interest expense on
outstanding convertible debt.
8
<PAGE>
Net income was $167,000 and $355,000 for the three and six-month periods ended
November 30, 1997, respectively, compared to net losses of $415,000 and
$1,407,000 for the same periods of the prior year. The primary reasons for the
change in profitability are the costs included in the prior year periods related
to terminated contracts in Colorado, Illinois and Missouri and costs related to
severance agreements with employees terminated as part of the workforce
reduction effort in July 1996.
In December 1997, the Company was notified that it was selected by the State of
Indiana, Department of Administration to continue to provide administrative
services under the State's Medicaid Managed Care Program. The contract renewal,
which is in excess of $11 million, extends through December 1999 and includes
the possibility of two one-year extensions.
In December 1997, the Company was also notified that the number of Houston-area
eligible beneficiaries voluntarily enrolling with Rio Grande HMO, Inc. in the
STAR+PLUS program exceeded the Company's initial estimate. As a result, the
Company expects the financial results of the Company for the next four quarters
to exceed the prior year's comparable quarters. The Company will begin a full
service management contract on January 1, 1998 pursuant to an agreement with
Blue Cross and Blue Shield of Texas. Under this contract, the Company will
provide administrative services to Rio Grande HMO, Inc., a subsidiary of Blue
Cross and Blue Shield of Texas, in the STAR+PLUS program. The STAR+PLUS program
will provide comprehensive managed health care services to approximately 60,000
aged, blind and disabled Medicaid beneficiaries. The percentage of initial
voluntary enrollment will determine the percentage of members that did not
enroll in the voluntary stage to be assigned to the Rio Grande HMO in the
auto-assignment phase of the enrollment. The auto-assignment phase begins
March 1, 1998. Any changes in the method of allocating members, or increases in
the costs of providing administrative services, could cause the Company's
expectations not to be realized.
LIQUIDITY AND CAPITAL RESOURCES
During the six-month period ended November 30, 1997, the Company's cash and cash
equivalents increased by $2,155,000 to $9,367,000. Operating activities provided
$2,856,000 for the six-month period ended November 30, 1997 as compared to
$745,000 for the same period of the previous year. The primary causes for the
increase were a decrease in accounts receivable and prepaid expenses and an
increase in accrued expenses offset by a decrease in accrued medical expenses
and risk pools payable.
Investing activities used $754,000 of cash during the six months ended
November 30, 1997 versus providing $1,092,000 during the same six months of the
previous year. Sources of cash for the six months ended November 30, 1997
consisted primarily of proceeds received in payment of notes receivable. These
proceeds were offset by $1,225,000 in purchases of fixed assets.
Financing activities provided $53,000 for the six months ended November 30, 1997
as compared to $1,316,000 for the same period of the prior year. Sources of cash
for the six months ended November 30, 1996 consisted of proceeds from the
issuance of long term debt and warrants to BCBSTX and to a trust controlled by
William Brown offset by payments to Medicus.
9
<PAGE>
Certain of the Company's operating subsidiaries are subject to state
regulations, which require compliance with certain net worth, reserve and
deposit requirements. To the extent the operating subsidiaries must comply with
these regulations, they may not have the financial flexibility to transfer funds
to MCS. Net assets of subsidiaries (after inter-company eliminations) which, at
November 30, 1997, may not be transferred to MCS by subsidiaries in the form of
loans, advances or cash dividends without the consent of a third party are
referred to as " Restricted Net Assets". Total Restricted Net Assets of these
operating subsidiaries were $8,784,000 at November 30, 1997, with deposit and
reserve requirements (performance bonds) representing $3,791,000 of the
Restricted Net Assets and net worth requirements, in excess of deposit and
reserve requirements, representing the remaining $4,993,000. The outstanding
balance on funds provided by Ventana to MCS under loan agreements totaled
$665,000 at November 30, 1997. VHS provided these loans in the normal course of
operations. All such agreements were pre-approved as required by Arizona Health
Care Cost Containment System Administration.
During January 1998, Beverly Enterprises, Inc., a long-term health care company,
invested $1,000,000 in the Company by purchasing 200,000 shares of the Company's
common stock at $5 per share. Based on current projections of existing
contracts, the Company believes that its cash and capital resources should be
sufficient to meet its financial requirements in fiscal 1998.
FORWARD-LOOKING INFORMATION
This report contains statements that may be considered forward-looking, such as
the discussion of the Company's strategic goals, new contracts and cash flow.
These statements speak of the Company's plans, goals or expectations, refer to
estimates, or use similar terms. Actual results could differ materially from the
results indicated by these statements because the realization of those results
is subject to many uncertainties.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10.1) Administrative Services Agreement between the registrant
and the County of San Diego, California.
(10.2) Administrative contract between Arizona Health Concepts,
Inc. and Arizona Health Care Cost Containment System.
(27) Financial data schedule.
(b) Reports on Form 8-K
None
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MANAGED CARE SOLUTIONS, INC.
By: /s/ James A. Burns
------------------------------------------------
James A. Burns, President and Chief Executive
Officer
By: /s/ Michael J. Kennedy
------------------------------------------------
Michael J. Kennedy, Chief Financial Officer
Dated: January 9, 1998
---------------
<PAGE>
EXHIBIT 10.1
COUNTY CONTRACT NUMBER 43817
AGREEMENT
AGREEMENT between the COUNTY OF SAN DIEGO hereinafter called COUNTY and
Managed Care Solutions, Inc. (MCS)
8840 Complex Drive, Suite 300
San Diego, CA 92123
(619) 492-4422
hereinafter referred to as CONTRACTOR for County of San Diego, Department of
Health Services, County Indigent Health Services.
- --------------------------------------------------------------------------------
WITNESSETH:
WHEREAS CONTRACTOR is specially trained and possesses certain skills,
experience, education and competency to perform certain special services, and
COUNTY desires to engage CONTRACTOR for such special services upon the terms
provided and,
WHEREAS, pursuant to the provisions of the California Government Code Section
26227, The Board of Supervisors of COUNTY is authorized to enter a contract for
such services.
WHEREAS, the County, by action of the Board of Supervisors, on February 18, 1997
(#6) authorized the Director of Purchasing and Contracting, pursuant to Article
XXIII, Section 401 of the Administrative Code, to award a contract for
Administrative Services Organization (ASO) for County Indigent Health Services
NOW THEREFORE the parties hereto do mutually agree to the terms and conditions
as attached and set forth in:
SECTION TITLE
A Special Terms and Conditions
B Direct Service Contract Standard Terms and Conditions
C-1 Statement of Work, County Indigent Health Services
and Comprehensive AIDS
D Contract Budget
E MCS Proposal, as Amended, Dated April 30, 1997
IN WITNESS THEREOF COUNTY AND CONTRACTOR have executed this AGREEMENT to be
effective:
October 1, 1997
---------------
CONTRACTOR: COUNTY:
BY: /s/ Michael Tweedell Date: 10/9/97 BY: /s/ William L. Napier Date: 11/3/97
-------------------- ------- --------------------- -------
NAME: Michael Tweedell NAME: William L. Napier
--------------------------- ------------------------------
TITLE: Senior Vice President TITLE:Purchasing and Contracting Director
-------------------------- -----------------------------------
Managed Care Solutions, Inc.
8840 Complex Drive, Suite 300
San Diego, CA 92123
County Counsel Approval: N/A Auditor-Controller Approval: N/A
<PAGE>
COUNTY OF SAN DIEGO, DEPARTMENT OF HEALTH SERVICES
ADMINISTRATIVE SERVICES ORGANIZATION
SECTION A - SPECIAL TERMS AND CONDITIONS
CONTRACT ADMINISTRATION. The Purchasing and Contracting Director is designated
as the Contracting Officer and is the only County official authorized to make
any changes in this agreement.
.1 The County has designated the following individual as the County's
Administrator and Contracting Officer's Technical Representative
(COTRs):
Section C-1 - County Indigent Health Services
Victoria Mizel, Administrator County Indigent Health
Services
P.O. Box 85222 (O577A)
San Diego, CA 92186-5222
(619) 565-3140
.2 County's COTR or designee will chair Contractor progress meetings
(per B-2.4) and will coordinate County's contract administrative
functions. The COTR or designee is designated to receive and approve
Contractor invoices for payment, audit and inspect records, inspect
Contractor services, and provide other technical guidance as
required. The COTR or designee is NOT authorized to change the terms
and conditions of the Contract. Changes to the scope of work or
total price will be made only by the Contracting Officer issuing a
properly executed contract amendment.
1.2.1 The COTR is authorized to make administrative adjustments,
such as adjustments to service requirements which do not
change the purpose or intent of the Statement of Work, the
Terms and Conditions of the Contract, or the total contract
price. These administrative adjustments will be in the form of
an amendment to the contract, signed by the Contractor and the
COTR. The Contracting Director will refer all inquiries about
such adjustments to the COTR.
.3 The Contract Program Monitor (CPR) for Section C-1 will be the COTR.
.4 Contractor's Project Director shall be in charge of performing this
Agreement and shall administer this Agreement on behalf of
Contractor.
2 TERMS OF AGREEMENT. The term of this Agreement shall commence on the
effective date October 1, 1997, and continue throughout and including June
30, 2000, during which time Contractor shall perform the services provided
herein. County reserves the option to exercise two additional option years
not to exceed June 30, 2002.
3 COMPENSATION
.1 For Section C-1, County agrees to pay Contractor a fixed rate
prorated in monthly payments for services to be performed during the
term of this Agreement. In addition, County shall also reimburse
Contractor for certain pass through costs that are approved by the
County prior to the Contractor incurring the expense.
3.1.1 The total amount of the contract, effective from October 1,
1997 through June 30, 2000, is
$9, 169,464.
3.2 Contractor and County may adjust the fixed price contract should the
following circumstances occur during the term of the agreement:
3.2.1 Total budgeted FTE's, as agreed to in Section D, are decreased
by two or more FTE's for 30 days or more. Any extension of
time to this requirement must be pre-approved, in writing by
the County. The Contractor has a duty to inform the County
about any decreases in total FTE's of two or more for a period
of 30 days.
1
<PAGE>
3.2.1.1 Contractor is required to collaborate with the Mental
Health Administrative Services Organization. Section
A-3.2. applies to savings that result from this
collaboration effort.
3.2.1.2 The County may consider structural changes in the
program, such as block granting of certain program
funds, which could produce additional program savings
in accordance with this section.
3.2.2 The County has designated the following key positions as vital
to the performance of this contract: Project Director, Medical
Director, MIS Manager and Finance Manager. Vacancies in these
key positions for 60 days or more may result in budget
adjustments if COTR determines that the Contractor is not
making a reasonable effort to fill the vacancies. The
Contractor has a duty to inform the County about any key
vacancies when a key position is vacated.
3.2.2.1 The Contractor was selected, in part, based upon the
qualifications of individuals filling these key
positions. Any replacements for these key positions
must be pre-approved, in writing, by the County in
accordance with B-1.12.
3.2.2.1.1The County and Contractor shall mutually
select any replacement of the Medical
Director during the term of this agreement.
3.3 After the County notifies the Contractor to proceed with close out
services, the County requires the Contractor to smoothly transition
services to the successor of this agreement in accordance with
Section C-1-6.12. During the close out period, the County shall
withhold 20% of the Contractor's monthly fixed payment each month up
to three months. Upon successful completion of the close out tasks,
all of the withheld funds will be paid to the Contractor in a lump
sum payment within 30 days. This section shall not apply in the
event of the termination for cause because of the payment withhold
and set off provisions contained in Section B-6.4.1.
3.3.1 The County's notice to Contractor to commence transition or
close out services shall satisfy any and all requirements the
County may have to notify Contractor and Contractor's
employees regarding the imminent close out of contract
services or resulting employee layoffs. The County shall make
all reasonable efforts to allow the Contractor at least sixty
(60) days to perform close out services.
4 METHOD OF PAYMENT. Contractor shall submit monthly invoices to COTR.
Monthly invoices shall be submitted per Contract Agreement. Monthly
invoices shall be accompanied by Contractor's documentation described in
Section C-1.
5 NOTICE. Any notice or notices required or permitted to be given pursuant
to this Agreement may be personally served on the other party by the party
giving such notice, or may be served by certified mail, postage prepaid,
return receipt requested, to the Officials cited in Paragraph 1 above, for
Contractor at the address cited on the P&C 600 form, and for County at the
address shown in Paragraph 1 above.
6 NOTICE OF DELAY. Contractor shall, within five (5) days of the beginning
of any delay in the performance of this Agreement, notify the County's
Administrator in writing of said delay, causes, and remedial action to be
taken by Contractor.
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7 COUNTY CONTRACTOR'S MANUAL Not applicable.
8 DEFINITIONS.
.1 "COTR" shall mean Contracting Officer's Technical Representative.
.2 "County" shall mean The County of San Diego, California. In
Statements of Work "County" is also used for County's Administrator
also called COTR.
.3 "Offeror" or "Proposer" shall mean any person, firm, partnership, or
corporation submitting a proposal to the County in response to this
solicitation.
.4 "Contractor" shall mean the offeror whose proposal is accepted by
the County and who has entered into an agreement with County to
provide the equipment and services described herein.
.5 "Vendor" shall mean the same as Contractor.
.6 "Provision" shall mean the same as Terms and Conditions.
.7 "County Staff" shall mean persons designated by COTR for specific
liaison functions and/or to receive Contractor reports.
.8 Additional definitions are provided in Section A, Attachment 2 for
the County Indigent Health Services Program. (Attachment 1- this
number not used.)
See Section A, Attachment 2 for additional definitions which apply to any
resulting contracts. These Attachments are printed on separate pages so
that they may be removed to facilitate use with the applicable Section C,
Statements of Work.
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COUNTY OF SAN DIEGO, DEPARTMENT OF HEALTH SERVICES
ADMINISTRATIVE SERVICES ORGANIZATION
SECTION B - DIRECT SERVICE CONTRACT STANDARD TERMS AND CONDITIONS
TABLE OF CONTENTS
SECTION TITLE PARAGRAPH
- ------------- ---------
INDEPENDENT CONTRACTOR 1
CONTRACTOR'S INTERESTS 2
COMPLIANCE WITH LAW, REGULATION AND BOARD POLICY 3
RECORDS, REPORTS AND STUDIES 4
CONTRACT TYPE, INVOICES AND PAYMENT 5
AVAILABILITY OF FUNDS, CHANGES, TERMINATION AND EXTENSIONS 6
1 INDEPENDENT CONTRACTOR
1.1 INDEPENDENT CONTRACTOR. The Contractor is, for all purposes arising
out of this contract, an independent Contractor and shall not be deemed an
employee of the County. It is expressly understood and agreed that the
Contractor shall in no event, as a result of this Contract, be entitled to
any benefits to which County employees are entitled, including, but not
limited to overtime, any retirement benefits, worker's compensation
benefits, and injury leave or other leave benefits.
1.2 HOLD HARMLESS.
1.2.1 The Contractor agrees, during the term of this agreement, to
indemnify, defend and hold harmless the County against any claims or
liabilities for which the Contractor is responsible, which may arise
as a result of the Contractor's acts or omissions in the provision
of services by the Contractor under this agreement, or which may
otherwise arise in connection with the use and maintenance of any
property, facility or equipment by or under the direction or control
of the Contractor or the performance of any activities by or under
the direction or control of the Contractor in the performance of
this agreement. The Contractor's obligation to defend is limited to
the defense of the County in connection with alleged Contractor acts
and omissions. The County shall be responsible to defend itself
against any allegations of County's acts and omissions.
1.2.2 The County agrees, with regard to the termination of the
County Indigent Health Services Program, to indemnify, defend and hold
harmless the Contractor against any claims or liabilities arising
from the action to terminate the County Indigent Health Services
Program which are the responsibility of the County which may arise
as a result of the County's acts and omissions in the performance of
this agreement. The County's obligation to defend is limited to the
defense of the Contractor in connection with alleged County's acts
and omissions. The Contractor shall be responsible to defend itself
against any allegations of Contractor's acts and omissions.
1.3 LIMITATION ON FUTURE CONTRACTS.
1.3.1 It is agreed by the parties to the contract that the
Contractor will be restricted in its future contracting with the
County to the manner described below. Except as specifically
provided in this clause, this Contractor shall be free to compete for
business on an equal basis with other companies.
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1.3.2 If the Contractor, under the terms of the contract, or through
the performance of tasks pursuant to this contract, is required to
develop specifications of statements of work and such specifications
or statements of work are to be incorporated into a solicitation,
the Contractor shall be ineligible to perform the work described
within that solicitation as a prime or subcontractor under an ensuring
County contract. Such restrictions shall remain in effect for three
years following the date of the initial solicitation. It is further
agreed that the County will not UNILATERALLY require the contractor
to prepare such specifications or statements of work under this
contract.
1.3.3 To the extent that the work under this contract requires
access to proprietary, business confidential or financial data of
other companies, and as long as such data remains proprietary or
confidential, the Contractor shall protect such data from
unauthorized use and disclosure and agrees not to use it to compete
with such companies.
1.3.4 The restrictions of Paragraph 1.3.2 above may be waived by the
Contracting Officer if the Contracting Officer determines that such
restrictions would be detrimental to County programs.
1.4 CONDUCT OF CONTRACTOR. The Contractor agrees to inform the County of
all the Contractor's interests, if any, which are or which the
Contractor believes to be incompatible with any interests of the County.
1.4.1 INFLUENCE. The Contractor shall not, under circumstances which
might reasonably be interpreted as an attempt to influence the
recipient in the conduct of his duties, accept any gratuity or special
favor from individuals or organizations with whom the Contractor is
doing business or proposing to do business, in accomplishing the work
under the Contract.
1.4.2 PERSONAL GAIN. The Contractor shall not use for personal gain
or make other improper use of privileged information which is acquired
in connection with his employment. In this connection, the term
"privileged information" includes, but is not limited to,
unpublished information relating to technological and scientific
development; medical, personnel, or security records of individuals;
anticipated material requirements or pricing actions; and knowledge
of selections of contractors or subcontractors in advance of
official announcement.
1.4.3 GIFTS AND GRATUITIES. The Contractor shall not offer, directly
or indirectly, gifts, gratuity, favors, entertainment or other item of
monetary value to an employee of the County.
1.4.4 REFERRALS. Contractor further covenants that no referrals of
clients through Contractor's intake or referral process shall be made
to the private practice of any person(s) employed by the Contractor.
1.5 COVENANT AGAINST CONTINGENT FEES. The Contractor warrants that no
person or selling agency has been employed or retained to solicit or secure
this contract upon an agreement or understanding for a commission,
percentage, brokerage, or contingent fee, excepting bona fide employees or
bona fide established commercial or selling agencies maintained by the
Contractor for the purpose of securing business. For breach or violation of
this warranty, the County shall have the right to terminate this contract
without liability or in its discretion, to deduct from the contract price
or consideration, or to otherwise recover, the full amount of such
commission, percentage, brokerage or contingent fee.
1.6 CONTRACTOR'S EMPLOYEES AND EQUIPMENT. Contractor agrees that
Contractor has secured or shall secure at Contractor's own expense all
persons, employees and equipment required to perform the services
required under this Agreement and that all such services shall be performed
by Contractor, or under Contractor's supervision, by persons authorized by
law to perform such services. If any arrangement is made whereby
employees of County are used by Contractor and are subject to Contractor's
supervision and control, they shall, while engaged in such work be
considered for all purposes, as employees, servants, or agents of the
Contractor and not the County, irrespective of party paying them.
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1.7 RESPONSIBILITY FOR EQUIPMENT. County shall not be responsible nor be
held liable for any damage to persons or property consequent upon the use,
misuse, or failure of any equipment used by Contractor, or Contractor's
employee, even though such equipment may be furnished, rented or loaned to
Contractor by County. The acceptance or use of any such equipment by
Contractor or Contractor's employees shall be construed to mean that
Contractor accepts full responsibility for and agrees to exonerate,
indemnify and hold harmless County from and against any and all claims for
any damage whatsoever resulting from the use, misuse, or failure of such
equipment, whether such damage be to the employee or property of Contractor,
other contractors, County or other persons. Equipment includes, but is not
limited to, material, tools, or other things. Contractor shall repair or
replace, at Contractor's expense, all County equipment or fixed assets that
are damaged or lost as a result of contractor negligence.
1.8 NONEXPENDABLE PROPERTY ACQUISITION. County retains title to all
nonexpendable property which Contractor may acquire with funds from this
Agreement, including property acquired by lease purchase agreement.
Contractor may not expend funds under this Agreement for the acquisition of
nonexpendable property having a unit cost of $1,000 or more and a normal
life expectancy of more than one year without the prior written approval
of the COTR. Contractor shall comply with the inventory of nonexpendable
equipment provisions contained in the County Contractors Manual.
1.9 RIGHT TO ACQUIRE EQUIPMENT AND SERVICES. Nothing in this agreement
shall prohibit the County from acquiring the same type or equivalent
equipment and/or service from other sources, when deemed by the County
to be in its best interest.
1.10 INSURANCE.
1.10.1 Before commencement of the work, contractor shall submit
insurance policies or Certificate(s) of Insurance and appropriate
separate endorsements evidencing that contractor has obtained for the
period of the contract, from insurance companies which have been
approved to do business in the State of California by the State
Department of Insurance, and which hold a current policy holder's
alphabetic and financial size category rating of not less than A,
VII according to the current Best's Key Rating Guide, or a company of
equal financial stability that is approved in writing by County's
Risk Manager, insurance in the following forms of coverage and
minimum amounts specified:
1.10.1.1 A policy of statutory worker's Compensation
insurance covering all employees of contractor and
Employer's Liability coverage for no less than one million
dollars ($1,000,000) per occurrence for all employees of
Contractor.
1.10.1.2 Comprehensive General Liability or Commercial
General Liability Insurance in an amount of not less than
$5,000,000 combined single limit per occurrence, for bodily
injury, including death, and property damage.
1.10.1.3 Medical Malpractice or Professional Liability -
covering all licensed medical personnel providing services
under this contract:
a. $5,000,000 Per Occurrence
b. $10,000,000 in the Aggregate
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1.10.1.4 Commercial Automobile Liability
a. $1,000,000 Bodily Injury (including death)
and Property Damage Per Occurrence
b. This insurance shall be applicable to all
owned, non-owned and hired vehicles and
shall include Contractual Liability.
1.10.1.5 Employee Dishonesty or Fidelity coverage for all
employees of Contractor of not less than Four Million
Dollars ($4,000,000) with a deductible of not more than
Twenty-Five Thousand Dollars.
1.10.2 The Comprehensive General or Commercial Liability policy
shall name the County of San Diego as additional insured by separate
endorsement.
1.10.3 Each policy of insurance shall contain the following
clauses:
1.10.3.1 "It is agreed that these policies shall not be
canceled nor the coverage reduced until thirty (30) days
after the COTR shall have received written notice of such
cancellation or reduction. The notice shall be deemed
effective the date delivered to said COTR, as evidenced by
properly validated return receipt."
1.10.3.2 "The insured waives any right of subrogation
against County of San Diego which might arise by reason of
payment under these policies."
1.11 THIS NUMBER NOT USED
1.12 PERSONNEL ASSIGNMENT AND REASSIGNMENT.
1.12.1 Resumes of key personnel who will be assigned to the project
shall be furnished. All such personnel shall be assigned to the
project.
1.12.2 A Project Director shall be assigned, and on site (if more
than one individual is assigned) as the individual responsible for
the overall performance of any resulting contract and shall be
directly responsible for responding to the COTR at all times during
the term of this contract.
1.12.3 No reassignments of key personnel shall be allowed without
full resume submittal, justification therefore and approval by the
COTR.
1.13 FINANCIAL INDEPENDENCE
1.13.1 Contractor and subcontractors for Administrative Services
shall have no financial interests in any service provider
delivering physical health services to be administered by the ASO and
funded by the County of San Diego, during the term of any resulting
contract. Proposers shall disclose all financial interests between
the proposer and services providers. The County believes that the
potential for conflict of interest, real or apparent, is significant
in the ASO undertaking. The mere presence of apparent conflicts of
interest raise major concerns with public policy decision making and
can limit the effectiveness of an organization in accomplishing
system change.
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1.13.2 "Financial interest" as prohibited by Paragraph 1.13.1 is
defined as a relationship between the ASO and any physical health
care service provider entity where any one or more of the following
conditions exist:
1.13.2.1 Either entity has a direct or indirect
investment in the other entity worth more than $ 1,000.
1.13.2.2 Either entity has a direct or indirect interest
in real property owned by the other entity worth more than
$1,000.
1.13.2.3 Either entity receives income equal to or greater
than $250 or is promised to receive within the preceding
12 month period income equal to or greater than $250 from
the other entity.
1.13.2.4 Any individual associated with either entity is
employed by or holds any position as director, officer,
partner, trustee, employer, or holds any position of
management in the other entity.
2 CONTRACTOR'S INTEREST
2.1 ASSIGNMENT OF CLAIMS. The Contractor shall not assign any interest in
this agreement, and shall not transfer any interest in the same, whether by
assignment or novation, without the prior written consent of the County
thereto; provided, however, that claims for money due or to become due to
Contractor from County under this agreement may be assigned without such
approval. Notice of any such assignment or transfer shall be furnished
promptly to the County.
2.2 INTEREST OF CONTRACTOR. Contractor covenants that it presently has no
interest and shall not acquire any interest direct or indirect, which would
conflict in any manner of degree with the performance of services required
to be performed under this Agreement. The Contractor further covenants
that in the performance of this Agreement no person having such interest
shall be employed.
2.3 SUBCONTRACT FOR WORK OR SERVICES. No contract shall be made by the
Contractor with any other party for furnishing any of the work or services
herein contained without the prior written approval of the COTR but this
provision shall not require the approval of contracts of employment between
the Contractor and personnel assigned for services thereunder.
2.3.1 Contractor shall provide the COTR with copies of all
subcontracts relating to this Agreement entered into by Contractor
within 30 days after the beginning of the subcontract. Such
subcontracts of Contractor shall be notified of Contractor's
relationship to County.
2.3.2 "Subcontractor" means any entity, other than County, that
furnishes to Contractor services or supplies, relevant to this
Agreement other than standard commercial supplies, office space,
printing services or maintenance services.
2.4 CONTRACT PROGRESS MEETINGS. The Contracting Officer's Technical
Representative(s) (COTR) and other County personnel, as appropriate, will
meet periodically with the Contractor to review the contract performance.
At these meetings the COTR will apprise the Contractor of how the County
views the Contractor's performance and the Contractor will apprise the
County of problems, if any, being experienced. The Contractor will also
notify the Contracting Officer (in writing) of any work being performed,
if any, that the Contractor considers to be over and above the
requirements of the contract. Appropriate action shall be taken to resolve
outstanding issues.
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2.4.1 The minutes of these meetings will be reduced to writing and
signed by the COTR and the Contractor. Should the Contractor not
concur with the minutes, the Contractor shall set out in writing any
area of disagreement. Appropriate action will be taken to resolve any
areas of disagreement.
3 COMPLIANCE WITH LAW, REGULATION AND BOARD POLICY
3.1 AFFIRMATIVE ACTION. Each Vendor, where the cumulative total of
County of San Diego purchases are $10,000 or more during a calendar year,
shall comply with the Affirmative Action Program for Vendors as set forth in
Article IIIk (commencing at Section 84) of the San Diego County
Administrative Code, which program is incorporated herein by reference.
A copy of this Affirmative Action Program may be obtained by contacting:
OFFICE OF CONTRACT COMPLIANCE
COUNTY OPERATIONS CENTER
5555 OVERLAND AVENUE
SAN DIEGO, CA 92123
3.1.1 The County of San Diego, as a matter of policy, encourages the
participation of small, minority, and women-owned businesses.
3.2 EQUAL OPPORTUNITY. Contractor will not discriminate against any
employee, or against any applicant for such employment, because of age,
race, color, religion, sex, sexual orientation, physical handicap,
ancestry or national origin. This provision shall include but not be
limited to the following: employment, upgrading, demotion, or transfer;
recruitment or recruitment advertising; layoff or termination; rates of
pay or other forms of compensation; and selection for training, including
apprenticeship.
3.3 NONDISCRIMINATION. Contractor shall ensure that services and
benefits are provided without regard to race, color, religion, sex, age or
national origin in accordance with Title VI of the Civil Rights Act of
1964. Contractor shall comply with Section 504 of the Rehabilitation Act of
1973, as amended, pertaining to the prohibition of discrimination against
qualified handicapped persons under any program or activity which
receives or benefits from Federal financial assistance.
3.3.1 Contractor shall ensure that no person shall, on the basis of
ethnic group identification, religion, age, sex, color, or physical
or mental disability, be unlawfully denied the benefits of, or
be unlawfully subjected to discrimination under, any program or
activity that is funded directly by the state or receives any
financial assistance from the state. Section 11135 of the California
Government Code is incorporated herein by reference.
3.4 AIDS DISCRIMINATION. Contractor shall not deny any person the full
and equal enjoyment of, or impose less advantageous terms, or restrict
the availability of, the use of any County facility or participation in
any County funded or supported service or program on the grounds that such
person has Acquired Immune Deficiency Syndrome (AIDS), AIDS-related
complex (ARC), or AIDS-related status (ARS), as those terms are defined in
Chapter 1, section 32.1203, San Diego County Code of Regulatory Ordinances,
a copy of which can be obtained from the Clerk of the Board of Supervisors,
1600 Pacific Highway, San Diego, CA 92101.
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3.5 AMERICANS WITH DISABILITIES ACT OF 1990 (ADA). Contractor shall
comply with the ADA, pertaining to discrimination against qualified people
with disabilities in employment, public services, transportation, public
accommodations and telecommunications services.
3.6 POLITICAL ACTIVITIES PROHIBITED. None of the funds, provided
directly or indirectly, under this Agreement shall be used for any
political activities or to further the election or defeat of any
candidate for public office. Contractor shall not utilize or allow its name
to be utilized in any endorsement of any candidate for elected office.
Neither the contract nor any funds provided thereunder shall be
utilized in support of any partisan political activities, or activities
for or against the election of a candidate for an elected office.
3.7 ALCOHOL AND DRUG USE PROHIBITED. In compliance with the requirements
of San Diego County Drug and Alcohol Abuse Policy C-25, Contractor agrees
that the Contractor and Contractor employees, while performing service for
the County, on County property, or while using County equipment, shall
not be in any way impaired because of being under the influence of alcohol
or a drug; shall not possess an open container of alcohol or consume
alcohol or possess or be under the influence of an illegal drug; shall not
sell, offer, or provide alcohol or a drug to another person, unless the
Contractor or Contractor employee prescribes or administers medically
prescribed drugs as part of the performance of normal job duties and
responsibilities. The Contractor shall inform all employees who are
performing services for the County on County property or using County
equipment, of the County objective of a safe, healthful and productive work
place and the prohibition of drug or alcohol use or impairment from same
while performing such service for the County.
3.8 ZERO TOLERANCE IN COACHING UNDOCUMENTED IMMIGRANTS: The County of
San Diego, in recognitions of it's unique geographical location, and the
utilization of Welfare and Medi-Cal system by foreign nationals who are not
legal residents of this County or Country, has adopted a Zero Tolerance
policy and shall aggressively prosecute employees and contractors who coach
undocumented immigrants.
3.8.1 As a material condition of this Agreement, the Contractor
agrees that the Contractor and the Contractor employees, while
performing service for the County, on County property, or while
using County equipment:
3.8.1.1 Shall not in any way coach, instruct, advise, or
guide any Medi-Cal or Welfare clients or prospective clients
who are undocumented immigrants on ways to obtain or qualify
for Medi-Cal assistance.
3.8.1.2 Shall not support or provide funds to any
organization engaged directly of indirectly in advising
undocumented immigrants on ways to obtain or qualify for
Medi-Cal assistance.
3.8.2 The Contractor shall inform all employees that are performing
service for the County on County property or using County equipment,
of the County's Zero Tolerance policy.
3.8.3 The County may Terminate for Default or Breach this Agreement
and any other Agreement the Contractor has with the County, if the
Contractor, or Contractor employees are determined by the Contracting
Officer not to be in compliance with the conditions listed herein.
3.9 ZERO TOLERANCE FOR FRAUDULENT CONDUCT IN COUNTY SERVICES. County
Board of Supervisor's Policy A-120 is that any type of fraud or similar
abuse will not be tolerated in County government by County employees, by
Contractors or by Contractor's employees.
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3.9.1 DEFINITION. Fraud is defined as an intentional perversion of
truth, false representation, misleading allegation, or concealment of
information for the purpose of deceiving another, whether by words or
conduct.
3.9.2 FINANCIAL EFFECT. No County employee, contractor or employees
of the contractor shall participate in or influence the making of any
governmental decision, which he or she has reason to know will have
a foreseeable personal or organizational financial effect.
3.9.3 CONTRACT REQUIREMENTS. Every County Contract for services
shall:
3.9.3.1 Prohibit activities which conflict with the
performance of services required under this agreement;
3.9.3.2 Require disclosure to the County (Purchasing and
Contracting Director, Contracting Officer's Technical
Representative (COTR) or Contract Administrator) of all
incompatible Contractor interests;
3.9.3.3 Prohibit actions to influence county employees with
gratuities; and
3.9.3.4 Prohibit use for personal gain and privileged
information acquired in connection with their service with
the County.
3.9.4 NOTICE TO EMPLOYEES. Contractor shall inform all Contractor
employees and sub-contractors performing services for the
County of the County's Zero Tolerance policy.
3.10 CONTRACTOR PAYMENT FOR COUNTY STAFF TRAVEL OR OTHER EXPENSES.
3.10.1 In accordance with County Administrative Manual 10-8, no
County official or employee shall accept travel, lodging, meals,
or related expenses from private persons or entities doing business
with the County or seeking to do business with the County unless such
expenses are provided pursuant to a County contract for goods or
services.
3.10.2 When travel (and related expenses) have been approved by the
County in Accordance with Board of Supervisor's Policy D-7, the
Contractor shall arrange for the travel. Contractor shall claim
reimbursement for travel (and related expenses) which are
specifically identified in the contract Statement of Work and are
included in the contract budget, or are approved in advance by the
COTR who will prepare a contract amendment to include the specific
travel in the Statement of Work and Budget.
3.10.3 All travel costs shall be limited to amounts and kinds of
reimbursement which is authorized under Article XXVIa, Section 470,
or the County Administrative Code, "Out-of-County and In-County
Business Authority to Conduct Official Business Outside the
Geographic Boundaries of San Diego County (Out-of-County Business)
and within San Diego County (in-County business)".
3.11 CITIZENS COMPLAINTS. Contractor shall establish procedures for
documenting and timely responding to citizens complaints and grievances in
compliance with County Administrative Manual Item Number 0040-5, "Citizen
Complaint Handling Policy and Procedure," and County Department of Health
Services Policy C-1, "Citizen Comments, Suggestions & Complaints,"
incorporated herein by reference.
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3.12 LICENSING. Contractor shall comply with the provisions of Chapter 9
of Division 3 of the Business and Professions Code concerning the icensing
of contractors. All offerors and contractors shall be licensed, if
required, in accordance with the laws of this state and any offeror or
contractor not so licensed is subject to the penalties imposed by such laws.
3.13 PERMITS, NOTICES, FEES AND LAWS. The contractor shall, at
contractor's expense, obtain all necessary permits and licenses, give all
necessary notices, pay all fees required by law, and comply with all laws,
ordinances, rules and regulations relating to work and to the preservation
of the public health and safety.
3.14 ORAL REPRESENTATION. This document and its Sections and references
incorporated herein fully express all understanding of the parties
concerning the matters covered herein. No addition to or alteration of the
terms of this Agreement and no verbal understanding of the parties, and
officers, agents or employees, shall be valid unless made in the form of a
written amendment to this Agreement.
3.15 SEVERABILITY. Should any part of this agreement be held to be
invalid by a court of competent jurisdiction, the remainder of the agreement
shall be considered as the whole agreement and be binding on the contracting
parties.
3.16 CALIFORNIA LAW. This Agreement shall be construed and interpreted
according to the laws and regulations of the State of California.
4 RECORDS, REPORTS AND STUDIES
4.1 OWNERSHIP, PUBLICATION, REPRODUCTION AND USE OF MATERIAL. All
reports, studies, information, data, statistics, forms, designs, plans,
procedures, systems, and any other materials or properties produced under
this Agreement shall be the sole and exclusive property of the County.
No such materials or properties produced in whole or in part under this
Agreement shall be subject to private use, copyright or patent without the
express written consent of the County. County shall have unrestricted
authority to publish, disclose, distribute and otherwise use, copyright
or patent, in whole or in part, any such reports, studies, data, statistics,
forms or other materials or properties produced under this contract.
4.1.1 The Contractor shall notify the County of any requests for
material or data and shall not release to third parties any material
or data without prior written approval from the County.
4.2 AUDIT AND INSPECTION. Contractor agrees to maintain and/or make
available within San Diego County accurate books and accounting records
relative to all its activities. Authorized County Representatives shall
have the right to monitor, assess, and evaluate Contractor's performance
pursuant to this Agreement, said monitoring, assessments, and evaluations
to include but not limited to audits, inspection of premises, reports,
patient records (subject to applicable legal limitation), and interviews of
Contractor's staff. At any time during normal business hours and as often as
County may deem necessary, upon reasonable advance notice, Contractor
shall make available to County for examination all of its records with
respect to all matters covered by this Agreement and will permit County to
audit, examine, copy and make excerpts or transcripts from such data and
records, and to make audits of all invoices, materials, payrolls, records of
personnel, information regarding patients receiving services (subject to
applicable legal limitations), and other data relating to all matters
covered by this Agreement. However, any such activities shall be carried
out in a manner so as to not unreasonably interfere with Contractor's
ongoing business operations and patient services. The aforementioned data
and records shall include patient records. Contractor shall maintain such
data and records for as long as may be required by applicable laws and
regulations. The State of California or any Federal agency having an
interest in the subject of this Agreement shall have the same rights
conferred upon County by this paragraph.
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4.3 SINGLE AUDIT ACT - SUBRECIPIENTS OF FEDERAL FUNDS. Contractor shall
annually engage a licensed Certified Public Accountant to conduct an audit
which will comply with Public Law 98-502, commonly known as the Single Audit
Act of 1984 (Act) as implemented in California by the State Controllers
Office (SCO).
4.3.1 COMPLIANCE WITH AUDIT REQUIREMENTS. Contractor shall ensure
that the audit complies with the requirements for independent program
or single-source audits, according to the number of federally funded
programs and the total amount of federal funding, as delineated in
Office of Management and Budget (OMB) Circulars A-128 (governmental
agencies) and A-133 (non-profit agencies).
4.3.2 SINGLE AND AGENCY-WIDE AUDIT. The Act specifies that audits of
subrecipients of federal funds be conducted on a single, agency-
wide basis.
4.3.3 MINIMUM FUNDING REQUIREMENT. Nonprofit agencies that receive
two hundred and fifty thousand dollars ($250,000) or more in federal
funds shall have an audit completed in accordance with OMB Circular
A-133.
4.3.3.1 EXEMPTED AGENCIES AND RECORDS AVAILABILITY.
Nonprofit agencies receiving less than $250,000 per year of
federally funds are exempt from Act requirements. However,
applicable records shall be available for review by
appropriate officials of the federal grantor agency or the
County of San Diego.
4.3.4 DEADLINES. OMB Circular A-128 specifies audit report
submission deadlines. All audits are to be completed within one (1)
year after the fiscal year of the audit and the reports submitted
within thirty (30) days after completion of the audit. Audits shall
be submitted by March 1, of the following fiscal year if a claim for
cost is submitted.
4.3.5 ALLOWABLE COST. The cost of obtaining a single audit is an
allowable cost. OMB Circular A-128 states: "Generally, the costs of
audit services charged to federal programs should not exceed the
percentage of federal program costs to total funds expended by the
recipient during the fiscal year. However, this percentage may be
exceeded with the maintenance of proper documentation to support the
additional cost."
4.3.6 SUBMISSION OF AUDIT. Contractor shall submit two (2) copies of
each audit report to the awarding agency COTR no later than thirty
(30) days after receiving it from the auditor.
4.3.7 GOVERNMENTAL ACCESS TO WORKING DOCUMENTS. Contractor shall
include a clause, in any contract or agreement the Contractor enters
into with an audit firm doing a single audit, to provide access by
the County, State or Federal government to the working papers of the
independent auditor who prepares the single audit for the Contractor.
4.3.8 APPLICABLE DOCUMENTS. Copies of the OMB Circulars and a copy
of the compliance supplement are available from the Superintendent of
Documents, U.S. Government Printing Office, Washington, D.C. 20402,
Telephone (202) 783-3238.
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4.4 AUDITS - FOR-PROFIT AGENCIES. For-profit Contractor agencies shall
adhere to the purpose and intent of the Single Audit Act and shall meet all
requirements and standards as can be reasonably applied to a for-profit
agency.
4.5 INSPECTION OF SERVICES. All performance (which includes services,
material, supplies and equipment furnished or utilized in the performance of
services) shall be subject to inspection and test by the County at all times
during the term of the contract. The Contractor shall provide adequate
cooperation to any inspector assigned by the County to permit the inspector
to determine the Contractor's conformity with these specifications and the
adequacy of the services being contractually provided. All inspection by the
County shall be made in such a manner as not to unduly interfere with
Contractor performance.
4.6 CONFIDENTIALITY OF FINDINGS. Contractor agrees that any reports,
information, data, etc., given to or prepared or assembled by the Contractor
under this Agreement which the County requests to be kept as confidential
shall not be made available to any individual or organization by the
Contractor without the prior written approval of the County.
4.7 CONFIDENTIALITY OF PATIENT RECORDS. Contractor shall maintain the
confidentiality of its patient records in accordance with all applicable
State and Federal laws relating to confidentiality. Contractor agrees
that all patient information and records obtained in the course of providing
services to County participants in the program shall be subject to
confidentiality and disclosure provisions of applicable Federal and State
statutes and regulations adopted pursuant thereto. Contractor agrees that it
has a duty and responsibility to make available to the COTR or designated
representatives, including the Auditor and Controller of this County,
the contents of records pertaining to any County participant which are
maintained in connection with the performance of Contractor's duties and
responsibilities under this Agreement, subject to the provisions of the
heretofore mentioned Federal and State statutes and regulations. The County
acknowledges its duties and responsibilities regarding such records under
such statutes and regulations.
4.8 MAINTENANCE OF RECORDS AND REPORTS. In order to assure that funds
provided in this Agreement are used by Contractor in accordance with such
Agreement, Contractor shall maintain:
4.8.1 ACCOUNTING RECORDS. Contractor shall maintain within San Diego
County accounting records that clearly reflect the cost of services
for which claims against County are made pursuant to this Agreement in
accordance with generally accepted accounting principles and as
further specified in the Contractor's Manual. Such records shall
include, but not be limited to, accounting ledgers, statistical data,
and supporting documents such as purchase requisitions, purchase
orders, vouchers, time sheets, payrolls, analyses of capital
equipment costs, and schedules for allocating costs.
4.8.2 PERSONNEL RECORDS. Contractor shall maintain within San Diego
County adequate personnel record, payroll records, personnel files,
and personnel policies and procedures. Employee time and attendance
records shall show the hours and dates worked and shall be signed and
approved by both the employee and his or her immediate supervisor.
Payroll and personnel records shall reflect employee's date of hire,
job title, authorized salary or rate of pay, payroll deduction data,
and leave time earned and taken. Contractor shall develop and maintain
written policies governing employment practices, job descriptions,
compensation, paid leave, promotion, termination procedures, and
performance evaluations.
4.8.3 CLIENT AND PATIENT RECORDS. Contractor shall maintain within
San Diego County adequate records for all services provided and
clients/patients served pursuant to this Agreement. Pertinent data
shall be kept in sufficient detail so as to allow for the evaluation
of the services rendered under this Agreement. County, will take
custody of the client/patient records upon contract termination.
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4.9 EVALUATION STUDIES. Contractor shall participate as reasonably
requested by the County in research and evaluative studies designed to show
the effectiveness and/or efficiency of the County Indigent Health Services
program, or to provide information about Contractor's services, subject to
nominal material costs being incurred by Contractor related to these
studies.
5 CONTRACT TYPE, INVOICES AND PAYMENT
5.1 CONTRACT TYPE.
5.1.1 The contract type for the County Indigent Health Services
program shall be a Firm Fixed Price Subject to Re-Determination. All
other costs (EXCEPT AGREED UPON PASS THROUGH COSTS) such as labor,
material, rents and leases, consultant services, etc. for providing
the specified services shall be reimbursed at a firm fixed price
prorated for monthly payments at one twelfth of the annual rate.
5.2 INVOICES AND PAYMENT.
5.2.1 An original invoice referencing contract number and describing
services provided in accordance with Section C-1 - Statement of Work
shall be submitted to: Contracting Officer's Technical Representative
(COTR), identified in Section A.
5.2.2 The invoice shall specify services provided in accordance with
the Statement of Work. Payment shall be NET 30 days from receipt and
approval of invoice unless otherwise stated.
5.3 PAYMENTS. The Contractor shall be paid upon the submission of proper
invoices or vouchers, the prices stipulated herein for supplies delivered
and accepted or services rendered and accepted, less deduction, if any, as
herein provided.
5.4 EXTRAS. Except as otherwise provided in the contract, no payment for
extras shall be made unless such extras and the price therefore have been
authorized in writing by the Contracting Officer.
5.5 DISCOUNTS. In connection with any discount offered, time will be
computed from date of delivery of the supplies to carrier when acceptance
is at point of origin, or from date of delivery at destination or port
of embarkation when delivery and acceptance are at either of these points,
or from the date the correct invoice or voucher is received in the office
specified by the County, if the latter is later than date of delivery.
Payment is deemed to be made for the purpose of earning the discount on the
date of mailing of the County check.
5.6 DISALLOWANCE. In the event Contractor claims and receives payment
from County for a service, reimbursement for which is later disallowed by
the County, Contractor shall promptly refund the disallowed amount to
County on request, or at its option, County may offset the amount disallowed
from any payment due or to become due to Contractor under any contract with
the County.
5.7 FEDERAL, STATE, AND LOCAL TAXES. The County generally is required to
pay California Sales or Use Tax, and it should be shown as a separate
item on invoices as part of the firm fixed price. The County is exempt
from payment of Federal Excise Tax. It shall not be included in invoices.
Exemption certificates will be furnished, if requested.
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6 AVAILABILITY OF FUNDS, CHANGES, TERMINATION AND EXTENSIONS
6.1 AVAILABILITY OF FUNDS. The County's obligation for payment of any
contract beyond the current fiscal year end is contingent upon the
availability of funds from which payment can be made. No legal liability on
the part of the County shall arise for payments beyond June 30 of the
calendar year unless funds are made available for such performance.
6.2 CHANGES.
6.2.1 COTR or designee may at any time, by a written order, and
without notice to the sureties, make changes, within the general
scope of this contract. If any such change causes an increase or
decrease in the cost of, or the time required for, the performance of
any part of the work under this contract, whether changed or not
changed by an such order, an equitable adjustment shall be made in the
contract price or delivery schedule, or both, and the contract shall
be modified accordingly. Any claim by the Contractor for adjustment
under this clause must be asserted within 30 days from the date of
receipt by the Contractor of the notification of change. Where the
cost of property made obsolete or excess as a result of a change is
included in the Contractor's claim for adjustment, the COTR or
designee shall have the right to prescribe the manner of disposition
of such property.
6.2.2 Failure to agree to any adjustment shall be a dispute
concerning a question of fact within the meaning of the clause of this
contract entitled "Disputes". However, nothing in this clause shall
excuse the Contractor from proceeding with the contract as changed.
6.3 DISPUTES.
6.3.1 Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is
not disposed of by agreement shall be decided by the Contracting
Officer who shall reduce the decision to writing and mail or
otherwise furnish a copy thereof to the Contractor. The decision of
the Contracting Officer shall be final and conclusive unless
determined by a court of competent jurisdiction to have been
fraudulent or capricious, or arbitrary, or so grossly erroneous as
necessarily to imply bad faith. The Contractor shall proceed
diligently with the performance of the contract pending the
Contracting Officer's decision.
6.3.2 This "Disputes" clause does not preclude consideration of law
questions in connection with decisions provided for in Paragraph
6.3.1 above:That nothing in this contract shall be construed as making
final the decision of any administrative official, representative, or
board on a question of law.
6.4 TERMINATION FOR CAUSE.
6.4.1 If through any cause, the Contractor shall fail to fulfill in
timely and proper manner its obligations under this Agreement, or if
the Contractor shall violate any of the covenants, agreements or
stipulations of this Agreement, the County shall thereupon have the
right to terminate this Agreement by giving written notice to the
Contractor of such termination and specifying the effective date
thereof, at least ten (10) days before the effective date of such
termination. Prior to issuing such notice, the County agrees to
provide Contractor with written notification of contractual
deficiencies, and shall give the Contractor forty-five (45) days to
remedy, to the County's satisfaction, the contractual deficiencies.
In the event of termination for cause, all finished or unfinished
documents, data, studies, surveys, drawings, maps, models,
photographs, and reports prepared by the Contractor shall, at the
option of the County, become County property and the Contractor
shall be entitled to receive just and equitable compensation for any
satisfactory work completed on such documents, and other materials.
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Notwithstanding the above, the Contractor shall not be relieved of
liability to the County for damages sustained by the County by virtue
of any breach of the Agreement by the Contractor, and the County may
withhold any payments to the Contractor for the purpose of set off
until such time as the exact amount of damages due the County from the
Contractor is determined. The Contractor hereby expressly waives
any and all claims for damages for compensation arising under this
Agreement except as set forth in this section in event of such
termination.
6.4.1.1 If after notice of termination of this contract
under the provisions of this clause, it is determined for any
reason that the Contractor was not in default under the
provisions of this clause, or that the default was excusable
under the provisions of this clause, the rights and
obligations of the parties shall, if the contract contains
a clause providing for termination for convenience of the
County, be the same as if the termination has been issued
pursuant to such clause.
6.5 TERMINATION FOR CONVENIENCE OF COUNTY. The County may terminate this
Agreement at any time by giving written notice to the Contractor of such
termination and specifying the effective date thereof at least sixty (60)
days before the effective date of such termination. In that event, all
finished or unfinished documents and othe materials as described in
Paragraph 6.4.1 above, shall at the option of the County, become County
property. If the Agreement is terminated by the County as provided herein,
the Contractor shall be entitled to receive just and equitable compensation
for any satisfactory work completed on such documents and other materials.
The Contractor hereby expressly waives any and all claims for damages or
compensation arising under this agreement except as set forth in this
paragraph in the event of such termination.
6.5.1 Upon notification of contract termination, Contractor shall
demonstrate a "good faith effort" to terminate or transfer leases,
subcontracts, software and maintenance agreements in sixty (60)days or
less. This provision also applies to Sections B-6.4 and B-6.6.
6.6 TERMINATION OR REDUCTION DUE TO CESSATION OR REDUCTION OF FEDERAL,
STATE OR COUNTY FUNDING. County shall have the right to issue a notice to
proceed with close out services in accordance with Section C-1-6.12 and
Section A-3.3 in the event that Federal, State or County funding for this
Agreement ceases prior to the ordinary term of this Agreement. The County
and Contractor shall meet within ten (10) days of notice to proceed with
close out services to renegotiate this Agreement based upon the modified
level of funding. In this case, if no agreement is reached between
County and Contractor within ten (10) days of the first meeting, a notice
of termination shall be issued and either party shall have the right to
terminate this Agreement within sixty (60) days.
6.6.1 In event there is a reduction of funds made available by the
County to Contractor under this or subsequent Agreements, the County
of San Diego and its Departments, officers and employees shall
incur no liability to Contractor and shall be held harmless from any
and all claims, demands, losses, damages, injuries, or liabilities
arising directly or from such action.
6.7 OPTION TO EXTEND SERVICES.
6.7.1 ONE TO SIX MONTHS-END OF CONTRACT PERIOD. The services
described in Section C (Statement of Work) may be extended in one or
more increments for a total of no less than one (1) and no more than
SIX (6) calendar months at the discretion of the County Purchasing
Director. Each extension shall be effected by written contract
modification delivered to the Contractor no less than thirty (30) days
prior to expiration of the contract. The rates set forth in the
pricing section (or budget) shall apply to any extension made
pursuant to this option clause unless provision for appropriate
price adjustment has been made elsewhere in this contract. All
payments are subject to General Terms and Conditions, Clause titled
"Availability of Funding".
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6.7.2 TWO ADDITIONAL ONE YEAR OPTION PERIODS - END OF CONTRACT
PERIOD. The County shall have its option to extend this Agreement
for two (2) years at the prices negotiated for each year. The
additional contract periods shall be from July 1, 2000 and end
June 30, 2002, and in the event of extension, the Contractor
agrees to grant the above one to six (1-6) month extension of the
price quoted in the pricing section, providing the County provides a
thirty (30) day written notice of its intent to exercise the option.
All payments are subject to Standard Terms and Conditions, Clause
titled "Availability of Funding"
6.8 ANNUAL ADJUSTMENT.
6.8.1 The Contracting Officer shall enter into negotiation on or
after April 1 of each option year (FY 2000-2001 and FY 2001-2002).
The purpose of which is to adjust the contract for changes in the
coming year appropriations. Contract amendments will be effective
when signed by the Purchasing and Contracting Director after signature
by the Contractor and the funding is approved by the Board of
Supervisors.
6.8.2 In the event that agreement can not be reached, the County may
require the Contractor to provide the current level of services for a
period up to 180 days at the current years rates. In addition, the
Contractor will be ineligible to provide the services for the next
three years. This ineligibility requirement may be waived by the
Contracting Officer if it is determined to be in the County's best
interest.
<PAGE>
COUNTY OF SAN DIEGO, DEPARTMENT OF HEALTH SERVICES
ADMINISTRATIVE SERVICES ORGANIZATION
SECTION C-1 STATEMENT OF WORK, COUNTY INDIGENT HEALTH SERVICES
1. GENERAL REQUIREMENTS
1.1 The County of San Diego through the Department of Health Services is
responsible for maintaining and protecting the health of the residents of
San Diego County by carrying out statutes and regulations of the Federal
and State governments, as well as ordinances and policies of the Board of
Supervisors. This is accomplished through the administration,
implementation and evaluation of contracts with private sector providers
of health care. Participating providers serve eligible medically indigent
residents of San Diego, who do not qualify for other forms of publicly
subsidized health care.
1.2 This contract is for an Administrative Services Organization (ASO)
tasked with the day-to-day administration of specific services related in
County Indigent Health Services. The County Indigent Health Services
program will provide primary and preventive care and emergency and urgently
needed health care to eligible adults. In addition, the ASO shall be
responsible for programs funded through the California Healthcare Indigent
(CHIP), the Physician Emergency Services (PES) Program, and the
Comprehensive AIDS Resources Emergency (CARE) Act.
1.2.1 Scope of Services. The ASO shall manag the provider
reimbursement pools and document service delivery and utilization
while insuring that the outcome of access to quality care is
achieved. The scope of services to be provided by the administrative
contractor shall include, but not be limited to: day-to-day
administration, MIS design and operation, enrollment and eligibility
verification, utilization management and care coordination, quality
management, claims processing and financial management, network
development and management of complaints, grievances and appeals.
1.3 Attachments 1 and 2, which describe different elements of the County
Indigent Health Services program, are incorporated herein as part of
Section C. Additional materials, listed in Section C-29 References,
are contained in the Technical Resource Center (TRC).
1.3.1 Attachment C-1.1: Description of County Indigent Health
Services (Paragraph 3.1)
1.3.2 Attachment C-1.2: List of Computer Equipmen and Furnishings
(Paragraph 3.3 & 6.3.2.1.1)
2. COUNTY INDIGENT HEALTH SERVICES PROGRAM GOALS
2.1 The ASO shall adhere to the County's established goals for physical
health services. These goals focus upon the provision of an organized
system of health care delivery for eligible, medically indigent residents.
The County's goals are intended to establish criteria for successful
program operation.
2.2 Obligation to Poor and Working Poor. The ASO shall meet the County
of San Diego's goals and obligation to provide physical health services
to medically indigent adult residents of the County, including the
following:
2.2.1 Operate a coordinated and organized system of care comprised
of physicians, hospitals, community clinics and ancillary service
providers
2.2.2 Incorporate care within the private sector, as a public/
private partnership
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2.2.3 Assure reasonable accessibility through management of the
provider network
2.2.4 Assure a price that is competitive and cost effective
2.2.5 Embrace a community standard for quality of care
2.2.6 Network with county and community health care agencies and
providers to maximize efficiencies in the delivery of health care
services.
3. SYSTEM OVERVIEW.
3.1 The County Indigent Health Services program is the integration of
several existing programs, including County Medical Services, Primary Care
Services, and County Patient Support Services. Attachment C-1.1 is a
description of the County Indigent Health Services.
3.1.1 For the past eight years, the County Medical Services
program has been managed by an Administrative Contractor. The County
Indigent Health Service will use the existing County Medical
Services operating systems, including existing policies and
procedures, except as modified by the County. Policies and procedures
contain certain performance standards that the Contractor shall be
expected to meet. Copies of these documents shall be maintained and
updated by the Contractor during the term of the contract.
3.1.2 Currently, the Administrative Contractor is co-located with
with the County staff responsible for the management of the program.
3.1.2.1 The Contractor shall negotiate sufficient lease
space for both Contractor and County. If exercised, County
shall reimburse the Contractor for the County's portion of
the lease costs, including early termination costs.
3.1.2.2 The Contractor shall negotiate a lease for upgraded
telephone equipment for both the Contractor and County.
The County shall reimburse the Contractor for the lease/
equipment early termination costs.
3.2 The intent of integrating the three services is to ensure that the
the County's health care obligation to the working poor and medically
indigent County residents is met in the most cost effective manner
possible. Integration should result in lower administrative costs, while
maintaining access and quality of care.
3.3 The County has furnishings, computer equipment and software which has
been designated for this contract in addition to the budgeted allocation.
Specifications are found in Attachment C-1.2.
3.4 The County Indigent Health Services program utilizes the same local
provider network for the delivery of services, which provided services for
the County Medical Services and Primary Care Services programs.
3.4.1 Hospital Network. The County currently contracts with 12
licensed acute-care facilities in San Diego, which meet the
conditions of participation as set forth in the standards and
provisions of the Hospital Contract, and are considered eligible
for participation in the County Indigent Health Services hospital
provider network. The current hospital network is subject to change
during the term of this agreement. Hospitals provide urgent and
emergent inpatient and outpatient services to the eligible
population.
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3.4.1.1 University of California, San Diego Medical Center.
The County has contracted with the University of California,
San Diego Medical Center through January 1, 2004 to provide
health care services to the medically indigent in accordance
with Section 17000 through 17410 of the California Welfare
and Institutions Code.
3.4.2 Community Clinic Network. Primary care, preventive and
urgent services are provided to the eligible population through a
network of Community Clinics and other private providers currently
under contract with the County. The current Community Clinic
network is subject to change during the term of this agreement. In
an expanded and more formal role, the Contractor shall collaborate
with the County and Community Clinics to develop a model for
Community Clinics to serve as gatekeepers for referrals to Specialty
Physicians and Ancillary Services.
3.4.2.1 Contractor shall provide education and training to
new clinics joining the contractual provider network.
3.4.2.2 Contractor is prohibited from offering any
Contractors, directly or indirectly, gifts, gratuity, favors
or special conditions that would result in a monetary gain.
3.4.2.3 Special contracting and/or referral arrangements
due to patient needs must be prior authorized by the County.
3.4.3 Specialty and Ancillary Services Network. Specialty Physician
and non-physician services are provided to eligible patients through
a network of contracting providers. The Specialty and Ancillary
Network of providers is subject to change during the term of this
agreement. Specialty Physicians who participate in the County
Indigent Health Services shall receive referrals from providers at
contracted Community Clinics. Ancillary service providers, such as
pharmacies, Durable Medical Equipment vendors, lab and radiology,
contract with the County Indigent Health Services program for
reimbursement for services delivered to eligible patients. County
Indigent Health Services eligible patients must have prior
authorization for the use of ancillary services, which must be
delivered by a County Indigent Health Services contracted provider.
4. FUND ALLOCATION.
The Contractor shall manage these funds:
4.1 STATE REALIGNMENT FUNDS. The basis of funding of the County Indigent
Health Services is the annual allocation of State Realignment funds to the
County of San Diego. No County General Funds are envisioned to be
appropriated to this program. State Realignment funds are used to reimburse
Hospitals, Community Clinics, Specialty Physicians and Ancillary Service
providers for primary, preventive, urgent and emergent inpatient and
outpatient care.
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4.2 CALIFORNIA HEALTHCARE INDIGENT PROGRAM (CHIP). The basis of funding
for the California Healthcare Indigent Program services are State tobacco
tax funds. California Healthcare Indigent Program funds are used to
reimburse hospitals for uncompensated emergency care and to supplement
payments for County Indigent Health Services hospital and specialty
providers. Funding levels are determined annually by the State based upon
Medically Indigent Care Reporting System (MICRS) data.
4.3 PHYSICIAN EMERGENCY SERVICES (PES) ACT. The basis for funding the
Physician Emergency Services program is established through State
legislation utilizing moving traffic violations fees and State tobacco tax
funds. Physician Emergency Services funds reimburse physicians for
emergency services that would otherwise be uncompensated.
4.4 COMPREHENSIVE AIDS RESOURCES EMERGENCY (CARE) ACT. The 1990
Comprehensive AIDS Resources Emergency, also known as the Ryan White Act,
was enacted by the federal government to provide grants to improve the
quality and availability of care for individuals and families with Human
Immunodeficiency Virus (HIV). A separate account established with funds
from the Comprehensive AIDS Resources Emergency, Title I grant is used
for primary and preventive clinic services for HIV+ patients.
4.5 COUNTY PATIENT SUPPORT SERVICES. Funds to reimburse services
provided under a contract between the County and the University of
California at San Diego Medical Center (UCSD-MC), known as the Fourth
Operating Agreement are part of the Hospital Reimbursement Pool but managed
separately to ensure that funds are available to meet the County's
Welfare and Institution's Code Section 17000 obligation.
4.6 ACCRUED INTEREST. Accumulated interest on program funds, associated
with the timing of receipts and disbursements, will also be managed and
accounted for by the Contractor.
4.7 OTHER FUNDING SOURCES. Other funding sources allocated to the
program, such as grant proceeds or third party recoveries, will also be
managed and accounted for by the Contractor.
5. PROVIDER PAYMENTS.
The Contractor shall perform provider reimbursement in accordance with the
County approved process, based on the following payment mechanisms:
5.1 STATE REALIGNMENT FUNDS. State Realignment funds are allocated
by the County to three separate reimbursement pools: Community Clinic
Pool, Hospital Pool and Specialty Pool. Allocations to the reimbursement
pools are capped at the beginning of each year. The Community Clinic and
Hospital Pools are fully dispersed to participating providers at the end
of each fiscal year. The distribution of the reimbursement pools has been
to 1) fund primary care services to provide access to health care for
medically indigent patients eligible for County support, and reduce the
impact of patients seeking primary care services through hospital emergency
rooms; 2) maintain a physician network for specialty care; 3) reduce
inappropriate hospital utilization by refocusing patients to outpatient
settings; 4) provide emergency services for patients requiring acute care.
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5.1.1 COMMUNITY CLINICS POOL. Community Clinics shall be reimbursed
by the Contractor from the Clinic Pool (s) for services to eligible
patients. The amount of the monthly payment shall be based on
utilization of services by County Indigent Health Services patients.
Payments are paid to Community Clinics on a monthly basis. Community
Clinics shall submit encounter based claims data for services
rendered. The Contractor shall perform a quarterly reconciliation to
ensure that the minimum units of service represented by the payments
have been provided. To ensure that Community Clinics are providing
the appropriate level of urgent care, Maintenance of Efforts levels
will be established by the Contractor and the County for each
participating Community Clinic based on the historic provision of
County Medical Services and Primary Care Services.
5.1.1.1 The Community Clinic Pool utilization and funding
level shall be evaluated quarterly. A final reconciliation
and distribution at the end of each fiscal year shall be
based upon Maintenance of Effort performance.
5.1.1.2 Claims shall be reimbursed by the Contractor from
the Community Clinic Pool or other designated funding sources
based upon utilization as approved by the County.
5.1.1.2.1 Contractor shall work with the County
and Community Clinics to implement an optimal
disbursement methodology for the Community
Clinics, e.g. the integration of Primary Care and
County Medical Services funding or block granting a
base line of funding.
5.1.1.3 The Contractor shall facilitate improved electronic
data interchange with participating providers.
5.1.2 HOSPITAL POOL. Hospitals shall be reimbursed by the
Contractor from the Hospital Pool for urgent and emergent inpatient
care to eligible adults. The amount of the monthly payment shall be
based on utilization of services by County Indigent Health Services
patients. Hospitals submit encounter data for services that will be
credited against the Hospital Pool. The Contractor shall perform a
quarterly reconciliation to ensure that the minimum units of service
represented by payments have been provided. Future annual allocations
from the Hospital Pool shall be based upon the previous year's
service levels.
5.1.2.1 The Contractor shall work with the County and
hospitals to implement an optimal disbursement methodology,
e.g. block grant or firm fixed price.
5.1.2.2 The Contractor shall manage and account for
payments to the University of California, San Diego Medical
Center under the Fourth Operating Agreement.
5.1.3 SPECIALTY POOL. Specialty physicians and ancillary services
shall be reimbursed by the Contractor from the Specialty Pool based
on approved claims submitted by the provider for services to eligible
clients. Claims for payment from the Specialty Pool shall require
prior authorization.
5.1.3.1 The Contractor shall monitor and report quarterly
utilization of the Specialty pool by providers.
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5.2 CALIFORNIA HEALTHCARE FOR INDIGENT PROGRAM (CHIP). California
Healthcare Indigent Program services are reimbursed through three
separate interest bearing accounts: Hospital, Physicians, and Other Health
Services. Within the Hospital account, there are two sub-accounts,
which shall be separately managed: 1) Hospital formula-driven funds,
which are to be distributed to hospitals for uncompensated care utilizing
Medically Indigent Care Reporting System (MICRS) data; 2) Hospital
discretionary funds which shall be distributed to participating hospitals.
5.2.1 HOSPITAL FORMULA ACCOUNT. The Contractor shall distribute
funding to participating hospitals as allocated by state guidelines,
and in accordance with contract provisions as outlined in California
Healthcare Indigent Program Hospital Agreement. Payments shall be
made within ten (10) working days of receipt by the Contractor.
5.2.2 HOSPITAL DISCRETIONARY ACCOUNT. The Contractor shall utilize
funding under this account for the County Indigent Health Services
Hospital Pool in accordance with contracting provisions as outlined
in both California Healthcare Indigent Program Hospital Agreement
and the County Medical Services Hospital Contract.
5.2.3 UNALLOCATED ACCOUNT. The Contractor shall utilize available
Unallocated California Healthcare Indigent Program funds as
identified by the County to supplement County Indigent Health
Services Reimbursement Pools.
5.2.4 PHYSICIAN EMERGENCY SERVICES (PES) PROGRAM. The Physician
Emergency Services is funded by California Healthcare Indigent
Program and SB 12/612 funds which shall be distributed for
uncompensated emergency services. Claims processing and criteria
used will be in accordance with Physician Emergency Services Fund
Billing Requirements. Payments shall be made twice annually to
physicians who have submitted authorized claims.
5.2.4.1 PHYSICIAN NEW CONTRACTS ACCOUNT. The Contractor
shall utilize funding under this account for the County
Indigent Health Services Specialty Pool in accordance with
contract provisions as outlined in the County Medical
Services Physician Contract.
5.3 COMPREHENSIVE AIDS RESOURCES EMERGENCY (CARE) ACT. The Contractor
shall administer the Comprehensive AIDS Resources Emergency Supplemental
Pool in a manner similar to County Indigent Health Services Reimbursement
Pools. Funds from the Supplemental Pool shall be used for the payment of
services for eligible and registered Comprehensive AIDS Resources
Emergency patients seen at the clinics. Community Clinic visits include
primary care medical visits, ancillary services, pharmacy and dental
services.
5.4 OTHER FUNDING SOURCES. The Contractor shall administer and account
for the disbursement of other CIHS program funding.
6. PROGRAM REQUIREMENTS
The County of San Diego, in conjunction with an Administrative Services
Organization, shall administer the County Indigent Health Services
Program. The expected outcomes, tasks, Reports and Deliverables of the
Contractor and the County's responsibility for program management are
identified below.
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6.1 ANNUAL OUTCOMES. The Contractor shall ensure that the following
outcomes are achieved annually:
6.1.1 Services in the County Indigent Health Services program shall
become more cost efficient, without affecting the quality of
services.
6.1.2 The viability of the County Indigent Health Services provider
network shall be ensured.
6.1.3 Funding shall be managed in such a way as to ensure access to
services resulting in maximum service capacity.
6.1.3.1 The Contractor shall maximize the recovery of Medi-
Cal or other third party payments.
6.1.4 A patient satisfaction survey and a provider satisfaction
survey shall be measured annually prior to May 1st of each year.
6.1.4.1 The Contractor and County shall review and develop
recommendations based upon participant surveys.
6.2 ADMINISTRATION
6.2.1 The Contractor shall implement a system that manages the
eligible population's care, utilization of services, and program
funds while ensuring that the outcome of access to quality care is
achieved.
6.2.1.1 The Contractor shall advise the County regarding
the operation of the program and inform the County of
problems identified in the structure and/or administration of
the program, and opportunities for improvement in the
program's administration.
6.2.1.2 The Contractor must submit all subcontracts for
County review and approval prior to implementation.
6.2.2 Tasks shall include:
6.2.2.1 UPDATE AND MAINTAIN POLICY AND PROCEDURE MANUAL
The Contractor shall update and modify the existing
County Medical Services Policy and Procedure Manual as
necessary to reflect the integration of services into the
County Indigent Health Services program.
6.2.2.2 PREPARE ANNUAL BUDGET The annual budget shall
reflect programmatic changes approved by the County and
continue to reflect economic efficiencies.
6.2.2.3 RECOMMEND CHANGES IN PROGRAM DESIGN The
Contractor shall identify opportunities for improvement in
the program and recommend changes in the program design
based on programmatic experience, including service
utilization trend analysis, patient focus groups and patient
satisfaction surveys.
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6.2.2.4 REPRESENTATION AT MEETINGS The Contractor shall
provide appropriate representation to meetings scheduled by
the County.
6.2.2.5 PREPARE INFORMATION AND MAKE PRESENTATIONS The
Contractor shall prepare program information and make
presentations as scheduled by the County.
6.2.2.6 TRAIN STAFF ON COUNTY POLICIES The Contractor shall
train its staff to update them on County policies and
procedures.
6.2.2.7 MAINTAIN REGULAR OFFICE HOURS The Contractor shall
maintain office hours and answer telephone calls based upon
a schedule approved by the County. In general terms, these
hours are 8 am to 5 pm, Monday through Friday.
6.2.2.7.1 The Contractor shall provide a flexible
work schedule for evening and weekend as negotiated
by the County.
6.2.3 Reports and Deliverables
6.2.3.1 The Contractor shall provide reports that contain
information on the level of service activity, client
demographics, provider status and other information required
by the County. These reports shall include quantitative and
qualitative documentation of the Contractor's performance,
as measured against the goals and outcomes of the program.
At minimum the reports include:
6.2.3.1.1 Program Activity Report
6.3.2.1.1.1 The Program Activity
Report shall contain a one page
Executive Summary of the most
significant results.
6.2.3.1.2 Annual Report
6.2.3.1.2.1 The Annual Report shall
contain an Executive Summary of the
most significant results.
6.3.2.1.2.2 The Annual Report shall
include recommended changes in program
design per Section 6.2.2.3 above.
6.2.3.2 Deliverables
6.2.3.2.1 Revised Policy and Procedure Manual
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6.2.4 Unless waived by the County, the County will:
6.2.4.1 Represent the CIHS program at the local, State and
federal level. Provide overall direction and oversight to
the County Indigent Health Services Program and make
necessary policy recommendations and annual budget requests
to the Board of Supervisors, as appropriate.
6.2.4.2 Monitor state legislative activity relevant to the
program and engage in legislative and administrative
advocacy.
6.2.4.3 Make decisions about interjurisdictional issues,
e.g., claims from other counties.
6.2.4.4 Monitor and evaluate the performance of the
Administrative Services Organization, as measured by the
goals and outcomes of the County Indigent Health Services
Program.
6.3 MIS DESIGN AND OPERATIONS
6.3.1 The Contractor shall maintain a centralized data collection
and analysis system that will serve as the basis for program
management and strategic planning.
6.3.2 Tasks shall include:
6.3.2.1 MAINTAIN A MANAGEMENT INFORMATION SYSTEM (MIS)
The Contractor shall maintain a management information system
to assist the County and service providers with the payment
of claims, management of benefits, network management and
coordination of care.
6.3.2.1.1 The Contractor shall assure all changes
to the existing MIS are compatible with the
County's year 2000 equirements.
6.3.2.1.2.1 Contractor shall complete
the IDX Version 8.0 upgrade or greater
in FY 98-99 to comply with year 2000
requirements.
6.3.2.1.3 The Contractor shall utilize the
County's existing IDX system. Attachment C-1.3
contains a list of the County's computer
equipment. Significant changes to the MIS system
must be submitted for approval by the County prior
to implementation.
6.3.2.2 ENSURE ADEQUATE REPORTING BY PROVIDERS The
Contractor shall work with hospitals, Community Clinics and
other providers to ensure that there is an adequate system
for reporting data on all eligible patients served and
that providers submit all required reports.
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6.3.2.2.1 The Contractor shall recommend to the
County what information is required to be
submitted by providers that is not already
contained within the Medically Indigent Care
Reporting System (MICRS).
6.3.2.2.2 The Contractor shall analyze and
implement where feasible the linkage of IDX with
the Medically Indigent Care Reporting System
(MICRS), the Healthy San Diego MIS, Common
Application Transaction System (CATS) or other
information systems utilized by the County.
6.3.2.2.2.1 The Contractor shall
collaborate with and facilitate
linkage with the County Mental Health
MIS subject to available funding.
6.3.2.3 PREPARE QUARTERLY PROJECTIONS OF INDICATORS
RELATING TO PROGRAM UTILIZATION, COST, AND PROGRAM NEEDS The
Contractor shall utilize data collected and analyzed through
the MIS to provide the County with information on the status
of the County Indigent Health Services program.
6.3.2.4 IDENTIFY PATIENTS AND SERVICES BY FUNDING SOURCE
The Contractor shall maintain a distinct indicator within
the MIS to register, track, process and report on patients
and services by funding source, such as the Comprehensive
AIDS Resources Emergency Act.
6.3.2.4.1 The MIS shall include enrollment and
eligibility data as described in Section 6.4 below.
6.3.2.4.2 The MIS shall be designed to assure
that services are provided to the target
population.
6.3.2.4.3 The MIS shall screen for clients that
receive benefits from more than one funding source
or pool.
6.3.2.4.3.1 The Contractor shall
report the results of this screening to
the County on a monthly basis.
6.3.2.4.4 The MIS will screen for individuals
receiving Medi-Cal.
6.3.2.4.5 The MIS will assist the County with its
initiatives to stop fraud.
6.3.2.5 PREPARE SPECIAL STUDIES, REPORTS, GRAPHS AND CHARTS
AS REQUESTED At the County's request, the Contractor shall
regularly prepare special reports and studies utilizing
the current data available through the Management
Information System.
6.3.2.5.1 The Contractor shall generate patient
listings as required.
6.3.2.6 COLLECT AND SUBMIT TO THE COUNTY THE MEDICALLY
INDIGENT CARE REPORTING SYSTEM (MICRS) DATA FOR COUNTY
TRANSMITTAL TO THE STATE QUARTERLY, ANNUALLY AND AS REQUIRED.
State funding for California Healthcare Indigent Program and
Physician Emergency Services requires annual submission of
Medically Indigent Care Reporting System (MICRS) data.
Hospital, Community Clinic and County Patient Support data
will be collected monthly. The Contractor shall input data as
necessary such as Patient Data Records (PDR's) and shall be
responsible for data collection, transfer and reconciliation
of all required MICRS data for the CIHS program. This task
includes correcting erroneous records and other actions as
necessary for assuring accurate transmittal of information to
the State.
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6.3.2.6.1 The Contractor shall analyze the
Medically Indigent Care Reporting System
(MICRS) and shall implement, where feasible, the
utilization of this data for the purpose of
monitoring the performance of providers.
6.3.2.6.2 The Contractor shall maintain the
Master Recipient Index (MRI) data base.
6.3.2.6.3 The Contractor shall coordinate work
with the County's Information System Division.
6.3.2.6.4 The Contractor shall prepare for the
County responses to MICRS inquiries from the State
pertaining to the CIHS program and CARE Act on
behalf of the County.
6.3.2.7 ENSURE CONFIDENTIALITY OF ADMINISTRATIVE AND
PATIENT DATA The Contractor shall maintain appropriate
network security procedures to ensure that local, state and
federal confidentiality regulations are met.
6.3.2.7.1 The Contractor shall ensure compliance
with all laws, regulations, policies and procedures
regarding the confidentiality rights of individuals
and protection of individuals from system's abuse.
6.3.2.7.1.1 The County and the
Contractor share the mission and
philosophy that only patients who meet
the eligibility criteria as determined
by the County will receive benefits.
The Contractor has adopted and will
maintain a policy prohibiting Medi-Cal
and CIHS fraud consistent with the
policy adopted by the County of San
Diego Board of Supervisors. Subject to
State and Federal law and the
Contractor's personnel policies regard-
ing confidentiality, the Contractor
will disclose outcomes of investiga-
tions of alleged improprieties by the
Contractor's staff to COTR or designee.
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6.3.2.8 MANAGE FORMULARY AND PHARMACY BENEFIT The
Contractor shall manage the County Indigent Health Services
formulary and control pharmaceutical costs through a pharmacy
management program.
6.3.2.8.1 All rebates or other financial benefits
derived from the pharmacy management program shall
be fully disclosed by the Contractor, with the
proceeds belonging to the County unless otherwise
agreed upon in writing.
6.3.2.9 COLLECT AND ANALYZE UTILIZATION DATA The Contractor
shall collect and analyze utilization of the population
served. As a minimum this information should include:
identification of trends in unduplicated users, trends in
service use per unduplicated user; trends in the demographic
characteristics of the population served, including income
and employment status; trends in health status of clients
served, admissions and length of stay by diagnostic category
by hospital; and, trends in characteristics and patterns of
UTILIZATION for the most expensive clients.
6.3.2.10 Collect, input and report in a format approved by
the County, General Relief Employability Evaluation (GREE)
information submitted by the clinics or other providers.
6.3.2.10.1 Analyze GREE data and reports and
make recommendations for improved system
efficiencies to the County.
6.3.3 Reports and Deliverables
6.3.3.1 The Contractor shall provide report that contain
information on trends in service utilization, management of
benefits, claims payment, coordination of care and other
information required by the County. At a minimum, the
following reports shall be prepared. Each report shall
include a one page Executive Summary of the most significant
results.
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6.3.3.1.1 Utilization Review Report
6.3.3.1.1.1 The Utilization Review
Report shall include quantitative and
qualitative measurements regarding the
performance of program providers.
6.3.3.1.2 Financial Report
6.3.3.1.3 Medically Indigent Care Reporting
System (MICRS) Report
6.3.3.1.4 General Relief Employability Evaluation
(GREE) Report
6.3.4 Unless waived by the County, the County will:
6.3.4.1 Liaison and collaborate with major provider
organizations (e.g., Hospital Council, San Diego County
Medical Society, Council of Community Clinics, Health
Services Advisory Board, etc.,) on various aspects of the
County Indigent Health Services Program.
6.3.4.2 Establish data collection and analysis standards
for the Contractor and request and approve reports.
6.3.4.3 Review projections which could impact budgets or
policies during future contract periods.
6.3.5 County Management Information System (MIS) Responsibilities
6.3.5.1 The County acknowledges and agrees that the
Contractor will be using the application software operating
on the County's computer system in the performance of its
duties under the County Indigent Health Services Agreement,
and that therefore the maintenance of the system and the
performance of the County's other duties with respect thereto
(including without limitation the obligation to regularly
back up system data) is essential to the Contractor's ability
to effectively, efficiently and economically discharge its
duties under the County Indigent Health Services Agreement.
6.3.5.2 The County, at its own cost and expense, shall keep
the system in good repair, condition, and working order and
shall furnish any and all parts, mechanisms and devices
required to keep the system in good mechanical working order
and in compliance with all laws, ordinances and regulations
relating to the possession, use and maintenance of the
system. The County's obligations hereunder shall include,
without limitation:
6.3.5.2.1 All maintenance and repair of the
system in accordance with manufacturer's specifica-
tions and good industry practice;
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6.3.5.2.2 All maintenance and repair of any and
all networks, communication devices and other
peripherals and other system used in connection
with, but not included as part of, the system in
accordance with manufacturer's specifications and
good industry practice;
6.3.5.2.3 All operational support for the
computer system (County hardware and software) of
which the system is a part; and
6.3.5.2.4 All regular, recommended and necessary
system data back up. In connection therewith,
the County shall establish a policy for the
regular, recommended and necessary system data
back up prior to all upgrade installations of the
IDX software on the system. Such policy as it
pertains to back up of the IDX software and
databases shall be provided to the Contractor for
approval, and the County shall make any modifica-
tions thereto reasonably requested by the
Contractor.
6.3.5.3 The parties acknowledge that the County will be
using the system for other software applications not
connected with the Contractor's duties under the County
Indigent Health Services agreement. The County shall not
utilize the system in any way tha will intentionally
interfere with the performance of the County Indigent Health
Services agreement by the Contractor. In planning such other
applications, the County shall take into account the
requirements of the software and the applications being made
of the system by the Contractor under the terms of the County
Indigent Health Services agreement, particularly with
respect to system capacity, storage and peripheral use.
County agrees to notify the Contractor about new system
utilization that may interfere with the Contractor's
performance of duties under this agreement.
6.3.5.4 If, as a result of the failure of the County to
discharge its maintenance obligations (including without
limitation the obligation to regularly back up the system
data), the Contractor shall be excused from timely
performance of any of its other duties under the County
Indigent Health Services agreement that are prevented,
delayed or hindered by any such failure by the County, but
only to the extent caused by such failure, hindrance, or
delay. In addition, if any such maintenance failure causes
increased costs or expenses to the Contractor not
contemplated by the payments otherwise to be made to the
Contractor under the terms of the County Indigent Health
Services agreement, then the County shall reimburse the
Contractor for increased costs and expenses actually incurred
by the Contractor, subject to approval by the County prior to
incurring the additional costs or expenses.
6.3.5.5 The system will be used in a live environment for
the processing of actual data in connection with the
Contractor's responsibilities under the County Indigent
Health Services agreement. In the event the system is deemed
to be inoperable or is projected to be inoperable for a
period in excess of three (3) working days, the Contractor
reserves the right to reinstitute a timesharing arrangement
with IDX, or obtain other appropriate operating solutions,
subject to prior approval of the County. The County
agrees to reimburse the Contractor for any costs incurred in
instituting and operating under any such arrangement, subject
to prior approval of any such costs by the County.
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6.3.5.6 The Contractor is entitled to use and to make
available to the County the IDX software pursuant to a
revocable license granted in the IDX agreement. The County
acknowledges receipt and review of a copy of the IDX
agreement. The County and the Contractor agree that neither
they nor any of their employees, agents or contractors shall
in any way use or disclose the IDX software in violation of
any of the terms or provisions of the IDX agreement. The
County agrees to indemnify, protect, defend and hold harmless
the Contractor and its officers, directors, agents, employees
and independent contractors from and against any and all
claims, costs, suits, damages, judgments or other expenses
and liability (including attorney's fees and costs) arising
in anyway from acts of negligence on the part of the County
or its employees that results directly or indirectly in any
violation of the IDX agreement.
6.3.5.7 The Contractor shall transfer the IDX software to
the County upon written notice from the County.
6.3.5.8 The County recognizes that Contractor is not
responsible for internal management of IDX, therefore, in
the event of IDX default, the Contractor shall notify
the County and develop a plan for County approval to
mitigate and correct the program problems caused by the
failure of IDX to perform in accordance with their agreement,
and Contractor and the County shall renegotiate MIS
responsibilities and timelines.
6.4 ENROLLMENT AND ELIGIBILITY CERTIFICATION
6.4.1 The Contractor shall maintain a centralized on-line patient
registration system to verify patient certification for providers and
to ensure accurate claims payment.
6.4.1.1 The Contractor shall assist Community Clinics,
hospitals and other providers in the development of on-line
capability for verification of patient eligibility.
6.4.2 Tasks shall include:
6.4.2.1 ENTRY OF PATIENT ELIGIBILITY STATUS AND
CERTIFICATION PERIOD Patient eligibility for County Indigent
Health Services is the responsibility of the County. The
Contractor shall be responsible for the development and
maintenance of a patient registration system that reflects
the current eligibility status of patients.
6.4.2.2 PROCESS EMERGENCY ROOM EPISODES Emergency Treat and
Release episodes are processed separately from other hospital
claims. The Contractor's system must track and process these
episodes to assure reimbursement in a timely manner.
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6.4.2.3 ENSURE ACCURATE IDENTIFICATION OF ELIGIBLE PATIENTS
The Contractor shall ensure that provider hospitals
accurately identify and refer potential County Indigent
Health Services patients to the appropriate eligibility
resource.
6.4.2.4 COORDINATION OF ELIGIBILITY INFORMATION The
Contractor shall coordinate eligibility information from all
sources to ensure accurate claims payment. The Contractor
shall provide reports as necessary to providers and the
County.
6.4.2.4.1 The Contractor shall analyze and
implement, where feasible, linkages with other
eligibility systems, such as Healthy San Diego.
6.4.3 Reports and Deliverables
6.4.3.1 The Contractor shall provide reports that contain
information on patient eligibility status and other
information as required by the County. At a minimum, the
following reports shall be prepared. Each repor shall
include a one page Executive Summary of the most significant
results.
6.4.3.1.1 Eligibility Report including an
unduplicated CIHS patient count.
6.4.4 Unless waived by the County, the County will:
6.4.4.1 Perform all eligibility determinations using the
Department of Social Services (DSS) Medi-Cal Program Guide.
Eligibility certifications are currently performed by County
staff.
6.4.4.2 Ensure eligibility coordination, including
establishing and promulgating eligibility standards and
guidelines, providing Contractor with eligibility status
information.
6.5 UTILIZATION MANAGEMENT AND CARE COORDINATION
6.5.1 The Contractor shall maintain a system for the management of
patient care that ensures the timely referral to the appropriate
level of care and reduces barriers to care, with the goal of serving
people at the most appropriate level of care.
6.5.2 The Contractor shall implement a Utilization Review system to
ensure the appropriate, cost effective use of County Indigent Health
Services funds to eligible patients.
6.5.2.1 The Contractor shall notify the County of any
significant trends or patterns of unusual or abnormal claims
by any of the providers.
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6.5.3 Tasks shall include:
6.5.3.1 DEVELOP, AND MANAGE THE IMPLEMENTATION OF A
DISEASE MANAGEMENT PROGRAM The intent of the Disease
Management Program, which will be implemented by the
Community Clinics, will focus on the primary and preventive
services for specific diseases commonly found in County
Indigent Health Services patients. The Contractor shall
work with the Community Clinics in the development of
standardized treatment protocols which can have a positive
impact on patient care and programmatic costs.
6.5.3.1.1 DEVELOP CASE RATES FOR SPECIFIED CASES
INCLUDED IN THE DISEASE MANAGEMENT PROGRAM The
Contractor shall work with the Community Clinics in
the development of case rates based upon the
implementation of standardized treatment protocols.
6.5.3.2 DEVELOP A PLAN FOR A TARGETED CASE MANAGEMENT
PROGRAM The plan must include the program's scope of
services, referral, discharge, reporting and payment
requirements. It must also specify a transition plan from
the existing Care Coordination function manage by the
Contractor to Targeted Case Management program managed by
providers.
6.5.3.3 DEVELOP, NEGOTIATE AND MANAGE THE TARGETED CASE
MANAGEMENT CONTRACT After County approval, the resulting
contract must reflect the scope of services contained in the
Targeted Case Management plan, with documented cost savings
to the County.
6.5.3.4 COORDINATE DISCHARGE ACTIVITIES WITH HOSPITAL
DISCHARGE PLANNERS The Contractor coordinates with dis-
charge planners to ensure appropriate referrals between
levels of care for County Indigent Health Services patients
occurs between clinics and hospitals.
6.5.3.4.1 The Contractor shall coordinate dis-
charge for patients requiring Durable Medical
Equipment and/or placement in a Board and Care
facility.
6.5.3.5 MANAGE, COLLECT AND REPORT DATA ON SPECIFIC
CONTRACTS Under the general direction of the County, the
Contractor shall manage the contractors and reimburse
providers for: 1) the provision of emergency dental
services for Probation Department inmates; 2)
communicable disease screening of newly arrived
refugees; and 3) the evaluation of General Relief
recipients for participation in General Relief
Employability Evaluations; and 4) other supplemental
County Indigent Health Services programs such as breast
cancer treatment.
6.5.3.6 GRANT PRIOR AUTHORIZATION OF ALL NON-EMERGENT
INPATIENT ADMISSIONS A system must be in place to review
and process requests for non-emergent hospital admissions.
The system must include a procedure for notifying patients
when requests for non-emergent inpatient admissions are
denied, including the reason for the denial.
6.5.3.7 CONDUCT CONCURRENT REVIEW OF ALL INPATIENT
ADMISSIONS Concurrent reviews of hospital admissions are
intended to ensure that patients are discharged to a lower
level of care as soon as it is medically appropriate.
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6.5.3.8 DESIGN AND IMPLEMENT A TREATMENT AUTHORIZATION
REQUEST SYSTEM The Contractor shall work with the
Community Clinics to develop a system for ambulatory
specialty care that include the Community Clinic's
gatekeeper role.
6.5.3.9 ASSIST HOSPITALS IN ACCESSING ANCILLARY
SERVICES THROUGH THE COUNTY INDIGENT HEALTH SERVICES
PROGRAM The Contractor shall work with hospital
discharge planners to ensure that County Indigent Health
Services contracted providers are used upon discharge from
the hospital for ancillary services, including pharmacy and
lab.
6.5.3.9.1 The Contractor shal monitor and
control the costs of ancillary services.
6.5.3.10 UPDATE AND MAINTAIN EXISTING PHARMACEUTICAL
FORMULARY The Medi-Cal formulary shall be used as the
basis for updating and maintaining the County Indigent
Health Services formulary, with the exception of the
Comprehensive AIDS Resources Emergency (CARE) Act which
maintains a separate formulary. All changes to either
formulary must be pre-approved by the County.
6.5.4 Reports and Deliverables
6.5.4.1 The Contractor shall provide reports that contain,
information on the Treatment Authorization System,
management of the pharmaceutical program, use of ancillary
services and other information as required by the County. At
a minimum, the following reports shall be prepared. Each
report shall include a one page Executive Summary of the most
significant results.
6.5.4.1.1 Disease Management Report
6.5.4.1.2 Specialt and Ancillary Service
Utilization Report
6.5.4.2 Deliverables
6.5.4.2.1 Quarterly Targeted Case Management
Report
6.5.4.2.2 Targeted Case Management Plan
6.5.4.2.3 Disease Management Program Protocol
6.5.4.2.4 Disease Management Program Case Rates
6.5.4.2.5 Treatment Authorization Request System
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6.5.5 Unless waived by the County, the County will:
6.5.5.1 Liaison with other systems serving the indigent
population, e.g., mental health, drug and alcohol
treatment providers, social service providers and ancillary
providers.
6.5.5.2 Meet at least quarterly with the representatives of
the major provider groups (e.g. Council of Community Clinics,
Hospital Council, etc.) to discuss issues related to
patient care, program management and reimbursement.
6.5.5.3 Review and approve the plan, protocols and rates
for the Disease Management Program.
6.5.5.4 Review and approve discharge planning standards
6.5.5.5 Review and approve expenditure of "Special
Discharge Needs", at the request of the Contractor.
6.5.5.6 Establish reimbursement pool levels based on
anticipated revenue and utilization for each fiscal year by
April 30.
6.5.5.7 Review and approve provider reimbursement plans and
pool close-out.
6.6 QUALITY MANAGEMENT
6.6.1 The Contractor shall develop and implement a quality
assurance program that ensures that patients have access to and are
receiving the appropriate levels of patient care. This program shall
include a fair and impartial grievance process, which has been
approved by the County.
6.6.2 In cooperation with and approved by the County, tasks shall
include:
6.6.2.1 CONDUCT PATIENT FOCUS GROUPS AND PROVIDER
SATISFACTION SURVEYS Focus groups and provider
satisfaction surveys will be conducted annually, unless
otherwise indicated.
6.6.2.2 IMPLEMENT RECOMMENDED CHANGES THAT ARE THE RESULT OF
FOCUS GROUPS AND SATISFACTION SURVEYS The Contractor shall
report the results of the focus groups and satisfaction
surveys to the County, and implement changes recommended by
the County as a result of this report.
6.6.2.3 ASSIST AND PARTICIPATE IN PROGRAMMATIC/FISCAL
AUDITS OF COMMUNITY CLINICS The Contractor shall work with
the County and Community Clinics in the design, implementa-
tion and reporting of Community Clinic programmatic/fiscal
audits.
6.6.2.4 MAINTAIN PROVIDER CREDENTIALLING SYSTEM The
Contractor shall develop, maintain and implement a provider
credentialling system to ensure that all County Indigent
Health Services contracted providers meet program
participation standards.
6.6.2.5 IDENTIFICATION OF ANNUAL QUALITY IMPROVEMENT GOALS
The Contractor, with County participation, shall review County
Indigent Health Services utilization data and other program
activities in order to identify opportunities for quality
improvement in County Indigent Health Services. The
Contractor shall prepare these recommendations for County
approval and work with providers to meet the goals.
C-1-19
<PAGE>
6.6.2.5.1 The Contractor shall develop methodology
to ensure access of required health services to
eligible patients.
6.6.3 Reports and Deliverables
6.6.3.1 The Contractor shall provide reports that contain
information on access to care, patient and provider
satisfaction, complaints and grievances and other information
required by the County. At a minimum, the following reports
shall be prepared. Each report shall include a one page
Executive Summary of the most significant results.
6.6.3.1.1 Patient and Provider Satisfaction Survey
Results
6.6.3.1.2 Patient Complaint Status Report
6.6.4 Unless waived by the County, the County will:
6.6.4.1 Review and approve the quality assurance program
operated by the Contractor and annual quality improvement
goals.
6.6.4.2 Liaison with providers to assist with resolution of
identified problems.
6.7 CLAIMS PROCESSING AND FINANCIAL MANAGEMENT
6.7.1 The Contractor shall manage the distribution of funds for the
County Indigent Health Services program to ensure the maximum
utilization of available funds and will maximize revenue through
revenue maximization and recovery activities.
6.7.2 Tasks shall include:
6.7.2.1 PROCESS CLAIMS AND ENCOUNTER DATA, INCLUDING CLAIMS
SUBMITTED FOR PAYMENT UNDER THE FOURTH OPERATING AGREEMENT All
claims and invoice processing and review activities by the
Contractor shall be capable of safeguarding public funds,
ensuring appropriate controls over expenditures of public
funds and ensuring a proper audit trail for documentation of
expenditures.
6.7.2.2 MANAGE COMMUNITY CLINIC, HOSPITAL AND SPECIALTY
REIMBURSEMENT POOLS AND RECALCULATE PROSPECTIVE PAYMENTS BASED
ON POOL UPDATES The Contractor shall assure that reconcilia-
tion of payments to services provided will occur on a
quarterly basis.
6.7.2.3 MANAGE THE CALIFORNIA HEALTHCARE INDIGENT PROGRAM
HOSPITAL ACCOUNT The Contractor shall track and administer the
hospital account and be able to account by a patient specific
claim the payments from each subaccount of hospital funds.
C-1-20
<PAGE>
6.7.2.4 DISBURSE CALIFORNIA HEALTHCARE INDIGENT PROGRAM
(CALIFORNIA HEALTHCARE INDIGENT PROGRAM), PHYSICIAN
EMERGENCY SERVICES (PHYSICIAN EMERGENCY SERVICES) PROGRAM
FUNDS The Contractor shall ensure that California Healthcare
Indigent Program and Physician Emergency Services funds are
distributed according to contractual guidelines.
6.7.2.5 ESTABLISH AND MAINTAIN COMPREHENSIVE AIDS RESOURCES
EMERGENCY FUND REIMBURSEMENT POOL The Contractor shall
calculate initial and subsequent payments from the
Comprehensive AIDS Resources Emergency (CARE) Act pool,
request required funding from the County and process
prospective and applicable fee for service payments to
participating providers.
6.7.2.6 PROVIDE EXPLANATION OF BENEFITS (EOBS) The
Contractor shall provide patient-specific EOBs to
participating Comprehensive AIDS Resources Emergency,
California Healthcare Indigent Program and Physician
Emergency Services providers, and other providers as
requested.
6.7.2.7 ISSUE PROVIDER PAYMENTS The Contractor shall make
payments to providers according to different program require-
ments and deadlines, and maintain a separate accounting for
each account and for interest accrued by each account.
6.7.2.7.1 The Contractor shall provide the County,
on a quarterly basis, a copy of detailed bank state-
ments for each account
6.7.2.7.1.1 All program funding
(principal, interest and funding from
Medi-Cal recovery or third party
recovery) must be properly accounted
for.
6.7.2.7.1.2 All disbursement of funds
must be approved by the County in
accordance with procedure.
6.7.2.8 MANAGE ANNUAL SETTLEMENT AND DISTRIBUTION OF
COMMUNITY CLINIC AND HOSPITAL POOLS The Contractor shall
manage the close-out of the Community Clinic and
Hospital Pools in accordance with established policies and
procedures.
6.7.2.9 OPERATE A REVENUE RECOVERY PROJECT INVOLVING MEDI-
CAL AND THIRD PARTY REIMBURSEMENTS The Contractor shall
administer a revenue recovery function that meet all
applicable requirements for health care collection agencies.
C-1-21
<PAGE>
6.7.2.9.1 The Contractor's staff who work on Medi-
Cal recovery are funded solely from the Contractor's
share (25%) of recovered funds.
6.7.2.9.2 The Contractor shall not receive any
revenues or interest generated from other third
party recoveries; nor interest from Medi-Cal
recoveries.
6.7.2.10 MAINTAIN ACCOUNTING RECORDS BY SEPARATE FUNDING
SOURCES AND SUB-ACCOUNTS The County Indigent Health
Services program is funded through several funding sources,
as described in Section 5, Provider Payments, of the Statement
of Work. The Contractor shall ensure that the accounting of
each funding source meets contractual requirements.
6.7.2.11 DEVELOP A MECHANISM FOR REIMBURSEMENT BASED ON
UTILIZATION AND DATA REPORTING The Contractor shall be
responsible for ensuring that payments to providers are based
on approved reimbursement methodology and accurate utilization
data.
6.7.2.12 DEVELOP STANDARDIZED INCOME SCHEDULES WITH A SHARE
SHARE OF COST SLIDING SCALE The Contractor shall work with
Community Clinics to implement a sliding fee scale for
patients accessing care at Community Clinics. The sliding
fee scale will be based upon Federal Poverty Guidelines as
published annually.
6.7.2.13 DEVELOP A PROVIDER REIMBURSEMENT RATE SCHEDULE
WHICH REFLECTS THE COLLECTION OF A SHARE OF COST The
Contractor, in conjunction with the Community Clinics, shall
develop a provider reimbursement rate schedule which reflects
the collection of a Share of Cost based on Federal Poverty
Guidelines.
6.7.2.14 ESTABLISH MAINTENANCE OF EFFORT LEVELS FOR
COMMUNITY CLINICS The Contractor shall work with the
Community Clinics to determine Maintenance of Effort levels
to ensure a continuing level of primary care and urgent care
services. These Maintenance of Effort levels, will be
based on the historic provision of services by the
Community Clinics.
6.7.2.15 DEVELOP A PLAN FOR THE SPECIALTY POOL THAT INCLUDES
ASSUMPTION OF SOME LEVEL OF RISK BY THE COMMUNITY CLINICS
The Contractor, in conjunction with the County and the
Community Clinics will develop a Specialty Pool Management
Plan, which includes the assumption of some level of risk by
the Community Clinics. The Plan shall incorporate the
Community Clinic's role as gatekeeper to specialty services.
6.7.2.16 DISBURSE COUNTY PATIENT SUPPORT SERVICES FUNDS The
Contractor shall pay claims submitted for services
provided by UCSD under the terms of the Fourth Operating
Agreement.
6.7.2.17 DEVELOP A FINANCIAL INCENTIVE PLAN FOR PROVIDERS
The Contractor shall work with the County and providers to
design and implement a Financial Incentive Plan to improve or
expand services.
C-1-22
<PAGE>
6.7.3 Reports and Deliverables
6.7.3.1 The Contractor shall provide reports that contain
information on the management and distribution of funds,
revenue and recovery activities, and other information
required by the County. At a minimum, the following reports
shall be prepared. Each report shall include a one page
Executive Summary of the most significant results.
6.7.3.1.1 Reimbursement Report
6.7.3.1.2 Physician Emergency Services Fund Claim
and Payments Report
6.7.3.1.3 California Healthcare Indigent Program
Trust Fund Report
6.7.3.1.4 Comprehensive AIDS Resources Emergency
(CARE) Act Utilization and Provider Reimbursement
Report
6.7.3.1.5 County Patient Support Services
Reimbursement Report
6.7.3.2 Deliverables
6.7.3.2.1 Recommendations for Reimbursement
Methodology Improvements
6.7.3.2.2 Standardized Income Schedule
6.7.3.2.3 Provider Reimbursement Rate Schedule
6.7.3.2.4 Specialty Pool Management Plan
6.7.3.2.5 Financial Incentive Plan
6.7.4 Unless waived by the County, the County will:
6.7.4.1 Approve guidelines, payment standards and mechanisms
for claims processing and provider payments.
6.7.4.2 Establish funding limits for each component of the
County Indigent Health Services Program.
6.7.4.3 Approve provider reimbursement methodology
6.7.4.4 Approve Financial Incentive Plan and payments
6.8 NETWORK DEVELOPMENT AND MANAGEMENT
6.8.1 The Contractor shall maintain a provider network that
ensures reasonable access to services by recruiting providers
for ambulatory, specialty and inpatient care for eligible
patients.
C-1-23
<PAGE>
6.8.2 Tasks shall include:
6.8.2.1 Upon transfer, operate the 1-800 number currently
managed by the County. Direct line costs are the financial
responsibility of the County. This 1-800 number is utilized to
schedule appointments with the County's eligibility workers,
therefore, the operation will require close collaboration
with the County.
6.8.2.1.1 Contractor shall implement current
County procedures including follow-up with clients
for confirmation of appointments, and shall make
recommendations to improve efficiency of this
operation and related program tasks.
6.8.2.2 Provide administrative support during contract
negotiations, prepare and monitor provider contracts. The
Contractor shall manage contracts with the County Indigent
Health Services provider network, including hospitals,
Community Clinics, Specialty Physicians and ancillary
providers and develop methodology to monitor contracts.
6.8.2.2.1 Contractor shall draft, for County
approval, all provider contracts or amendments.
6.8.2.2.2 Contractor shall prepare for signature
all provider contracts or amendments to be
distributed by the County.
6.8.2.2.3 Contractor shall perform site visits and
perform fiscal and programmatic reviews of the
Community Clinics at least annually.
6.8.2.2.3.1 The County shall pre-
approve the site review methodology.
6.8.2.2.4 Contractor shall perform fiscal and pro-
grammatic reviews of other contractors and program
providers.
6.8.2.2.4.1 The County shall pre-
approve the review methodology.
6.8.2.3 Develop and implement a plan for re-contracting
Specialty Physicians/Ancillary Providers. The Contractor
shall evaluate the existing network of Specialty Physicians/
Ancillary Providers and propose an alternate model for
maintaining the Specialty Physician/Ancillary Providers
network.
6.8.3 Reports and Deliverables
6.8.3.1 The Contractor shall provide reports that contain
information on provider utilization and other information
required by the County. At a minimum, the following reports
shall be prepared. Each report shall include a one page
Executive Summary of the most significant results.
C-1-24
<PAGE>
6.8.3.1.1 Provider Status Report
6.8.3.1.1.1 The Provider Status Report
shall update listings of the provider
network when changes occur.
6.8.3.2 Deliverables
6.8.3.2.1 Specialty Physician/Ancillary Providers
Re-Contracting Plan
6.8.4 Unless waived by the County, the County will:
6.8.4.1 Proactively address equity and access issues in the
County Indigent Health Services system.
6.8.4.2 Routinely monitor the accessibility and
availability of services.
6.8.4.3 Serve as the final appeal stage for provider
complaints regarding claims payment and other issues.
6.8.4.4 Approve contracts with providers and perform
random audits to ensure contract compliance of providers and
the Contractor.
6.8.4.5 Determine the percentages within each reimbursement
pool and the method of distribution of funds within each
pool with the assistance of the Contractor.
6.9 COMPLAINTS, GRIEVANCES AND APPEALS
6.9.1 The Contractor shall operate a patient grievance system that
allows for the impartial review and resolution of patient complaints.
6.9.1.1 In cooperation with the County, the Contractor shall
collaborate with the Office of Consumer Education and
Advocacy.
6.9.2 Tasks shall include:
6.9.2.1 REVISE EXISTING GRIEVANCE SYSTEM The Contractor
shall propose changes in the existing grievance system, based
upon an analysis of the operation of the current system.
The grievance system shall resolve grievances in a timely
manner and include distinct levels of appeal.
6.9.2.2 OPERATE A TOLL-FREE NUMBER FOR PATIENT INQUIRIES AND
COMPLAINTS The Contractor shall operate a toll-free line for
patient inquiries and complaints and maintain documentation
regarding the number, nature and outcome of calls.
C-1-25
<PAGE>
6.9.2.3 MONITOR AND REPORT PATIENT COMPLAINTS AND
GRIEVANCES The Contractor shall maintain a log of all patient
and provider complaints and grievances which documents the
nature and resolution of the grievance. This log shall be
the basis for the monthly Grievance Report.
6.9.2.4 PREPARE AND PRODUCE PATIENT INFORMATION, INCLUDING
A PATIENT HANDBOOK The Contractor shall prepare, modify
or maintain patient information that reflects the integrated
County Indigent Health Services program.
6.9.3 Reports and Deliverables
6.9.3.1 The Contractor shall provide reports that include
level of complaint and grievance activity and other informa-
tion required by the County. At a minimum, the following
reports shall be prepared. Each report shall include a one
page Executive Summary of the most significant results.
6.9.3.1.1 Grievance Status Report Complaints
Status Report
6.9.3.2 Deliverables
6.9.3.2.1 Revised Grievance System
6.9.3.2.2 Revised Patient Handbook
6.9.4 Unless waived by the County, the County will:
6.9.4.1 Monitor the patient complaint and grievance
system, and act as a final appeal in the grievance system
6.9.4.2 Monitor the accessibility and availability of
services to patients, including regular meetings with
established consumer advocacy groups
6.9.4.3 Review annual patient satisfaction surveys and
initiate remedial action as indicated.
6.9.4.4 Approve revised grievance system and Patient
Handbook.
6.10 TECHNICAL RESOURCE CENTER
6.10.1 Contractor shall assume control of, maintain, and up-date
material contained in the Technical Resource Center (TRC) for the
County Indigent Health Services during the term of the contract. New
material shall be added at request of the COTR. TRC material shall be
available for Contractor staff or County personnel during normal
work hours. At time of re-solicitation, Contractor shall provide staff
and copy service to make TRC available to potential proposers.
C-1-26
<PAGE>
6.11 CONTRACTOR COLLABORATION WITH MENTAL HEALTH SERVICES' ADMINISTRATIVE
SERVICES ORGANIZATION (MHS - ASO)
6.11.1 The Contractor shall work collaboratively with the Mental
Health Services Administrative Services Organization during the term
of this agreement. The County believes that collaboration can
produce more efficient service delivery in the areas of management
information systems, eligibility, claims processing, records
management and customer service.
6.11.2 The County requires the two administrative service organiza-
tions to mutually plan and implement combined operations, where
those combined operations, in the opinion of the County, will
generate economies of scale or improved services to the public. The
two Administrative Services Organizations shall reach consensual and
reasonable agreement on collaboration plans and implementation time-
line with the approval of the County.
6.11.3 Collaboration Deliverables Based on Projected Timetable
6.11.3.1 By April 1, 1998, the Contractor shall work with
the MHS-ASO to complete a draft plan of action and
proposed time line for combining administrative functions for
both programs.
6.11.3.2 From April 1, 1998 through June 30, 1998, the
Contractor shall work with the County (County Indigent
Health Services and County Mental Health Services) and
the Mental Health ASO to finalize the collaboration plan of
action and timeline.
6.11.3.3 From July 1, 1998 through June 30, 1999, the
Contractor, after County approval, shall implement plans to
combine administrative functions.
6.11.3.4 From July 1, 1999 through contract close out,
after the implementation phase is completed, the
Contractor(s) shall produce quarterly reports that document
the results of the combined operations, in a report format
approved by the County.
6.12 CONTRACTOR CLOSE OUT SERVICES
6.12.1 When given notice by the County to proceed, the
Contractor shall assure a smooth transition of services to the County
or designated successor of this agreement. Tasks shall include:
6.12.1.1 Transition Plan
Contractor shall train the successor to this agreement in
all phases of the operation to assure that the new
organization can perform the tasks contained in this State-
ment of Work without the ongoing assistance of the
Contractor.
C-1-27
<PAGE>
6.12.1.1.1 The Contractor's Project Director
shall meet with the County and management from the
new organization at least weekly during the
transition period to facilitate a smooth and
timely transition.
6.12.1.1.1.1 The Contractor shall
make reasonable efforts to remedy any
problems identified in these weekly
transition meetings by the following
week.
6.12.1.2 Develop for County approval a plan of action and
timeline to complete the transition of all administrative
functions contained within this agreement, to include the
following deliverables:
6.12.1.2.1 Close out of all reimbursement pools
and final payments to providers;
6.12.1.2.2 Final accounting of all pools and
payments to providers, including all accumulated
interest;
6.12.1.2.3 Detailed transition plan for the IDX
system and other components of the MIS system,
preparation of all required reports, including
MICRS reporting;
6.12.1.2.4 Final inventory and turnover of all
County funded equipment, computer hardware and
software;
6.12.1.2.5 Transfer of program records including
patient records and active case files;
6.12.1.2.6 Compliance with Technical Resource
Center update and close out requirements;
6.12.1.2.7 Assignment of any active leases or
sub-contracts that are assignable and approved by
the County for assignment;
6.12.1.2.8 Appropriate close out of CARE Act
services with the Office of AIDS Coordination;
6.12.1.2.9 Other close out services, including
sub-programs, directed by the County.
C-1-28
<PAGE>
IMPLEMENTATION SCHEDULE
The County Indigent Health Services Administrative Services Organization (ASO)
contract is scheduled to begin in October 1997. At implementation of the
contract the Contractor shall assume operation of the systems that the current
County Indigent Health Services Administrative Contractor has in place. The
following implementation schedule indicates that tasks that are new to the
County Indigent Health Services program and for which the current ASO does not
have operating systems in place.
C-1-29
<PAGE>
1997 1998
TASK SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL
Contract Implementation X
Provider 1-800 Operation Assumed X
Data Conversion Transition Plan X
Implemented
Provider Reimbursement Method
Developed (Pending)
Provider Reimbursement Method
Implemented (Pending)
Contract Monitoring Initiated X
Standardized Income Schedule X
Reviewed & Implemented
Disease Management Program Developed
and Coordinated with CHIP (Pending)
Treatment Authorization Request X
(TAR) System Assessed
Disease Management Case Rates X
Developed
Specialty Pool Assessment X
Specialty Physician/Ancillary X
Providers Re-Contracting
Plan Developed
Grievance System Revised & Approved X
Targeted Case Management Plan X
Developed
Revised Grievance System Implemented X
Annual Budget Submitted X
Disease Management Program (Pending)
Disease Management Case Rates X
Implemented
Revised TAR System Implemented X
Revised Policy and Procedure Manual X
Specialty Pool Plan Implemented X
Specialty Physician/Ancillary X
Providers Re-Contracting
Plan Implemented
Financial Incentive Plan Developed X
Targeted Case Management Contract X
Negotiated
C-1-30
<PAGE>
8. REPORTS AND DELIVERABLES TIMELINE
MONTHLY QUARTERLY YEARLY DATE
REPORTS
Specialty & Ancillary Service X X
Utilization Report
Annual Report X
California Healthcare Indigent X X
Program Trust Fund Report
Comprehensive AIDS Resources X X
Emergency Utilization & Provider
Reimbursement Report
County Patient Support Services X X
Report
Contract Site Reviews X
Disease Management Report X X
Eligibility Report X X
Financial Report - PES, CHIP, Other X X X
General Relief Employability Evaluation X X
(GREE) Report
Grievance Status Report X X
Medically Indigent Care Reporting X X
System (MICRS) Data Submission
Patient/Provider Survey Results X
Patient Complaint Status Report X X
Physician Emergency Services Fund X
Program Activity Report X X
Provider Status Report X X
Reimbursement Report X X
Utilization Review Report X X X
C-1-31
<PAGE>
DELIVERABLES
Disease Management Case Rates 06/01/98
Disease Management Protocol Pending
Financial Incentive Plan 03/15/98
Provider Reimbursement Rate Schedule Pending
Recommendations for Reimbursement Pending
Methodology Improvements
Revised Policy and Procedure Manual 03/15/98
Standardized Income Schedule 03/01/98
(Reviewed)
Specialty Physician/Ancillary Providers 04/15/98
Re-Contracting Plan
Specialty Pool Management Plan 04/15/98
Targeted Case Management Plan 01/15/98
Treatment Authorization Request System 01/15/98
(Continued next page)
DELIVERABLES
- --------------------------------------
MHS ASO Collaboration*
Draft Plan Timeline 04/01/98
Final Plan and Timeline 06/30/98
Implementation 07/01/98-
06/30/99
Reporting 07/01/99-
06/30/00
* Tentative timeline and mutually
agreed upon
8.1 Proposers may review copies of existing reports which are located in
the County Indigent Health Services Technical Review Center.
C-1-32
<PAGE>
9. REFERENCES
The following references are applicable to work requirements and will be
available for review by prospective proposers in the Technical Resource
Center.
9.1 System Documentation
9.1.1 County Medical Services Policy and Procedures Manual -
Finance/Revenue Recovery
9.1.2 County Medical Services Policy and Procedures Manual -
Eligibility
9.1.3 County Medical Services Policy and Procedures Manual -
Pharmacy Benefits
9.1.4 County Medical Services Policy and Procedures Manual -
Consumer Advocacy
9.1.5 County Medical Services Policy and Procedures Manual - Data
Collection and Reporting
9.1.6 County Medical Services Policy and Procedures Manual - Claims
9.1.7 County Medical Services Policy and Procedures Manual -
Management of Care
9.1.8 County Medical Services Policy and Procedures Manual -
Utilization Review
9.1.9 County Medical Services Medical and Protocols Policy Manual
9.1.10 Provider Manuals
9.2 Contracts
9.2.1 Primary Care Service Community Clinic Contract
9.2.2 County Medical Services Hospital Contract
9.2.3 County Medical Services Community Clinic Contract
9.2.4 County Medical Services Physician Contract
9.2.5 California Healthcare Indigent Program (CHIP) Hospital
Agreement
9.2.6 Physician Emergency Services (PES) Act Fund Billing
Requirements
9.2.7 Comprehensive AIDS Resources Emergency (CARE) Act Primary
Care Clinic Contract
9.2.8 Fourth Operating Agreement with University of California,
San Diego Medical Center
9.2.9 Sample Ancillary Agreement
C-1-33
<PAGE>
EXHIBIT 10.2
ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
SOLICITATION, OFFER AND AWARD
Contract No: RFP No: YH8-0001 Date Issued: February 10, 1997
Revised: April 14, 1997
Issued by: AHCCCSA
Contracts and Purchasing Subject of Solicitation:
701 E. Jefferson Ave. ACUTE CARE SERVICES - CYE 98
Phoenix, AZ 85034 (TERM OF CONTRACT: 10/1/97- 9/30/98)
===============================================================================
I. SOLICITATION
Sealed offers (original and 5 copies) for providing the services described
herein will be received at the issuing office (above) until 3:00 p.m. local time
May 12, 1997. For information call:
Mark Renshaw, Contracts and Purchasing Phone: (602) 417-4577
===============================================================================
TABLE OF CONTENTS
A. SOLICITATION, OFFER AND F. LIST OF ATTACHMENTS.............62
AWARD FORM......................1 G. REPRESENTATIONS &
B. RATES ..........................2 CERTIFICATIONS...............63-70
C. DEFINITIONS...................3-7 H. INSTRUCTIONS TO OFFERORS.....71-83
D. PROGRAM REQUIREMENTS.........8-51 I. EVALUATION FACTORS...........84-86
E. CONTRACT CLAUSES............52-61 ATTACHMENTS
===============================================================================
II. OFFER (Must be fully completed by Offeror)
The undersigned Offeror hereby agrees, if this offer is accepted within 120 days
of bid opening to provide all services in accordance with the terms and
requirements stated herein, including all attachments, amendments, and
best-and-final offer (if any).
NAME OF OFFEROR: Arizona Health Concepts, Inc. PHONE: (602) 331-5100
----------------------------- --------------
ADDRESS: 7600 North 16th Street, Suite 150
---------------------------------
CITY/STATE: Phoenix, Arizona Zip: 85020
---------------- -----
NAME OF PERSON AUTHORIZED
TO SIGN OFFER: James A. Burns TITLE: President/CEO
-------------- -------------
OFFEROR'S
SIGNATURE: /s/ James A. Burns DATE: May 12, 1997
------------------ ------------
===============================================================================
III. AWARD (To be completed by AHCCCSA)
The offer, including all attachments, amendments and best-and-final offer (if
any), contained herein, is accepted.
NAME OF AHCCCSA CONTRACTING OFFICER: Michael Veit DATE: June 24, 1997
------------ -------------
SIGNATURE OF AHCCCSA CONTRACTING OFFICER: /s/ Michael Veit
---------------------------
===============================================================================
<PAGE>
SECTION B: CAPITATION RATES
1. The Contractor shall provide services as described in this solicitation.
2. Attachment B, Service Area Minimum Network Standards, describes location
requirements by Geographic Service Area (GSA).
3. The following capitation rate table, shown for example only, will be
generated by the capitation rate computer program, described in Attachment E.
The Offeror must complete one such rate table for each Geographic Service
Area (see Section H, Paragraph 9, Award of Contract) it is bidding. The
Offeror should insert between this page and the following page the
computer-generated printout of all such proposed rate tables.
4. In preparing capitation rate bids, offerors, especially continuing offerors,
should note the program changes described in the following paragraphs:
Section D, Paragraph 39, Reinsurance
Section D, Paragraphs 1 and 6, regarding Family Planning
Extension Program
Section D, Paragraph 6, regarding Health Plan Choice and
Prior Period Coverage
Section H, Paragraph 9, regarding bidding by Geographic Service
Areas
5. Offerors are encouraged to negotiate discounts for inpatient, outpatient and
other medical services to provide for the most cost-effective capitation
rates.
- --------------------------------------------------------------------------------
SAMPLE ONLY:
PROPOSED CAPITATION RATES:
(1) GEOGRAPHIC SERVICE AREA:
RATE CODE AND AGE/SEX CAPITATION RATE PER SUPPLEMENTAL PAYMENT
CLASSIFICATION MEMBER PER MONTH: PER SOBRA BIRTH:
TANF AND CCP AGE/ SEX:
1 year M + F $ _____________________
1-13 years M + F _____________________
14-44 years F _____________________
14-44 years M _____________________
45+ years M + F _____________________
SSI WITH MEDICARE _____________________
SSI WITHOUT MEDICARE _____________________
MN/MI * _____________________
SOBRA FAMILY PLANNING _____________________
SOBRA SUPPLEMENTAL $ ____________________
* All MN/MI's (i.e., with and without Medicare) are grouped together for
capitation purposes.
3
<PAGE>
SECTION C: DEFINITIONS
AAC See "Arizona Administrative Code".
AGENT Any person who has been delegated the authority to
obligate or act on behalf of a provider.
AID TO FAMILIES WITH A federal assistance program under Title IV-A of the
DEPENDENT CHILDREN Social Security Act. Replaced by the Temporary Assistance
(AFDC) to Needy Families (TANF) program.
AHCCCS Arizona Health Care Cost Containment System as defined by
ARS 36-2901.
AHCCCSA Arizona Health Care Cost Containment System
Administration.
AHCCCS BENEFITS See "COVERED SERVICES".
AHCCCS MEMBER See "MEMBER".
ALTCS The Arizona Long Term Care System (ALTCS), a program under
AHCCCSA that delivers long term, acute and behavioral
health care services to eligible members, as authorized by
ARS ss. 36-2931 et seq.
AMBULATORY CARE Preventive, diagnostic and treatment services
provided on an outpatient basis by physicians, nurse
practitioners, physician assistants and other primary care
providers.
AMPM The AHCCCS MEDICAL POLICY MANUAL.
ARIZONA State regulations established pursuant to relevant
ADMINISTRATIVE CODE statutes. For purposes of this solicitation, the relevant
(AAC) sections of the AAC are referred to throughout this
document as "AHCCCS Rules".
ARS Arizona Revised Statutes.
AT RISK Refers to the period of time that a member is
enrolled with a contractor during which time the
Contractor is responsible to provide AHCCCS covered
services under capitation.
BIDDERS LIBRARY As referred to in this RFP, a repository of
manuals, statutes, rules and other reference material
located at the AHCCCS office in Phoenix.
BOARD CERTIFIED An individual who has successfully completed all
prerequisites of the respective specialty board and
successfully passed the required examination for
certification.
CAPITATION A method by which a contractor is paid to deliver covered
services for the duration of a contract to members based
on a fixed rate per member notwithstanding (a) the actual
number of members who receive care from the contractor,
and (b) the amount of health care services provided to any
member; a cost containment alternative to fee-for-
service payments.
CATEGORICALLY A member who is eligible for Medicaid.
ELIGIBLE MEMBER
COMPETITIVE BID A state procurement system used to select contractors to
PROCESS provide covered services on a geographic basis.
CONTINUING OFFEROR An AHCCCS contractor during CYE 97 that submits a
proposal pursuant to this solicitation.
CONTRACT SERVICES See "COVERED SERVICES".
CONTRACT YEAR (CY) Corresponds to federal fiscal year (Oct. 1 through Sept.
30). For example, Contract Year 98 is 10/1/97 - 9/30/98.
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CONTRACTOR A person, organization or entity agreeing through a direct
contracting relationship with AHCCCSA to provide the goods
and services specified by this contract in conformance
with the stated contract requirements, AHCCCS statute and
rules and federal law and regulations.
CONVICTED A judgment of conviction has been entered by a federal,
state or local court, regardless of whether an appeal from
that judgment is pending.
CO-PAYMENT An amount which the member pays directly to a contractor
or provider at the time covered services are rendered.
COUNTY CONTRIBUTION Amount of funds contributed to the AHCCCSA fund by each
Arizona county based on funding formulas established by
law.
COVERED SERVICES Health care services to be delivered by a contractor which
are so designated in Section D of this contract and also
AHCCCS Rules R9-22-202 et seq.
CRS Children's Rehabilitative Services (See Section D,
Paragraph 1, Covered Services).
CY See "CONTRACT YEAR".
CYE Contract Year Ended; same as "CONTRACT YEAR".
DAYS Calendar days unless otherwise specified.
DHS Arizona Department of Health Services.
DIRECTOR The Director of AHCCCSA.
DISCLOSING ENTITY An AHCCCS provider or a fiscal agent.
DME Durable Medical Equipment; sturdy, long-lasting items and
appliances that can withstand repeated use, are designed
to serve a medical purpose, and are not generally useful
to a person in the absence of a medical condition, illness
or injury.
DUAL ELIGIBLE A member who is eligible for both Medicare and Medicaid.
DUAL ELIGIBLE A person who is entitled to Medicare Part A insurance and
QUALIFIED MEDICARE who meets certain income, resource and residency
BENEFICIARY requirements of the Qualified Medicare Beneficiary
program, and is categorically eligible for full AHCCCS
benefits.
EAC Eligible Assistance Child as defined in ARS 36-2905.03(B);
an AHCCCS state program for children under age 14
receiving food stamps.
ELIC Eligible Low-Income Child as defined in ARS 36-2905.05(C)
and (D); an AHCCCS state program for children under age 14
whose household income exceeds the income limit for the
MN/MI program but is less than 100% of the federal poverty
level.
ELIGIBLE PERSON A person who meets all eligibility requirements for
the AHCCCS acute care program but who has not yet been
enrolled with an AHCCCS acute care contractor.
ELIGIBILITY A process of determining, through a written application,
DETERMINATION including required documentation, whether an applicant
meets the qualifications for federal (categorical) and/or
state only eligibility.
ENCOUNTER An encounter is a record of a medically related service
rendered by a provider or providers registered with
AHCCCSA to a member who is enrolled with a contractor on
the date of service. It includes all services for which
the contractor incurred any financial liability.
ENROLLMENT The process by which a person who has been determined
eligible becomes a member with a contractor subject to the
limitations specified in AHCCCS Rule R9-22-333.
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EPSDT Early and Periodic Screening, Diagnosis and Treatment;
these services provide comprehensive health care, as
defined in Rule R9-22-213, through primary prevention,
early intervention, diagnosis and medically necessary
treatment of physical and behavioral health problems for
AHCCCS members under 21 years of age.
FEE-FOR-SERVICE (FFS) A method of payment to registered providers on an
amount-per service basis.
FEDERALLY QUALIFIED An entity which meets the requirements and receives a
HEALTH CENTER (FQHC) grant and funding pursuant to Section 330 of the Public
Health Service Act. An FQHC includes an outpatient health
program or facility operated by a tribe or tribal
organization under the Indian Self-Determination Act (PL
93-638) or an urban Indian organization receiving funds
under Title V of the Indian Health Care Improvement Act.
FFP Federal financial participation (FFP) refers to the
federal matching rate that the Federal government makes to
the Title XIX program portion of AHCCCS.
FISCAL YEAR (FY) The budget year - Federal Fiscal Year: October 1
through September 30; State fiscal year: July 1 through
June 30.
FULL-TIME EMPLOYEE One who is available at all times to fulfill the
requirements of the position.
GATEKEEPER Primary care provider who is primarily responsible for all
medical treatment rendered and who makes referrals as
necessary and monitors the member's treatment.
GEOGRAPHIC SERVICE A specific county or defined grouping of counties that are
AREA (GSA) available for contract award. An offeror may bid on any
or all GSA's. See Section H, Paragraph 9, Award of
Contract.
GROUP OF PROVIDERS Two or more health care professionals who
practice their profession at a common location (whether or
not they share facilities, supporting staff, or
equipment).
HCFA Health Care Financing Administration, an organization
within the Department of Health and Human Services, a
federal agency.
HEALTH MAINTENANCE Various forms of plan organization, including staff and
ORGANIZATION (HMO) group models, that meet the HMO licensing requirements of
the federal and/or state government and offer a full array
of health care services to members on a capitated basis.
HEALTH PLAN See "CONTRACTOR".
IBNR Incurred But Not Reported claims which is the liability
for services rendered for which claims have not been
received.
IHS Indian Health Service (IHS) is a division of the U.S.
Public Health Service. It administers a system of
hospitals and health centers providing health services to
Native Americans and Native Alaskans.
LIEN A legal claim filed with the County Recorder's office in
which a member resides and in the county an injury was
sustained for the purpose of ensuring that AHCCCS receives
reimbursement for medical services paid. The lien is
attached to any settlement the member may receive as a
result of an injury.
MANAGED CARE Systems that integrate the financing and delivery of
health care services to covered individuals by means of
arrangements with selected providers to furnish
comprehensive services to members; explicit criteria for
the selection of health care providers; significant
financial incentives for members to use providers and
procedures associated with the plan; and formal programs
for quality assurance and utilization review.
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MANAGING EMPLOYEE A general manager, business manager, administrator,
director, or other individual who exercises operational or
managerial control over, or who directly or indirectly
conducts the day-to-day operation of, an institution,
organization or agency.
MANAGEMENT SERVICES A person or organization who agrees to perform any
SUBCONTRACTOR administrative function or service for the Contractor
specifically related to securing or fulfilling the
Contractor's obligations to AHCCCSA under the terms of the
contract.
MATERIAL OMISSION A fact, data or other information excluded from a report,
contract, etc. which could lead to erroneous conclusions
following reasonable review of such report, contract, etc.
MEDICAID A Federal/State program authorized by Title XIX of the
Social Security Act, as amended, which provides Federal
matching funds for a state-operated medical assistance
program for specified populations. Certain mandatory
populations and services must be included to receive FFP;
however, states may add additional optional populations
and services with HCFA approval and also receive FFP.
MEDICARE A Federal program authorized by Title XVIII of the Social
Security Act, as amended.
MEMBER For purposes of this solicitation, a person eligible for
AHCCCS who is enrolled with a Contractor.
MN/MI Medically Needy/ Medically Indigent; state program for
individuals not eligible for Medicaid but who meet the
eligibility requirements for the state program.
NEW OFFEROR The organization, entity or person which submits a
proposal in response to this solicitation and which has
not been an AHCCCS contractor during CYE 97.
NON-CONTRACTING A provider who has a contract or subcontract within the
PROVIDER AHCCCS system and renders covered services to an eligible
person or member to whom such provider bears no
contractual obligation.
OFFEROR The organization, entity or person which submits a
proposal in response to the AHCCCS Request for Proposal.
An offeror who is awarded a contract becomes a Contractor.
PERFORMANCE MEASURES A set of standardized indicators designed to
assist AHCCCS in evaluating, comparing and improving the
performance of its contractors. Specific descriptions of
health services measurement goals are found in Section D,
Paragraph 16, Performance Measures.
PMMIS Pre-paid Medicaid Management Information System.
PRIMARY CARE An individual responsible for the management of the
PROVIDER (PCP) member's health care that includes a physician who is
generally a family practitioner, general practitioner,
pediatrician, general internist, obstetrician,
gynecologist, certified nurse practitioner or, under the
supervision of a physician, a physician's assistant. The
PCP must be an individual, not a group or association of
persons, such as a clinic.
PROVIDER A person or entity who contracts with AHCCCSA or
subcontracts with an AHCCCS health plan to provide AHCCCS
covered services to members.
QUALIFIED MEDICARE A Medicare cost-sharing program established by the
BENEFICIARY (QMB) Medicare Catastrophic Coverage Act of 1988 in which
Medicaid pays the Medicare premiums, coinsurance and
deductibles for Medicare recipients meeting specific
eligibility requirements.
RATE CODE Eligibility classification for capitation payment
purposes.
REINSURANCE A risk-sharing program provided by AHCCCSA to contractors
for the reimbursement of certain contract service costs
incurred by a member beyond a certain monetary threshold.
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RELATED PARTY A party that has, or may have, the ability to control or
significantly influence a contractor, or a party that is,
or may be, controlled or significantly influenced by a
contractor. "Related parties" include, but are not
limited to, agents, managing employees, persons with an
ownership or controlling interest in the disclosing
entity, and their immediate families, subcontractors,
wholly-owned subsidiaries or suppliers, parent companies,
sister companies, holding companies, and other entities
controlled or managed by any such entities or persons.
RFP Request For Proposal document prepared by AHCCCSA which
describes the services required and which instructs
prospective offerors how to prepare a response (proposal).
SCOPE OF SERVICES See "COVERED SERVICES".
SERIOUSLY MENTALLY An adult whose emotional or behavioral functioning is so
ILL (SMI) impaired as to interfere with his (or her) capacity to
remain in the community without supportive treatment or
services of a long-term or indefinite duration. The mental
disability is severe and persistent and may result in a
long-term limitation of his capacities for primary
activities of daily living, interpersonal relationships,
home-making, self-care, employment or recreation.
SOBRA Refers to a federal law (Sixth Omnibus Budget and
Reconciliation Act) passed in 1986 and subsequently
amended, which establishes eligibility for pregnant women
and children based on a percentage of the federal poverty
level (FPL). Currently, AHCCCS covers pregnant women and
infants up to age one with income up to 140% of FPL,
children from 1 through 5 years with income up to 133% of
FPL and children born on or after September 30, 1983 with
income up to 100% of FPL.
STATE The State of Arizona.
STATE PLAN The written agreement between the State and HCFA
which describes how the AHCCCS program meets HCFA
requirements for participation in the Medicaid program.
SUBCONTRACT An agreement entered into by Contractor with a provider of
health care services who agrees to furnish covered
services to members, or with a marketing organization, or
with any other organization or person who agrees to
perform any administrative function or service for
Contractor specifically related to fulfilling Contractor's
obligations to AHCCCSA under the terms of this contract.
SUBCONTRACTOR (1) A person, agency or organization to which a contractor
has contracted or delegated some of its management
functions or responsibilities to provide covered services
to its members; or (2) A person, agency or organization
with which a fiscal agent has entered into a contract,
agreement, purchase order or lease (or leases of real
property) to obtain space, supplies, equipment or services
provided under the AHCCCS agreement.
SUPPLEMENTAL SECURITY A federal assistance program under Title XVI of the Social
INCOME (SSI) Security Act.
TEFRA RISK HMO A Health Maintenance Organization or Comprehensive
Medical Plan which provides Medicare services to Medicare
beneficiaries pursuant to a Medicare risk contract with
HCFA under ss.1876 of the Social Security Act.
THIRD PARTY An individual, entity or program that is or may be
liable to pay all or part of the medical cost of injury,
disease or disability of an AHCCCS applicant or member.
Filing of liens is a method of securing reimbursement from
third parties.
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THIRD PARTY LIABILITY The resources available from a person or
entity that is, or may be, by agreement, circumstance or
otherwise. liable to pay all or part of the medical
expenses incurred by an AHCCCS applicant or eligible
person.
YEAR See "Contract Year".
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SECTION D: PROGRAM REQUIREMENTS
Table of Contents
1. Scope of Services.......................................................9
2. Behavioral Health Services.............................................14
3. AHCCCS Medical Policy Manual...........................................15
4. Vaccine for Children Program...........................................15
5. Denials or Reductions of Services......................................15
6. Enrollment And Disenrollment...........................................16
7. Mainstreaming of AHCCCS Members........................................18
8. Member Information.....................................................18
9. Member Surveys.........................................................20
10. Marketing Plans........................................................20
11. Open Enrollment........................................................20
12. Transition of Members..................................................20
13. Staff Requirements and Support Services................................22
14. Written Policies, Procedures and Job Descriptions......................23
15. Advance Directives.....................................................23
16. Performance Measures...................................................23
17. Quality Management and Utilization Management (QM/UM)..................25
18. Physician Incentives...................................................25
19. Appointment Standards..................................................25
20. Referral Procedures and Standards......................................26
21. Provider Manual........................................................27
22. Primary Care Provider Standards........................................27
23. Other Provider Standards...............................................28
24. Network Development....................................................29
25. Network Management.....................................................29
26. Federally Qualified Health Centers (FQHC)..............................30
27. Provider Registration..................................................31
28. Provider Affiliation Tape..............................................31
29. Periodic Report Requirements...........................................31
30. Dissemination of Information...........................................32
31. Requests for Information...............................................32
32. Operational and Financial Readiness Reviews............................32
33. Operational and Financial Reviews......................................32
34. Claims Payment System..................................................33
35. Hospital Reimbursement.................................................33
36. Nursing Facility Reimbursement.........................................34
37. Compensation...........................................................34
38. Capitation Adjustments.................................................36
39. Reinsurance............................................................36
40. Coordination of Benefits/ Third Party Liability........................38
41. Medicare Services and Cost Sharing ....................................39
42. Copayments.............................................................41
43 Records Retention......................................................41
44 . Medical Records........................................................41
45. Advances, Distributions, Loans and Investments.........................42
46. Accumulated Fund Deficit...............................................42
47. Data Exchange Requirement..............................................42
48. Encounter Data Reporting...............................................43
49. Monthly Roster Reconciliation..........................................44
50. Term Of Contract and Option To Renew...................................44
51. Subcontracts...........................................................45
52. Specialty Contracts....................................................46
53. Management Services Subcontractors.....................................46
54. Management Services Subcontractor Audits...............................47
55 . Minimum Capitalization Requirements....................................47
56. Performance Bond or Bond Substitute....................................48
57. Amount of Performance Bond.............................................48
58. Financial Viability Criteria/ Performance Measures.....................48
59. Merger, Reorganization and Change of Ownership.........................49
60. Sanctions..............................................................49
61. Auto-Assignment Algorithm..............................................50
62. Grievance Process and Standards........................................50
63. Quarterly Grievance Report.............................................50
64. Pending Legislative Issues.............................................50
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SECTION D: PROGRAM REQUIREMENTS
- -------------------------------------------------------------------------------
NOTE TO PROSPECTIVE OFFERORS: ATTACHMENT L, OFFEROR'S CHECKLIST, HAS BEEN
ADDED TO THIS RFP AS A CONVENIENCE TO OFFERORS. IT IS BELIEVED TO BE A
COMPLETE LISTING OF ALL SUBMISSION REQUIREMENTS PURSUANT TO THIS RFP.
HOWEVER, IF A REQUIREMENT IS STATED ANYWHERE IN THE RFP TEXT YET DOES NOT
APPEAR IN THE OFFEROR'S CHECKLIST, THE TEXT STATEMENT TAKES PRECEDENCE
OVER THE OMISSION OF THAT REQUIREMENT IN THE OFFEROR'S CHECKLIST.
- -------------------------------------------------------------------------------
1. SCOPE OF SERVICES
The Contractor shall provide covered services to AHCCCS members in accordance
with all applicable federal, State and local laws, rules, regulations and
policies, including services listed in this document, listed by reference in
attachments, and AHCCCS policies referenced in this document. The services are
described in detail in AHCCCS Rules R9-22-202 et seq., the AHCCCS MEDICAL POLICY
MANUAL, the AHCCCS BEHAVIORAL HEALTH POLICY MANUAL, and the document entitled
"AHCCCS Health Plan Performance Indicators", all of which are incorporated
herein by reference and may be found in the Bidder's Library. The covered
services are briefly described below. Covered services must be medically
necessary and provided by, or coordinated with, a primary care provider, except
for behavioral health and children's preventive dental services. Services must
be rendered by providers that are appropriately licensed, operating within their
scope of practice, and registered as an AHCCCS provider. The Contractor shall
provide the same standard of care for all members regardless of the member's
eligibility category. In situations where a medical policy will not become
effective until 10/1/97 but will affect the bidding or negotiation processes,
relevant information regarding the policy will be available in the Bidder's
Library.
The Contractor shall ensure that its providers are not restricted or inhibited
in any way from communicating freely with members regarding the members' health
care, medical needs and treatment options.
AMBULATORY SURGERY AND ANESTHESIOLOGY: The Contractor shall provide surgical
services for either emergency or scheduled surgeries when provided in an
ambulatory or outpatient setting such as a free-standing surgical center or a
hospital based outpatient surgical setting.
AUDIOLOGY: The Contractor shall provide audiology services to EPSDT members
including the identification and evaluation of hearing loss and rehabilitation
of the hearing loss through other than medical or surgical means (i.e. hearing
aids). Only the identification and evaluation of hearing loss are covered for
members 21 years of age and older unless the hearing loss is due to an accident
or injury-related emergent condition.
BEHAVIORAL HEALTH: The Contractor shall provide behavioral health services as
described in Section D, Paragraph 2, Behavioral Health Services. For
non-categorical members (MN/MI, EAC, ELIC) behavioral health services are
limited to up to the first 72 hours per episode of emergency/ crisis
stabilization, not to exceed 12 days per contract year. See also the AHCCCS
MEDICAL POLICY MANUAL and the AHCCCS BEHAVIORAL HEALTH POLICY MANUAL for details
on covered behavioral health services.
CHILDREN'S REHABILITATIVE SERVICES (CRS): The program for CRS-covered conditions
is administered by the Arizona Department of Health Services (ADHS) for children
who meet CRS eligibility criteria. The Contractor is responsible for referring
children to the CRS program who are potentially eligible for these services.
Eligibility criteria and the referral process are described in the CRS Policy
and Procedures Manual available in the Bidder's Library . The Contractor is also
responsible for providing primary medical care, including emergency services and
initial care of newborn infants, for members who are also CRS eligible, and to
require the member's Primary Care Provider (PCP) to coordinate their care with
the CRS program. All services provided must be included in the member's medical
record maintained by the PCP.
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DENTAL: The Contractor shall provide EPSDT members all medically necessary
dental services including emergency dental services; dental screening and
preventive services in accordance with the AHCCCS periodicity schedule;
therapeutic dental services; dentures; and pre-transplantation dental services.
The Contractor shall monitor compliance with the EPSDT periodicity schedule for
dental screening services and ensure that dental service reports are included in
the member's medical record maintained by the PCP. The Contractor is required to
meet specific utilization rates for EPSDT members described in Section D,
Paragraph 16, Performance Measures. The Contractor shall ensure that EPSDT
members are notified when dental screenings are due if the member has not been
scheduled for a visit. If no response is received, a second notice must be sent.
EPSDT members may request dental services without referral from their PCP and
may choose a dental provider from the Contractor's provider network. Members 21
years of age and older are eligible for emergency dental services, medically
necessary dentures and pre-transplantation dental services only. Dental
standards may be found in the AHCCCS MEDICAL POLICY MANUAL which is incorporated
herein by reference and which may be found in the Bidder's Library.
DIALYSIS: The Contractor shall provide medically necessary dialysis, supplies,
diagnostic testing and medication for all members when provided by
Medicare-certified hospitals or Medicare-certified end stage renal disease
(ESRD) providers. Services may be provided on an outpatient basis, or on an
inpatient basis if the hospital admission is not solely to provide chronic
dialysis services.
EARLY AND PERIODIC SCREENING, DIAGNOSIS AND TREATMENT (EPSDT): The Contractor
shall provide comprehensive health care services through primary prevention,
early intervention, diagnosis and medically necessary treatment for members
under age 21. The Contractor shall ensure that EPSDT members receive required
health screenings in compliance with the AHCCCS periodicity schedule to take
effect 10/1/97 (included herein as Attachment K) and to submit to the AHCCCS
Office of the Medical Director/Acute Care Unit, all EPSDT reports as required by
AHCCCS medical policy. The Contractor is required to meet specific
participation/ utilization rates for EPSDT members; these are described in
Section D, Paragraph 16, Performance Measures.
EMERGENCY SERVICES: The Contractor shall have and/or provide the following as a
minimum: a. Emergency services facilities adequately staffed by qualified
medical professionals to provide pre-hospital, emergency care on a
24-hour-a-day, 7-day-a-week basis, for the sudden onset of a medically emergent
condition as defined by AHCCCS Rule R9-22-101. The Contractor is encouraged to
contract with emergency service facilities for the provision of emergency
services. The Contractor is encouraged to contract with or employ the services
of non-emergency facilities (e.g. urgent care centers) to address member
non-emergency care issues occurring after regular office hours or on weekends.
The Contractor shall be responsible for educating members and providers
regarding appropriate utilization of emergency room services. The Contractor
shall monitor emergency services utilization (by both provider and member) and
shall have guidelines for implementing corrective action for inappropriate
utilization. b. All medical services necessary to rule out an emergency
condition c. Emergency transportation d. Member access by telephone to a
physician, registered nurse, physician assistant or nurse practitioner for
advice in emergent or urgent situations, 24 hours per day, 7 days per week.
EYE EXAMINATIONS/ OPTOMETRY: The Contractor shall provide all medically
necessary emergency eye care, vision examinations, prescriptive lenses, and
treatments for conditions of the eye for EPSDT members. For members who are 21
years of age and older, the Contractor shall provide emergency care for eye
conditions which meet the definition of an emergency medical condition, cataract
removal, and/or medically necessary vision examinations and prescriptive lenses
if required following cataract removal and other eye conditions as specified in
the AHCCCS MEDICAL POLICY MANUAL (AMPM).
<PAGE>
FAMILY PLANNING: The Contractor shall provide family planning services for all
members who choose to delay or prevent pregnancy, including medical, surgical,
pharmacological and laboratory services, as well as contraceptive devices,
information and counseling necessary to allow the members to make informed
decisions regarding family planning methods. If the Contractor does not provide
family planning services, it must contract for these services through another
health care delivery system which allows members freedom of choice in selecting
a provider. A prospective offeror may discuss arrangements for family planning
services only with other prospective offerors during the RFP process for the
purpose of making arrangements for the provision of family planning services. In
addition, the Contractor shall provide services to members enrolled in the
Family Planning Services Extension Program, a program that provides only family
planning services for a maximum of 24 months to women whose SOBRA eligibility
has terminated. The Data Book contains cost-related information for this
population and is available in the Bidder's Library.
HEALTH RISK ASSESSMENT AND SCREENING: The Contractor shall provide these
services for non-hospitalized members 21 years of age and older. These services
include, but are not limited to, screening for hypertension, elevated
cholesterol, colon cancer, sexually-transmitted diseases, tuberculosis and
HIV/AIDS; mammographies and prostate screenings; physical examinations and
diagnostic work-ups; and immunizations. Assessment and screening services for
members under age 21 are based on the AHCCCS EPSDT periodicity schedule.
HOME HEALTH: The Contractor shall provide these services when members require
part-time or intermittent care but do not require hospital care under the daily
direction of a physician to prevent re-hospitalization or institutionalization
and may include skilled nursing, therapies, supplies and home health aide
services.
HOSPITAL: Inpatient services include semi-private accommodations for routine
care, intensive and coronary care, surgical care, obstetrics and newborn
nurseries, and behavioral health emergency/ crisis stabilization. If the
member's medical condition requires isolation, private inpatient accommodations
are covered. Nursing services, dietary services and ancillary services such as
laboratory, radiology, pharmaceuticals, medical supplies, blood and blood
derivatives, etc. are also covered. Outpatient services include any of the above
services which may be provided on an outpatient or ambulatory basis (i.e.
laboratory, radiology, therapies, ambulatory surgery, etc.). Observation
services may be provided on an outpatient basis for up to 24 hours if determined
reasonable and necessary to decide whether the member should be admitted for
inpatient care. Observation services include the use of a bed and periodic
monitoring by hospital nursing staff and/or other staff to evaluate, stabilize
or treat medical conditions of a significant degree of instability and/or
disability.
IMMUNIZATIONS: The Contractor shall provide immunizations for adults (21 years
of age and older) to include diphtheria-tetanus, influenza, pneumococcus,
rubella, measles and hepatitis-B. EPSDT immunization requirements include
diptheria, tetanus, pertussis vaccine (DPT), oral polio vaccine, measles, mumps,
rubella vaccine (MMR), H. influenza, type B (HIB), hepatitis B (Hep B), combined
3-antigen rate (4 DPT, 3 OPV, 1 MMR) and varicella vaccine. The Contractor is
required to meet specific immunization rates for EPSDT members which are
described in Section D, Paragraph 16, Performance Measures.
LABORATORY: Laboratory services for diagnostic, screening and monitoring
purposes are covered when ordered by the member's PCP, other attending physician
or dentist, and provided by a CLIA (Clinical Laboratory Improvement Act)
approved hospital, clinic, physician office or other health care facility
laboratory.
<PAGE>
MATERNITY: The Contractor shall provide pre-conception counseling, pregnancy
identification, prenatal care, treatment of pregnancy related conditions, labor
and delivery services, and postpartum care for members. Services may be provided
by physicians, physician assistants or nurse practitioners certified in
midwifery. Members may select or be assigned to a PCP specializing in
obstetrics. Circumcisions are covered if performed during the newborn's hospital
stay after birth, or on an outpatient basis within one month of the infant's
hospital discharge. Members anticipated to have a low-risk delivery may elect to
receive labor and delivery services in their home from their maternity provider
if this setting is included in allowable settings for the Contractor, and the
Contractor has providers in its network that offer home labor and delivery
services. Members anticipated to have a low-risk prenatal course and delivery
may elect to receive maternity services of prenatal care, labor and delivery and
postpartum care provided by licensed midwives if they are in the Contractor's
provider network. All licensed midwife labor and delivery services must be
provided in the member's home since licensed midwives do not have admitting
privileges in hospitals or AHCCCS registered free-standing birthing centers.
Members receiving maternity services from a licensed midwife must also be
assigned to a PCP for other health care and medical services.
MEDICALLY-NECESSARY ABORTIONS: These services are covered when the pregnancy
would endanger the life of the mother if the fetus were to be carried to term
or, for Title XIX members, if the pregnancy is the result of rape or incest.
Providers must document and submit to the Contractor a Certificate of Medical
Necessity for Pregnancy Termination and prior authorization is required. If the
procedure is performed on an emergency basis, documentation must be submitted to
the Contractor within two working days. Additional documentation, outlined in
the AMPM, is required for members under 18 years of age who seek medically
necessary abortion due to rape or incest.
MEDICAL SUPPLIES, DURABLE MEDICAL EQUIPMENT (DME), ORTHOTIC AND PROSTHETIC
DEVICES: These services are covered when prescribed by the member's PCP, other
attending physician or practitioner, or by a dentist. Medical equipment may be
rented or purchased only if other sources are not available which provide the
items at no cost. The total cost of the rental must not exceed the purchase
price of the item. Reasonable repairs or adjustments of purchased equipment are
covered to make the equipment serviceable and/or when the repair cost is less
than renting or purchasing another unit.
NURSING FACILITY: The Contractor shall provide nursing facility services for
members who require short-term convalescent care not to exceed 90 days per
contract year. Services must be provided in a dually-certified Medicare/
Medicaid facility which includes in the per-diem rate: nursing services, basic
patient care equipment and sickroom supplies, dietary services, administrative
physician visits, non-customized DME, necessary maintenance rehabilitation
therapies, over-the-counter medications, social, recreational and spiritual
activities, and administrative, operational medical direction services. The
Contractor shall continue medically necessary nursing facility services for any
member who has not been determined ALTCS eligible but is currently residing in a
nursing facility and is eligible for services provided under this contract. If
the member becomes ALTCS eligible and is enrolled with an ALTCS Program
Contractor before the end of the maximum 90 days of nursing facility coverage,
the Contractor is only responsible for nursing facility coverage during the time
the member is enrolled with the Contractor.
NUTRITION: The Contractor shall provide nutritional assessment and nutritional
supplements including oral supplements for EPSDT members when medically
necessary. Total parenteral nutrition (TPN) is covered for all members when it
is the sole source of nutrition due to severe pathology of the alimentary tract.
TPN may also be used to supplement nutrition for EPSDT members when medically
necessary but need not be the member's sole source of nutrition.
PHYSICIAN: The Contractor shall provide physician services to include medical
assessment, treatments and surgical services provided by licensed allopathic or
osteopathic physicians.
PODIATRY: The Contractor shall provide podiatry services to include
bunionectomies, casting for the purpose of constructing or accommodating
orthotics, medically necessary orthopedic shoes that are an integral part of a
brace, and medically necessary routine foot care for patients with a severe
systemic disease which prohibits care by a nonprofessional person.
<PAGE>
PRESCRIPTION MEDICATIONS AND PHARMACY: Medications ordered by a PCP, attending
physician or dentist and dispensed under the direction of a licensed pharmacist
are covered subject to limitations related to prescription supply amounts,
Contractor formularies and prior authorization requirements, as well as
restrictions for immunosuppressant drugs addressed in AHCCCS medical policies
for transplantations.
PRIMARY CARE PROVIDER (PCP): PCP services are covered when provided by a
physician, physician assistant or nurse practitioner selected by, or assigned
to, the member. The PCP provides primary health care and serves as a gate-keeper
and coordinator in referring the member for specialty medical services,
behavioral health and dental services. The PCP is responsible for maintaining
the member's primary medical record which contains documentation of all health
risk assessments and health care services, including those provided by the PCP
and through referral.
RADIOLOGY AND MEDICAL IMAGING: These services are covered when ordered by the
member's PCP, attending physician or dentist and are provided for diagnosis,
prevention, treatment or assessment of a medical condition. Services are
generally provided in hospitals, clinics, physician offices and other health
care facilities.
REHABILITATION THERAPY: The Contractor shall provide occupational, physical and
speech therapies. Therapies must be prescribed by the member's PCP or attending
physician for an acute condition and the member must have the potential for
improvement due to the rehabilitation. Occupational and speech therapies are
only covered on an inpatient basis for those 21 and over; physical therapy for
all members and occupational and speech therapies for EPSDT members are covered
on both an inpatient and outpatient basis if not used as a maintenance regimen.
RESPIRATORY THERAPY: This therapy is covered on an inpatient or outpatient basis
when prescribed by the member's PCP or attending physician and is necessary to
restore, maintain or improve respiratory functioning.
TRANSPLANTATION OF ORGANS AND TISSUE, AND RELATED IMMUNOSUPPRESSANT DRUGS: These
services include bone marrow, heart, lung, heart-lung, kidney, liver and cornea
transplantations (all with related immunosuppressant medications), and are
covered within limitations defined in the AMPM, Chapter 300 for members
diagnosed with specified medical conditions. Such limitations include whether
the stage of the disease is such that the transplant can affect the outcome; the
member has no other conditions which substantially reduce the potential for
successful transplantation; and whether the member will be able to comply with
necessary and required regimens of treatment. Bone grafts are also covered under
this service. Services include: pre-transplant inpatient or outpatient
evaluation; donor search; organ/tissue harvesting or procurement; preparation
and transplantation services; and convalescent care. In addition, if a member
receives a transplant covered by a source other than AHCCCS, medically necessary
non-experimental services are provided within limitations after the discharge
from the acute care hospitalization for the transplantation. AHCCCS has
contracted with transplantation providers for the Contractor's use or the
Contractor may select its own transplantation provider. However, the quality of
services must be equal to or exceed those from the AHCCCS provider and the rate
paid can not exceed the AHCCCS provider's negotiated rate. Transplantations for
the MN/MI population are subject to available funding.
TRANSPORTATION: These services include emergency and non-emergency medically
necessary transportation. Emergency transportation, including transportation
initiated by an emergency response system such as 911, may be provided by
ground, air or water ambulance to manage an AHCCCS member's emergency medical
condition at an emergency scene and transport the member to the nearest
appropriate medical facility. In an emergency, the member shall be taken to the
nearest appropriate emergency facility. Non-emergency transportation shall be
provided for members who are unable to provide their own transportation for
medically necessary services.
TRIAGE/ SCREENING AND EVALUATION: These are covered services when provided by
acute care hospitals, IHS facilities and urgent care centers to determine
whether or not an emergency exists, assess the severity of the member's medical
condition and determine services necessary to alleviate or stabilize the
emergent condition. The provider must notify the Contractor within 12 hours of
the member's registration with the facility for emergency services. Supporting
documentation for services rendered must be provided when reporting or billing a
service. Triage/screening services must be reasonable, cost effective and meet
the criteria for severity of illness and intensity of service.
<PAGE>
2. BEHAVIORAL HEALTH SERVICES
The Contractor is responsible for the provision of Title XIX covered behavioral
health services to members as described below:
CATEGORICAL MEMBERS:
UNDER AGE 18; AGE 21 AND OVER; SMI: On and after the effective date of
enrollment, the Contractor is responsible for up to 72 hours of emergency
behavioral health services provided to categorical members not enrolled with
ADHS. The Contractor is also responsible for referring categorically eligible
members under the age of 18, age 21 and older, and SMI members of any age to the
Regional Behavioral Health Authorities (RBHAs) for the provision of Title XIX
covered behavioral health services. (The RBHAs may, in turn, contract with local
providers.) The Contractor is responsible for ensuring that a medical record is
established by the PCP when information is received about an assigned member
even if the PCP has not yet seen the assigned member. The Contractor shall also
communicate information pertaining to ADHS enrolled members to the ADHS RBHAs
including, but not limited to, current diagnosis, medication, pertinent
laboratory results, last PCP visit, and last hospitalization. For prior period
coverage, the Contractor is responsible for payment of all claims for medically
necessary covered behavioral health services to eligible persons not enrolled
with ADHS.
NON-SMI, AGE 18, 19 AND 20: The Contractor is responsible for providing Title
XIX covered behavioral health services to categorically eligible non-SMI members
age 18, 19 and 20 in accordance with AHCCCS Rule R9-22-1204 and the AHCCCS
BEHAVIORAL HEALTH POLICY MANUAL. Covered services include: inpatient hospital,
inpatient psychiatric facility for individuals under the age of 21, individual
therapy and counseling, group and/or family therapy and counseling, psychotropic
medication adjustment and monitoring, partial care, emergency crisis services,
behavior management, psychosocial rehabilitation, screening, evaluation and
diagnosis, case management, psychotropic medications, and medically necessary
transportation.
REFERRALS: Categorically eligible members age 18, 19 and 20 may be referred
directly for the provision of behavioral health services by the PCP, family
members, self-referrals, schools, other service providers, and members of
the community and State agencies as well as the Contractor's staff. The
same referral procedures which are applicable to other health care services
apply to behavioral health services.
SERVICE PLAN: The Contractor is responsible for developing a Service Plan
for each categorically eligible member age 18, 19 and 20 requiring
behavioral health services. Service Plans shall be developed within two
weeks of assessment and services shall be authorized and provided within 30
days from completion of the screening. The Service Plan is to be included
as part of the member's medical record.
CASE MANAGEMENT, CASE COORDINATION: The Contractor is responsible for
providing case management services, when medically necessary. Case
management services may vary in scope and frequency, depending on the
eligible person's intensity of need. Case management services consist of a
set of services and activities through which appropriate and cost-effective
Title XIX covered services are identified, planned, coordinated, obtained,
monitored and continuously evaluated. Case coordination is provided to
categorically eligible members age 18, 19 and 20 who are in need of
behavioral health services but who do not require case management services
which are more intensive. Case coordination is limited to Service Plan
development, identification of service providers, monitoring, updates and
follow-up, when necessary.
<PAGE>
QUALITY MANAGEMENT/ UTILIZATION MANAGEMENT (QM/UM) REQUIREMENTS: Quality
management QM/UM for behavioral health services must be integrated into the
Contractor's QM/UM plans and must meet the QM/UM requirements established
by AHCCCSA.
PROVIDER NETWORK: The Contractor is responsible for contracting with
behavioral health providers who meet ADHS licensure and/or certification
standards and who are registered as a behavioral health provider with
AHCCCSA. The Contractor may, at its option, contract with ADHS RBHAs for
the provision of behavioral health services. The Contractor must ensure
that a sufficient number of qualified behavioral health providers are in
their provider network and that providers comply with subcontracting,
appointment standards and other provider related requirements in this
document.
NOTIFICATION REQUIREMENTS: The Contractor is responsible for notifying
AHCCCSA monthly of 18-, 19- and 20-year-old categorical, non-SMI members
referred and receiving behavioral health services. The information is to be
submitted to the AHCCCS Office of Managed Care using the reporting format
developed by AHCCCSA and available in the Bidder's Library.
MN/MI, EAC, ELIC MEMBERS:
For non-categorical members (MN/MI, EAC, ELIC) behavioral health services are
limited to up to 72 hours per episode of emergency/ crisis stabilization, not to
exceed 12 days per contract year.
3. AHCCCS MEDICAL POLICY MANUAL (AMPM)
The AHCCCS MEDICAL POLICY MANUAL (AMPM) is hereby incorporated by reference into
this contract. AHCCCSA will provide three copies of the AMPM to the Contractor
(for use by the CEO, Medical Director and Quality Management staff). Updates to
medical policies will be distributed quarterly. The Contractor is responsible
for maintaining the AMPM with these updates and for complying with the
requirements set forth therein.
4. VACCINE FOR CHILDREN PROGRAM
Federal legislation passed in 1993 (OBRA 93) amended Title XIX of the Social
Security Act and created the Vaccine for Children (VFC) program which became
effective 10/1/94. Through this program the federal government purchases, and
makes available to the states free of charge, vaccines for children under age 19
who are Title XIX eligible (or Native American) and not insured, or whose
insurance does not cover immunizations. Any provider licensed by the State to
administer immunizations may register with ADHS as a "VFC provider" and receive
free vaccines. State money to purchase vaccines is not available since the
program is 100% funded by the federal government. The Contractor shall comply
with all VFC requirements and monitor its providers to ensure that, if providing
immunizations to AHCCCS EPSDT members, the providers are registered with
ADHS/VFC.
5. DENIALS OR REDUCTIONS OF SERVICES
When a covered service is denied, reduced, suspended or terminated, the
Contractor shall comply with the notice and continuation of benefits
requirements specified in 42 CFR 431.200 et seq. and further prescribed in
PERRY V. CHEN, now referred to as PERRY V. KELLY.
<PAGE>
6. ENROLLMENT AND DISENROLLMENT
AHCCCSA has the exclusive authority to enroll and disenroll members. The
Contractor shall not disenroll any member for any reason unless directed to do
so by AHCCCSA. Eligibility for the various AHCCCS coverage groups is determined
by one of the following agencies:
SOCIAL SECURITY SSA determines eligibility for the Supplementary
ADMINISTRATION (SSA) Security Income (SSI) cash program. SSI Cash
recipients are automatically eligible for AHCCCS
coverage.
DEPARTMENT OF ECONOMIC DES determines eligibility for the Temporary
SECURITY (DES) Assistance to Needy Families (TANF) program
(formerly Aid to Families with Dependent
Children), TANF Medical Assistance Only (MAO)
groups (including SOBRA women and children), the
Eligible Assistance Children state program (EAC)
and the Federal Emergency Services program (FES)
related to the TANF or SOBRA programs.
AHCCCSA AHCCCSA determines eligibility for the SSI/MAO
groups, including the FES program related to the
SSI-Cash program (aged, disabled, blind), the
Arizona Long-Term Care System (ALTCS), and the
Qualified Medicare Beneficiary program.
ARIZONA'S 15 COUNTIES Each county determines eligibility for the
Medically Needy/Medically Indigent (MN/MI),
Eligible Low Income Children (ELIC), and the
State Emergency Services state programs.
AHCCCS acute care eligible members are enrolled with contractors in accordance
with the rules set forth in R9-22-333, R9-22-334, R9-22-335, R9-22-337,
R9-22-339, R9-22-340, R9-22-342 and R9-22-707.
HEALTH PLAN CHOICE
All members except for those eligible under the MN/MI program have a choice of
available health plans. AHCCCSA anticipates that a listing of the available
health plans and their telephone numbers will be given to each member applicant
during the application process for AHCCCS benefits. Also included are
instructions to member applicants to call the health plans directly with
specific questions concerning the health plan. If there is only one health plan
available for the member applicant's Geographical Service Area, no choice is
offered. Members who do not choose prior to AHCCCSA's being notified of their
eligibility are anticipated to be automatically assigned to a health plan based
on family continuity or the auto-assignment algorithm.
AHCCCSA assigns MN/MI eligible members to an available health plan based on
family continuity or through AHCCCSA's auto-assignment algorithm. These members
do not get a choice of available contractors until the annual open enrollment
period.
Exceptions to the above enrollment policies include: Previously eligible and
enrolled members who have been disenrolled for less than 90 days will be
automatically enrolled with the same contractor if that contractor is still
available. Also, women whose SOBRA eligibility has terminated and have become
enrolled in the Family Planning Services Extension Program will automatically
remain assigned to the same health plan. The Family Planning Services Extension
Program provides a maximum of 24 months of family planning services.
The effective date of enrollment of a new member with the Contractor will
generally be the day prior to the date the Contractor receives notification from
AHCCCSA via the daily roster. However, the Contractor is responsible for payment
of medically necessary covered services retroactive to the member's beginning
date of eligibility.
<PAGE>
PRIOR PERIOD COVERAGE: AHCCCS provides prior period coverage for categorical and
non-categorical members. For categorical members, prior period coverage starts
from the first day of the month of application, or first eligible month. The
Contractor is responsible for payment of all claims for medically necessary
covered services provided to categorical members during prior period coverage.
For non-categorical members (MN/MI, ELIC) prior period coverage is generally
limited to the two days prior to the date of AHCCCSA being notified of
eligibility. However, prior period coverage could include additional days prior
to the date of enrollment. The Contractor is responsible for payment of all
claims for medically necessary covered services provided on an emergency basis
to non-categorical members pursuant to ARS ss.36-2908 for the first two days of
the prior period coverage. Any additional prior period coverage for
non-categorical members will include all claims for medically necessary covered
services. This may include services provided prior to 10/1/97. (See Section D,
Paragraph 37, Compensation, for a description of the Contractor's reimbursement
from AHCCCSA for this eligibility time period.)
NEWBORNS: Newborns born to AHCCCS-eligible mothers who were enrolled at the time
of the child's birth and whose newborn notification was received by AHCCCSA will
be enrolled with the mother's contractor. The Contractor is responsible for
notifying AHCCCSA of a child's birth to an enrolled member and, for capitation
purposes, the effective date of the newborn's enrollment is the date AHCCCSA
receives such notification. Note that AHCCCSA is currently available to receive
these calls Monday through Friday from 8 am to 5 pm. The effective date of
enrollment will be the date notification is received and capitation will begin
on that date. Categorically eligible mothers of newborns are sent a letter
advising them of their right to choose a different contractor for their child;
otherwise the child will remain with the mother's contractor. The Contractor is
responsible for all covered services to the newborn whether or not AHCCCSA has
received notification of the child's birth. Newborns of MN/MI mothers are
enrolled with the mother's contractor for a minimum of 30 days up to a maximum
of 60 days.
AHCCCS Rules R9-22-342 and R9-22-707 contain additional information concerning
newborn enrollment and payment.
ENROLLMENT GUARANTEES: Upon initial capitated enrollment as a categorically
eligible member, or as an Eligible Assistance Child (EAC), the member is
guaranteed a minimum of five full months of continuous enrollment. Enrollment
guarantees do not apply to Native Americans who choose to obtain their covered
services through Indian Health Services (IHS) on a fee-for-service basis. The
enrollment guarantee applies a maximum of one time per member as a categorical
member and one time as an EAC member. If a member changes from one contractor to
another within the enrollment guarantee period, the remainder of the guarantee
period applies to the new contractor. The enrollment guarantee may not be
granted or may be terminated if the member is incarcerated or, if a minor child,
is adopted. AHCCCS Rule R9-22-337 describes other reasons for which the
enrollment guarantee may not apply.
NATIVE AMERICANS: Native Americans eligible under any coverage group other than
MN/MI, on or off-reservation, have a choice of Indian Health Services (IHS) or
any available contractor. If choice is not made within the specified time limit,
Native American members living on-reservation will be assigned to IHS and Native
American members living off-reservation will be assigned to an available
contractor using AHCCCSA's family continuity policy and auto-assignment
algorithm. Native American members eligible under the MN/MI coverage group
living on-reservation will be assigned to Indian Health Services (IHS) and those
living off-reservation will be assigned to a contractor using regular MN/MI
enrollment policy. Native Americans may change from IHS to a contractor or from
a contractor to IHS at any time.
<PAGE>
7. MAINSTREAMING OF AHCCCS MEMBERS
To ensure mainstreaming of AHCCCS members, the Contractor shall take affirmative
action so that members are provided covered services without regard to payer
source, race, color, creed, sex, religion, age, national origin, ancestry,
marital status, sexual preference, or physical or mental handicap, except where
medically indicated. Examples of prohibited practices include, but are not
limited to, the following:
a. Denying or not providing a member any covered service or access to an
available facility.
b. Providing to a member any covered service which is different, or is
provided in a different manner or at a different time from that provided to
other members, other public or private patients or the public at large
except where medically necessary.
c. Subjecting a member to segregation or separate treatment in any manner
related to the receipt of any covered service; restricting a member in any
way in his or her enjoyment of any advantage or privilege enjoyed by others
receiving any covered service.
d. The assignment of times or places for the provision of services on the basis
of the race, color, creed, religion, age, sex, national origin, ancestry,
marital status, sexual preference, income status, AHCCCS membership, or
physical or mental handicap of the participants to be served.
If the Contractor knowingly executes a subcontract with a provider with the
intent of allowing or permitting the subcontractor to implement barriers to care
(i.e. the terms of the subcontract act to discourage the full utilization of
services by some members), the Contractor will be in default of its contract.
If the Contractor identifies a problem involving discrimination by one of its
providers, it shall promptly intervene and implement a corrective action plan.
Failure to take prompt corrective measures may place the Contractor in default
of its contract.
8. MEMBER INFORMATION
All informational materials prepared by the Contractor shall be approved by
AHCCCSA prior to distribution to members. Information shall be submitted on
disk, saved as a text file (.txt) along with a hard copy printout. Information
shall be provided in English and a second language when 200 members or 5% of the
Contractor's enrolled population, whichever is greater, are non-English
speaking. (AHCCCSA will advise the Contractor when and if this requirement
applies.) When there are program or service site changes notification will be
provided to the affected members at least 14 days before implementation. The
Contractor shall review and update the Member Handbook at least once a year. The
Handbook must be submitted to AHCCCSA Office of Managed Care for approval by
Sept. 1 of each contract year, or within four weeks of receiving the annual
renewal amendment, whichever is later.
The Contractor shall make every effort to ensure that all information prepared
for distribution to members is written at a 4th grade level.
<PAGE>
The Contractor shall produce and provide the following printed information to
each member or family within 10 days of receipt of notification of the
enrollment date:
I. A MEMBER HANDBOOK which, at a minimum, shall include:
a. A table of contents
b. A general description of how managed care works, particularly in regards to
member responsibilities, appropriate utilization of services and the PCP's
role as gatekeeper of services
c. A description of all available covered services and an explanation of any
service limitations or exclusions from coverage and a notice stating that
the Contractor will be liable only for those services authorized by the
Contractor. The description should include a brief explanation of the
Contractor's approval and denial process.
d. Information on what to do when family size changes
e. How to obtain a PCP
f. How to change PCPs
g. How to make, change and cancel appointments with a PCP
h. List of applicable copayments (including a statement that care will not be
denied due to lack of copayment). The member handbook must clearly state
that members cannot be billed for covered services (other than applicable
copayments) and under what circumstances a member may be billed for
non-covered services.
i. Dual eligibility (i.e. Medicare and Medicaid); services received in and out
of the Contractor's network; copayments. See Section D, Paragraph 41,
Medicare Services and Cost Sharing.
j. The process of referral to specialists and other providers, including access
to behavioral health services provided by the ADHS RBHA system for members
under age 18, 21 and older, and SMI members of any age.
k. How to contact Member Services and a description of its function
l. What to do in case of an emergency and instructions for receiving advice
on getting care in case of an emergency. In a life-threatening situation,
the member handbook should instruct members to use the emergency medical
services (EMS) available and/or activate EMS by dialing 9-1-1. Handbook
should contain information on proper emergency service utilization.
m. How to obtain emergency transportation and medically necessary
transportation.
n. EPSDT services. Screenings include a comprehensive and developmental
history, comprehensive unclothed physical examination, appropriate vision
testing, hearing testing, laboratory tests, dental screening and
immunizations.
o. Maternity and family planning services
p. Listing of covered behavioral health services
q. Listing of all covered dental services for members under 21 and how to
access these services
r. Out of county/ out of state moves
s. Grievance procedures, including a clear explanation of the member's right to
file a grievance and to appeal any decision that affects the member's
receipt of covered services.
t. Contributions the member can make towards his/her own health, member
responsibilities, appropriate and inappropriate behavior, and any other
information deemed essential by the Contractor or AHCCCS. This shall include
a statement that the member is responsible for protecting his or her ID card
and that misuse of the card, including loaning, selling or giving it to
others could result in loss of the member's eligibility and/or legal action.
u. How to access after-hours care (urgent care).
v. Advance directives for adults
w. Use of other sources of insurance. See Section D, Paragraph 40, Coordination
of Benefits.
x. The last revision date
<PAGE>
Regardless of the format chosen by the Contractor, the member handbook must be
printed in a type-style and size which can easily be read by members with
varying degrees of visual impairment. At a minimum, the member handbook shall
also contain the following language regarding questions, problems and grievances
(Ref. AHCCCS Rule 9-22-518):
Q. What if I have any questions, problems or complaints about [Contractor's
name] ?
A. If you have a question or problem, please call ________ and ask to talk
to a Member Representative. They are there to help you.
A. If you have a specific complaint about your medical care, the Member
Representative will help you.
Q. What if I'm not happy with the help given to me by the Member
Representative?
A. If you are unhappy with the answer you receive, you can tell the Member
Representative you want to file a written or oral grievance. The grievance
must be filed not later than 35 days after the date of the action, decision,
or incident.
A. [Contractor's name] will make a final decision for grievances within 30 days
of receiving your written or oral grievance. A letter will be mailed to you
stating the health plan's decision and the reason for the decision. The
letter will tell you how you can appeal the decision if you are still
unhappy. You must let the health plan know you want to appeal the decision
letter.
A. If you are appealing the health plan's decision, [Contractor's name] will
send your request for appeal to the AHCCCSA. You will receive information
from AHCCCSA on how your appeal will be handled. AHCCCSA will then decide if
the health plan's decision was correct under the circumstances.
II. A LIST OF THE NAMES, TELEPHONE NUMBERS AND SERVICE SITE ADDRESSES OF PCPs
available for selection by the member and a description of the selection
process.
9. MEMBER SURVEYS
AHCCCSA may periodically conduct a survey of a representative sample of the
Contractor's membership. AHCCCSA will design a questionnaire to assess
accessibility, availability and continuity of care with PCPs; communication
between members and the Contractor; and general member satisfaction with the
AHCCCS program. To ensure comparability of results, the questions to the members
will be the same for all contractors. AHCCCSA will consider suggestions from the
Contractor for questions to be included in this survey. The results of these
surveys will become public information and available to all interested parties
upon request. In addition, the Contractor shall perform its own annual general
or focused member survey. All such contractor surveys must be approved in
advance by AHCCCSA.
10. MARKETING PLANS
The Contractor shall submit all proposed marketing plans and materials to
AHCCCSA for prior approval in accordance with the AHCCCS HEALTH PLAN MARKETING
POLICY, a copy of which is available in the Bidder's Library. The Contractor
must have signed contracts with hospitals (in Maricopa and Pima counties), PCPs,
specialists and pharmacies in order for them to be included in marketing
materials.
11. OPEN ENROLLMENT
AHCCCSA conducts an open enrollment for members once per contract year, usually
in August or September. AHCCCSA may hold additional open enrollments on a
limited basis as deemed necessary. During open enrollment members may change
contractors subject to the availability of other contractors within their area.
Members are mailed a printed enrollment form and may choose a new contractor by
contacting AHCCCSA to complete the enrollment process. If the member does not
participate in open enrollment, no change of contractor will be made (except for
approved changes under the Change of Plan policy) for the new contract year
provided the Contractor's contract is renewed and the member continues to live
in the Contractor's service area. The Contractor shall comply with the OFFICE OF
MANAGED CARE MEMBER TRANSITION FOR OPEN ENROLLMENT policy.
<PAGE>
12. TRANSITION OF MEMBERS
The Contractor shall comply with the AMPM standards for member transitions
between health plans or GSA's, to or from an ALTCS program contractor, and upon
termination or expiration of a contract. The Contractor shall develop and
implement policies and procedures which comply with AHCCCS medical policy to
address transition of:
1. Members with significant medical conditions such as a high-risk pregnancy or
pregnancy within the last 30 days, the need for organ or tissue
transplantation, chronic illness resulting in hospitalization or nursing
facility placement, etc.;
2. Members who are receiving ongoing services such as behavioral health,
dialysis, home health, chemotherapy and/or radiation therapy or who are
hospitalized at the time of transition;
3. Members who have received prior authorization for services such as
scheduled surgeries, out-of-area specialty services, nursing home
admission;
4. Prescriptions, DME and medically necessary transportation ordered for the
transitioning member by the relinquishing contractor; and
5. Medical records of the transitioning member (the cost of reproducing and
forwarding medical records shall be the responsibility of the relinquishing
contractor).
When relinquishing members, the Contractor is responsible for timely
notification of the receiving contractor regarding pertinent information related
to any special needs of transitioning members. The Contractor, when receiving a
transitioning member with special needs, is responsible to coordinate care with
the relinquishing contractor in order that services not be interrupted, and for
providing the new member with health plan and service information, emergency
numbers and instructions of how to obtain services. The Contractor shall comply
with the AHCCCS Behavioral Health Policy Manual for transition of members in
need of behavioral health services to be provided through the ADHS RBHA system.
In the event the contract, or any portion thereof, is terminated for any reason,
or expires, the Contractor shall assist AHCCCSA in the transition of its members
to other contractors, and shall abide by standards and protocols set forth
above. In addition, AHCCCSA reserves the right to extend the term of the
contract on a month-to-month basis to assist in any transition of members. The
Contractor shall make provision for continuing all management and administrative
services until the transition of all members is completed and all other
requirements of this contract are satisfied. The Contractor shall be responsible
for providing all reports set forth in this contract and necessary for the
transition process and shall be responsible for the following:
a. Notification of subcontractors and members.
b. Payment of all outstanding obligations for medical care rendered to
members.
c. Until AHCCCSA is satisfied that the Contractor has paid all such
obligations, the Contractor shall provide the following reports to AHCCCSA:
1) A monthly claims aging report by provider/creditor including IBNR
amounts;
2) A monthly summary of cash disbursements;
3) Copies of all bank statements received by the Contractor. Such reports
shall be due on the fifth day of each succeeding month for the prior
month.
d. In the event of termination or suspension of the contract by AHCCCSA, such
termination or suspension shall not affect the obligation of the Contractor
to indemnify AHCCCSA for any claim by any third party against the State or
AHCCCSA arising from the Contractor's performance of this contract and for
which the Contractor would otherwise be liable under this contract.
e. Any dispute by the Contractor with respect to termination or suspension of
this contract by AHCCCSA shall be exclusively governed by the provisions of
Section E, Paragraph 26, Disputes.
f. Any funds advanced to the Contractor for coverage of members for periods
after the date of termination shall be returned to AHCCCSA within 30 days of
termination of the contract.
<PAGE>
HOSPITAL REIMBURSEMENT PILOT PROGRAM - MARICOPA AND PIMA COUNTIES ONLY: Members
transferred from non-contracting hospitals shall be done in accordance with the
AHCCCS Medical Policy pertaining to member transfers dated 10/1/94.
13. STAFF REQUIREMENTS AND SUPPORT SERVICES
The Contractor shall have in place the organization, management and
administrative systems capable of fulfilling all contract requirements. At a
minimum, the following staff are required.
a. A full-time ADMINISTRATOR who is available at all times to fulfill the
responsibilities of the position and to oversee the entire operation of the
health plan.
b. A MEDICAL DIRECTOR who shall be an Arizona-licensed physician. The
Medical Director shall be actively involved in all major clinical programs
and QM/UM components of the Contractor's health plan. The Medical Director
shall devote sufficient time to Contractor's health plan to ensure timely
medical decisions, including after-hours consultation as needed.
c. A full-time CHIEF FINANCIAL OFFICER who is available at all times to fulfill
the responsibilities of the position and to oversee the budget and
accounting systems implemented by the Contractor.
d. A QUALITY MANAGEMENT/ UTILIZATION MANAGEMENT COORDINATOR who is an
Arizona-licensed registered nurse, physician or physician's assistant.
e. A MATERNAL HEALTH/ EPSDT COORDINATOR who shall be an Arizona-licensed
registered nurse, physician or physician's assistant; or have a Master's
degree in health services, public health or health care administration or
other related field.
f. A BEHAVIORAL HEALTH COORDINATOR who shall be a behavioral health
professional as described in Health Services Rule R9-20-306.B.
g. PRIOR AUTHORIZATION STAFF to authorize medical care 24 hours per day, 7 days
per week. This staff shall include an Arizona-licensed registered nurse,
physician or physician's assistant.
h. CONCURRENT REVIEW STAFF to conduct inpatient concurrent review. This staff
shall consist of an Arizona-licensed registered nurse, physician,
physician's assistant or an Arizona-licensed practical nurse experienced in
concurrent review and under the direct supervision of a registered nurse,
physician or physician's assistant.
i. MEMBER SERVICES MANAGER AND STAFF to coordinate communications with members
and act as member advocates. There shall be sufficient Member Service staff
to enable members to receive prompt resolution to their problems.
j. PROVIDER SERVICES MANAGER AND STAFF to coordinate communications between the
Contractor and its subcontractors. There shall be sufficient Provider
Services staff to enable providers to receive prompt resolution to their
problems or inquiries.
k. A CLAIMS ADMINISTRATOR and CLAIMS PROCESSORS to ensure the timely and
accurate processing of original claims, claims correction letters,
re-submissions and overall adjudication of claims.
l. ENCOUNTER PROCESSORS to ensure the timely and accurate processing and
submission to AHCCCSA of encounter data and reports.
m. A GRIEVANCE COORDINATOR who will manage and adjudicate member and provider
grievances.
n. CLERICAL AND SUPPORT STAFF to ensure appropriate functioning of the
Contractor's operation.
<PAGE>
The Contractor shall inform AHCCCSA, Office of Managed Care, in writing within
seven days of staffing changes in the following key positions:
Administrator Member Services Manager
Medical Director Provider Services Manager
Chief Financial Officer Claims Administrator
Maternal Health/EPSDT Coordinator Quality Management/Utilization Management
Coordinator
Grievance Coordinator Behavioral Health Coordinator
The Contractor shall ensure that all staff have appropriate training, education,
experience and orientation to fulfill the requirements of the position. See the
AMPM, Chapter 600 for specific position requirements.
14. WRITTEN POLICIES, PROCEDURES AND JOB DESCRIPTIONS
The Contractor shall develop and maintain written policies, procedures and job
descriptions for each functional area of its health plan, consistent in format
and style. The Contractor shall maintain written guidelines for developing,
reviewing and approving all policies, procedures and job descriptions. All
policies and procedures shall be reviewed at least annually to ensure that the
Contractor's written policies reflect current practices. Reviewed policies shall
be dated and signed by the Contractor's appropriate manager, coordinator,
director or administrator. All medical and quality management policies must be
approved and signed by the Contractor's Medical Director. Job descriptions shall
be reviewed at least annually to ensure that current duties performed by the
employee reflect written requirements.
15. ADVANCE DIRECTIVES
The Contractor shall specify in the contract or agreement with each hospital,
nursing facility, provider of home health care, hospice or personal care
services that the provider must comply with federal and State law regarding
advance directives for adult members. At a minimum, the providers (hospitals,
nursing facilities, home health care, hospice and personal services) shall:
a. Maintain written policies for adult members receiving care through their
organization regarding the member's right to make decisions about medical
care, including the right to accept or refuse medical care and the right to
execute an advance directive. The information must contain an explanation of
any conscientious objection the provider may have in carrying out the
advance directive. (The Contractor is not prohibited from making such
objection when made pursuant to ARS 36-3205 (C.1)
b. Provide written information to adult members regarding an individual's
rights under State law to make decisions regarding medical care and the
provider's written policies concerning advance directives.
c. Require documentation in the member's medical record as to whether the adult
member has executed an advance directive.
d. Not condition the provision of care or discriminate against a member because
of his or her decision to execute or not execute an advance directive.
e. Provide education for staff on issues concerning advance directives.
f. Ensure compliance with requirements of federal and State law regarding
advance directives.
The Contractor shall also maintain policies and procedures on advance directives
with respect to all adult members. These policies and procedures must contain
the same information described immediately above.
16. PERFORMANCE MEASURES
EPSDT PARTICIPATION: The Contractor shall take affirmative steps to increase
member participation in the EPSDT program to at least 80% of all enrolled EPSDT
members during CYE 98. "Participation" is defined as at least one initial and
periodic screening or one preventive or treatment visit. AHCCCSA will measure
participation levels through encounter data and will not use information from
prior period coverage (see Paragraph D.6, PRIOR PERIOD COVERAGE) in evaluating
the Contractor's performance.
If the Contractor has not achieved at least the statewide average participation/
utilization rates for EPSDT services by the end of the contract year, as
indicated through notification from AHCCCSA, the Contractor shall submit a
corrective action plan to AHCCCSA. The plan shall be submitted within 30 days of
the Contractor's receipt of participation/ utilization rate notification from
AHCCCSA. In addition, AHCCCSA may conduct one or more follow-up on-site reviews
to verify compliance with the corrective action plan.
<PAGE>
If the Contractor's rate is higher than the statewide average for EPSDT
participation, but lower than 80%, AHCCCSA may require the Contractor to submit
a corrective action plan within specified time lines. EPSDT IMMUNIZATIONS: The
Contractor shall ensure EPSDT members receive age-appropriate immunizations as
specified in the AHCCCS Medical Policy Manual. The AHCCCSA long range goal is to
reach or exceed the Healthy People Year 2000 goal of 90 % immunization for two
year old members. During CYE98, the Contractor shall meet or exceed the
following:
Percentage of Number of
Immunization Members Immunized Doses
Diptheria, Tetanus, Pertussis vaccine (DPT) 80% 4
Oral Polio Vaccine 85% 3
Measles, Mumps, Rubella Vaccine (MMR) 90% 1
H. Influenza, Type B (HIB) 90% 1
Hepatitis B (Hep B) 85% 3
Combined 3-Antigen Rate (4DPT, 3 OPV, 1MMR) 80% N/A
Combined All Antigens 70% N/A
Varicella Vaccine N/A N/A
The Contractor shall conduct an annual immunization audit based on random
sampling to assess and verify the immunization status of two year old EPSDT
members. AHCCCSA will provide the Contractor, within two weeks after the end of
the contract year, the selected sample, specifications for conducting the audit,
the AHCCCSA reporting requirements, and technical assistance. The Contractor
shall identify the children's PCP, conduct the assessment, and report to AHCCCSA
in the required format all immunization rates for the sampled two-year-old
children no later than December 15 after the end of the contract year. If
medical records are missing for more than 5% of the sample group, the Contractor
is subject to sanctions by AHCCCSA. Health Services Advisory Group (HSAG) will
conduct a study to validate the Contractor's reported rates.
AHCCCSA will provide the statewide average immunization rates to the Contractor.
If the Contractor has not achieved at least these statewide averages by the end
of the contract year, the Contractor shall submit a corrective action plan to
AHCCCSA. The plan shall be submitted within 60 days of the Contractor's receipt
of utilization rate notification from AHCCCSA. In addition, AHCCCSA may conduct
one or more follow-up on-site reviews to verify compliance with the corrective
action plan. .
If the Contractor's immunization rates are higher than the statewide average for
immunizations, but lower than the stated goals set forth in this contract,
AHCCCSA may require the Contractor to submit a corrective action plan within
specified time lines.
PERFORMANCE INDICATORS: The AHCCCS goal for quality of care is to meet or exceed
the Healthy People Year 2000 national goals. For CYE 98, the Contractor shall
comply with AHCCCS quality management requirements to improve performance of at
least the following established performance indicators: low birth weight;
mammography screening; and cervical cancer screening.
If the Contractor has not achieved at least the statewide average for each
performance indicator by the end of the contract year, it shall submit to
AHCCCS, Office of the Medical Director, Acute Care Unit, a quality improvement
plan. The plan shall be submitted within 60 days after the Contractor's receipt
of performance measurement notification from AHCCCSA.
A quality improvement plan may be required for each performance indicator in
which the Contractor's performance rate is above the statewide average for all
contractors but below the midpoint between the statewide average and the
best-performing health plan.
EPSDT DENTAL SERVICES: The Contractor shall take affirmative steps to increase
utilization of dental services for EPSDT members. At least 50% of all enrolled
members under age 21 shall have at least one dental visit during CYE98. AHCCCSA
will monitor utilization through reported encounter data.
If the Contractor has not achieved at least the statewide average rate for
utilization of dental services by the end of the contract year, as indicated
through notification from AHCCCSA, the Contractor shall submit a corrective
action plan to AHCCCSA. The plan shall be submitted within 30 days of the
Contractor's receipt of utilization rate notification from AHCCCSA. In addition,
AHCCCSA may conduct one or more follow-up on-site reviews to verify compliance
with the corrective action plan. If the Contractor's rate is higher than the
statewide average for EPSDT dental services, but lower than 50%, AHCCCSA may
require the Contractor to submit a corrective action plan within specified time
lines.
<PAGE>
17. QUALITY MANAGEMENT AND UTILIZATION MANAGEMENT (QM/UM)
The Contractor shall provide to members quality medical care as described in the
AHCCCS MEDICAL POLICY MANUAL, Chapter 900, regardless of payer source or
eligibility category. The Contractor shall institute processes to assess, plan,
implement and evaluate quality improvement activities. The Contractor shall
conduct two clinical studies each contract year as required in Chapter 900 of
the AHCCCS MEDICAL POLICY MANUAL. AHCCCSA will determine the subject matter and
study methodology for one of the annual studies and the Contractor shall submit
to AHCCCSA by November 15 of each contract year its proposed subject matter and
methodology for the other. The results of the studies shall be submitted to
AHCCCS, Office of the Medical Director, within 90 days after the end of each
contract year.
The Contractor must maintain a written QM/UM plan which details plans for
compliance with the AHCCCS MEDICAL POLICY MANUAL. The Contractor shall
incorporate in its QM/UM plan an action plan for improving the performance rates
for those indicators with established baselines.
18. PHYSICIAN INCENTIVES
The Contractor must comply with all applicable physician incentive requirements
and conditions defined in 42 CFR 417.479. These regulations prohibit physician
incentive plans that directly or indirectly make payments to a doctor or a group
as an inducement to limit or refuse medically necessary services to a member.
The Contractor is required to disclose all physician incentive agreements to
AHCCCSA and to AHCCCS members who request them.
The Contractor shall not enter into contractual arrangements that place
providers at significant financial risk as defined in CFR 417.479 unless
specifically approved in advance by the Office of Managed Care. AHCCCSA has
accumulated all available information from HCFA regarding physician incentives
in a binder marked "Physician Incentive Guidelines" in the Bidder's Library. Due
to recent verbal communication with HCFA representatives regarding physician
incentives, AHCCCSA is postponing its development of the "AHCCCS Physician
Incentive Guidelines"; therefore, offerors are instructed to use the information
described above.
19. APPOINTMENT STANDARDS
For purposes of this section, "urgent" is defined as an acute but not
necessarily severe disorder which, if not attended to, could endanger the
patient's health. The Contractor shall have procedures in place that ensure the
following standards are met:
a. Emergency PCP appointments - same day
b. Urgent care PCP appointments - within two days
c. Routine care PCP appointments - within 21 days
<PAGE>
For specialty referrals and dental appointments, the Contractor shall be able
to provide:
a. Emergency appointments - within 24 hours of referral
b. Urgent care appointments - within 3 days of referral
c. Routine care appointments - within 30 days of referral
For maternity care, the Contractor shall be able to provide initial prenatal
care appointments for enrolled pregnant members as follows:
a. First trimester - within 14 days of request
b. Second trimester - within 7 days of request
c. Third trimester - within 3 days of request
d. High risk pregnancies - within 3 days of identification of high risk by the
Contractor or maternity care provider or immediately
if an emergency exists
For behavioral health services to members 18-20 years of age, non-seriously
mentally ill, the Contractor shall be able to provide appointments as follows:
a. Emergency screening and evaluation - within 24 hours of referral or request
for services b. Behavioral health screening - within seven days of referral c.
Non-emergency appointments - within 30 days of referral or behavioral health
screening
If a member needs medically-necessary transportation, the Contractor shall
require its transportation provider to schedule the transportation so that the
member arrives no sooner than one hour before the appointment; does not have to
wait more than one hour after making the call to be picked up; nor have to wait
for more than one hour after conclusion of the appointment for transportation
home.
The Contractor shall monitor the adequacy of its appointment processes and
reduce the unnecessary use of alternative methods such as emergency room visits.
The Contractor shall monitor and ensure that a member's waiting time for a
scheduled appointment at the PCP's or specialist's office is no more than 45
minutes, except when the provider is unavailable due to an emergency.
The Contractor shall have written policies and procedures about educating its
provider network about appointment time requirements. The Contractor must assign
a specific staff member or unit within its organization to monitor compliance
with appointment standards and shall require a corrective action plan when
appointment standards are not met.
20. REFERRAL PROCEDURES AND STANDARDS
The Contractor shall have adequate written procedures regarding referrals to
specialists to include, as a minimum, the following:
a. Use of referral forms clearly identifying the Contractor
b. A system for resolving disputes regarding the referrals
c. Having a process in place that ensures the member's PCP receives all
specialist and consulting reports and a process to ensure PCP follow-up of
all referrals including EPSDT referrals for behavioral health services
d. A referral plan for any member who is about to lose eligibility and who
requests information on low-cost or no-cost health care services
e. Referral to Medicare HMO including payment of copayments
<PAGE>
21. PROVIDER MANUAL
The Contractor shall develop, distribute and maintain a provider manual. The
Contractor shall ensure that each contracted provider is issued a copy of the
provider manual and is encouraged to distribute a provider manual to any
individual or group that submits claim and encounter data. The Contractor
remains liable for ensuring that all providers, whether contracted or not, meet
the applicable AHCCCS requirements such as covered services, billing, etc. At a
minimum, the Contractor's provider manual must contain information on the
following:
a. Introduction to the Contractor which explains the Contractor's organization
and administrative structure
b. Provider responsibility and the Contractor's expectation of the provider
c. Overview of the Contractor's Provider Service department and function
d. Listing and description of covered and non-covered services, requirements
and limitations
e. Emergency room utilization (appropriate and non-appropriate use of the
emergency room)
f. EPSDT Services - screenings include a comprehensive and developmental
history, comprehensive unclothed physical examination, appropriate vision
testing, hearing testing, laboratory tests, dental screenings and
immunizations
g. Dental services
h. Maternity/ Family Planning services
i. Listing of behavioral health services
j. The Contractor's policy regarding PCP assignments
k. Referrals to specialists and other providers, including access to behavioral
health services provided by the ADHS RBHA system for members under age 18,
21 and older, and SMI members of any age
l. Grievance and appeal rights
m. Billing and encounter submission information
- indicate which form, UB92, HCFA 1500, or Form C is to be used for services
- indicate which fields are required for a claim to be considered
acceptable by the Contractor. A completed sample of each form shall be
included
n. Contractor's written policies and procedures which affect the provider(s)
and/or the provider network
o. Claims re-submission policy and procedure
p. Reimbursement, including reimbursement for dual eligibles (i.e. Medicare
and Medicaid) or members with other insurance
q. Explanation of remittance advice
r. Prior authorization requirement
s. Claims medical review
t. Concurrent review
u. Fraud and Abuse
v. Formularies (with updates and changes provided in advance to providers,
including pharmacies)
w. AHCCCS appointment standards
22. PRIMARY CARE PROVIDER STANDARDS
The Contractor shall include in its provider network a sufficient number of PCPs
to meet the requirements of this contract. Health care providers designated by
the Contractor as PCPs shall be licensed in Arizona as allopathic or osteopathic
physicians who generally specialize in family practice, internal medicine,
obstetrics or pediatrics; certified nurse practitioners or certified nurse
midwifes; or physician's assistants.
<PAGE>
At a minimum, the Contractor's number of full-time equivalent PCPs to enrolled
members shall not exceed a ratio of 1:1800 for adults and 1:1200 for children
who are 12 or younger. If the PCP contracts with more than one AHCCCS health
plan, the ratio shall be adjusted by the Contractor to ensure the total number
of AHCCCS members does not exceed the above ratio. The Contractor should
consider the PCP's total patient panel size (i.e. AHCCCS and non-AHCCCS
patients) when assessing the PCP's ability to meet AHCCCS' appointment and other
standards. In addition, AHCCCS members shall not comprise the majority of the
PCP's panel of patients. The Contractor shall also reduce the number of members
assigned to its network PCPs as necessary to meet the appointment standards
specified in Section D, Paragraph 19, Appointment Standards. Any variation to
the above standards must be submitted to AHCCCSA, Office of the Medical Director
for prior approval. PCPs with assigned members diagnosed with AIDS or as
HIV-positive shall meet criteria and standards set forth in AHCCCS Medical
Policy and AHCCCS AIDS Advisory Committee Guidelines.
The Contractor shall have a system in place to monitor and ensure that each
member is assigned to an individual PCP and that the Contractor's data regarding
PCP assignments is current. The Contractor is encouraged to assign members with
complex medical conditions who are age 12 and younger to Board-certified
pediatricians.
To the extent required by this contract, the Contractor shall offer members
freedom of choice in selecting a PCP. When a new member has been assigned to the
Contractor, the Contractor shall inform the member in writing of his enrollment
and of his PCP assignment within 10 days of the Contractor's receipt of
notification of assignment by AHCCCSA. The Contractor shall include with the
enrollment notification a list of all the Contractor's available PCPs and the
process for changing the PCP assignment, should the member desire to do so. The
Contractor shall confirm any PCP change in writing to the member. Members may
make both their initial PCP selection and any subsequent PCP changes either
verbally or in writing.
At a minimum, the Contractor shall hold the PCP responsible for the following
gatekeeping activities: a. Supervision, coordination and provision of care to
each assigned member b. Initiation of referrals for medically necessary
specialty care c. Maintaining continuity of care for each assigned member d.
Maintaining the member's medical record, including documentation of all services
provided to the member by the PCP, as well as any specialty or referral
services.
The Contractor shall establish and implement policies and procedures to monitor
PCP gatekeeping activities and to ensure that PCPs are adequately notified of,
and receive documentation regarding, specialty and referral services provided to
assigned members by specialty physicians, dentists and other health care
professionals. Contractor policies and procedures shall be subject to approval
by AHCCCSA, Office of the Medical Director. PCPs and specialists who provide
inpatient services to the Contractor's members shall have admitting and
treatment privileges in a minimum of one general acute care hospital that is
located within the Contractor's service area.
23. OTHER PROVIDER STANDARDS
The Contractor shall develop and implement policies and procedures to:
a. Recruit sufficient specialty physicians, dentists, health care
professionals, health care institutions and support services to meet the
medical needs of its members.
b. Monitor the adequacy, accessibility and availability of its provider network
to meet the needs of its members.
<PAGE>
Contractor policies shall be subject to approval by AHCCCS, Office of the
Medical Director and shall be monitored through operational audits at least
annually.
For specialty services, the Contractor shall ensure that:
a. PCP referral shall be required for specialty physician services.
b. Specialty physicians shall not begin a course of treatment for a medical
condition other than that for which the member was referred, unless
approved by the member's PCP.
c. The specialty physicians shall provide to the member's PCP complete
documentation of all diagnostic services including copies of test results
if applicable, treatment services provided and the resulting outcome for
each.
The Contractor shall ensure that a maternity care provider is designated for
each pregnant member for the duration of her pregnancy and postpartum care and
that maternity services are provided in accordance with the AMPM. The
Contractor may include in its provider network the following maternity care
providers:
a. Arizona licensed allopathic and/or osteopathic physicians who are general
practitioners or specialize in family practice or obstetrics
b. Certified nurse midwives
c. Licensed midwives.
Members may choose, or be assigned, a PCP who provides obstetric care (physician
or certified nurse midwife). Such assignment shall be consistent with the
freedom of choice requirements for selecting health care professionals while
ensuring that the continuity of care is not compromised. Members who choose to
receive maternity services from a licensed midwife shall also be assigned to a
PCP for medical care as primary care is not within the scope of practice for
licensed midwives.
All physicians and certified nurse midwives who perform deliveries shall have OB
hospital privileges. Licensed midwives perform deliveries only in the member's
home. Labor and delivery services may also be provided in the member's home by
physicians and certified nurse practitioners and certified nurse midwives who
include such services within their practice.
24. NETWORK DEVELOPMENT
The Contractor shall develop and maintain a provider network that is sufficient
to provide all covered services to AHCCCS members. It shall ensure covered
services are provided promptly and are reasonably accessible in terms of
location and hours of operation. There shall be sufficient professional and
paramedical personnel for the provision of covered services, including emergency
medical care on a 24-hour-a-day, 7-days-a-week basis. The proposed network shall
be sufficient to provide covered services within designated time and distance
limits.
25. NETWORK MANAGEMENT
The Contractor shall have policies and procedures in place that pertain to all
service specifications described in the AHCCCS MEDICAL POLICY MANUAL, Chapters
300, 600 and 900. In addition, the Contractor shall have policies on how the
Contractor will:
a. Communicate with the network regarding contractual and/or program changes
and requirements
b. Monitor and control network compliance with policies and rules of AHCCCSA
and the Contractor
c. Evaluate the quality of services delivered by the network
d. Provide or arrange for medically necessary covered services should the
network become temporarily insufficient within the contracted service area
e. Monitor network capacity to ensure that there are sufficient providers to
handle the volume of members
f. Ensure service accessibility, including monitoring appointment procedures
standards, appointment waiting times, and service provision standards
<PAGE>
All material changes in the Contractor's provider network must be approved in
advance by AHCCCSA, Office of Managed Care. A material change is defined as one
which affects, or can reasonably be foreseen to affect, the Contractor's ability
to meet the performance and network standards as described in this solicitation.
The Office of Managed Care must be notified of planned material changes in the
provider network before the change process has begun, for example before issuing
a 60-day termination notice to a provider. The notification shall be made within
one working day if the change is unexpected. AHCCCSA will assess proposed
changes in the Contractor's provider network for potential impact on members'
health care and provide a written response to the Contractor within 14 days of
receipt of request. For emergency situations, AHCCCSA will expedite the approval
process.
The Contractor shall notify AHCCCSA, Office of Managed Care, within one working
day of any unexpected changes that would impair its provider network. This
notification shall include (1) information about how the change will affect the
delivery of covered services, and (2) the Contractor's plans for maintaining the
quality of member care if the provider network change is likely to result in
deficient delivery of covered services.
26. FEDERALLY QUALIFIED HEALTH CENTERS (FQHC)
The Contractor is encouraged to use FQHCs in Arizona to provide covered services
and must comply with the federal mandates in OBRA 89 and OBRA 90. This
legislation gives FQHCs the option to require state Medicaid programs to
reimburse the FQHC at 100% of reasonable costs for the services delivered.
AHCCCSA and its contractors are required to comply with this legislation.
At the time of contracting, the Contractor must offer the FQHC the option to
elect reasonable cost reimbursement for categorically eligible members. This
provision should be within the contract between the FQHC and the Contractor. If
the FQHC does not elect reasonable cost reimbursement, the FQHC waives the
opportunity to receive reasonable cost reimbursement for that contract period.
No retroactive elections shall be permitted.
If the FQHC elects reasonable cost reimbursement, the Contractor must notify the
AHCCCSA Office of Managed Care within seven days of the subcontract signing. If
the FQHC elects reasonable cost reimbursement, the Contractor may, at its
discretion, pay reasonable cost reimbursement, or pay using some other method of
payment, such as capitation, since the requirement to pay reasonable costs
applies to the State Medicaid Agency, not to the Contractor.
For example, the Contractor contracts with an FQHC that elects reasonable cost
reimbursement. The method of payment throughout the contract period could be
capitation. Throughout the year, the Contractor would be required to file a
quarterly cost report with AHCCCS. (The instructions for the health plan
quarterly reports can be obtained from the Office of Managed Care.) At the end
of the year, the FQHC must complete certain reporting requirements outlined in
the ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM REASONABLE COST REIMBURSEMENT
COST REPORT & INSTRUCTIONS. These two reporting packages will enable AHCCCSA to
determine reasonable costs, in comparison to actual capitation paid by the
Contractor. AHCCCSA would reimburse the FQHC if the capitation payments were
less than reasonable costs. Likewise, AHCCCSA would recoup payments in excess of
reasonable costs.
In determining the reasonableness of the capitation payments made by the
Contractor to the FQHC, AHCCCSA will value the per member per month capitation
payment at a rate which approximates the average rate being paid by the
Contractor in the community to other similar providers. If there are no other
providers from which to develop an average rate, other means will be used to
determine the average for the area. If the actual capitation rate paid by the
Contractor to the FQHC is less than the average rate being paid by the
Contractor to other providers, the Contractor must reimburse the FQHC for this
difference. AHCCCSA would reimburse the difference between reasonable cost and
the average capitation rate.
<PAGE>
The Contractor shall adhere to the AHCCCS FEDERALLY QUALIFIED HEALTH CENTERS
COST REPORT INSTRUCTIONS-GENERAL INSTRUCTIONS which describes the reporting
requirements applicable to the Contractor's contracting with a FQHC that elects
cost reimbursement. A copy of these requirements is available in the Bidder's
Library. Included among the FQHCs currently recognized by HCFA are the
following:
Clinica Adelante
West Pinal Family Health Center
Valley Health
Center United Community Health Center
Mariposa Community Health Center
Lake Powell Medical Center
Mountain Park Health Center
El Rio Santa Cruz Neighborhood Health Center
Native American Health Care Center
Traditional Indian Alliance
Native Americans for Community Action, Inc.
27. PROVIDER REGISTRATION
The Contractor shall ensure that each of its subcontractors register with
AHCCCSA as an approved service provider and receive an AHCCCS Provider ID
Number. A Provider Participation Agreement must be signed with each provider who
does not already have a current AHCCCS ID number. The original shall be
forwarded to AHCCCSA. This provider registration process must be completed in
order for the Contractor to report services a subcontractor renders to enrolled
members and for the Contractor to be paid reinsurance.
28. PROVIDER AFFILIATION TAPE
The Contractor shall submit information quarterly regarding its provider
network. This information shall be submitted in the format described in the
PROVIDER AFFILIATION TAPE USER MANUAL on October 15, January 15, April 15, and
July 15 of each contract year. The MANUAL may be found in the Bidder's Library.
29. PERIODIC REPORT REQUIREMENTS
AHCCCSA, under the terms and conditions of its HCFA grant award, requires
periodic reports, encounter data, and other information from the Contractor. The
submission of late, inaccurate, or otherwise incomplete reports shall constitute
failure to report subject to the penalty provisions described in this contract.
Standards applied for determining adequacy of required reports are as follows:
a. TIMELINESS: Reports or other required data shall be received on or before
scheduled due dates.
b. ACCURACY: Reports or other required data shall be prepared in strict
conformity with appropriate authoritative sources and/or
AHCCCS defined standards.
c. COMPLETENESS: All required information shall be fully disclosed in a
manner that is both responsive and pertinent to report intent
with no material omissions.
AHCCCS requirements regarding reports, report content and frequency of
submission of reports are subject to change at any time during the term of the
contract. The Contractor shall comply with all changes specified by AHCCCSA.
The Contractor shall be responsible for continued reporting beyond the term of
the contract. For example, processing claims and reporting encounter data will
likely continue beyond the term of the contract because of lag time in filing
source documents by subcontractors. The Contractor shall comply with all
financial reporting requirements contained in the REPORTING GUIDE FOR ACUTE
HEALTH CARE CONTRACTORS WITH THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM, a
copy of which may be found in the Bidder's Library. The required reports, which
are subject to change during the contract term, are summarized in Attachment F,
Periodic Report Requirements.
<PAGE>
30. DISSEMINATION OF INFORMATION
Upon request, the Contractor shall assist AHCCCSA in the dissemination of
information prepared by AHCCCSA, or the federal government, to its members. The
cost of such dissemination shall be borne by the Contractor. All advertisements,
publications and printed materials which are produced by the Contractor and
refer to covered services shall state that such services are funded under
contract with AHCCCSA .
31. REQUESTS FOR INFORMATION
AHCCCSA may, at any time during the term of this contract, request financial or
other information from the Contractor. Upon receipt of such requests for
information, the Contractor shall provide complete information as requested no
later than 30 days after the receipt of the request unless otherwise specified
in the request itself.
32. OPERATIONAL AND FINANCIAL READINESS REVIEWS
AHCCCSA may conduct Operational and Financial Readiness Reviews on all
successful offerors and will, subject to the availability of resources, provide
technical assistance as appropriate. The Readiness Reviews will be conducted
prior to the start of business for the contract year beginning 10/1/97. The
purpose of Readiness Reviews is to assess new contractors' readiness and ability
to provide contract services to members at the start of the contract year. A new
contractor will be permitted to commence operations only if the Readiness Review
factors are met to AHCCCSA's satisfaction.
33. OPERATIONAL AND FINANCIAL REVIEWS
In accordance with HCFA requirements, AHCCCSA will conduct regular Operational
and Financial Reviews for the purpose of (but not limited to) ensuring
operational and financial program compliance. The Reviews will identify areas
where improvements can be made and make recommendations accordingly, monitor the
Contractor's progress towards implementing mandated programs and provide the
Contractor with technical assistance if necessary. The Contractor shall comply
with all other medical audit provisions as required by AHCCCS Rule R9-22-521.
The type and duration of the Operational and Financial Review will be solely at
the discretion of AHCCCSA. Except in cases where advance notice is not possible
or advance notice may render the review less useful, AHCCCSA will give the
Contractor at least three weeks advance notice of the date of the on-site
review. In preparation for the on-site Operational and Financial Reviews, the
Contractor shall cooperate fully with AHCCCSA and the AHCCCSA Review Team by
forwarding in advance such policies, procedures, job descriptions, contracts,
logs and other information that AHCCCSA may request. The Contractor shall have
all requested medical records on-site. Any documents not requested in advance by
AHCCCSA shall be made available upon request of the Review Team during the
course of the review. The Contractor personnel as identified in advance shall be
available to the Review Team at all times during AHCCCSA on-site review
activities. While on-site, the Contractor shall provide the Review Team with
work space, access to a telephone, electrical outlets and privacy for
conferences. Certain documentation submission requirements may be waived at the
discretion of AHCCCSA if the Contractor has obtained accreditation from NCQA or
any other nationally recognized accrediting body. The Contractor must submit the
entire NCQA report to AHCCCSA for such waiver consideration.
The Contractor will be furnished a copy of the Operational and Financial Review
Report and given an opportunity to comment on any review findings prior to
AHCCCSA publishing the final report. Operational and Financial Review findings
may be used in the scoring of subsequent bid proposals by that Contractor.
Recommendations made by the Review Team to bring the Contractor into compliance
with federal, State, AHCCCS, and/or RFP requirements must be implemented by the
Contractor. AHCCCSA may conduct a follow-up Operational and Financial Review to
determine the Contractor's progress in implementing recommendations and
achieving program compliance. Follow-up reviews may be conducted at any time
after the initial Operational and Financial Review.
<PAGE>
AHCCCSA may conduct an Operational and Financial Review in the event the
Contractor undergoes a merger, reorganization, change in ownership or makes
changes in three or more key staff positions within a 12-month period.
34. CLAIMS PAYMENT SYSTEM
The Contractor shall develop and maintain a claims payment system capable of
processing, cost-avoiding and paying claims in accordance with AHCCCS Rule
R9-22-705, a copy of which may be found in the Bidder's Library. In the absence
of a subcontract provision to the contrary, claims submission deadlines shall be
calculated from the date of service or the effective date of enrollment,
whichever is later. Remittance advices accompanying the Contractor's payments to
providers must contain, at a minimum, adequate descriptions of all denials and
adjustments, the reasons for such denials and adjustments, the amount billed,
the amount paid, and grievance rights. The Contractor's claims payment system,
as well as its prior authorization and concurrent review process, must minimize
the likelihood of having to recoup already-paid claims. Any recoupment in excess
of $50,000 per provider within a contract year must be approved in advance by
AHCCCSA, Office of Managed Care.
During the term of this contract, AHCCCSA anticipates requiring all health plans
to use a standardized electronic format for electronic claims processing between
the plan and its providers. AHCCCSA plans to require the formats outlined in the
Technical Interface Guidelines under CLAIMS Processing, which is the format
adopted by FFS providers and their billing agents who submit claims
electronically to AHCCCS. The form UB-92 and 1500 layouts will be supplemented
by a Form C layout. All formats are subject to changes initiated by the
Kennedy-Kassebaum legislation. Reasonable implementation timeframes will be
negotiated with each plan.
35. HOSPITAL REIMBURSEMENT
MARICOPA AND PIMA COUNTIES ONLY: The Arizona Laws of 1996 Chapter 288 Section 20
sets forth the Hospital Reimbursement Pilot Program (Pilot), which is effective
from October 1, 1997, through September 30, 2000. The Pilot as defined by AHCCCS
Rule R9-22-718 requires hospital subcontracts to be negotiated between health
plans in Maricopa and Pima counties and hospitals to establish reimbursement
levels, terms and conditions. Subcontracts shall be negotiated by the Contractor
and hospitals to cover operational concerns, such as timeliness of claims
submission and payment, payment of discounts or penalties, legal resolution,
which may, as an option, include establishing arbitration procedures. These
negotiated subcontracts shall remain under close scrutiny by AHCCCSA to insure
availability of quality services within specific service districts, equity of
related party interests, reasonableness of rates, and only marketing of
contracted organizations. The general provisions of this program encompass acute
care hospital services and outpatient hospital services that result in an
admission. The Contractor shall submit all hospital subcontracts and any
amendments to AHCCCSA, Office of Managed Care, for prior approval. For
non-emergency patient-days, the Contractor shall ensure that at least 85% of its
members use contracted hospitals. AHCCCSA reserves the right to subsequently
adjust the 85% standard. Further, if in AHCCCSA's judgment the number of
emergency days at a particular non-contracted hospital becomes significant,
AHCCCSA may require a subcontract at that hospital. Hospitals and health
plans/program contractors outside of Maricopa and Pima counties are not included
in this Pilot. Offerors should refer to the "Hospital Reimbursement Pilot
Program Packet" for additional information and requirements.
<PAGE>
ALL GSA'S EXCEPT MARICOPA AND PIMA: The Contractor shall reimburse hospitals for
member care in accordance with AHCCCS Rule R9-22-705. The Contractor is
encouraged to obtain contracts with hospitals in all other GSA's and must submit
copies of these contracts to AHCCCSA, Office of Managed Care, at least seven
days prior to the effective dates thereof.
FOR OUT-OF-STATE HOSPITALS: The Contractor shall reimburse out-of-state
hospitals in accordance with AHCCCS Rule R9-22-705.
The Contractor may conduct prepayment and postpayment medical reviews of all
hospital claims including outlier claims. Erroneously paid claims are subject to
recoupment. If the Contractor fails to identify LACK OF MEDICAL NECESSITY
through concurrent review and/or prepayment medical review, lack of medical
necessity identified during postpayment medical review shall not constitute a
basis for recoupment by the Contractor. See also Section D, Paragraph 34, Claims
Payment System. For a more complete description of the guidelines for hospital
reimbursement, please consult the Bidder's Library for applicable statutes and
rules.
36. NURSING FACILITY REIMBURSEMENT
The Contractor shall not deny nursing facility services if the nursing facility
is unable to obtain prior authorization in situations where acute care
eligibility and ALTCS eligibility overlap and the member is enrolled with an
AHCCCS acute care contractor. In such situations, the Contractor shall impose
reasonable authorization requirements. The Contractor's payment responsibility
described above applies only in situations where the nursing facility has not
been notified in advance of the member's enrollment with an AHCCCS acute care
contractor. To further illustrate, when ALTCS eligibility overlaps AHCCCS acute
care enrollment, the acute care enrollment takes precedence. Although the member
could be ALTCS eligible for this time period, there is no ALTCS enrollment that
occurs on the same days as AHCCCS acute enrollment. The Contractor is
responsible for payment of services while the member is enrolled with the
Contractor. The Contractor is not responsible for the full 90 days of nursing
facility coverage if ALTCS enrollment occurs before the 90 days has ended.
37. COMPENSATION
The method of compensation under this contract will be capitation, SOBRA
supplement, HIV-AIDS supplement, reinsurance, and third party liability, as
described and defined within this contract and appropriate laws, regulations or
policies.
Subject to the availability of funds, AHCCCSA shall make payments to the
Contractor in accordance with the terms of this contract provided that the
Contractor's performance is in compliance with the terms and conditions of this
contract. Payment must comply with requirements of ARS Title 36. AHCCCSA
reserves the option to make payments to the Contractor by wire or NACHA transfer
and will provide the Contractor at least 30 days notice prior to the effective
date of any such change.
Where payments are made by electronic funds transfer, AHCCCSA shall not be
liable for any error or delay in transfer nor indirect or consequential damages
arising from the use of the electronic funds transfer process. Any charges or
expenses imposed by the bank for transfers or related actions shall be borne by
the Contractor. Except for adjustments made to correct errors in payment, any
savings remaining to the Contractor as a result of favorable claims experience
and efficiencies in service delivery at the end of the contract term may be kept
by the Contractor.
<PAGE>
All funds received by Contractor pursuant to this contract shall be separately
accounted for in accordance with generally accepted accounting principles.
Except for funds received from the collection of permitted copayments and
third-party liabilities, the only source of payment to Contractor for the
services provided hereunder is the Arizona Health Care Cost Containment System
Fund, as described in ARS ss.36-2913. An error discovered by the State with or
without an audit in the amount of fees paid to Contractor will be subject to
adjustment or repayment by Contractor making a corresponding decrease in a
current Contractor's payment or by making an additional payment by AHCCCSA to
the Contractor.
No payment due the Contractor by AHCCCSA may be assigned by the Contractor. This
section shall not prohibit AHCCCSA at its sole option from making payment to a
fiscal agent hired by Contractor.
The Contractor or its subcontractors shall collect any required copayment from
members but service will not be denied for inability to pay the copayment.
Except for permitted copayments, the Contractor or its subcontractors shall not
bill or attempt to collect any fee from, or for, a member for the provision of
covered services. Any required copayments collected shall belong to the
Contractor or its subcontractors.
CAPITATION: The Contractor will be paid capitation for all prospective member
months, including partial member months. This capitation includes the cost of
providing medically necessary covered services to members during prior period
coverage. AHCCCSA will make monthly capitation payments to the Contractor for
each member enrolled with the Contractor on the first of the month as payment in
full for any and all covered services provided to the member including covered
services provided during prior period coverage. (See Section D, Paragraph 6,
Enrollment and Disenrollment, for clarification of prior period coverage.)
Payment shall be made no later than the fifth working day of the month for which
payment is due. For members enrolled at any time after the beginning of the
month's payment cycle, capitation will be prorated from the effective date of
enrollment through the remainder of the month of enrollment. These payments will
be made by AHCCCS to Contractor on a weekly basis.
SOBRA SUPPLEMENT: When the Contractor has an enrolled SOBRA woman who delivers
during an enrollment period, the Contractor will be entitled to a SOBRA payment.
AHCCCSA reserves the right at any time during the term of this contract to
adjust the amount of this SOBRA payment for women who deliver at home. The
Contractor is responsible for meeting the newborn notification requirements
defined in AHCCCS Rule R9-22-342 before this payment will be made to the
Contractor.
HIV-AIDS SUPPLEMENT: In addition to the capitation payment described above, a
separate and additional payment will be made to the Contractor to help defray
costs for members receiving approved protease inhibitors and associated lab work
related to their treatment for HIV/AIDS. The list of AHCCCSA-approved protease
inhibitors is available in the Bidder's Library.
On a quarterly basis, the Contractor shall submit to AHCCCSA, Office of Managed
Care, an unduplicated monthly count of members, by rate code, who are using
approved protease inhibitors. The report shall be submitted, along with the
quarterly financial reporting package, within 60 days after the end of each
quarter. (A sample of this reporting form may be found in the Bidder's Library.)
The rate of reimbursement for this separate payment will be $634.50 per month
and is subject to review during the term of the contract. Payment will be made
quarterly to the Contractor based on the reported eligible members for the
preceding quarter. AHCCCSA will review this HIV/AIDS-related data at least
annually as part of its Operational and Financial Review and reserves the right
to recoup any amounts paid for ineligible members as determined through this
review as well as an associated penalty for incorrect reporting.
<PAGE>
38. CAPITATION ADJUSTMENTS
Except for changes made specifically in accordance with this contract, the rates
set forth in Section B shall not be subject to re-negotiation or modification
during the contract period. AHCCCSA may, at its option, review the effect of a
program change and determine if a capitation adjustment is needed. In these
instances the adjustment will be prospective with assumptions discussed with the
Contractor prior to modifying capitation rates. The Contractor may request a
review of a program change if it believes the program change was not equitable;
AHCCCSA will not unreasonably withhold such a review.
If the Contractor is in any manner in default in the performance of any
obligation under this contract, AHCCCSA may, at its option and in addition to
other available remedies, adjust the amount of payment until there is
satisfactory resolution of the default. The Contractor shall reimburse AHCCCSA
and/or AHCCCSA may deduct from future monthly capitation for any portion of a
month during which the Contractor was not at risk due to, for example:
a. death of a member
b. member's incarceration (not eligible for AHCCCS benefits)
c. duplicate capitation to the same contractor
If a member is enrolled twice with the same contractor, recoupment will be made
as soon as the double capitation is identified. AHCCCSA reserves the right to
modify its policy on capitation recoupments at any time during the term of this
contract.
39. REINSURANCE
REGULAR ACUTE REINSURANCE: Reinsurance is a stop-loss program provided by
AHCCCSA to the Contractor for the partial reimbursement of covered inpatient
facility medical services incurred for a member with an acute medical condition
beyond an annual deductible (AHCCCS Rule R9-22-503). Per diem rates paid for
nursing facility services, including room and board, provided in lieu of
hospitalization for up to 90 days in any contract year shall be eligible for
reinsurance coverage (see AHCCCS Rule R9-22-203 subsection B for excluded
services). Reinsurance for the Hospital Reimbursement Pilot Program (See Section
D, Paragraph 35, Hospital Reimbursement), will be paid in accordance with AHCCCS
Rule R9-22-503.
AHCCCSA is self-insured for the reinsurance program. The program is
characterized by an initial deductible level and a subsequent coinsurance
percentage. The coinsurance percent is the rate at which AHCCCSA will reimburse
the Contractor for inpatient covered services incurred above the deductible.
Reinsurance coverage applies to both prospective and prior period coverage
periods. The deductible level the Contractor is eligible for is based on the
Contractor's statewide AHCCCS acute care enrollment as of October 1st each
contract year for all rate codes and counties, as shown in the following table.
These deductible levels are subject to change by AHCCCSA during the term of this
contract.
REGULAR REINSURANCE:
------------------------------------------------------------------------
STATEWIDE PLAN DEDUCTIBLE - DEDUCTIBLE - COINSURANCE %
ENROLLMENT MN/MI OTHERS
0 - 19,999 $15,000 $20,000 75%
20,000 - 49,999 $15,000 $35,000 75%
50,000 and over $15,000 $50,000 75%
------------------------------------------------------------------------
If a Contractor's actual non-MN/MI deductible is $35,000 or $50,000, AHCCCSA
will increase the Contractor's capitation rate awarded by defined amounts for
each capitation risk group. These specific capitation adjustments are available
in the Bidder's Library. A Contractor whose enrollment qualifies it for the
$35,000 or $50,000 non-NM/MI deductible level may, prior to the start of the
contract period, elect one of the lower deductible levels indicated in the above
table.
AHCCCSA will use inpatient encounter data to determine regular reinsurance
benefits. Reimbursement for regular reinsurance benefits will be made to the
Contractor each month. AHCCCSA will also provide for a reconciliation of
reinsurance payments in the case where encounters used in the calculation of
reinsurance benefits are subsequently adjusted or voided.
<PAGE>
The Contractor shall be subject to utilization and other reviews by AHCCCSA of
care provided to a member which results in a reinsurance claim as referenced in
R9-22-503 (G.3).
Medical review on regular reinsurance cases will be determined based on
statistically valid random sampling. AHCCCSA, Office of the Medical Director,
will generate the sampling and will notify the Contractor of documentation
needed for the retrospective medical review process to occur at the Contractor's
offices. The results of the medical review sampling will be extrapolated to the
entire regular reinsurance reimbursement population of the Contractor. A
recoupment of reinsurance reimbursements made to the Contractor may occur based
on the results of the medical review sampling. AHCCCSA will give the Contractor
at least 45 days advance notice of any on-site review. The Contractor shall have
all requested medical records on-site. Any documents not requested in advance by
AHCCCSA shall be made available upon request of the Review Team during the
course of the review. The Contractor representative shall be available to the
Review Team at all times during AHCCCSA on-site review activities. While
on-site, the Contractor shall provide the Review Team with work space, access to
a telephone, electrical outlets and privacy for conferences. The Contractor will
be furnished a copy of the Regular Acute Reinsurance Review Report within 60
days of the onsite review and given an opportunity to comment on any review
findings.
CATASTROPHIC REINSURANCE: The reinsurance program also includes a special
Catastrophic Reinsurance program. This program encompasses members diagnosed
with hemophilia and members who receive covered organ and tissue transplantation
including bone marrow, heart and other organ transplantation. For additional
detail and restrictions see AHCCCS Rule R9-222-202. There is no deductible for
catastrophic reinsurance cases and AHCCCS will reimburse the Contractor at 85%
of the Contractor's covered costs. All catastrophic claims will be subject to
medical review by AHCCCSA.
HEMOPHILIA: When an eligible member is identified as being catastrophically
eligible by AHCCCSA due to a specific diagnosis of hemophilia (ICD9 286.0,
286.1, 286.2 and 286.4), all medically necessary covered services provided
during the contract year shall be eligible for reimbursement at 85% of the
Contract's paid amount. Catastrophic reinsurance coverage is available for all
members diagnosed with von Willebrand's Disease who are non-DDA VP responders
that are dependent on Plasma Factor VIII. The Contractor must promptly notify
AHCCCS Office of the Medical Director Reinsurance Unit after diagnosis.
Catastrophic reinsurance will be paid for a maximum 30-day retroactive period
from the date of notification to AHCCCSA.
TRANSPLANTS: Bone grafts, kidney and cornea transplantation services are not
eligible for catastrophic reinsurance coverage but are eligible under the
regular (non-catastrophic) reinsurance program. Catastrophic reinsurance
coverage for transplants is limited to 85% of the AHCCCS contract amount for the
transplantation services rendered, or 85% of the Contractor-paid amount
whichever is lower. The AHCCCS contracted transplantation rates may be found in
the Bidder's Library.
<PAGE>
Encounter data will not be used to determine catastrophic reinsurance benefits.
However, this does not relieve the Contractor of the responsibility for
submitting encounters for catastrophic reinsurance services. The initial claims
for reimbursement under the catastrophic reinsurance program must be filed no
later than June 30th of the year following the contract year. Catastrophic
reinsurance claims that are submitted within this time limit and are denied or
adjusted, may be corrected until September 30th of the year following the
contract year. All catastrophic reinsurance claims must be submitted in
accordance with the AHCCCS REINSURANCE POLICY/PROCEDURE MANUAL.
40. COORDINATION OF BENEFITS/ THIRD PARTY LIABILITY
By law, AHCCCSA is the payer of last resort. This means AHCCCSA shall be used as
a source of payment for covered services only after all other sources of payment
have been exhausted. The two methods used in the coordination of benefits are
cost avoidance and postpayment recovery. See Section D, Paragraph 41, Medicare
Services and Cost Sharing.
COST AVOIDANCE: The Contractor shall cost-avoid all claims or services that are
subject to third-party payment and may deny a service to a member if it knows
that a third party (i.e. other insurer) will provide the service. However, if a
third-party insurer (other than Medicare) requires the member to pay any
copayment, coinsurance or deductible, the Contractor is responsible for making
these payments, even if the services are provided outside of the Contractor's
network. The Contractor's liability for coinsurance and deductibles is limited
to what the Contractor would have paid for the entire service pursuant to a
written contract with the provider or the AHCCCS fee-for-service rate, less any
amount paid by the third party. (The Contractor must decide whether it is more
cost-effective to provide the service within its network or pay coinsurance and
deductibles for a service outside its network. For continuity of care, the
Contractor may also choose to provide the service within its network.) If the
Contractor refers the member for services to a third-party insurer (other than
Medicare), and the insurer requires payment in advance of all copayments,
coinsurance and deductibles, the Contractor must make such payments in advance.
If the Contractor knows that the third party insurer will neither pay for nor
provide the covered service, and the service is medically necessary, the
Contractor shall not deny the service nor require a written denial letter. If
the Contractor does not know whether a particular service is covered by the
third party, and the service is medically necessary, the Contractor shall
contact the third party and determine whether or not such service is covered
rather than requiring the member to do so. (See also Section D, Paragraph 41,
Medicare Services and Cost Sharing.)
The requirement to cost-avoid applies to all AHCCCS covered services. For
pre-natal care and preventive pediatric services, AHCCCS may require the
Contractor to provide such service and then coordinate payment with the
potentially liable third party ("pay and chase"). In emergencies, the Contractor
shall provide the necessary services and then coordinate payment with the
third-party payer. The Contractor shall also provide medically necessary
transportation so the member can receive third-party benefits. Further, if a
service is medically necessary, the Contractor shall ensure that its cost
avoidance efforts do not prevent a member from receiving such service and that
the member shall not be required to pay any coinsurance or deductibles for use
of the other insurer's providers.
POSTPAYMENT RECOVERIES: Postpayment recovery is necessary in cases where the
Contractor was not aware of third-party coverage at the time services were
rendered or paid for, or was unable to cost avoid. The Contractor shall identify
all potentially liable third parties and pursue reimbursement from them except
in the circumstances below. The Contractor shall not pursue reimbursement in the
following circumstances unless the case has been referred to the Contractor by
AHCCCSA or AHCCCSA's authorized representative:
Uninsured/ underinsured motorist insurance Adoption recovery
First and third-party liability insurance Worker's Compensation
Tortfeasors Estate recovery
<PAGE>
The Contractor shall report any cases involving the above circumstances to
AHCCCSA's authorized representative should the Contractor identify such a
situation. See AHCCCS Rule R9-22-1002. The Contractor shall cooperate with
AHCCCSA's authorized representative in all collection efforts. In joint cases
involving both AHCCCS fee-for-service or reinsurance and the Contractor,
AHCCCSA's authorized representative is responsible for performing all research,
investigation and payment of lien-related costs. AHCCCSA's authorized
representative is also responsible for negotiating and acting in the best
interest of all parties to obtain a reasonable settlement in joint cases and may
compromise a settlement in order to maximize overall reimbursement, net of legal
and other costs. For total plan cases involving only payments from the
Contractor, the Contractor is responsible for performing all research,
investigation and payment of lien-related costs.
The Contractor may retain up to 100% of its third-party collections if all of
the following conditions exist:
a. Total collections received do not exceed the total amount of the
Contractor's financial liability for the member
b. There are no payments made by AHCCCS related to fee-for-service,
reinsurance or administrative costs (i.e. lien filing, etc.)
c. Such recovery is not prohibited by state or federal law
REPORTING: The Contractor may be required to report case level detail of
third-party collections and cost avoidance. The Contractor shall notify
AHCCCSA's authorized representative within five working days of the
identification of a third-party liability case with known reinsurance (often
referred to as joint liability cases). The Contractor shall communicate any
known change in health insurance information, including Medicare, to AHCCCS
Administration, Division of Member Services, not later than 10 days from the
date of discovery using the AHCCCS Third-Party Coverage Form found in the
Bidder's Library.
Approximately every four months, AHCCCSA will provide the Contractor with a
complete file of all third-party coverage information (other than Medicare) for
the purpose of updating the Contractor's files. The Contractor shall notify
AHCCCSA of any known changes in coverage within deadlines and in a format
prescribed by AHCCCSA.
41. MEDICARE SERVICES AND COST SHARING
AHCCCS has members enrolled who are eligible for both Medicare and AHCCCS
services. These members are referred to as "dual eligibles" and include persons
who are Qualified Medicare Beneficiaries (QMB) and non-QMB eligible persons. QMB
eligible persons are entitled to all covered Medicaid services and, in addition,
may receive the following Medicare services which are not covered by AHCCCS or
differ in scope or limitation:
Chiropractic services
Inpatient and outpatient occupational therapy coverage
Inpatient psychiatric services
Psychological services
Respite services
Any services covered by or added to the Medicare program which are not
covered by AHCCCS
For all dual eligible persons, the Contractor shall be responsible for providing
all AHCCCS covered services and pay all Medicare coinsurance and deductibles for
Medicare services which are covered by AHCCCS and provided on a fee-for-service
basis within the Contractor's network. The Contractor's network is defined as
any contracted provider, or provider used more than 12 times during the course
of the contract year , even if no written contract exists. For QMB eligible
persons, the Contractor shall be responsible for paying the Medicare coinsurance
and deductibles for Medicare services not covered by AHCCCS (described above)
which are provided by a Medicare provider on a fee-for-service basis, regardless
of whether the service is provided in or out of the Contractor's network.
Members shall not be required to pay any coinsurance or deductibles for Medicare
services.
<PAGE>
Based on an agreement between AHCCCS and HCFA, Medicare cost sharing
requirements for Medicare services provided on a fee-for-service basis (FFS) and
those services provided by a Medicare HMO are different. Please refer to the
table below:
CONTRACTOR LIABILITY FOR MEDICARE BENEFICIARIES
----------------------------------------------------------
COST SHARING FOR MEMBERS WITH COST SHARING FOR
FEE-FOR-SERVICE MEDICARE MEMBERS WITH
MEDICARE HMO
----------------------------------------------------------
Full amount of Full amount of Medicare co-
the co-insurance the co-insurance payments, deductibles
CONTRACTOR and deductibles and deductibles or premiums assessed
RESPONSIBILITY: for Medicare for Medicare by Medicare HMO for
services provided services not dual eligbles.
by a Medicare covered by AHCCCS
provider on a FFS and provided by a
basis in the Medicare provider
Contractor's net- on a FFS basis (in
work. or out-of-network)
- -----------------------------------------------------------------------------
QMB - DUALS
Persons who are
eligible for YES YES NO
Medicaid, who
meet QMB income
and resource
requirements and
who have Medicare
Part A and Part
B. AHCCCS pays
the Part B
premium.
- -----------------------------------------------------------------------------
NON-QMBS
Persons who are
eligible for YES NO NO
Medicaid, who do
not meet the QMB
income and
resource
requirements and
who have Medicare
Part A. AHCCCS
pays the Part B
premium in
certain instances.
- -----------------------------------------------------------------------------
MN/MI WITH
MEDICARE YES NO NO
- -----------------------------------------------------------------------------
The Contractor shall not deny payment of coinsurance and deductibles for
Medicare services provided in network or Medicare-only services provided
out-of-network if the reason for such denial is the failure of the provider to
obtain prior authorization for payment of coinsurance and deductibles.
Since AHCCCSA is the payer of last resort, all Medicare covered services which
are provided to dual eligibles who are not enrolled in a Medicare TEFRA Risk HMO
shall be billed to Medicare or any other third party liability source.
<PAGE>
If a dual eligible is enrolled with a Medicare TEFRA Risk HMO, Medicare will not
reimburse the Contractor for Medicare covered services provided by the
Contractor. Therefore, the Contractor shall refer the member to the Medicare
TEFRA Risk HMO for all Medicare covered services and shall not be responsible
for the payment of any Medicare copayments, deductibles or premiums assessed by
the Medicare TEFRA Risk HMO. The Contractor shall be responsible for any AHCCCS
covered services not provided by the Medicare TEFRA Risk HMO. As of July 1,
1996, persons who are eligible for Medicare and who can receive Medicare covered
services through a Medicare HMO will generally not be approved or re-approved
for the MN/MI program. The following individuals are not eligible to enroll in a
Medicare HMO: (1) those who are taking immunosuppressant drugs following a
transplant, (2) those who have end-stage renal disease, or (3) those who receive
Medicare hospice services. Persons who are not enrolled with Medicare Part B or
a Medicare HMO at the time of application or re-determination for MN/MI, may
receive MN/MI benefits until they can enroll in Medicare Part B and/or a
Medicare HMO.
42. COPAYMENTS
The Contractor is responsible for the collection of copayments from members in
accordance with AHCCCS Rule R9-22-711.
43. RECORDS RETENTION
The Contractor shall maintain books and records relating to covered services and
expenditures including reports to AHCCCSA and working papers used in the
preparation of reports to AHCCCSA. The Contractor shall comply with all
specifications for record keeping established by AHCCCSA. All books and records
shall be maintained to the extent and in such detail as required by AHCCCS Rules
and policies. Records shall include but not be limited to financial statements,
records relating to the quality of care, medical records, prescription files and
other records specified by AHCCCSA.
The Contractor agrees to make available at its office at all reasonable times
during the term of this contract and the period set forth in paragraphs a. and
b. below any of its records for inspection, audit or reproduction by any
authorized representative of AHCCCSA, State or federal government.
The Contractor shall preserve and make available all records for a period of
five years from the date of final payment under this contract except as
provided in paragraphs a. and b. below:
a. If this contract is completely or partially terminated, the records relating
to the work terminated shall be preserved and made available for a period of
five years from the date of any such termination.
b. Records which relate to grievances, disputes, litigation or the settlement
of claims arising out of the performance of this contract, or costs and
expenses of this contract to which exception has been taken by AHCCCSA,
shall be retained by the Contractor for a period of five years after the
date of final disposition or resolution thereof.
44. MEDICAL RECORDS
The member's medical record is the property of the provider who generates the
record. Each member is entitled to one copy of his or her medical record free of
charge. The Contractor shall have written policies and procedures to maintain
the confidentiality of all medical records. AHCCCSA shall be afforded access to
all members' medical records whether electronic or paper within 20 working days
of receipt of request. The Contractor is responsible for ensuring that a medical
record is established when information is received about a member. If the PCP
has not yet seen the member, such information may be kept temporarily in an
appropriately labeled file, in lieu of actually establishing a medical record,
but must be associated with the member's medical record as soon as one is
established.
The Contractor shall have written policies and procedures for the maintenance of
medical records so that those records are documented accurately and in a timely
manner, are readily accessible, and permit prompt and systematic retrieval of
information.
<PAGE>
The Contractor shall have written standards for documentation on the medical
record for legibility, accuracy and plan of care which comply with the AHCCCS
MEDICAL POLICY MANUAL, a copy of which may be found in the Bidder's Library.
The Contractor shall have written plans for providing training and evaluating
providers' compliance with the Contractor's medical records standards. Medical
records shall be maintained in a detailed and comprehensive manner which
conforms to good professional medical practice, permits effective professional
medical review and medical audit processes, and which facilitates an adequate
system for follow-up treatment. Medical records must be legible, signed and
dated.
When a member changes PCPs, his or her medical records or copies of medical
records must be forwarded to the new PCP within 10 working days from receipt of
the request for transfer of the medical records.
AHCCCSA is not required to obtain written approval from a member before
requesting the member's medical record from the PCP or any other agency. The
Contractor may obtain a copy of a member's medical records without written
approval of the member if the reason for such request is directly related to the
administration of the AHCCCS program.
Information related to fraud and abuse may be released so long as protected
HIV-related information is not disclosed. (ARS ss.36-664I)
45. ADVANCES, DISTRIBUTIONS, LOANS AND INVESTMENTS
The Contractor shall not, without the prior approval of AHCCCSA, make any
advances to a related party or subcontractor. The Contractor shall not, without
similar prior approval, make any distribution, loan or loan guarantee to any
entity, including another fund or line of business within its organization. All
investments, other than investments in U.S. Government securities or
Certificates of Deposit, also require AHCCCSA prior approval. (See the REPORTING
GUIDE FOR ACUTE CARE CONTRACTORS for alternatives to the prior approval of
individual investments.) All requests for prior approval are to be submitted to
the Office of Managed Care.
46. ACCUMULATED FUND DEFICIT
The Contractor and its owners shall fund any accumulated fund deficit through
capital contributions in a form acceptable to AHCCCSA within 30 days after
receipt by AHCCCSA of the final audited financial statements, or as otherwise
requested by AHCCCSA. AHCCCSA may, at its option, impose enrollment caps in any
or all GSA's as a result of an accumulated deficit, even if unaudited.
47. DATA EXCHANGE REQUIREMENT
The Contractor is authorized to exchange data with AHCCCSA relating to the
information requirements of this contract and as required to support the data
elements to be provided AHCCCSA in the format specified in the AHCCCS TECHNICAL
INTERFACE GUIDELINES which is available in the Bidder's Library. The information
so recorded and submitted to AHCCCSA shall be in accordance with all procedures,
policies, rules, or statutes in effect during the term of this contract. If any
of these procedures, policies, rules, regulations or statutes are hereinafter
changed both parties agree to conform to these changes following appropriate
notification to both parties by AHCCCSA. The Contractor is responsible for any
incorrect data, delayed submission or payment (to the Contractor or its
subcontractors), and/or penalty applied due to any error, omission, deletion, or
erroneous insert caused by Contractor-submitted data. Any data that does not
meet the standards required by AHCCCSA shall not be accepted by AHCCCSA.
<PAGE>
The Contractor is responsible for identifying any inconsistencies immediately
upon receipt of data from AHCCCSA. If any unreported inconsistencies are
subsequently discovered, the Contractor shall be responsible for the necessary
adjustments to correct its records at its own expense.
The Contractor shall accept from AHCCCSA original evidence of eligibility and
enrollment in a form appropriate for electronic data exchange. Upon request by
AHCCCSA, the Contractor shall provide to AHCCCSA updated date-sensitive PCP
assignments in a form appropriate for electronic data exchange.
The Contractor shall be provided with a Contractor-specific security code for
use in all data transmissions made in accordance with contract requirements.
Each data transmission by the Contractor shall include the Contractor's security
code. The Contractor agrees that by use of its security code, it certifies that
any data transmitted is accurate and truthful, to the best of the Contractor's
knowledge. The Contractor further agrees to indemnify and hold harmless the
State of Arizona and AHCCCSA from any and all claims or liabilities, including
but not limited to consequential damages, reimbursements or erroneous billings
and reimbursements of attorney fees incurred as a consequence of any error,
omission, deletion or erroneous insert caused by the Contractor in the submitted
input data. Neither the State of Arizona nor AHCCCSA shall be responsible for
any incorrect or delayed payment to the Contractor's AHCCCS services providers
(subcontractors) resulting from such error, omission, deletion, or erroneous
input data caused by the Contractor in the submission of AHCCCS claims.
The publication AHCCCS CONTRACTED HEALTH PLAN TECHNICAL INTERFACE GUIDELINES
describes the specific technical and procedural requirements for interfaces
between AHCCCS and the Contractor and its subcontractors. The Contractor is
responsible for complying with all technical requirements as stated in this
manual as well as any subsequent changes to the manual. A copy may be found in
the Bidder's Library.
The costs of software changes are included in administrative costs paid to the
Contractor. There is no separate payment for software changes. A PMMIS systems
contact will be assigned after contract award. AHCCCSA will work with the health
plans as they evaluate Electronic Data Interchange options.
ELECTRONIC DATA INTERCHANGE (EDI): In addition to the requirements outlined in
Section D, Paragraph 34, Claims Payment System, the Contractor will be required
to comply with all EDI standards which result from the Kennedy-Kassebaum
legislation. This law requires the Department of Health and Human Services to
provide national electronic submission standards for health care data and may
include compliance with National Provider Identifier requirements. The Secretary
has 18 months to develop these standards. As the standards are finalized,
AHCCCSA will phase in the implementation. Electronic standards which may be
implemented include, but are not limited to, encounters, enrollment and
capitation payments.
48. ENCOUNTER DATA REPORTING
The accurate and timely reporting of encounter data is crucial to the success of
the AHCCCS program. AHCCCSA uses encounter data to pay reinsurance benefits, set
fee-for-service and capitation rates, determine disproportionate share payments
to hospitals, and to determine compliance with performance measures. The
Contractor shall submit encounter data to AHCCCSA for all covered services for
which the Contractor incurred a financial liability, including services provided
during prior period coverage. This requirement is a condition of the HCFA grant
award.
Encounter data must be provided to AHCCCSA by electronic media and must be
submitted in the PMMIS AHCCCSA-supplied formats. Formatting and specific
requirements for encounter data are described in the AHCCCS ENCOUNTER REPORTING
USER MANUAL and the AHCCCS TECHNICAL INTERFACE GUIDELINES, copies of which may
be found in the Bidder's Library. The ENCOUNTER SUBMISSION REQUIREMENTS are
included herein as Attachment I.
<PAGE>
49. MONTHLY ROSTER RECONCILIATION
AHCCCSA produces daily roster updates identifying new members and changes to
members' demographic, eligibility and enrollment data which the Contractor shall
use to update its member records. The daily roster which is run prior to the
monthly roster is referred to as the "last daily" and will contain all rate code
changes made for the prospective month, as well as any new enrollments and
disenrollments.
The monthly roster is generally produced two days before the end of every month.
The roster will identify the total active population for the Contractor as of
the first day of the next month. This roster contains the information used by
AHCCCSA to produce the monthly capitation payment for the next month. The
Contractor will reconcile their member files with the AHCCCS monthly roster.
After reconciling the monthly roster information, the Contractor resumes posting
daily roster updates beginning with the last two days of the month. The last two
daily rosters are different from the regular daily rosters in that they pay
and/or recoup capitation into the next month.
Refer to the AHCCCS CONTRACTED HEALTH PLAN TECHNICAL INTERFACE GUIDELINES
available in the Bidder's Library for additional information.
50. TERM OF CONTRACT AND OPTION TO RENEW
The term of this contract shall be 10/1/97 through 9/30/98. In addition, AHCCCSA
reserves the sole option to extend the term of the contract, not to exceed a
total contracting period of five years. The terms and conditions of any such
contract extension shall remain the same as the original contract, as amended.
Any contract extension, however, shall not affect the maximum contracting period
of five years. All contract extensions shall be through contract amendment. If,
in conjunction with a contract extension, AHCCCSA elects to increase the
capitation rate for any rate code category, such increase will not exceed the
inflation rate recognized by the Arizona Legislature.
If the Contractor has been awarded a contract in more than one GSA, each such
contract will be considered separately renewable. AHCCCSA may renew the
Contractor's contract in one GSA but not in another. In addition, if the
Contractor has had significant problems of non-compliance in one GSA, it may
result in the capping of the Contractor's enrollment in another. Further,
AHCCCSA may require a contractor to renew all GSA's, or may terminate remaining
GSA's if the Contractor does not agree to renew all GSA's.
When AHCCCSA issues an amendment to extend the contract, the provisions of such
extension will be deemed to have been accepted 60 days after the date of mailing
by AHCCCSA, even if the extension amendment has not been signed by the
Contractor, unless within that time the Contractor notifies AHCCCSA in writing
that it refuses to sign the extension amendment. If the Contractor provides such
notification, AHCCCSA will initiate contract termination proceedings.
CONTRACTOR'S NOTICE OF INTENT NOT TO RENEW - If the Contractor chooses not to
renew this contract, the Contractor may be liable for certain costs associated
with the transition of its members to a different health plan. If the Contractor
provides AHCCCSA written notice of its intent not to renew this contract at
least 120 days before its expiration, this liability for transition costs may be
waived by AHCCCSA.
<PAGE>
51. SUBCONTRACTS
The Contractor shall be legally responsible for contract performance whether or
not subcontracts are used. No subcontract shall operate to terminate the legal
responsibility of the Contractor to assure that all activities carried out by
the subcontractor conform to the provisions of this contract. Subject to such
conditions, any function required to be provided by the Contractor pursuant to
this contract may be subcontracted to a qualified person or organization. All
such subcontracts must be in writing. See policy on claims processing by
subcontracted providers in the Bidder's Library.
All subcontracts entered into by the Contractor are subject to prior review and
approval by AHCCCSA, Contracts and Purchasing, and shall incorporate by
reference the terms and conditions of this contract. The following subcontracts
shall be submitted to AHCCCSA Contracting Office for prior approval at least 30
days prior to the beginning date of the subcontract:
a. Automated data processing
b. Third-party administrators
c. Management Services (See also Section D, Paragraphs 53 & 54)
d. Model subcontracts
e. Capitated or other risk subcontracts requiring claims processing by the
subcontractor must be submitted to AHCCCSA, Office of Managed Care.
See also Section D, Paragraph 35, Hospital Reimbursement, regarding required
submission of hospital subcontracts.
The Contractor shall maintain a fully executed original of all subcontracts
which shall be accessible to AHCCCSA within two working days of request by
AHCCCSA. A subcontract is voidable and subject to immediate cancellation by
AHCCCSA in the event any subcontract pertinent to "a" through "e" above is
implemented without the prior written approval of AHCCCSA. All subcontracts
shall comply with the applicable provisions of federal and State laws,
regulations and policies.
The Contractor shall not include covenant-not-to-compete requirements in its
provider agreements. Specifically, the Contractor shall not contract with a
provider and require that the provider not provide services for any other AHCCCS
contractor.
The Contractor must enter into a written agreement with any provider the
Contractor reasonably anticipates will be providing services on its behalf more
than 25 times during the contract year. Exceptions to this requirement include
the following:
a. If a provider who provides services more than 25 times during the contract
year refuses to enter into a written agreement with the Contractor, the
Contractor shall submit documentation of such refusal to AHCCCS Office of
Managed Care within seven days of its final attempt to gain such agreement.
b. If a provider performs emergency services such as an emergency room
physician or an ambulance company, a written agreement is not required.
<PAGE>
These and any other exceptions to this requirement must be approved by AHCCCS
Office of Managed Care. Each subcontract must contain verbatim all the
provisions of Attachment A, Minimum Subcontract Provisions. In addition, each
subcontract must contain the following:
a. Full disclosure of the method and amount of compensation or other
consideration to be received by the subcontractor.
b. Identification of the name and address of the subcontractor.
c. Identification of the population, to include patient capacity, to be covered
by the subcontractor.
d. The amount, duration and scope of medical services to be provided, and for
which compensation will be paid.
e. The term of the subcontract including beginning and ending dates, methods of
extension, termination and re-negotiation.
f. The specific duties of the subcontractor relating to coordination of
benefits and determination of third-party liability.
g. A provision that the subcontractor agrees to identify Medicare and other
third-party liability coverage and to seek such Medicare or third-party
liability payment before submitting claims to the Contractor/ Contractor.
h. A description of the subcontractor's patient, medical and cost record
keeping system.
i. Specification that the subcontractor shall cooperate with quality assurance
programs and comply with the utilization control and review procedures
specified in 42 C.F.R. Part 456, as implemented by AHCCCSA.
j. A provision stating that a merger, reorganization or change in ownership of
a subcontractor that is related to or affiliated with the Contractor shall
require a contract amendment and prior approval of AHCCCSA.
k. Procedures for enrollment or re-enrollment of the covered population.
l. A provision that the subcontractor shall be fully responsible for all tax
obligations, Worker's Compensation Insurance, and all other applicable
insurance coverage obligations which arise under this subcontract, for
itself and its employees, and that AHCCCSA shall have no responsibility or
liability for any such taxes or insurance coverage.
m. A provision that the subcontractor must obtain any necessary authorization
from the Contractor or AHCCCSA for services provided to eligible and/or
enrolled members.
n. A provision that the subcontractor must comply with encounter reporting and
claims submission requirements as described in the subcontract.
52. SPECIALTY CONTRACTS
AHCCCSA may at any time negotiate or contract on behalf of the Contractor and
AHCCCSA for specialized hospital and medical services. AHCCCSA will consider
existing Contractor resources in the development and execution of specialty
contracts. AHCCCSA may require the Contractor to modify its delivery network to
accommodate the provisions of specialty contracts. Specialty contracts shall
take precedence over and supersede existing and future subcontracts for services
that are subject to specialty contracts. AHCCCSA may consider waiving this
requirement in particular situations if such action is determined to be in the
best interest of the State; however, in no case shall reimbursement for
transplant surgery exceed that payable under the relevant AHCCCSA specialty
contract.
During the term of specialty contracts, AHCCCSA may act as an intermediary
between the Contractor and specialty contractors to enhance the cost
effectiveness of service delivery. AHCCCSA reserves the right to make direct
payments to specialty contractors on behalf of the Contractor. Adjudication of
claims related to such payments provided under specialty contracts shall remain
the responsibility of the Contractor. AHCCCSA may provide technical assistance
prior to the implementation of any specialty contracts.
AHCCCSA shall provide at least 60 days advance written notice to the Contractor
prior to the implementation of any specialty contract.
<PAGE>
53. MANAGEMENT SERVICES SUBCONTRACTORS
All proposed management services subcontracts and/or corporate cost allocation
plans must be approved in advance by AHCCCSA Contracting Office as described in
Section D, Paragraph 51, Subcontracts. Cost allocation plans must be submitted
with the proposed management fee agreement. AHCCCSA reserves the right to
perform a thorough review of actual management fees charged and/or corporate
allocations made. If the fees or allocations actually paid out are determined to
be unjustified or excessive, amounts may be subject to repayment to the
Contractor, the Contractor may be placed on monthly financial reporting, and/or
financial sanctions may be imposed.
54. MANAGEMENT SERVICES SUBCONTRACTOR AUDITS
All management services subcontractors that have oversight responsibilities for
the Contractor's program operations (such as third-party administrators) are
required to have an annual financial audit. A copy of this audit shall be
submitted to AHCCCSA, Office of Managed Care, within 120 days of the
subcontractor's fiscal year end. If services billed by a consultant or actuary
are less than $50,000, AHCCCSA will waive the requirement for an audit of that
consultant or actuary.
55. MINIMUM CAPITALIZATION REQUIREMENTS
In order to be considered for contract award, the Offeror must meet a minimum
capitalization requirement for each GSA bid. The capitalization requirement for
both new and continuing offerors must be met within 15 days after contract
award. Minimum capitalization requirements by GSA are as follows:
---------------------------------------------
GEOGRAPHIC SERVICE CAPITALIZATION
AREA REQUIREMENT
1. Yuma $ 1,400,000
2. Mohave, La Paz 1,150,000
3. Yavapai, Coconino 1,250,000
4. Pinal, Gila 1,450,000
5. Pima 1,250,000
6. Maricopa 2,500,000
7. Graham, Greenlee 350,000
8. Apache, Navajo 650,000
9. Cochise, Santa Cruz 1,450,000
---------------------------------------------
NEW OFFERORS: To be considered for a contract award in a given GSA or group of
GSAs, a new offeror must meet the minimum capitalization requirements listed
above. The capitalization requirement is subject to a $5,000,000 ceiling
regardless of the number of GSAs awarded. This requirement is in addition to the
Performance Bond requirements defined in Paragraphs 56 and 57 below and must be
met with cash with no encumbrances, such as a loan subject to repayment. The
capitalization requirements may be applied toward meeting the equity per member
requirement (see Section D, Paragraph 58, Financial Viability Criteria) and is
intended for use in operations of the Contractor.
CONTINUING OFFERORS: Continuing offerors that are bidding a county or GSA that
they are currently servicing must meet the equity per member standard (see
Section D, Paragraph 58, Financial Viability Criteria) for their current
membership. Continuing offerors that do not meet the equity standard must fund
through capital contribution the necessary amount to meet this requirement.
Continuing offerors that are bidding a new GSA must provide the additional
capitalization for the new GSA they are bidding. (See the table of requirements
by GSA above). Continuing offerors will not be required to provide additional
capitalization if they currently meet the equity per member standard with their
existing membership and their excess equity is sufficient to cover the proposed
additional members, or they have at least $5,000,000 in equity.
<PAGE>
56. PERFORMANCE BOND OR BOND SUBSTITUTE
The Contractor shall be required to provide a performance bond of standard
commercial scope issued by a surety company doing business in this State, an
irrevocable letter of credit, or a cash deposit ("Performance Bond") to AHCCCSA
for as long as the Contractor has AHCCCS-related liabilities of $50,000 or more
outstanding, or 15 months following the effective date of this contract,
whichever is later, to guarantee: (1) payment of the Contractor's obligations to
providers, non-contracting providers, and non-providers; and (2) performance by
the Contractor of its obligations under this contract. The Performance Bond
shall be in a form acceptable to AHCCCSA as described in PERFORMANCE BOND
GUIDELINES - OFFICE OF MANAGED CARE.
In the event of a default by the Contractor, AHCCCSA shall, in addition to any
other remedies it may have under this contract, obtain payment under the
Performance Bond or substitute security for the purposes of the following:
a. Paying any damages sustained by providers, non-contracting providers and
nonproviders by reason of a breach of the Contractor's obligations under
this contract,
b. Reimbursing AHCCCSA for any payments made by AHCCCSA on behalf of the
Contractor, and
c. Reimbursing AHCCCSA for any extraordinary administrative expenses incurred
by reason of a breach of the Contractor's obligations under this contract,
including, but not limited to, expenses incurred after termination of this
contract for reasons other than the convenience of the State by AHCCCSA.
In the event AHCCCSA agrees to accept substitute security in lieu of the
Performance Bond, irrevocable letter of credit or cash deposit, the Contractor
agrees to execute any and all documents and perform any and all acts necessary
to secure and enforce AHCCCSA's security interest in such substitute security
including, but not limited to, security agreements and necessary UCC filings
pursuant to the Arizona Uniform Commercial Code. In the event such substitute
security is agreed to and accepted by AHCCCSA, the Contractor acknowledges that
it has granted AHCCCSA a security interest in such substitute security to secure
performance of its obligations under this contract. The Contractor is solely
responsible for establishing the credit-worthiness of all forms of substitute
security. AHCCCSA may, after written notice to the Contractor, withdraw its
permission for substitute security, in which case the Contractor shall provide
AHCCCSA with a form of security described above.
57. AMOUNT OF PERFORMANCE BOND
The initial amount of the Performance Bond shall be equal to 110% of the total
capitation payment expected to be paid in the month of October, 1997, or as
determined by AHCCCSA. The total capitation amount shall include SOBRA
supplemental payments. This requirement must be satisfied by the Contractor not
later than 15 days after notification by AHCCCSA of the amount required.
Thereafter, AHCCCSA shall evaluate the enrollment statistics of the Contractor
on a monthly basis. If there is an increase in capitation payment that exceeds
10% of the performance bond amount, AHCCCSA may require an increase in the
amount of the Performance Bond. The Contractor shall have 15 days following
notification by AHCCCSA to increase the amount of the Performance Bond. The
Performance Bond amount that must be maintained after the contract term shall be
sufficient to cover all outstanding liabilities and will be determined by
AHCCCSA.
<PAGE>
58. FINANCIAL VIABILITY CRITERIA/ PERFORMANCE MEASURES
AHCCCSA has established the following financial viability criteria/ performance
goals:
CURRENT RATIO Current assets divided by current liabilities.
"Current assets" includes any long-term investments that
can be converted to cash within 24 hours without
significant penalty (i.e., greater than 20%).
STANDARD: AT LEAST 1.00
EQUITY PER MEMBER Equity divided by the number of non-SOBRA Family
Planning Extension Services members enrolled at the
end of the period.
STANDARD: AT LEAST $150
(Failure to meet this standard may result in an
enrollment cap being imposed in any or all contracted
GSA's.)
NOTE: EQUITY MUST BE UNENCUMBERED WITH NO LIENS OR
OBLIGATIONS AGAINST IT.
MEDICAL EXPENSE RATIO Total medical expenses divided by total capitation +
SOBRA + TPL + reinsurance
STANDARD: 85-90%
ADMINISTRATIVE COST Total administrative expenses (excluding income taxes),
PERCENTAGE divided by total capitation + SOBRA + TPL + reinsurance
STANDARD: NO MORE THAN 10%
RECEIVED BUT UNPAID Received but unpaid claims divided by the average daily
CLAIMS medical expenses for the period, net of sub-capitation
(DAYS OUTSTANDING) expense
STANDARD: NO MORE THAN 45 DAYS
59. MERGER, REORGANIZATION AND CHANGE OF OWNERSHIP
A proposed merger, reorganization or change in ownership of the Contractor
health plan shall require prior approval of AHCCCSA and a subsequent contract
amendment. The Contractor must submit a detailed merger, reorganization and/or
transition plan to AHCCCSA Contracting Office for AHCCCSA review. The purpose of
the plan review is to ensure uninterrupted services to members, evaluate the new
entity's ability to support the provider network, ensure that services to
members are not diminished and that major components of the organization and
AHCCCS programs are not adversely affected by such merger, reorganization or
change in ownership.
60. SANCTIONS
AHCCCSA may suspend, deny, refuse to renew, or terminate this contract or any
related subcontracts in accordance with AHCCCS Rule R9-22-405 and the terms of
this contract and applicable law and regulations. AHCCCSA may, in addition to
these remedies, impose monetary sanctions if the Contractor violates any
provision stated in law or this contract in accordance with AHCCCS Rule
R9-22-406 and the provisions of this contract, applicable law and regulations.
Written notice will be provided to the Contractor specifying the sanction to be
imposed, the grounds for such sanction and either the length of suspension or
the amount of capitation prepayment to be withheld. The Contractor may appeal
the decision to impose a sanction in accordance with AHCCCS Rule R9-22-804.
In addition to the above remedies, AHCCCSA may, at its option, impose partial or
full enrollment caps on the Contractor. Among the contract violations that may
result in an enrollment cap are, but are not limited to, the following:
a. Marketing violations
b. Failure to meet AHCCCS financial viability standards
c. Material deficiency in the Contractor's provider network
d. Quality of care and quality management issues
CURE NOTICE PROCESS - Prior to the imposition of a sanction for non-compliance,
AHCCCSA may provide a written cure notice to the Contractor regarding the
details of the non-compliance. The cure notice will specify the period of time
during which the Contractor must bring its performance back into compliance with
contract requirements. If, at the end of the specified time period, the
Contractor has complied with the cure notice requirements, AHCCCSA will take no
further action. If, however, the Contractor has not complied with the cure
notice requirements, AHCCCSA will proceed with the imposition of sanctions.
<PAGE>
61. AUTO-ASSIGNMENT ALGORITHM
Members who do not have the right to choose a contractor or members who have the
right to choose but do not exercise this right, are assigned to contractors
through an auto-assignment algorithm. The algorithm is a mathematical formula
used to distribute members to the various contractors in a manner that is
predictable and consistent with AHCCCSA goals. The algorithm favors those
contractors with lower capitation rates. For further details on the AHCCCS
Auto-Assignment Algorithm, refer to Attachment G. AHCCCSA may change the
algorithm at any time during the term of the contract and frequently does so in
response to contractor-specific issues of non-compliance (e.g. imposition of an
enrollment cap). The Contractor should consider this in preparing its response
to this RFP. AHCCCSA is not obligated to adjust for any financial impacts this
may have on the Contractor.
62. GRIEVANCE PROCESS AND STANDARDS
The Contractor shall have in place a written grievance policy for members and
providers which defines their rights regarding any adverse action by the
Contractor. This written policy shall be in accordance with applicable federal
and State law and AHCCCS Rules and policy including, but not limited to, AHCCCS
Rules R9-22-512; R9-22-518(A); R9-22-802; and R9-22-804. The grievance process
may not be delegated or subcontracted outside of the health plan. Refer to
Attachment H for a complete description of grievance process requirements.
63. QUARTERLY GRIEVANCE REPORT
The Contractor shall submit a Quarterly Grievance Report to AHCCCSA, Office of
Grievance and Appeals, using the Quarterly Grievance Report Format on file in
the Bidder's Library. The Quarterly Grievance Report must be received by the
AHCCCSA, Office of Grievance and Appeals, no later than 45 days from the end of
the quarter.
64. PENDING LEGISLATIVE ISSUES
In addition to the requirements described in this RFP, there are several
legislative issues that could have an impact on services provided by the
Contractor on or after October 1, 1997. The following is a brief description of
the issues that AHCCCS is aware of at the time of the issuance of this RFP:
ELIGIBILITY BASED ON 100% OF THE FEDERAL POVERTY LEVEL (FPL): Through a
successful initiative effort, eligibility for AHCCCS has been expanded to allow
persons with income up to 100% of the FPL to become eligible for the Medicaid
program. Legislative action will be required to implement this new eligibility
guideline and HCFA must approve the expansion. If HCFA approval is granted,
there will be a significant number of new persons who will be eligible for the
program and enrolled with the health plans at some future date.
<PAGE>
MANDATORY 48 HOUR MATERNITY STAY: Effective January 1, 1998, a new federal law
requires all group health insurers to allow women and their newborns to receive
48 hours of inpatient hospital care after a normal vaginal delivery and up to 96
hours of inpatient care after a cesarean delivery. The attending health care
provider, in consultation with the mother, may discharge the mother or newborn
prior to the minimum length of stay. HCFA has advised that the mandatory stay
provisions will apply to Medicaid. In preparing their capitation rate proposals,
offerors must assume any additional costs associated with this new requirement.
AHCCCSA will not compensate for additional costs effective January 1, 1998.
PREMIUM SHARING: The Arizona legislature passed legislation (Chapter 368, Laws
of 1996) which authorizes a 6-member legislative committee to make
recommendations for a three-year premium sharing demonstration program for
persons whose income does not exceed 300% of FPL. If enacted, the premium
sharing program would add additional people to the AHCCCS program. The program
is scheduled to begin October 1, 1997 but will be repealed if the legislature
does not implement a program by December 31, 1997.
WELFARE REFORM: The Personal Responsibility and Work Opportunity Act of 1996
replaces the AFDC entitlement program with Temporary Assistance to Needy
Families block grants to the states. In addition, states were given an option to
provide full Medicaid services or only emergency services to several groups of
legal immigrants who were in the United States on or before August 22, 1996. The
legislature will be considering the various options and making decisions about
the level of service to legal immigrants. Depending on the outcome of
legislative deliberations, there may be changes to AHCCCS eligibility.
GRADUATE MEDICAL EDUCATION (GME): The legislature may be making changes to the
funding formula for GME. Currently, GME is funded as an add-on to the AHCCCS
tiered per diem inpatient hospital rates. There is legislation to remove the GME
component from the hospital rates and establish a separate GME fund. For
purposes of your response to the RFP, please assume that GME will not be
included in the AHCCCS tiered per diem rates .
[END OF SECTION D]
<PAGE>
SECTION E: CONTRACT CLAUSES
Table of Contents
1. Applicable Law........................................................53
2. Authority..............................................................53
3. Order of Precedence....................................................53
4. Contract Interpretation and Amendment..................................53
5. Severability...........................................................53
6. Relationship of Parties................................................54
7. Assignment and Delegation..............................................54
8. General Indemnification................................................54
9. Indemnification -- Patent and Copyright................................54
10. Compliance with Applicable Laws, Rules and Regulations................54
11. Advertising and Promotion of Contract..................................54
12. Property of the State..................................................54
13. Third Party Antitrust Violations.......................................55
14. Right to Assurance.....................................................55
15. Termination for Conflict of Interest...................................55
16. Gratuities.............................................................55
17. Suspension or Debarment................................................55
18. Termination for Convenience............................................55
19. Termination for Default................................................56
20. Termination - Availability of Funds....................................56
21. Right of Offset........................................................56
22. Non-Exclusive Remedies.................................................56
23. Non-Discrimination.....................................................56
24. Effective Date.........................................................56
25. Insurance..............................................................57
26. Disputes...............................................................57
27. Right to Inspect Plant or Place of Business............................58
28. Incorporation by Reference.............................................58
29. Covenant against Contingent Fees.......................................58
30. Changes................................................................58
31. Type of Contract.......................................................58
32. Americans with Disabilities Act........................................58
33. Warranty of Services...................................................58
34. No Guaranteed Quantities...............................................59
35. Conflict of Interest...................................................59
36. Disclosure of Confidential Information.................................59
37. Cooperation with Other Contractors.....................................59
38. Assignment of Contract and Bankruptcy..................................59
39. Ownership of Information and Data......................................59
40. AHCCCSA Right to Operate Contractor....................................60
41. Audits and Inspections.................................................60
42. Fraud and Abuse........................................................60
43. Lobbying...............................................................61
<PAGE>
SECTION E: CONTRACT CLAUSES
1. APPLICABLE LAW
Arizona Law - The law of Arizona applies to this contract including, where
applicable, the Uniform Commercial Code, as adopted in the State of Arizona.
Implied Contract Terms - Each provision of law and any terms required by law to
be in this contract are a part of this contract as if fully stated in it.
2. AUTHORITY
This contract is issued under the authority of the Contracting Officer who
signed this contract. Changes to the contract, including the addition of work or
materials, the revision of payment terms, or the substitution of work or
materials, directed by an unauthorized state employee or made unilaterally by
the Contractor are violations of the contract and of applicable law. Such
changes, including unauthorized written contract amendments, shall be void and
without effect, and the Contractor shall not be entitled to any claim under this
contract based on those changes.
3. ORDER OF PRECEDENCE
The parties to this contract shall be bound by all terms and conditions
contained herein. For interpreting such terms and conditions the following
sources shall have precedence in descending order: The Constitution and laws of
the United States and applicable federal regulations; the terms of the HCFA 1115
waiver for the State of Arizona; the Constitution and laws of Arizona, and
applicable State rules; the terms of this contract, including all attachments
and executed amendments and modifications; AHCCCSA policies and procedures.
4. CONTRACT INTERPRETATION AND AMENDMENT
NO PAROL EVIDENCE - This contract is intended by the parties as a final and
complete expression of their agreement. No course of prior dealings between the
parties and no usage of the trade shall supplement or explain any term used in
this contract.
NO WAIVER - Either party's failure to insist on strict performance of any term
or condition of the contract shall not be deemed a waiver of that term or
condition even if the party accepting or acquiescing in the non-conforming
performance knows of the nature of the performance and fails to object to it.
WRITTEN CONTRACT AMENDMENTS - The contract shall be modified only through a
written contract amendment within the scope of the contract signed by the
procurement officer on behalf of the State.
5. SEVERABILITY
The provisions of this contract are severable to the extent that any provision
or application held to be invalid shall not affect any other provision or
application of the contract which may remain in effect without the invalid
provision or application.
<PAGE>
6. RELATIONSHIP OF PARTIES
The Contractor under this contract is an independent contractor. Neither party
to this contract shall be deemed to be the employee or agent of the other party
to the contract.
7. ASSIGNMENT AND DELEGATION
The Contractor shall not assign any right nor delegate any duty under this
contract without prior written approval of the Contracting Officer, who will not
unreasonably withhold such approval.
8. GENERAL INDEMNIFICATION
The Contractor shall defend, indemnify and hold harmless the State from any
claim, demand, suit, liability, judgment and expense (including attorney's fees
and other costs of litigation) arising out of or relating to injury, disease, or
death of persons or damage to or loss of property resulting from or in
connection with the negligent performance of this contract by the Contractor,
its agents, employees, and subcontractors or anyone for whom the Contractor may
be responsible. The obligations, indemnities and liabilities assumed by the
Contractor under this paragraph shall not extend to any liability caused by the
negligence of the State or its employees. The Contractor's liability shall not
be limited by any provisions or limits of insurance set forth in this contract.
The State shall reasonably notify the Contractor of any claim for which it may
be liable under this paragraph.
9. INDEMNIFICATION -- PATENT AND COPYRIGHT
The Contractor shall defend, indemnify and hold harmless the State against any
liability including costs and expenses for infringement of any patent, trademark
or copyright arising out of contract performance or use by the State of
materials furnished or work performed under this contract. The State shall
reasonably notify the Contractor of any claim for which it may be liable under
this paragraph.
10. COMPLIANCE WITH APPLICABLE LAWS, RULES AND REGULATIONS
The materials and services supplied under this contract shall comply with all
applicable federal, state and local laws, and the Contractor shall maintain all
applicable licenses and permits.
11. ADVERTISING AND PROMOTION OF CONTRACT
The Contractor shall not advertise or publish information for commercial benefit
concerning this contract without the prior written approval of the Contracting
Officer.
12. PROPERTY OF THE STATE
Any materials, including reports, computer programs and other deliverables,
created under this contract are the sole property of AHCCCSA. The Contractor is
not entitled to a patent or copyright on those materials and may not transfer
the patent or copyright to anyone else. The Contractor shall not use or release
these materials without the prior written consent of AHCCCSA.
<PAGE>
13. THIRD PARTY ANTITRUST VIOLATIONS
The Contractor assigns to the State any claim for overcharges resulting from
antitrust violations to the extent that those violations concern materials or
services supplied by third parties to the Contractor toward fulfillment of this
contract.
14. RIGHT TO ASSURANCE
If AHCCCSA, in good faith, has reason to believe that the Contractor does not
intend to perform or continue performing this contract, the procurement officer
may demand in writing that the Contractor give a written assurance of intent to
perform. The demand shall be sent to the Contractor by certified mail, return
receipt required. Failure by the Contractor to provide written assurance within
the number of days specified in the demand may, at the State's option, be the
basis for terminating the contract.
15. TERMINATION FOR CONFLICT OF INTEREST
AHCCCSA may cancel this contract without penalty or further obligation if any
person significantly involved in initiating, negotiating, securing, drafting or
creating the contract on behalf of AHCCCSA is, or becomes at any time while the
contract or any extension of the contract is in effect, an employee of, or a
consultant to, any other party to this contract with respect to the subject
matter of the contract. The cancellation shall be effective when the Contractor
receives written notice of the cancellation unless the notice specifies a later
time.
16. GRATUITIES
AHCCCSA may, by written notice to the Contractor, immediately terminate this
contract if it determines that employment or a gratuity was offered or made by
the Contractor or a representative of the Contractor to any officer or employee
of the State for the purpose of influencing the outcome of the procurement or
securing the contract, an amendment to the contract, or favorable treatment
concerning the contract, including the making of any determination or decision
about contract performance. AHCCCSA, in addition to any other rights or
remedies, shall be entitled to recover exemplary damages in the amount of three
times the value of the gratuity offered by the Contractor.
17. SUSPENSION OR DEBARMENT
AHCCCSA may, by written notice to the Contractor, immediately terminate this
contract if it determines that the Contractor has been debarred, suspended or
otherwise lawfully prohibited from participating in any public procurement
activity.
18. TERMINATION FOR CONVENIENCE
AHCCCSA reserves the right to terminate the contract in whole or in part at any
time for the convenience of the State without penalty or recourse. The
Contracting Officer shall give written notice by certified mail, return receipt
requested, to the Contractor of the termination at least 90 days before the
effective date of the termination. In the event of termination under this
paragraph, all documents, data and reports prepared by the Contractor under the
contract shall become the property of and be delivered to AHCCCSA. The
Contractor shall be entitled to receive just and equitable compensation for work
in progress, work completed and materials accepted before the effective date of
the termination. 19. TERMINATION FOR DEFAULT
<PAGE>
AHCCCSA reserves the right to terminate this contract in whole or in part due to
the failure of the Contractor to comply with any term or condition of the
contract or failure to take corrective action as required by AHCCCSA to comply
with the terms of the contract. If the Contractor is providing services under
more than one contract with AHCCCSA, AHCCCSA may deem unsatisfactory performance
under one contract to be cause to require the Contractor to provide assurance of
performance under any and all other contracts. In such situations, AHCCCSA
reserves the right to seek remedies under both actual and anticipatory breaches
of contract if adequate assurance of performance is not received. The
Contracting Officer shall mail written notice of the termination and the
reason(s) for it to the Contractor by certified mail, return receipt requested.
Upon termination under this paragraph, all documents, data, and reports prepared
by the Contractor under the contract shall become the property of and be
delivered to AHCCCSA on demand.
AHCCCSA may, upon termination of this contract, procure, on terms and in the
manner that it deems appropriate, materials or services to replace those under
this contract. The Contractor shall be liable for any excess costs incurred by
AHCCCSA in re-procuring the materials or services.
20. TERMINATION - AVAILABILITY OF FUNDS
Funds are not presently available for performance under this contract beyond the
current fiscal year. No legal liability on the part of AHCCCSA for any payment
may arise under this contract until funds are made available for performance of
this contract.
21. RIGHT OF OFFSET
AHCCCSA shall be entitled to offset against any amounts due the Contractor any
expenses or costs incurred by AHCCCSA concerning the Contractor's non-conforming
performance or failure to perform the contract.
22. NON-EXCLUSIVE REMEDIES
The rights and the remedies of AHCCCSA under this contract are not exclusive.
23. NON-DISCRIMINATION
The Contractor shall comply with State Executive Order No. 75-5, which mandates
that all persons, regardless of race, color, religion, sex, national origin or
political affiliation, shall have equal access to employment opportunities, and
all other applicable federal and state laws, rules and regulations, including
the Americans with Disabilities Act. The Contractor shall take positive action
to ensure that applicants for employment, employees, and persons to whom it
provides service are not discriminated against due to race, creed, color,
religion, sex, national origin or disability.
<PAGE>
24. EFFECTIVE DATE
The effective date of this contract shall be the date that the Contracting
Officer signs the award page (page 1) of this contract.
25. INSURANCE
A certificate of insurance naming the State of Arizona and AHCCCSA as the
"additional insured" must be submitted to AHCCCSA within 10 days of notification
of contract award and prior to commencement of any services under this contract.
This insurance shall be provided by carriers rated as "A+" or higher by the A.M.
Best Rating Service. The following types and levels of insurance coverage are
required for this contract:
a. Commercial General Liability: Provides coverage of at least $1,000,000 for
each occurrence for bodily injury and property damage to others as a result
of accidents on the premises of or as the result of operations of the
Contractor.
b. Commercial Automobile Liability: Provides coverage of at least $1,000,000
for each occurrence for bodily injury and property damage to others
resulting from accidents caused by vehicles operated by the Contractor.
c. Workers Compensation: Provides coverage to employees of the Contractor for
injuries sustained in the course of their employment. Coverage must meet
the obligations imposed by federal and state statutes and must also
include Employer's Liability minimum coverage of $100,000. Evidence of
qualified self-insured status will also be considered.
d. Professional Liability (if applicable): Provides coverage for alleged
professional misconduct or lack of ordinary skills in the performance of a
professional act of service. THE ABOVE COVERAGES MAY BE EVIDENCED BY EITHER
ONE OF THE FOLLOWING:
a. The State of Arizona Certificate of Insurance: This is a form with the
special conditions required by the contract already pre-printed on the form.
The Contractor's agent or broker must fill in the pertinent policy
information and ensure the required special conditions are included in the
Contractor's policy.
b. The Acord form: This standard insurance industry certificate of insurance
does not contain the pre-printed special conditions required by this
contract. These conditions must be entered on the certificate by the agent
or broker and read as follows:
The State of Arizona and Arizona Health Care Cost Containment System are
hereby added as additional insureds. Coverages afforded under this
Certificate shall be primary and any insurance carried by the State or any
of its agencies, boards, departments or commissions shall be in excess of
that provided by the insured Contractor. No policy shall expire, be canceled
or materially changed without 30 days written notice to the State. This
Certificate is not valid unless countersigned by an authorized
representative of the insurance company.
<PAGE>
26. DISPUTES
The exclusive manner for the Contractor to assert any claim, grievance, dispute
or demand against AHCCCSA shall be in accordance with AHCCCS Rule R9-28-804(C).
Pending the final resolution of any disputes involving this contract, the
Contractor shall proceed with performance of this contract in accordance with
AHCCCSA's instructions, unless AHCCCSA specifically, in writing, requests
termination or a temporary suspension of performance.
27. RIGHT TO INSPECT PLANT OR PLACE OF BUSINESS
AHCCCSA may, at reasonable times, inspect the part of the plant or place of
business of the Contractor or subcontractor which is related to the performance
of this contract, in accordance with ARS ss.41-2547.
28. INCORPORATION BY REFERENCE
This solicitation and all attachments and amendments, the Contractor's proposal,
best and final offer accepted by AHCCCSA, and any approved subcontracts are
hereby incorporated by reference into the contract.
29. COVENANT AGAINST CONTINGENT FEES
The Contractor warrants that no person or agency has been employed or retained
to solicit or secure this contract upon an agreement or understanding for a
commission, percentage, brokerage or contingent fee. For violation of this
warranty, AHCCCSA shall have the right to annul this contract without liability.
30. CHANGES
AHCCCSA may at any time, by written notice to the Contractor, make changes
within the general scope of this contract. If any such change causes an increase
or decrease in the cost of, or the time required for, performance of any part of
the work under this contract, the Contractor may assert its right to an
adjustment in compensation paid under this contract. The Contractor must assert
its right to such adjustment within 30 days from the date of receipt of the
change notice. Any dispute or disagreement caused by such notice shall
constitute a dispute within the meaning of Section E, Paragraph 26, Disputes,
and be administered accordingly.
When AHCCCSA issues an amendment to modify the contract, the provisions of such
amendment will be deemed to have been accepted 60 days after the date of mailing
by AHCCCSA, even if the amendment has not been signed by the Contractor, unless
within that time the Contractor notifies AHCCCSA in writing that it refuses to
sign the amendment. If the Contractor provides such notification, AHCCCSA will
initiate termination proceedings.
31. TYPE OF CONTRACT
Firm Fixed-Price
32. AMERICANS WITH DISABILITIES ACT
People with disabilities may request special accommodations such as
interpreters, alternative formats or assistance with physical accessibility.
Requests for special accommodations must be made with at least three days prior
notice by calling Mark Renshaw at (602) 417-4577.
33. WARRANTY OF SERVICES
The Contractor warrants that all services provided under this contract will
conform to the requirements stated herein. AHCCCSA's acceptance of services
provided by the Contractor shall not relieve the Contractor from its obligations
under this warranty. In addition to its other remedies, AHCCCSA may, at the
Contractor's expense, require prompt correction of any services failing to meet
the Contractor's warranty herein. Services corrected by the Contractor shall be
subject to all of the provisions of this contract in the manner and to the same
extent as the services originally furnished.
<PAGE>
34. NO GUARANTEED QUANTITIES
AHCCCSA does not guarantee the Contractor any minimum or maximum quantity of
services or goods to be provided under this contract.
35. CONFLICT OF INTEREST
The Contractor shall not undertake any work that represents a potential conflict
of interest, or which is not in the best interest of AHCCCSA or the State
without prior written approval by AHCCCSA. The Contractor shall fully and
completely disclose any situation which may present a conflict of interest. If
the Contractor is now performing or elects to perform during the term of this
contract any services for any AHCCCS health plan, provider or Contractor or an
entity owning or controlling same, the Contractor shall disclose this
relationship prior to accepting any assignment involving such party.
36. DISCLOSURE OF CONFIDENTIAL INFORMATION
The Contractor shall not, without prior written approval from AHCCCSA, either
during or after the performance of the services required by this contract, use,
other than for such performance, or disclose to any person other than AHCCCSA
personnel with a need to know, any information, data, material, or exhibits
created, developed, produced, or otherwise obtained during the course of the
work required by this contract. This nondisclosure requirement shall also
pertain to any information contained in reports, documents, or other records
furnished to the Contractor by AHCCCSA.
37. COOPERATION WITH OTHER CONTRACTORS
AHCCCSA may award other contracts for additional work related to this contract
and Contractor shall fully cooperate with such other contractors and AHCCCSA
employees or designated agents, and carefully fit its own work to such other
contractors' work. Contractor shall not commit or permit any act which will
interfere with the performance of work by any other contractor or by AHCCCSA
employees.
38. ASSIGNMENT OF CONTRACT AND BANKRUPTCY
This contract is voidable and subject to immediate cancellation by AHCCCSA upon
Contractor becoming insolvent or filing proceedings in bankruptcy or
reorganization under the United States Code, or assigning rights or obligations
under this contract without the prior written consent of AHCCCSA.
39. OWNERSHIP OF INFORMATION AND DATA
Any data or information system, including all software, documentation and
manuals, developed by Contractor pursuant to this contract, shall be deemed to
be owned by AHCCCSA. The federal government reserves a royalty-free,
nonexclusive, and irrevocable license to reproduce, publish, or otherwise use
and to authorize others to use for federal government purposes, such data or
information system, software, documentation and manuals. Proprietary software
which is provided at established catalog or market prices and sold or leased to
the general public shall not be subject to the ownership or licensing provisions
of this section.
<PAGE>
Data, information and reports collected or prepared by Contractor in the course
of performing its duties and obligations under this contract shall be deemed to
be owned by AHCCCSA. The ownership provision is in consideration of Contractor's
use of public funds in collecting or preparing such data, information and
reports. These items shall not be used by Contractor for any independent project
of Contractor or publicized by Contractor without the prior written permission
of AHCCCSA. Subject to applicable state and federal laws and regulations,
AHCCCSA shall have full and complete rights to reproduce, duplicate, disclose
and otherwise use all such information. At the termination of the contract,
Contractor shall make available all such data to AHCCCSA within 30 days
following termination of the contract or such longer period as approved by
AHCCCSA, Office of the Director. For purposes of this subsection, the term
"data" shall not include member medical records.
Except as otherwise provided in this section, if any copyrightable or patentable
material is developed by Contractor in the course of performance of this
contract, the federal government, AHCCCSA and the State of Arizona shall have a
royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or
otherwise use, and to authorize others to use, the work for state or federal
government purposes. Contractor shall additionally be subject to the applicable
provisions of 45 CFR Part 74 and 45 CFR Parts 6 and 8.
40. AHCCCSA RIGHT TO OPERATE CONTRACTOR
If, in the judgment of AHCCCSA, Contractor's performance is in material breach
of the contract or Contractor is insolvent, AHCCCSA may directly operate
Contractor to assure delivery of care to members enrolled with Contractor until
cure by Contractor of its breach, by demonstrated financial solvency or until
the successful transition of those members to other contractors.
41. AUDITS AND INSPECTIONS
The Contractor shall comply with all provisions specified in applicable AHCCCS
Rule R9-22-519, -520 and -521 and AHCCCS policies and procedures relating to the
audit of Contractor's records and the inspection of Contractor's facilities.
Contractor shall fully cooperate with AHCCCSA staff and allow them reasonable
access to Contractor's staff, subcontractors, members, and records.
At any time during the term of this contract, the Contractor's or any
subcontractor's books and records shall be subject to audit by AHCCCSA and,
where applicable, the federal government, to the extent that the books and
records relate to the performance of the contract or subcontracts.
AHCCCSA and the federal government may evaluate through on-site inspection or
other means, the quality, appropriateness and timeliness of services performed
under this contract.
42. FRAUD AND ABUSE
It shall be the responsibility of the Contractor to report all cases of
suspected fraud and abuse by subcontractors, members or employees. The
Contractor shall provide written notification of all such incidents to AHCCCSA.
The Contractor shall comply with the AHCCCS HEALTH PLANS AND PROGRAM CONTRACTORS
POLICY FOR PREVENTION, DETECTION AND REPORTING OF FRAUD AND ABUSE which is
available in the Bidder's Library and incorporated herein by reference.
As stated in ARS ss. 13-2310, incorporated herein by reference, any person who
knowingly obtains any benefit by means of false or fraudulent pretenses,
representations, promises or material omissions is guilty of a class 2 felony.
<PAGE>
43. LOBBYING
No funds paid to the Contractor by AHCCCSA, or interest earned thereon, shall be
used for the purpose of influencing or attempting to influence an officer or
employee of any federal or State agency, a member of the United States Congress
or State Legislature, an officer or employee of a member of the United States
Congress or State Legislature in connection with awarding of any federal or
State contract, the making of any federal or State grant, the making of any
federal or State loan, the entering into of any cooperative agreement, and the
extension, continuation, renewal, amendment or modification of any federal or
State contract, grant, loan, or cooperative agreement. The Contractor shall
disclose if any funds other than those paid to the Contractor by AHCCCSA have
been used or will be used to influence the persons and entities indicated above
and will assist AHCCCSA in making such disclosures to HCFA.
[END OF SECTION E]
<PAGE>
SECTION F: LIST OF ATTACHMENTS
Attachment A: Minimum Subcontract Provisions
Attachment B: Geographic Service Area Minimum Network Requirements
Attachment C: Management Services Subcontractor Statement
Attachment D: Sample Letter of Intent; Network Summary Form
Attachment E: Instructions for Preparing Capitation Proposal on Computer Disk.
Attachment F: Periodic Report Requirements
Attachment G: Auto-Assignment Algorithm
Attachment H: Grievance Process and Standards
Attachment I: Encounter Submission Requirements
Attachment J: New Offeror Review Guide
Attachment K: EPSDT Periodicity Schedule
Attachment L: Offeror's Checklist
<PAGE>
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> NOV-30-1997
<EXCHANGE-RATE> 1
<CASH> 9,367,000
<SECURITIES> 1,502,000
<RECEIVABLES> 3,311,000
<ALLOWANCES> 575,000
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<CURRENT-ASSETS> 15,131,000
<PP&E> 6,554,000
<DEPRECIATION> 2,333,000
<TOTAL-ASSETS> 27,646,000
<CURRENT-LIABILITIES> 11,822,000
<BONDS> 0
0
7,000
<COMMON> 44,000
<OTHER-SE> 11,774,000
<TOTAL-LIABILITY-AND-EQUITY> 27,646,000
<SALES> 30,845,000
<TOTAL-REVENUES> 30,845,000
<CGS> 0
<TOTAL-COSTS> 30,524,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 193,000
<INCOME-PRETAX> 532,000
<INCOME-TAX> 177,000
<INCOME-CONTINUING> 355,000
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<EXTRAORDINARY> 0
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