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EXHIBIT 10.1
Agreement
between
Lovelace Health Systems, Inc.
and
Lifemark Corporation
(Contract #LHS00271)
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TABLE OF CONTENTS
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SECTION TITLE PAGE
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<S> <C> <C>
1 Recitals 2
2 Definitions 3
3 Lifemark Duties 3
4 LHS Duties 4
5 Administrative Services 5
6 Performance Standards and Penalties 9
7 Reports and Records 9
8 Compensation 10
9 Relationship of Parties 11
10 Ownership of Data 11
11 Confidentiality 12
12 Insurance and Indemnification 13
13 Term and Termination of Agreement 13
14 Rights and Obligations Upon Termination 14
15 Assignment and Delegation of Duties 14
16 Affirmative Action 14
17 Interpretation 15
18 Amendment 15
19 Entire Agreement 15
20 Notice 15
21 Enforceability and Waiver 15
22 Dispute Resolution 16
Exhibit A: Standards for Delegation of Member Rights and Responsibilities Function
Exhibit B: Minimum Requirements for Call Tracking System
Exhibit C: Standards for Delegation of Utilization Management Activities
Exhibit D: Standards for Delegation of Specific Preventive Health Activities
Exhibit E: Standards for Delegation of Payment Administration Activities
Exhibit F: Matrix of Performance Standards and Penalties
Exhibit G: Matrix of Required Reports and Reporting Frequencies
Exhibit H: Confidentiality Agreement
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ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made and entered into by and between Lovelace Health Systems,
Inc., a New Mexico Corporation (hereinafter called "LHS") and Lifemark
Corporation, a Delaware Corporation (hereinafter collectively called
"Lifemark").
1. RECITALS
WHEREAS, LHS is a New Mexico corporation wholly owned by HealthSource,
Inc., a New Hampshire Corporation; and,
WHEREAS, LHS is a health maintenance organization ("HMO"), doing business
as Lovelace Health Plan ("LHP"), duly licensed under the New Mexico HMO Act
(Chapter 59A, Article 46 NMSA 1978), as amended, federally qualified under
the federal HMO Act of 1973 (42 U.S.C. Section 300e et seq.), as amended,
and accredited by the National Committee on Quality Assurance (NCQA). LHP
provides, insures, or administers health care benefits for participants
("Participants") in various insured and self-insured plans. In the course
of its business, LHS establishes and administers contracts with physicians
and other health care providers, conducts health care utilization
management and quality improvement activities, maintains member services
operations, and other administrative functions of an HMO; and,
WHEREAS, LHS is also a health care delivery system ("LDS") consisting of a
multispecialty medical group and an acute care hospital facility duly
licensed by the New Mexico Department of Health ("DOH"), certified to
participate in Medicare and Medicaid, and accredited by the Joint
Commission on Accreditation of Healthcare Organizations ("JCAHO"). In the
course of its business, the LDS operates inpatient and outpatient health
care facilities in Albuquerque and Santa Fe, New Mexico, to provide health
care services and supplies to LHP Participants, and to patients with other
third party payor sources or who are financially responsible for their own
care ("FFS Patients"). Participants and FFS Patients are hereinafter
collectively referred to as "LHS Patients"; and,
WHEREAS, LHS is a contracted health plan under a managed care program
administered by the State of New Mexico Human Services Department ("HSD")
for the provision of covered medical, dental, vision, behavioral, home
health, and other health services to Medicaid recipients through a program
known as SALUD! New Mexico Partnership for Wellness and Health ("Program");
and,
WHEREAS, LHS has organized Lovelace Community Health Plan ("LCHP") as a
division of LHS for the purpose of contracting with HSD and performing
LHS's obligations to manage and administer the Program; and,
WHEREAS, Lifemark is primarily organized for and engaged in the
development, management, and ownership of managed care health plans and
programs serving the indigent and Medicaid population; and,
WHEREAS, LHS desires to engage Lifemark, and Lifemark desires to be
engaged, to provide administrative and management services in connection
with LCHP's contract with the Program and the Members enrolled through the
Program.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
2. DEFINITIONS
a. Covered Services. Medically necessary health care services or
products, including those
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medical, dental, vision, behavioral, home health, and other health
care services to which Members are entitled under the Program as
described in the Request for Proposal and contract between LHS and
HSD.
b. Human Services Department or "HSD". The department of the State of New
Mexico government responsible for administration of its State Medicaid
Program pursuant to Title XIX of the Social Security Act and
applicable law.
c. Members. Those individuals who are eligible for coverage under the
Program and who have enrolled with LCHP to provide their health care
benefits.
d. Participating Provider. A duly licensed (if subject to licensure)
hospital, health care facility, medical group, physician, or other
health care provider that has entered into a contract with LHS for the
provision of Covered Services to Members.
e. Program. The State of New Mexico SALUD! New Mexico Partnership for
Wellness and Health, a program established for the provision of
covered medical, dental, vision, behavioral, home health, and other
health services to Medicaid recipients in a managed care delivery
setting as described in the Request for Proposal.
f. Request for Proposal or "RFP". The Request for Proposal for the
Program and any amendments thereto issued by HSD.
3. LIFEMARK DUTIES
a. Lifemark shall be responsible for furnishing administrative services
to LCHP in accordance with the provisions of this Agreement, as well
for all ordinary and necessary business expenses associated with
Lifemark's employees and its responsibilities under this Agreement,
including but not limited to the following:
(1) Office space (including all property lease/purchase
arrangements);
(2) Business and operating licenses and/or certifications, except
those specifically required of LHS;
(3) Office equipment/furniture;
(4) Utilities;
(5) Telephone lines and equipment;
(6) Computer hardware and software;
(7) Printing and copying equipment;
(8) Office supplies;
(9) Personnel and human resources;
(10) Personnel training and education;
(11) Travel, expenses, taxes.
b. Lifemark will appoint a Program Director who will reside in the
Albuquerque area and be responsible for oversight of Lifemark's day to
day Program related operational activities. Lifemark Program Director
will be responsible for coordinating all Lifemark activities and, for
purposes of this Agreement, will be subject to the oversight of the
LHP General Manager and others as designated by LHP for this
agreement. Lifemark will only use LHS, LHP, or LCHP trademarks, trade
names, or logos as designated and approved by the LHP General Manager.
c. Lifemark shall not discriminate in arranging for delivery of Covered
Services for LHS Patients based upon race, color, religion, sex,
sexual preference, age, national origin, or payor source.
d. Lifemark shall comply with all aspects of LHS's response to the RFP,
HSD regulations pertaining to the Program, all the regulations
promulgated by the Medical Assistance program
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under Title XIX of the Social Security Amendments of 1965 (Medicaid),
and with all other federal and state laws and regulations applicable
to the Administrative Services.
e. Lifemark shall be responsible for any sanctions or penalties imposed
on LHS by HSD, HCFA, or other governmental entity that arise from
Lifemark's failure to comply with any applicable law or regulation or
any other nonperformance of obligations outlined in this Agreement.
Lifemark shall not be responsible for the non-performance of LHS
subcontractors, and Lifemark agrees to promptly notify LHS in writing
of non-performance issues by LHS subcontractors when identified by
Lifemark and will assist in developing recommended corrective action
plans where applicable. As a condition to Lifemark's obligation to pay
such penalties, at Lifemark's request, LHS shall appeal such penalties
to the fullest extent possible under the regulation of HSD, HCFA or
other governmental entity if reasonable grounds for such appeal exist.
f. Lifemark shall, upon request by LHS, and at no cost to LHS, assist LHS
in developing and implementing reasonable and necessary undertakings
initiated by LHS to comply with applicable regulations and HSD
requirements, or to improve the quality of programs and services
furnished to Members by LCHP. Such undertakings shall include
Lifemark's participation, as requested, with LHS's response to the
anticipated 2000-2001 HSD RFPs.
4. LHS DUTIES
a. The primary liaison with HSD and other governmental entities for the
purposes of LCHP's business and the Program shall be the General
Manager of LHP or his/her designate.
b. LHS shall budget and pay the costs of marketing the Program to
prospective Members in amounts consistent with HSD regulations and
deemed reasonable by LHS. The procurement of such items shall utilize
the standard LHS procurement system according to LHS policies if paid
by LHS or its affiliates.
c. LHS shall select and recruit, negotiate and establish contracts with
providers to become Participating Providers of LHS for medical dental,
vision, behavioral, and other services to provide Covered Services to
Members as required by the contract between HSD and LHS. Such
contracts shall be between LHS and Participating Providers. All
contracts with Participating Providers shall be in a form and contain
such provisions as are acceptable to LHS, set forth the amount of
compensation to Participating Providers, and specify that the
Participating Providers shall be subject to all the requirements
contained in the RFP and any contract between HSD and LHS. LHS shall
submit any unusual payment methodologies to Lifemark for review and
comment before executing contracts containing such methodologies.
d. LHS shall be responsible for credentialing and recredentialing of
Participating providers.
e. LHS shall maintain its established process for subrogation tracking
and recovery.
f. LHS shall be responsible for Quality Improvement programs requirements
of HSD and appropriate accrediting bodies (e.g. NCQA, JCAHO, etc.).
g. LHS shall be responsible for performing or sub-contracting for case
management services. Case management services shall encompass
inpatient and outpatient case management as defined by HSD's case
management benefit and as set forth in the contract between HSD and
LHS.
h. LHS shall furnish the services of a Medical Director to provide
oversight to Lifemark Utilization Management services.
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i. LHS shall be responsible for the following Program-related expenses:
(1) Covered Services.
(2) Legal services of LHS.
(3) Actuarial Services of LHS
(4) All insurance and re-insurance premium of LHS.
(5) Expenses related to corporate existence for LHS.
(6) Income, property, premium, and other taxes of LHS and any
assessments or license fees of LHS.
(7) Costs associated with health assessment administration, health
education, and promotion (excluding Health Promotion Services for
which Lifemark is engaged), administration of case management and
quality management functions as they relate to NCQA, JCAHO, and
HSD (including HSD's independent external quality review
organization) quality requirements, credentialing, and marketing
(except for those Marketing Services for which Lifemark is
engaged.
(8) Costs associated with LHS's business operations and its employees
including, but not limited to capitalized and non-capitalized
computer equipment, office equipment furniture, software, office
supplies, office space for LHS staff, printing, copying, postage
(associated with quality management and case management),
contracted labor (including clerical, word processing, and
secretarial services), legal fees, sub-contracted professional
fees, wages (including overtime wages), employee benefits,
telephone line leases, telephone, utilities, licenses, seminars
and all related travel expenses for LHS employees, audits, taxes,
fees, and other expenses incurred.
(9) Costs associated with LCHP Medical Director(s), including, but
not limited to, salaries and benefits.
(10) Prescription drug claims processing and payment.
j. LHS shall establish and maintain a separate bank account ("Account")
specifically for use by Lifemark for the purpose of depositing all
receipts from any source including payments from HSD, and for the
payment of claims for Covered Services under the Program and
Lifemark's administrative fees. Failure to maintain an adequate
balance in the Account, and any penalties incurred as a result, will
be the sole responsibility of LHS; except where the failure by LHS to
maintain an adequate Account balance occurred because Lifemark
negligently mispaid, overpaid, or committed any other negligent action
or omission in processing claims payable from the Account, in which
case the penalties will be the responsibility of Lifemark.
5. ADMINISTRATIVE SERVICES
Lifemark shall furnish the following services ("Administrative Services"):
a. Marketing Service(s)
(1) Distribute (including postage) marketing materials developed or
procured by LHS within the scope of normal plan operations as
outlined by contractual requirements set forth by HSD and this
Agreement.
b. Enrollment and Eligibility Service(s)
(1) Make available to LHS and Participating Providers, in a
nationally accepted standard format (e.g. NSF 2.0), Member
enrollment and eligibility information within three business days
of receipt of such information from HSD.
(2) Make available electronic enrollment/eligibility data obtained by
HSD in a format set forth by Lifemark and agreed to by LHP and
its subcontractors. Lifemark will educate subcontractors about
the electronic enrollment data file structure and processes, and
will verify that data is being appropriately transferred to LHS
subcontractors. It will be the responsibility of LHP
subcontractor's to maintain interfaces that allow for electronic
data interchange to obtain enrollment files maintained by
Lifemark.
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(3) Provide card stock, print, and distribute member ID cards within
timeframes required by HSD.
c. Member Service(s)
(1) Provide all Member Services functions as are required by the RFP,
any and all existing and known contracts between HSD and LHS, and
this Agreement.
(2) Establish and maintain a complaint resolution procedure to
process Member and Participating Provider complaints that
complies with applicable law, LHS's contract with HSD (including
HSD's independent external quality review organization),
applicable law and regulations, NCQA standards, and, with respect
to Member complaints, LHS's "Standards for Delegation of Member
Rights and Responsibilities Function", which is attached hereto
as Exhibit A.
(3) Operate or provide for a member services call center in
accordance with HSD and Lovelace requirements. This will be
accomplished by Lifemark using the LHS nurse hotline after normal
business hours.
(4) Implement an enhanced call tracking system and reporting
capabilities in accordance with NCQA standards and LHS
requirements attached as Exhibit B. Implementation to be
substantially completed by June 30, 2001.
d. Provider Contracting Service(s)
Supply consultation to LHS regarding geographic distribution of
network and negotiated rates.
e. Provider Relations Service(s)
(1) Lifemark will appropriately update its information systems with
new or revised contract information within ten (10) business days
after complete and accurate information has been received by
Lifemark personnel. Lifemark will periodically perform audits of
its contract loading functions and allow oversight by LHS Medical
Economics group if requested by LCHP, LHP, or LHS. Lifemark will
have the right to review all non-standard SALUD! provider and
subcontractor agreements prior to final execution to ensure
compliance with system administration. Lifemark will not be held
responsible for timely processing of claims for contracts that
have been executed, or for provider information forwarded to
Lifemark staff, with effective dates prior to receipt date by
Lifemark. However, Lifemark will be responsible for timely
processing after the tenth (10th) day following receipt by
Lifemark of the signed contract.
(2) Produce and distribute a new Provider Reference Manual on an
annual basis and produce and distribute an update to the Manual
every six months.
(3) Perform orientation of new Participating Providers regarding
features of the Program and LCHP.
(4) Align the geographic territory assignment of Lifemark's Provider
Relations Representatives consistent with the geographic
territory assignment of LHP's Provider Relations alignment, even
if LHP changes the territory assignments of its Provider
Relations Representative. LHP shall give Lifemark reasonable
advance notice of such changes.
(5) Conduct on-going education of existing Participating Providers
regarding features of the Program and LCHP, and any changes that
may have be implemented by HSD.
(6) Update, print, and distribute a directory of Participating
Providers two times per year after receiving approval of the
draft by LHP personnel.
(7) Operate a provider relations call center to address Participating
provider and non-participating provider inquiries about billing,
referrals/authorizations, claims issues, etc.
f. Utilization Management Service(s)
(1) Conduct Utilization Management ("UM") in accordance with a UM
program plan, which shall be submitted to LHS annually for review
by the Health Plan Quality Council. Such
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plan and related activities shall comply with LHS's contract with
HSD (including HSD's independent external quality review
organization requirements), applicable law and regulations, NCQA
standards, and LHS's "Standards for Delegation of Utilization
Management Activities", which is attached hereto as Exhibit C.
Lifemark shall obtain and maintain any license, certification, or
accreditation necessary to perform it UM activities. Lifemark
agrees that its UM activities shall be subject to oversight and
supervision of the designated LHS Medical Director.
(2) Ensure necessary interfaces for electronic data interchange to
timely update the claims system related to referrals, prior
authorizations, and other UM activities.
(3) Perform prior authorization function in accordance with HSD and
LHS requirements.
(4) Perform referral process in accordance with HSD and LHS
requirements and performance standards.
g. Preventive Health Service(s)
(1) Perform Member outreach and education for well childcare,
including but not limited to EPSDT (including the behavioral
health screening component of the EPSDT) and prenatal care in
accordance with HSD requirements and the requirements of any
appropriate accrediting body in which LHS participates (e.g.
NCQA, JCAHO, etc.) as set forth in the "Standards for Delegation
of Specific Preventive Health Activities", which is attached
hereto as Exhibit D.
(2) Cooperate with other reasonable preventive health or quality
improvement initiatives as requested by LHS.
h. Claims Administration Services(s)
(1) Process and pay claims to Participating Providers for all
approved Covered Services rendered to Members (except
prescription drug benefit claims and other benefits for which LHS
has sub-contracted claims payment) in accordance with contracts
entered into between Participating Providers and LHS, the RFP,
HSD requirements, and this Agreement.
(2) Comply with LHS "Standards for Delegation of Payment
Administration Activities", attached hereto as Exhibit E.
(3) Comply with the requirements of the RFP, the contract between HSD
and LHS, and the contracts between LHS and Participating
Providers with respect to payment of claims to Participating
Providers. Claims payments shall be made by check or drafts
signed by Lifemark out of the Account established under the terms
of this Agreement.
(4) Ensure necessary interfaces to accept electronic data interchange
of claims and encounter data.
(5) Process complete encounter data that has been received from
Participating Providers who pay their own claims. Such encounter
data must be received by Lifemark in a nationally accepted
standard format (or other format agreed to by Lifemark). Lifemark
will upload such data into Lifemark information systems or data
repository systems for reporting purposes.
(6) Conduct necessary activities in connection with coordination of
benefits, third-party liability recoveries, and reinsurance as
required under the provisions of the RFP and HSD requirements.
Such activities will include but not be limited to the following:
(a) Recovering or coordinating medical expenses incurred by
Members from all third-party liability sources on behalf of
LHS, and depositing any amounts recovered in the Account;
(b) Establishing and maintaining files of Members' third-party
liability information;
(c) Receiving third-party liability information from HSD and
updating the Members' files on a timely basis;
(d) Informing HSD and the LHS of third-party liability
information discovered during the course of business
operations;
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(e) Providing HSD and the LHS with required reports relating to
amounts recovered from third-parties;
(f) Recovering reinsurance revenues payable to LHS from HSD and
/or other reinsurers.
(7) Cooperate with LHS in the development of a subrogation tracking
and recovery program and provide LHS with any information,
reports, or other data in its possession which indicates that a
right of recovery may exist with respect to a benefit or service
provided under the Program.
i. Accounting and Finance Services(s)
(1) Install appropriate controls and perform finance accounting
functions as reasonably requested by the LHS VP of Financial
Operations.
(2) Make deposits to and payments from the Account established by LHS
for LCHP. Payments from the account are expressly limited to (i)
payment of approved provider claims, (ii) payment of monthly
(PMPM) fees in accordance with Section 8 of this Agreement, and
(iii) other expenses as expressly approved in advance by LHS.
(3) Reconcile Account statements as reasonably requested by LHS.
(4) Performing all day to day financial and accounting functions of
LCHP, including preparation of regulatory financial reporting,
claims accounts payable, and premium accounts receivable
administration.
(5) Provide LHS with financial statement information and related
supporting documentation (including information that Lifemark
possesses for required filings for the New Mexico Department of
Insurance.
(6) Prepare for LHS's review, signature and submission any financial
and regulatory reports required by HSD in connection with the
Program.
j. Information Systems Services(s)
(1) Maintain an automated management information system as required
by the contract with HSD, HSD requirements, and as necessary for
Lifemark to fulfill its obligations under the provisions of this
Agreement.
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k. Exit/Transition Planning Services(s)
(1) Cooperate in a professional and businesslike manner with
transition to new vendor.
(2) Continue, for no additional administrative fee, to process and
pay claims accurately for dates of service up to termination date
for a period of one hundred, eighty (180) days following the
effective date of termination/expiration of the Agreement.
(3) Transition of data upon termination shall include transfer of
file data, accruals against benefit limitations and copayment
carryover if appropriate, and shall be timely enough to allow
smooth transition of activities to the new vendor.
6. PERFORMANCE STANDARDS AND PENALTIES
a. Lifemark agrees that performance standards pertaining to certain
Administrative Services, along with penalties for failure on the part
of Lifemark to achieve the performance standards, shall be
established. A matrix of Performance Standards and Penalties is
attached and made part of this Agreement as Exhibit F.
b. The methods of measurement of performance related to each Performance
Standard is also contained in Exhibit F.
c. Lifemark shall supply, from its information and other systems, all
data necessary for measurement of performance against the Performance
Standards.
d. The periods of performance and reporting dates shall be as follows:
(1) For the period from September 1, 2000, through June 30, 2001,
Lifemark will supply performance data to LHS no later than July
31, 2001. The total of all penalties imposed for this period of
performance shall not exceed [ ]* of the total amount paid by LHS
to Lifemark for Administrative Services for the same period.
(2) For the period July 1, 2001, through December 31, 2001, Lifemark
will supply performance data to LHS no later than January 31,
2002. The total of all penalties imposed for this period of
performance shall not exceed [ ]* of the total amount paid by LHS
to Lifemark for Administrative Services for the same period.
(3) For each six- (6-) month period thereafter, Lifemark will supply
performance data to LHS for that period no later than thirty (30)
days following the close of the period. The total of all
penalties imposed for each such period of performance shall not
[ ]* of the total paid by LHS to Lifemark for Administrative
Services for the same period.
e. Subject to Lifemark's rights under section 22 hereof, Lifemark shall
pay penalties related to performance standards within ninety (90) days
following the close of the period of performance.
f. In addition to penalties related to performance standards as described
herein, Lifemark shall also be responsible for any penalties pursuant
to Paragraph 3.e.
7. REPORTS AND RECORDS
a. Lifemark shall maintain financial, utilization, claims, and other
records necessary to demonstrate that it has met its obligations under
this Agreement.
b. Lifemark agrees to furnish certain data and reports in a form and
format mutually agreed and in the frequency reasonably required by
HSD, LHS, and other third parties. A matrix of Required Reports and
Reporting Frequencies is attached and made part of this Agreement
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as Exhibit G.
c. For each occurrence of failure on the part of Lifemark to furnish the
on-time reports as described in Exhibit G, Lifemark shall pay LHS,
upon request, a penalty of [ ]* per report for each day it is not
delivered as scheduled, to a maximum of [ ]* per occurrence. Penalty
shall not be imposed if said reports are not produced due to data that
has not been received from third parties other than Lifemark
subcontractors.
d. Until the expiration of four (4) years after performing Administrative
Services under this Agreement, Lifemark and its subcontractors whose
subcontracts are of a value or cost of [ ]* or more, shall upon
written request, make available to the Secretary of the Department of
Health and Human Services, the Comptroller General of the United
States, or any of other duly authorized government entity, the
Agreement and such books, documents, and records of Lifemark and such
subcontractors, if any, as are necessary to certify the nature and
extent of the costs to LHS of performance of the Agreement. The
subcontracts, if any, shall contain a clause similarly requiring the
retention and availability of like documentation. LHS may, at any
reasonable time, audit the financial records related to Administrative
Services.
e. Notwithstanding the obligations of this section. Lifemark acknowledges
and agrees that all information concerning Members, including, but not
limited to, eligibility lists, utilization data, and claims
information, which are generated by HSD, LHS, Lifemark or other third
parties, shall be treated by Lifemark as confidential and proprietary
information of LHS and shall be returned to LHS upon request by LHS
and upon termination or expiration of this Agreement. Any use of such
information for other than the express purpose for which it is
provided is prohibited and shall be construed as a material breach of
this Agreement.
f. Lifemark shall treat as confidential all Member records in compliance
with all applicable state and federal laws and regulations and this
Agreement.
g. LHS shall have the exclusive right to use, publish, distribute,
market, or sell any such information and data in statistical form, but
the release of such information shall not violate the right of privacy
of any LHS Patient or any trade secrets of Lifemark. Subject to the
qualification herein, Lifemark hereby authorizes the release of all
such information and data.
8. COMPENSATION
a. LHS shall compensate Lifemark as follows for Administrative Services
performed by Lifemark in accordance with the provisions of this
Agreement.
(1) For the period from September 1, 2000, to June 30, 2001, LHS
shall pay Lifemark at the rate of [ ]* per Member per month
(PMPM).
(2) If by June 30, 2001, LHS has not implemented electronic
transmission of claims data (in a nationally accepted data format
or UB-92 claim) for facility services provided to Members in the
LDS, LHS shall increase the rate of compensation to [ ]* PMPM
beginning on July 1, 2001. If LHS has implemented electronic
transmission of claims data for facility services provided to
Members in the LDS, the rate of payment will remain [ ]* PMPM
through June 30, 2002.
(3) In the event this Agreement is renewed for additional one (1)
year periods, the rate of payment for the new period, beginning
on July 1, shall increase by the percentage of increase in the
CPI-All Items for the twelve-month period most recently published
by the U.S. Department of Labor, Bureau of Labor Statistics.
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(4) The above compensation rates are predicated on the scope of
Administrative Services performed by Lifemark as of the effective
date of this Agreement (e.g., management of behavioral health
benefits is not included).
(5) Programming expenses related to the transition of data upon
termination or expiration of this Agreement shall be paid by LHS
at Lifemark's cost plus [ ]*, to a maximum of [ ]*.
b. The compensation payable by LHS to Lifemark shall not be subject to
withholding for taxes, F.I.C.A. or otherwise, and nothing in this
Agreement creates for LHS any duties of an employer with respect to
Lifemark under any state workers' compensation laws or any state or
federal laws applicable to employers. The amount paid by LHS hereunder
shall be inclusive of all taxes and Lifemark will be responsible for
all applicable sales, use, real or personal property, franchise or
other like taxes attributable to this Agreement.
c. The payment rates specified herein shall be payment in full for all
Administrative Services provided under this Agreement, Lifemark agrees
that in no event including but not limited to nonpayment by LHS,
insolvency of LHS, or breach of this Agreement, shall Lifemark bill,
charge, collect a deposit from, seek compensation, remuneration, or
reimbursement from or have any recourse against a Member, HSD, or
persons other than LHS for Administrative Services provided pursuant
to this Agreement. This hold harmless provision shall survive the
termination of this Agreement with respect to Administrative Services
performed by Lifemark under the provisions of this Agreement.
9. RELATIONSHIP OF PARTIES
a. Lifemark shall perform Administrative Services under this Agreement as
an independent contractor of LHS. Nothing contained in this Agreement
shall be deemed or construed to make Lifemark or any of Lifemark's
employees an agent, employee, partner, or joint venturer of or with
LHS.
b. Lifemark agrees that Lifemark and its personnel are not employees of
LHS and are not entitled to worker's compensation or employee benefits
provided by LHS to its employees. In addition, Lifemark agrees that
Lifemark is responsible for Lifemark's own federal, state and local
income, social security, unemployment, sales, disability and any other
applicable local, state or federal taxes arising out of Lifemark's
performance of Administrative Services under this Agreement.
c. Lifemark is available to perform services for entities other than LHS.
However, Lifemark warrants and represents that there is no breach of
any duties to LHS in the delivery of Administrative Services under
other contracts for services.
d. Both Lifemark and LHS agree not to employ personnel from the other
party for the period of one year after an employee has left its
respective organization or for one year following the effective date
of termination or expiration of this agreement, unless approved in
advance by the other party.
10. OWNERSHIP OF DATA
a. The parties acknowledge that Lifemark may use certain proprietary
software programs, source and object codes and databases, the trade
secrets related thereto, the copyright of Managed Care One, CareOne,
or other Lifemark software, the trademark of the names, all
intellectual property rights associated with the programs, the
technical information, design concepts, processes, formulae and
algorithms and all other rights and aspects pertaining thereto are
highly confidential and the exclusive property of Lifemark. Nothing in
this Agreement shall be construed to be an assignment, transfer,
purchase, lease or license of
11
*Confidential Treatment Requested
<PAGE> 13
such rights. Lifemark has selected Managed Care One in fulfilling its
duties under this Agreement and may elect at any time in its sole
discretion to use a different information system; provided however
that no disruption of LCHP functions, increase in LHS cost or
reduction in LCHP capability will result from such decision. LHS
waives all claim, right or interest whatsoever in Managed Care One,
CareOne, or other Lifemark software, or any of the above described
aspects and features thereof, and all amendments or revisions thereto.
b. All data entered into Lifemark's information systems in the course of
fulfilling its duties under this Agreement are owned by LHS. Lifemark
shall furnish such data to LHS, in a nationally accepted form and
format (as described in Exhibit C, paragraph 5.c.) reasonably
requested by LHS, upon request from LHS.
11. CONFIDENTIALITY
a. During the term of the Agreement, the parties may have access to
certain proprietary materials of each other.
(1) In the case of Lifemark, LHS acknowledges that certain features
of Managed Care One and CareOne are proprietary software programs
of Lifemark subject to protection by copyright law and Lifemark's
policies procedures, systems, clinical, financial or
administrative assessment tools, systems, data information, or
other related content are highly confidential and proprietary
("Trade Secrets").
(2) In the case of LHS, Lifemark acknowledges that while supplying
Administrative Services under this Agreement, Lifemark will be
exposed to records, documents, client lists, records, computer
data and systems information, provider information and listings,
and other written or verbal information ("Information")
considered confidential and proprietary in nature to LHS.
b. Neither party shall disclose any of the other party's Trade Secrets or
Information, directly or indirectly, during or after the term of the
Agreement. The parties shall not photocopy or otherwise duplicate any
such material without the prior written consent of its owner except as
otherwise required under the terms of this Agreement. All Trade
Secrets and Information shall remain the exclusive property of its
owner and shall be returned thereto immediately upon the termination
of the Agreement.
c. Without limiting the foregoing, the parties specifically agree that
all software associated with the operation of the Services, including
without limitation, each party's accounting systems, and other
software, are owned by or licensed to each party. Access or use of
such software shall not create any right, title, interest, or
copyright in such software, except to the party that owns or licenses
the software and only the party that owns or licenses the software
shall retain such software beyond the termination of the Agreement.
d. Lifemark further agrees that its personnel, contractors, and
subcontractors involved in the performance of Administrative Services
under the terms of this Agreement shall sign a Confidentiality
Agreement, which is attached hereto as Exhibit H. For purposes of that
Confidentiality Agreement, all activities performed under this
Administrative Services Agreement shall be considered "an activity
managed by Lifemark Corporation."
e. The obligations of this section shall survive the termination of this
Agreement.
12
<PAGE> 14
12. INSURANCE AND INDEMNIFICATION
a. During the term of this Agreement, LHS shall maintain, at its sole
expense, a policy of HMO-type professional liability insurance
coverage with minimum limits of liability of [ ]* per occurrence and
[ ]* in the annual aggregate or such greater limits of liability as
may be required by applicable state or federal law.
b. LHS and Lifemark shall each maintain, at its sole expense, throughout
the term of this Agreement, the following types of insurance with the
indicated minimum limits:
(1) Workers' Compensation insurance to the full extent as required by
applicable laws but not less than [ ]* each occurrence; and,
(2) Comprehensive General Liability coverage, including bodily
injury, property damage, and contractual liability coverage, with
a combined single limit of not less than [ ]*; and,
(3) Motor Vehicle liability insurance with a combined single limit of
not less than [ ]* for any owned vehicles or operated for the
purpose of fulfilling its duties under this Agreement; and,
(4) Errors and Omissions coverage with limits of liability of [ ]*
per occurrence and [ ]* in the aggregate; and,
(5) Fidelity Bond with a minimum of [ ]* coverage limit.
c. Each party shall, upon request from the other party, furnish the other
party with evidence of insurance reflecting the coverage and amounts
set forth in this section. Each party shall provide the other party
with a minimum of thirty (30) days prior written notice in the event
any of the insurance policies required by this Agreement are
cancelled, modified, or restricted in any way.
d. LHS and Lifemark agree to indemnify, defend, and hold harmless the
other, its agents and employees from and against any and all liability
or expense, including defense costs and reasonable legal fees,
incurred in connection with claims for damages of any nature,
including but not limited to bodily injury, death, personal injury,
property damage, financial loss, or other damages arising from the
performance of, or failure to perform, the indemnifying party's
obligations under this Agreement, unless it is determined that the
liability was the direct consequence of negligence or willful
misconduct on the part of the other party, its agents or employees."
13. TERM AND TERMINATION OF AGREEMENT
a. This Agreement shall be effective on September 1, 2000, and shall be
for an initial term of twenty-two months, ending on June 30, 2002.
Thereafter, it shall continue from year to year, unless terminated as
set forth below.
b. Lifemark or LHS may terminate this Agreement at any time for cause.
Cause for termination includes, but is not limited to, the following:
(1) Except as otherwise set forth in the Exhibits hereto, material
breach that is not remedied within 60 days of receipt of written
notice thereof by either party.
(2) An adverse change in the financial condition of the other party
that results in its inability to materially perform this
Agreement.
(3) Failure by either party to maintain licenses or certificates
required to comply with the terms of this Agreement, or to comply
with applicable laws or regulations that have not been cured
within 60 days of written notice by the other party.
(4) Any material misrepresentation or material intentional
falsification of any information
13
*Confidential Treatment Requested
<PAGE> 15
(5) submitted by Lifemark to LHS.
(6) Failure of either party to maintain required insurance coverage
protection that has not been cured within 60 days of written
notice by the other party.
(7) Intentional failure of either party to comply with Section 8,
Confidentiality.
(8) Expiration or termination of the contract between HSD and LHS.
c. This Agreement may be terminated by either party without cause at any
time upon one hundred, eighty (180) days' prior written notice by
either party. This paragraph may not be exercised by either party
before January 1, 2002.
14. RIGHTS AND OBLIGATIONS UPON TERMINATION
a. Upon termination of this Agreement for any reason, the rights of each
party hereunder shall terminate, except as otherwise provided in this
Agreement.
b. Termination shall not release Lifemark or LHS from obligations under
this Agreement prior to the effective date of termination.
c. LHS shall compensate Lifemark for any services rendered in accordance
with the provisions of this Agreement prior to the effective date of
termination.
15. ASSIGNMENT AND DELEGATION OF DUTIES
a. Neither party shall assign any right or interest in this Agreement
without the written permission of the other party. Neither party shall
delegate any duty owed under this Agreement without the written
permission of the other party.
b. Any attempted assignment or delegation without the written permission
of the other party shall be wholly void and totally ineffective for
all purposes.
c. Notwithstanding the foregoing, either party may assign its rights or
delegate its duties under this Agreement, in whole or in part, to its
parent, affiliates and/or subsidiaries, provided that such assignee or
delegate agrees in writing to comply with all applicable provisions of
this Agreement and prior notice of such assignment is given to the
other party. Assignment or delegation by either party will not act to
relieve that party of any of its obligations under this Agreement.
16. AFFIRMATIVE ACTION
a. Lifemark agrees that, if Lifemark employs any other individuals to
perform services under this Agreement, that Lifemark shall comply with
all federal, state, and municipal laws and regulations dealing with
equal employment opportunity.
b. The provisions set forth in U.S. Department of Labor regulations
dealing with employment opportunity obligation of government
contractors and subcontractors, employment by government contractors
of Vietnam-era and disabled veterans, and employment of the physically
handicapped by government contractors and subcontractors, are
incorporated herein by reference and shall constitute additional terms
and conditions to the extent required by law.
c. Lifemark warrants that, to the best of Lifemark's knowledge, no laws,
regulations, or ordinances of the United States, or any state, or
government authority or agency has been violated, including the Fair
Labor Standards Act, as amended, in the performance of work pursuant
to this Agreement, and agrees to indemnify and hold harmless from any
and all claims arising out of its own failure to comply with all laws,
rules and regulations with respect
14
<PAGE> 16
to Lifemark's performance hereunder.
17. INTERPRETATION
The validity, enforceability and interpretation of this Agreement shall be
governed by any applicable federal law and by the laws of the state of New
Mexico.
18. AMENDMENT
No changes, amendments, or alterations to this Agreement will be effective
unless in writing and signed by both parties.
19. ENTIRE AGREEMENT
This Agreement, together with all its Exhibits, contains all the terms and
conditions agreed upon by the parties, and supersedes all other agreements,
expressed or implied, regarding the subject matter.
20. NOTICE
a. Any notice required hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, Certified, return receipt
requested or by facsimile (as evidenced by written confirmation of
receipt by recipient's machine), to LHS and Lifemark at the addresses
set forth below.
(1) To LHS at: Lovelace Health Systems, Inc.
c/o Lovelace Health Plan
4101 Indian School Rd., N.E., Suite 110 S
Albuquerque, New Mexico 87110
Attention: General Manager
With a copy to: Lovelace Health Systems, Inc.
5400 Gibson Blvd., S.E.
Albuquerque, NM 87108
Attention: Senior Contracting Officer
(2) To Lifemark at: Lifemark Corporation
7600 North 16th Street, Suite 150
Phoenix, AZ 85020
Attention: Michael Kennedy, CFO
With a copy to: Smyth, Schneck, Fisher, Smyth and Herrod, PC
1221 E. Osborn
Albuquerque, NM 87108
Phoenix, AZ, 85014
Attention: Mr. Stephen Smyth
b. Either party may change the address to which notice is to be delivered
upon reasonable notice.
21. ENFORCEABILITY AND WAIVER
The invalidity and nonenforceability of any term or provision of this
Agreement shall in no way affect the validity or enforceability of any
other term or provision. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a
waiver of any subsequent breach thereof.
22. DISPUTE RESOLUTION
15
<PAGE> 17
a. Attempts to resolve any disputes between the parties arising with
respect to the performance or interpretation of the Agreement should
first be made at the operational levels of both LHS's and Lifemark's
organizations.
b. Should the dispute not be resolved through the aforementioned process,
then the parties shall refer the dispute, controversy or question
arising under this Agreement to arbitration as follows:
(1) Each party shall select an arbitrator of its choice and the
appointed arbitrators will select a third arbitrator.
(2) The panel of three arbitrators will hear the parties and settle
the dispute, controversy or question.
(3) The proceeding shall be governed by the Rules of the American
Arbitration Association then in effect, and shall be held in
Albuquerque, New Mexico.
(4) Each party shall assume its own costs, but the compensation and
expenses of the arbitrator(s) and any administrative fees or
costs associated with the arbitration proceeding shall be borne
equally by the parties.
(5) Arbitration shall be the exclusive remedy for the settlement of
disputes arising under this Agreement.
(6) The decision of the arbitrators shall be final, conclusive and
binding, and no action at law or in equity may be instituted by
either party other than to enforce the award of the
arbitrator(s).
(7) Judgment upon the award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction.
IN WITNESS whereof the parties have caused this Agreement to be signed by their
duly authorized representatives on the date first set forth above.
Lovelace Health Systems, Inc. Lifemark Corporation
By: /s/ Gayle Adams By: /s/ Rick Jelinek
----------------------------- -------------------------------
(Signature) (Signature)
Gayle Adams Rick Jelinek
----------------------------- -------------------------------
(Print Name) (Print Name)
Its: Its:
----------------------------- -------------------------------
(Title) (Title)
Date: Date:
----------------------------- -------------------------------
APPROVED AS TO FORM
/s/ Nicholas R. Hatrim
----------------------------------
Senior Contracting Officer
16
<PAGE> 18
EXHIBIT A
STANDARDS FOR DELEGATION OF MEMBER RIGHTS AND RESPONSIBILITIES FUNCTION
1. Lifemark shall administer the written policies and procedures developed by
the LHS and Lifemark for the timely and appropriate resolution of Member
concerns and complaints that meet LHS's requirements, requirements set
forth in applicable law and LHS's contract with HSD, and NCQA requirements.
Lifemark shall not materially modify such written policies and procedures
without LHS's prior written approval.
a. Lifemark shall document appropriate procedures that address the
various types of complaints.
b. Lifemark's/LCHP's procedures shall define at least a two-step process:
(1) how the organization responds to first-level concerns; and (2) how
the organization responds to second level complaints with a review by
individual(s) not involved in the original decision.
c. LHS retains the responsibility for the final level of appeal (third
step) in all cases of Member grievances.
d. Lifemark shall maintain appropriate documentation of the substance of
concerns and complaints received and the investigation of such
concerns/complaints.
e. Lifemark shall maintain appropriate documentation of its monitoring of
complaints to ensure that appropriate actions are taken, as well as
compliance with standards for timeliness of resolution.
f. Lifemark's/LCHP's procedures for the resolution of complaints about
quality of care issues shall specify when a review by a clinical
person is required.
g. Lifemark's/LCHP's procedures shall include timely notification to
Members of the resolution of the problem and should inform Member of
his or her right to appeal during each step of the complaint and
appeal process.
h. Lifemark's procedures will include a mechanism for notifying LHS
within one working day of a Member's request for final appeal
(grievance).
2. Lifemark shall maintain Lifemark developed written policies and procedures
that protect the confidentiality of Member information and records.
3. Lifemark shall make available the following information to LHS:
a. Lifemark's/LCHP's complaint and grievance policies and procedures -
annually.
b. Lifemark's tracking and trending reports for complaints and
grievances, including timeliness of resolution - quarterly.
c. Lifemark's confidentiality policies and procedures - annually.
4. LHS, its designee and any applicable governmental authorities or
accrediting bodies shall have the right to conduct routine periodic audits
at LHS's expense, of the performance hereunder upon reasonable prior
notice, and Lifemark shall cooperate with any such audits. LHS will conduct
an onsite visit at least annually and will provide a written assessment of
findings. If the audit reveals any deficiencies, Lifemark shall submit a
written corrective action plan to LHS within 30 days of receipt of LHS's
findings. Such plan must be acceptable to LHS. Evidence that corrective
actions have been implemented must be documented and submitted to LHS by
Lifemark within 90 days of Lifemark's receipt of the audit findings. All
identified deficiencies shall be corrected as soon as
<PAGE> 19
possible but no later than 6 months after Lifemark's receipt of the audit
findings.
5. Lifemark's system must be capable of administering appropriate payment,
adjustments and coordination of benefits in a timely manner.
Lifemark acknowledges receipt of the above standards for delegation of Member
rights and responsibilities function and agrees to comply with the standards set
forth herein.
Lifemark Corporation
By: /s/ Rick Jelinek
---------------------------------
(Signature)
---------------------------------
(Print Name)
Its:
---------------------------------
(Title)
Date:
---------------------------------
<PAGE> 20
EXHIBIT B
MINIMUM REQUIREMENTS FOR CALL TRACKING SYSTEM
- Subscriber Information
Name, address, phone number, date of birth, effective date, primary care
physician, SCHIPS member
- Who's Calling - Member or Provider?
- Reasons for calls - Inquiry, Concern, Complaint
INQUIRY REASONS:*
Core benefits
Delegated benefits - VSP, CBH, Superior, Doral
Coverage questions (i.e. referral process, change primary care physician)
Location of services
Enrollment status emergency care
* Within the reasons categories there should be built in categorization
CONCERN REASONS:
Core benefit (hardcoded selections)
Delegated benefit (hardcoded selections)
Claims (hardcoded selections)
Quality of services (hardcoded - location, provider)
Quality of care (hardcoded - location, provider)
Referral denial (hardcoded - type of service)
Access (hardcoded - location, provider)
Physical plant (hardcoded - location)
Prescription coverage
Etc.
COMPLAINT REASONS:
Quality/appropriateness of care (hardcoded selections)
Attitude of provider (hardcoded selections)
Refusal to provide care (hardcoded selections)
Risk management/safety issues (hardcoded - location)
Referral denials (hardcoded - type of service)
The Call Tracking System must have the capability of showing historical calls by
Member, which includes date stamping for each call date. Member Services
Representative should not be able to change the reason categories or change
free-text without there being a chronological listing of events and who made the
change.
The System must be able to report on each of the global categories and have the
capability to break down the reasons to the next level of detail.
Written letters from members should be tracked in the System and reported as
part of the call tracking system.
<PAGE> 21
EXHIBIT C
STANDARDS FOR DELEGATION OF UTILIZATION MANAGEMENT ACTIVITIES
1. Lifemark shall be subject upon reasonable prior notice to a site review and
evaluation of the Lifemark/LCHP utilization management program ("UM
Program").
2. Lifemark shall maintain a written UM Program description which includes:
a. Description of Lifemark's/LCHP's
(1) Policies/procedures to evaluate Medical Necessity, and,
(2) Use of nationally recognized and locally approved criteria and
information sources; and,
(3) Process to review and approve services.
b. Description of Lifemark's/LCHP's mechanism to periodically update the
UM Program description and the UM Program's policies and procedures;
c. Documented evidence of approval of Lifemark's/LCHP's UM Program by
LHS;
d. Description of the roles and functions of Lifemark's/LCHP's UM Program
to include a definition of the roles and responsibilities of
Lifemark's/LCHP's UM Program staff; and
e. Evidence demonstrating a utilization management work plan which
responds to identified opportunities for improvement and action steps,
as well as a process for, and evidence of, an annual evaluation of the
UM Program.
3. Lifemark's/LCHP's UM Program shall at a minimum comply in all respects with
the requirements of an appropriate accrediting body designated by LHS (i.e.
NCQA, JCAHO, etc.), the requirements established by LHS herein, the
Administrative Services Agreement, the contract between LHS and HSD, and
the requirements of applicable law. Lifemark shall maintain all applicable
licensures and certifications required to perform the delegated utilization
management activities. Lifemark shall maintain appropriate records with
respect to all utilization management activities for the duration of the
managed care provider agreement with LHS and six years thereafter. Lifemark
shall regard all clinical records of Members and any other records
containing individually identifiable information with respect to Members as
confidential and shall comply with all applicable federal and state laws
and regulations regarding such records.
4. Lifemark shall maintain adequate professional liability coverage as
required by the Administrative Services Agreement. Any Lifemark
subcontractor shall be required to comply with all standards applicable to
Lifemark with regard to the subcontracted services.
5. Lifemark shall provide LHS with a copy of Lifemark's/LCHP's written UM
Program description upon request. Such UM Program description shall be
submitted to LHS for review and approval and annually thereafter and shall
not be materially modified without LHS's prior written approval.
6. With respect to each request for medical services for which Lifemark
performs utilization management hereunder, Lifemark shall apply the
utilization management criteria set forth in the Lifemark/LCHP UM Program
description as required by HSD applicable to the Member for whom medical
services have been requested.
7. All information relating to Lifemark's utilization management activities
hereunder shall be confidential, shall not be disclosed to any third
parties except as required by applicable law and
<PAGE> 22
except as required to fulfill Lifemark's utilization management
responsibilities hereunder, and shall be maintained in such a manner so
that such information shall be protected from discovery and use in judicial
or administrative proceedings to the fullest extent possible under
applicable law. In the event that Lifemark receives a subpoena, civil
investigative demand or other similar process requesting disclosure of
information relating to its utilization management activities hereunder,
Lifemark shall immediately notify LHS of such subpoena, demand or process
so as to afford LHS with an adequate opportunity to seek an appropriate
protective order should it choose to do so.
8. This exhibit, all information provided by LHS to Lifemark pertaining to
LHS's delegation of utilization management to Lifemark and all data made
known to Lifemark relating to services rendered to Members under the
managed care provider agreement is confidential and proprietary information
subject to the protections set forth in the confidentiality provision
contained in Lifemark's managed care provider agreement with LHS. In the
event that Lifemark receives a subpoena, civil investigative demand or
other similar process requesting disclosure of such confidential and
proprietary information, Lifemark shall immediately notify LHS of such
subpoena, demand or process so as to afford LHS with an adequate
opportunity to seek an appropriate protective order should it choose to do
so.
9. Lifemark shall authorize services requested to be provided by
noncredentialed providers within approved guidelines and protocols.
10. All UM Program activities shall be supervised by appropriately qualified
professionals including:
a. use of a licensed physician to conduct medical review on any denial;
and
b. use of board certified specialists to assist in determining Medical
Necessity and in preparing documentation to support the decision.
11. Total UM Program staff ratios (including nurses) shall be at least 1 per
10,000 Members. The UM Program shall utilize clinical nurses (RN or
LPN/LVN) licensed to practice nursing as required by the State of New
Mexico with a ratio of licensed clinical nurses to Members to be agreed
upon by Lifemark and LHS. Non-clinical staff shall utilize protocols and
criteria approved by the Medical Director and shall not make medical
appropriateness/necessity decisions. All decisions of the non-clinical
staff shall be supervised by clinical staff. Lifemark shall maintain
appropriate levels of telephone line staffing for the utilization
management activities required to be performed hereunder and shall satisfy
the following standards: (a) the overall abandonment rate for the
pre-certification telephone line shall be less than 5%; (b) 80% of all
calls to the pre-certification telephone line shall be answered in less
than 30 seconds; (c) telephone prompts shall be clear and user friendly;
and (d) a telephone message after hours shall give normal business hours
information and after hours instructions.
12. Lifemark shall maintain a set of written utilization management decision
protocols that are based on reasonable available medical evidence, are
acceptable to LHS and indicate that:
a. Criteria for appropriateness of medical services are clearly
documented, communicated to participating physicians, and available to
the physician upon request; and,
b. An appropriate mechanism is present for checking the consistency of
application of criteria across physician and non-physician reviewers;
and
c. An appropriate mechanism is present for updating review criteria
periodically and the time of the update is specified in protocol or
policy.
* Confidential Treatment Requested
<PAGE> 23
13. In connection with all utilization management activities hereunder,
Lifemark shall obtain all necessary information, including pertinent
clinical information, and consult with the treating physician, as
appropriate, and document such efforts.
14. Denials must be clearly documented including:
a. Documentation indicating who recommended denial and why;
b. Documentation that an explanation is provided to the Member and
applicable provider;
c. Notification to the Member and applicable provider in writing, which
includes all information required by applicable law, including but not
limited to, the specific reason for the denial, and a description of
how to file a final appeal.
Lifemark's form denial letters will be made available to LHS and HSD
and shall not be materially modified without LHS's and HSD's prior
written approval. LHS shall administer the appeal process with respect
to all appeals of determinations hereunder. In connection with any
such appeal, LHS shall assist and cooperate with Lifemark and shall
promptly provide all documentation reasonably requested by Lifemark.
LHS, or the applicable governmental authority (i.e. HSD), as
applicable, shall have final decision making authority with regard to
all appeals (including expedited appeals) of determinations hereunder.
In connection with any such appeal, Lifemark shall assist and cooperate
with LHS and shall promptly provide all documentation reasonably requested
by LHS and any such other relevant information as Lifemark deems
appropriate.
15. Lifemark's/LCHP's UM Program decisions shall be made in a timely manner.
a. Lifemark's/LCHP's UM Program policies and procedures shall clearly
define the maximum time frames for utilization management decisions.
All utilization management decisions shall be made within the time
frames that satisfy all applicable legal requirements (e.g. HSD).
b. Lifemark shall implement an appropriate mechanism to monitor and
document timeliness of decisions which shall include:
(1) Documentation to show Emergency requests are responded to as soon
as possible and as necessary in relate to the Member's medical
condition, or within the timeframes required by applicable law,
if earlier; and,
(2) Documentation to show urgent requests are responded to within 24
hours, or within the time frame required by applicable law, if
earlier; and
(3) Documentation to show routine requests are responded to within 3
to 5 working days, or within the time frame required by
applicable law, if earlier.
c. Lifemark shall monitor and analyze its compliance with timeliness
requirements and take prompt action to meet or improve adherence to
such requirements.
16. Lifemark shall maintain a system to track authorizations, to evaluate
Lifemark's compliance with Lifemark's/LCHP's utilization management
requirements as set forth in the Administrative Services Agreement, to
monitor providers for inappropriate utilization, to evaluate member
satisfaction and provider satisfaction, and other measures of evaluation
agreed upon by the parties. Lifemark shall submit reports to LHS, in
mutually agreed formats, at the frequency established in the
<PAGE> 24
Administrative Services Agreement. Upon request, Lifemark will submit an
action plan that addresses opportunities for improvement when applicable.
17. LHS, its designee and any applicable governmental authorities or
accrediting bodies shall have the right to conduct periodic audits of
Lifemark's/LCHP's UM Program activities upon reasonable prior notice, and
Lifemark shall cooperate with any such audits. In addition, Lifemark's
performance of its utilization management activities hereunder may be
measured by LHS at least annually. Lifemark shall cooperate with any such
audits and shall provide any and all information reasonably requested by
LHS in connection with such audits. Applicable performance measures include
but are not limited to:
a. Member satisfaction survey results which indicate a significant
overall satisfaction with the service provided and document an
improvement process for any specific areas identified with
satisfaction lower than [ ]*;
b. Timeliness in responding to Member complaints and grievances; and
c. Audits of utilization management activities show compliance with LHS
requirements.
LHS will provide Lifemark with a written report detailing its findings with
respect to any such audits. If such audits reveal any deficiencies,
Lifemark shall submit a corrective action plan to LHS within 30 days of
receipt of LHS's findings. Such plan must be acceptable to LHS. Evidence
that corrective actions have been implemented must be documented and
submitted to LHS by Lifemark within 90 days of Lifemark's receipt of the
audit findings. All identified deficiencies shall be corrected as soon as
possible but no later than 6 months after Lifemark's receipt of the audit
findings. Failure to correct any identified deficiencies within such 6
month period may be cause for revocation of the delegation set forth herein
and LHS's pursuit of other remedies under the Administrative Services
Agreement.
18. Lifemark shall prepare and provide such periodic reports or other data as
is reasonably requested by LHS relating to Lifemark's utilization
management activities. Lifemark shall participate in utilization management
oversight activities (i.e., committee meetings, report submission) to the
extent reasonably required by LHS and at least quarterly.
19. If LHS determines that Lifemark cannot meet its utilization management
obligations, LHS may elect to assume responsibility for such activities. If
LHS elects to assume responsibility for such activities, the parties agree
to renegotiate the rates set forth in the managed care provider agreement
to the extent necessary, and Lifemark shall cooperate and provide to LHS
any information reasonably required to perform such activities.
20. All referrals shall be to Participating Providers whenever possible, except
where an Emergency requires otherwise or as otherwise required by law.
Except in an Emergency, Lifemark shall require all Participating Providers
to obtain authorization from Lifemark prior to hospital admission of any
Member or outpatient surgical procedures. Lifemark shall not make a
referral to a non-Participating Providers without the consent of the
Medical Director or as stipulated in the LHS out-of-network referral or
related policy.
21. All electronic data which Lifemark maintains concerning the detail of all
utilization management decisions made hereunder shall be made available and
submitted to LHS, upon request, using ANSI standard transaction formats or
other mutually agreeable formats. Such data shall be submitted to LHS at
least monthly. If a non-ANSI format is reasonably agreed upon, Lifemark
shall cooperate with LHS in the development of the transmission format,
frequency and protocol.
*Confidential Treatment Requested
<PAGE> 25
22. Lifemark shall distribute a statement to its employees, affirming the
following:
a. UM decision making is based only on appropriateness of care and
service.
b. Lifemark does not compensate practitioners/providers/employees for
denials.
c. Lifemark does not offer incentives to encourage denials.
d. The need for special concern about underutilization.
23. If a subcontractor is used for the purpose of meeting these requirements,
the subcontractor must agree in writing to meet these standards for
delegation.
Lifemark acknowledges receipt of LHS's above Standards for Delegation and, in
accordance with the managed care provider agreement between LHS and Lifemark,
will comply with the terms and conditions set forth herein.
Lifemark Corporation
By: /s/ Rick Jelinek
-----------------------------
(Signature)
-----------------------------
(Print Name)
Its:
-----------------------------
(Title)
Date:
-----------------------------
<PAGE> 26
EXHIBIT D
STANDARDS FOR DELEGATION OF SPECIFIC PREVENTIVE HEALTH ACTIVITIES
1. Lifemark shall maintain written policies and procedures describing in
detail the performance of each of the Preventive Health Functions delegated
to Lifemark. Such Policies and Procedures shall meet LHS requirements, the
requirements set forth in applicable law, requirements of HSD, and the
requirements of an appropriate accrediting body designated by LHS (i.e.
NCQA, JCAHO, etc.). Lifemark shall not materially modify or implement such
written policies and procedures without LHS's prior written approval.
The following Preventive Health Functions are delegated to Lifemark.
a. As directed and approved by LHS: member outreach and education for
well childcare including but not limited to EPSDT (including the
behavioral health screening component) and Prenatal Care.
b. Provider Education with regards to well childcare, and prenatal care
guidelines. Such education shall include Lifemark and LHS's
expectations for provider compliance with well childcare and prenatal
care guidelines.
2. Lifemark shall maintain written policies and procedures that protect the
confidentiality of participant information and records.
3. Lifemark shall provide the following information to LHS:
a. Policies and Procedures describing in detail how each of the
Preventive Health Functions delegated to Lifemark will be executed.
b. An annual work plan describing how Lifemark will satisfy the
requirements of each of the delegated preventive health functions.
c. Any materials used to satisfy the requirements of each of the
delegated preventive health functions.
d. Information necessary for LHS to satisfy HEDIS reporting requirements.
e. Evaluation of preventive health initiatives specific to wellchild
(EPSDT) and prenatal care. Such evaluation shall be reported to LHS no
less than quarterly.
4. LHS, its designee and any applicable governmental authorities or
accrediting bodies shall have the right to conduct periodic audits of the
performance hereunder upon reasonable prior notice, and Lifemark shall
cooperate with any such audits. LHS will conduct an onsite visit at least
annually and will provide a written assessment of findings. If the audit
reveals any deficiencies, Lifemark shall submit a written corrective action
plan to LHS within 30 days of receipt of LHS's findings. Such plan must be
acceptable to LHS. Evidence that corrective actions have been implemented
must be documented and submitted to LHS by Lifemark within 90 days of
Lifemark's receipt of the audit findings. All identified deficiencies shall
be corrected as soon as possible but no later than 6 months after
Lifemark's receipt of the audit findings.
5. If LHS determines that Lifemark cannot meet its obligations hereunder, LHS
may elect to assume responsibility for such activities. If LHS elects to
assume responsibility for such activities, Lifemark shall cooperate and
provide to LHS any information necessary to perform such activities.
6. All electronic data which Lifemark is required to maintain and/or permit
access to hereunder shall include the century (MMDDCCYY) and, all system
logic with regard to all of such data shall be
<PAGE> 27
century compliant (i.e. 19xx can roll correctly to 20xx).
7. Any other Preventive Health Functions not identified in this Agreement,
remain the responsibility of LHS.
Lifemark acknowledges receipt of the above standards for the delegation of
specific preventive health activities agrees to comply with the standards set
forth herein.
Lifemark Corporation
By: /s/ Rick Jelinek
------------------------------
(Signature)
------------------------------
(Print Name)
Its:
------------------------------
(Title)
Date:
------------------------------
<PAGE> 28
EXHIBIT E
STANDARDS FOR DELEGATION OF PAYMENT ADMINISTRATION ACTIVITIES
1. GENERAL CONSIDERATIONS
a. Lifemark shall be responsible for administering payments for all
Covered Services included within the scope of the Administrative
Services Agreement. Any Lifemark subcontractor will be required to
comply with all standards applicable to Lifemark under the
Administrative Services Agreement with regard to the subcontracted
services.
b. Lifemark's payment activities shall, at a minimum, satisfy the
requirements established by LHS herein, the requirements in the
Administrative Services Agreement between LHS and Lifemark, the
contract between LHS and HSD, and any requirements set forth in
applicable laws and regulations, including but not limited to, laws
relating to fair claims settlement practices, laws and regulations
related to timely claims processing and notices of determination and
appeal rights, laws regulations applicable to Members in LCHP.
Lifemark shall maintain any applicable licensures required to perform
its payment activities hereunder.
c. Lifemark shall submit its payment administration process to LHS upon
request. If Lifemark materially modifies its documented payment
processes it will notify LHS not less than 30 days in advance of such
modification taking effect.
d. Lifemark's payment administration processes shall, at a minimum:
(1) Administer claims payment under the Program in accordance with
the terms of the contract between LHS and HSD and applicable laws
and regulations of the Program; and,
(2) Utilize eligibility information furnished by HSD to determine any
person's right to benefits; and,
(3) Promptly process claims and adjustments, determine whether
requests for payment qualify for reimbursement in accordance with
the terms of contract between LHS and HSD and applicable laws and
regulations, and calculate and issue payment due; and
(4) Implement a contingency and recovery plan in the event that
Lifemark's payment processing systems become inoperable.
e. LHS, its designee and applicable governmental regulatory authorities
shall have the right to audit Lifemark's payment activities for the
purpose of evaluating Lifemark's performance of its payment
responsibilities hereunder. Reasonable advance notice shall be given
to Lifemark prior to an audit and LHS shall bear the cost of such
audit, if any. Lifemark shall cooperate with any such audits. LHS will
provide Lifemark with a written report detailing the findings with
respect to any such audits. If such audits reveal any material
deficiencies, Lifemark shall submit a corrective action plan to LHS
within 30 days of receipt of such findings. Such plan must be
acceptable to LHS. Evidence that corrective actions have been
implemented must be documented and submitted to LHS by Lifemark within
90 days of Lifemark's receipt of the audit findings. All identified
deficiencies shall be corrected as soon as possible but no later than
6 months after Lifemark's receipt of the audit findings. If LHS
determines that Lifemark cannot adequately satisfy its payment
responsibilities hereunder, LHS may elect to assume such
responsibility. If LHS elects to assume such responsibility, the
parties shall renegotiate the rates set forth in the managed care
provider agreement to the extent necessary and Lifemark shall
cooperate and provide to LHS any information necessary to perform such
activities.
f. Lifemark shall be responsible for the production of all applicable tax
reporting documents (e.g.,
<PAGE> 29
1099's) for Participating Providers. Such documents shall be produced
in a format and within time frames set forth in applicable state and
federal laws and regulations.
g. Lifemark shall produce any applicable explanations of benefits and/or
remittance advises for Participating Providers. Any changes to
Lifemark's standard Explanation of Benefits or Remittance Advice
formats must be mutually agreed upon by both parties.
h. Lifemark shall develop and deliver training programs for Participating
Providers, which outline Lifemark's billing and reimbursement
processes. Lifemark shall make best efforts to ensure that
Participating Providers avoid submitting requests for payment to LHS
for those Covered Services rendered for which Lifemark has payment
responsibility.
2. SERVICE STANDARDS
For the purposes of this Agreement, it is understood by both parties that
Lifemark's ability to satisfy the service standards that follow are based
on the Provider's responsibility to submit clean claims to Lifemark in a
prompt manner. Lifemark will not be liable for any provider's failure to
perform its duties in an acceptable manner.
a. With respect to Participating Providers entitled to reimbursement on a
fee-for-service basis, Lifemark shall pay for Covered Services in
accordance with the Matrix of Performance Standards set forth in
Exhibit E, or any more rigorous standard established or required by
any laws or regulations governing this activity.
b. With respect to the Performance Standards set forth in Exhibit E:
(1) Financial accuracy shall be measured during routinely conducted
audits and calculated in accordance with the following formula:
total value of dollars paid correctly divided by total dollars
paid.
(2) Processing accuracy shall be measured during routinely conducted
audits and calculated in accordance with the following formula:
total number of claims processed without data errors, divided by
the total number of claims audited.
c. In addition to the Performance Standards set forth in Exhibit E,
Lifemark's agrees to the following standards:
(1) Lifemark shall ensure that less than [ ]* of remaining
mail-on-hand are pended claims (excluding newborns) and there are
no more than five percent [ ]* of pends over [ ]* days old.
(2) Lifemark shall establish and maintain a process to inventory,
store and track incoming mail to ensure that mail on hand is less
than 5 days old.
d. Lifemark shall establish and maintain a process acceptable to LHS,
which tracks and audits the financial accuracy, data accuracy,
timeliness and productivity of its payment administration activities.
Lifemark shall report to LHS the results of any such audits in a
format and in time frames acceptable to LHS and shall promptly correct
any deficiencies identified.
e. Lifemark shall respond to general inquiries or claim adjustments in a
timely manner and shall provide LHS with a contact person who will
oversee the handling of these situations.
f. Lifemark shall maintain appropriate levels of telephone line staffing
for the inquiry of claims status, claims payment and administration
activities required to be performed hereunder and shall satisfy the
following standards: (a) the overall abandonment rate shall be less
than [ ]*; and (b) [ ]* of all calls shall be answered in less than
[ ]* seconds. Some claims inquiry calls may be taken within the
Provider Relations Department of Lifemark.
*Confidential Treatment Requested
<PAGE> 30
3. DENIALS, REQUESTS FOR APPEALS AND MEMBER INQUIRIES AND COMPLAINTS
a. Lifemark's form payment denial letters shall be submitted to LHS for
approval upon request, and the approved forms shall not be materially
modified without LHS's prior written consent. All such denial letters
shall contain the information required by applicable law .
b. LHS shall administer the final appeal process with respect to all
appeals of payment determinations made hereunder. In connection with
any such appeal, Lifemark shall assist and cooperate with LHS and
shall promptly provide all documentation reasonably requested by LHS.
LHS, or the applicable governmental authority (e.g. HSD), as
applicable, shall have final decision making authority with respect to
all appeals of payment determinations hereunder.
4. SYSTEMS
Lifemark's system must be capable of administering appropriate payment,
adjustments and coordination of benefits in a timely manner and to perform
all of Lifemark's other obligations under the Administrative Services
Agreement related to payment administration activities.
5. RECORDS AND REPORTING REQUIREMENTS
a. Lifemark shall maintain appropriate records with respect to all
payment determinations made hereunder for the duration of the
Administrative Services Agreement and for six years thereafter, or for
any greater duration required by any applicable law or regulation. All
requests for payment shall be maintained in the original form or on
electronic media.
b. Lifemark shall comply with all applicable laws and regulations
relating to the confidentiality of medical records and other
individually identifiable information. In addition, this exhibit, all
information provided by LHS to Lifemark pertaining to LHS's delegation
of payment responsibility to Lifemark and all data or information made
known to Lifemark relating to the services rendered to Members is
confidential and proprietary information subject to the protections
set forth in the confidentiality provision contained in the
Administrative Services Agreement, the contract between LHS and HSD,
and any applicable law or regulation. In the event that Lifemark
receives a subpoena, civil investigative demand or other similar
process requesting disclosure of such confidential and proprietary
information, Lifemark shall immediately notify LHS of such subpoena,
demand or process so as to afford LHS with an adequate opportunity to
seek an appropriate protective order should it choose to do so.
c. Lifemark shall provide LHS with processed encounter data with respect
to all services rendered by all providers to LCHP Members. Such
encounter data shall be submitted electronically or by using magnetic
or optical media. The format of the data shall be the
industry-standard ANSI X.12 837 submission record layout or a format
mutually acceptable to all parties. Data shall made available monthly.
The contents of the data submission shall include all data items,
which appear on the HCFA approved 1500 or 1450 (UB-92) forms, as
determined by the type of service reported.
d. Lifemark shall provide any additional reports, which are reasonably
requested by LHS and relate to Lifemark's performance of its payment
responsibilities hereunder.
6. QUALITY AND TRAINING
a. Lifemark shall maintain a quality program acceptable to LHS, which
ensures that processing errors are identified, trended and used to
provide feedback to payment analysts for corrective action.
b. Lifemark will maintain a training program acceptable to LHS to ensure
adequate training for payment analysts on medical coding, benefits,
provider reimbursement and system functionality.
<PAGE> 31
c. Lifemark shall implement a hiring process for hiring appropriately
qualified payment analysts. Lifemark shall only utilize appropriately
qualified trainers, quality reviewers and payment analysts.
Lifemark acknowledges receipt of LHS's above Standards for Delegation and, in
accordance with the managed care provider agreement between LHS and Lifemark,
will comply with the terms and conditions set forth herein.
Lifemark Corporation
By: Rick Jelinek
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
Its:
--------------------------------------------
(Title)
Date:
--------------------------------------------
<PAGE> 32
EXHIBIT F
MATRIX OF PERFORMANCE STANDARDS AND PENALTIES
<TABLE>
<CAPTION>
PERFORMANCE STANDARD PENALTY COMMENTS
<S> <C> <C>
MEMBER SERVICES CALL ABANDONMENT RATE: [ ]* OF FEE
- [ ]* or less of all calls abandoned (excluding the first 20 sec.) or FOR PERIOD
- [ ]* or less of all calls abandoned (including the first 20 sec.)
MEMBER SERVICES TIME TO ANSWER CALLS: [ ]* OF FEE
- [ ]* of all calls answered within 30 seconds FOR PERIOD
REFERRAL PROCESSING TIMELINESS: [ ]* OF FEE
All referrals processed within two (2) Business Days FOR PERIOD
AUTHORIZATION PROCESSING TIMELINESS: [ ]* OF FEE
- [ ]* of all routine authorizations processed within two (2) business days FOR PERIOD
- All urgent authorizations processed within one (1) Business Day
HEALTH SERVICES CALL ABANDONMENT RATE: [ ]* OF FEE
- [ ]* or less of all calls abandoned (excluding the first 20 sec.) or FOR PERIOD
- [ ]* or less of all calls abandoned (including the first 20 sec.)
CLAIMS PROCESSING TIMELINESS: [ ]* OF FEE ALL CLAIMS MEASURES TO INCLUDE
- [ ]* of Clean Claims processed within 60 days FOR PERIOD ALL (INCL. RESUBMISSIONS)
- [ ]* of all Clean Claims processed with 90 days CLAIMS LDS, HH, ETC
CLAIMS PROCESSING FINANCIAL ACCURACY: [ ]* OF FEE ALL CLAIMS MEASURES TO INCLUDE
- [ ]* of all claims paid error free FOR PERIOD ALL (INCL. RESUBMISSIONS)
CLAIMS LDS, HH, ETC
PENDED CLAIMS: [ ]* OF FEE ALL CLAIMS MEASURES TO INCLUDE
- Participating Providers: no more than [ ]* over [ ]* days FOR PERIOD ALL (INCL. RESUBMISSIONS)
- Non-Participating providers: no more than [ ]* over [ ]* days CLAIMS EXCLUDE NEWBORNS
PROVIDER RELATIONS ACTIVITIES: [ ]* OF FEE
- Conduct orientation of new provider within [ ]* days FOR PERIOD
- Visit PCP & hospitals [ ]* times/ year
- Visit other high volume providers [ ]* times/ year
- Participate in LHP sponsored workshops not less than [ ]*times/year
- Publish/distribute Provider newsletter not less than [ ]* times/year
ENROLLMENT AND ELIGIBILITY DATA ENTRY TIMELINESS: [ ]* OF FEE
- All enrollments data entered into Lifemark Systems and available to FOR PERIOD
subcontractors within [ ]* working days of receipt of data from HSD
</TABLE>
For purposes of this exhibit:
1. "Clean Claim" will mean a claim received on appropriate HCFA-1500
or UB-92 claim form, complete, no additional documentation
needed, and does not meet pend code criteria; and,
2. "Business Day" will mean the day(s) of the week that the Lifemark
is conducting business, which excludes Saturdays, Sundays and
holidays observed by Lifemark.
*Confidential Treatment Requested
<PAGE> 33
MEASUREMENT OF PERFORMANCE STANDARDS
MEMBER SERVICES CALL ABANDONMENT RATE:
- Reporting Period Monthly
- The Lifemark Automatic Call Distribution (ACD) System will
monitor calls received by the Member Services call center and
abandoned.
- Abandonment Rate will be measured by:
Dividing the total number of calls received by the call center
during the reporting period that result in the caller terminating
the call before speaking to a Member Services representative by
the total number of telephone calls received by the call center
during the reporting period, and expressing that number as a
percent; or,
Dividing the total number of calls received by the call center
during the reporting period that result in the caller terminating
the call before speaking to a Member Services representative
(excluding those calls that are abandoned within twenty seconds)
by the total number of telephone calls received by the call
center during the reporting period, and expressing that number as
a percent.
MEMBER SERVICES TIME TO ANSWER CALLS:
- Reporting Period Monthly
- The Lifemark Automatic Call Distribution (ACD) System will
monitor the elapsed time between the time calls come into the
call center and the time calls are connected to a Member Services
representative.
- The Time to Answer Calls will be determined by measuring the
total elapsed time between the moment when callers select to
speak Member Services representative and the time the callers are
connected with a Member Services representative during the
reporting period.
REFERRAL PROCESSING TIMELINESS:
- Reporting Period Monthly
- Referral Processing Timeliness will be determined by counting the
number of Business Days from the Business Day that a Referral is
received by Lifemark to and including the Business Day the
Approved Referral is entered into the Lifemark system. - Lifemark
will systematically select [ ]* of the total number of referrals
processed during the reporting period to determine the percentage
processed within [ ]* working days.
AUTHORIZATION PROCESSING TIMELINESS:
- Reporting Period Monthly
- Authorization Processing Timeliness will be determined by
counting the number of Business Days from the Business Day that
an Authorization request is received by Lifemark to and including
the Business Day the Approved Authorization is entered into the
Lifemark system.
- Lifemark will systematically select [ ]* of the total number of
routine authorizations processed during the reporting period to
determine the percentage processed within [ ]* working days.
HEALTH SERVICES CALL ABANDONMENT RATE:
- Reporting Period Monthly
- The Lifemark Automatic Call Distribution (ACD) System will
monitor calls received by the Health Services call center and
abandoned.
- Abandonment Rate will be measured by: Dividing the total number
of calls received by the call center during the reporting period
that result in the caller terminating the call before speaking to
a Member Services representative by the total number of telephone
calls received by the call center during the reporting period,
and expressing that number as a percent; or,
*Confidential Treatment Requested
<PAGE> 34
- Dividing the total number of calls received by the call center
during the reporting period that result in the caller terminating
the call before speaking to a Member Services representative
(excluding those calls that are abandoned within twenty seconds)
by the total number of telephone calls received by the call
center during the reporting period, and expressing that number as
a percent.
CLAIMS PROCESSING TIMELINESS:
- Reporting Period Monthly
- Claims Processing Timeliness will be determined by counting the
number of Business Days from the Business Day that a claim is
received by Lifemark to and including the Business Day the claim
is paid.
- Lifemark will systematically select three hundred (300) claims
(150 HCFA -1500 claims, and 150 UB92 claims) processed during the
reporting period for audit of Claims Processing Timeliness.
Audits will be completed within [ ]* days after the end of a
period being audited.
CLAIMS PROCESSING FINANCIAL ACCURACY:
- Reporting Period Monthly
- Claims Processing Financial Accuracy will be measured by
subtracting the sum of the total dollars overpaid and the total
dollars underpaid (without offsetting one against the other) from
the total dollars paid and dividing that amount by the total
dollars paid.
- Lifemark will systematically select three hundred (300) claims
(150 HCFA -1500 claims, and 150 UB92 claims) processed during the
reporting period for audit of Claims Processing Financial
Accuracy. Audits will be completed within [ ]* days after the end
of a period being audited.
PENDED CLAIMS:
- Reporting Period Monthly
- Lifemark will maintain an aged inventory of Pended Claims for
Participating Providers and non-Participating provider.
- Lifemark will divide the number of pended claims for each
category of provider by the total number of claims received
during the reporting period (excluding newborns) and will provide
a report of the of the current percent of Pended Claims by age in
inventory.
PROVIDER RELATIONS ACTIVITIES:
- Reporting Period Quarterly
- Lifemark will maintain a log of the orientations given to new
Participating Providers, including their effective date of
Participation and the date on which the orientation was given.
Lifemark will report the number of new providers and the number
of orientations given in the reporting period.
- Lifemark will maintain a log of the Providers and the dates on
which they receive a provider relations visit. Lifemark will
report the number of visits to each PCP, hospital, and high
volume providers during the reporting period . (High volume
providers will be identified by the parties within [ ]* days of
the effective date of the Administrative Services Agreement.)
ENROLLMENT AND ELIGIBILITY DATA ENTRY TIMELINESS:
- Reporting Period Monthly
- Lifemark will maintain a log of receipt of all enrollment files
from HSD, date processed, date files posted to bulletin board for
access by subcontractors and LHS. Lifemark will furnish the log
to LHS within [ ]* days of end of the reporting period.
*Confidential Treatment Requested
<PAGE> 35
EXHIBIT G:
MATRIX OF REQUIRED REPORTS AND REPORTING FREQUENCIES
PART 1: HSD QUALITY ASSURANCE REPORTS
<PAGE> 36
EXHIBIT G:
MATRIX OF REQUIRED REPORTS AND REPORTING FREQUENCIES
PART 2: MONTHLY FINANCIAL/OPERATIONAL REPORT
THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 3RD BUSINESS DAY OF EACH MONTH:
- Pended Claims Report - Lovelace & Non-Lovelace
- Shock Loss Report (Cases over $50,000)
- Lag Schedule Reports
- Total Payments
- Payments to LHS Providers/Lovelace & Non-Lovelace
- Payments to Non-LHS Providers/ Lovelace & Non-Lovelace
- Non-LHS providers for all members by COS
- Payments to Non-LHS providers for Non-Lovelace Members by COS
- Payments to Non-LHS providers for Lovelace Members by COS
- Payments for IHS Members
(For purposes of penalties as described in Paragraph 7.C of
this Agreement, all Lag Schedule Reports shall be treated as
one)
THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 4TH BUSINESS DAY OF EACH MONTH:
- Membership/Revenue Report (age/sex adjusted)
- Cash Report
- Reinsurance Receivable Report - Lovelace & Non-Lovelace
- Inpatient Days
- A/R Reconciliation - IHS Deferred Revenue; Recoveries Receivable;
Capitation Acute Receivable; Risk Pool Payable
- Admits
THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 10TH BUSINESS DAY OF EACH MONTH:
- ACD Reporting (Provider, Member, Medical)
- QI indicators
- Member Roster to Hotline
- Member Enrollment report by region
THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 10TH BUSINESS DAY OF A END OF A
QUARTER:
- Denied Claims Report - Lovelace & Non-Lovelace
Monthly reports will be submitted by the due date, as shown above, of the month
following the activity.
<PAGE> 37
EXHIBIT H
CONFIDENTIALITY AGREEMENT
This agreement is entered into this day ____ of __________, 200__ by and
between LIFEMARK CORPORATION, its affiliated companies including but not limited
to Arizona Health Concepts, Inc. and Ventana Health Systems, Inc., or any other
company or activity managed by Lifemark Corporation (hereinafter referred to as
"COMPANY") and ________________ (hereinafter referred to as "EMPLOYEE").
RECITALS:
1. COMPANY desires to protect its investment in confidential information,
trade secrets, and in its other property.
2. COMPANY considers the protection of its confidential information, trade
secrets and its property to be critical and is therefore unwilling to hire
anyone to work for it unless such person is willing to agree to the terms
of this Agreement.
3. The EMPLOYEE understands the importance this Confidentiality Agreement
plays in his or her employment and is therefore willing to work for COMPANY
under the terms of this Agreement.
NOW THEREFORE, IN CONSIDERATION of the mutual promises and conditions set forth
herein, the parties do hereby agree as follows:
1. Confidential Information. The EMPLOYEE acknowledges that in the course of
his or her employment, he or she will become acquainted with and will have
access to trade secrets, confidential information, files, records, manuals,
lists, forms, WAGE INFORMATION, COMPUTER PASSWORDS, and computer programs
(collectively "Confidential Information"). Confidential Information shall
include but is not limited to, any information or materials related to
COMPANY's organizational structure, internal policy and procedure manuals,
case management protocols and tools, utilization review/quality management
protocols and tools, advertising/sales programs, financial results,
anticipated premium capitation rates, computer system design, software
source and/or object code, customer lists, provider lists, member/provider
specific medical information, and any other information or materials which
will give COMPANY an opportunity to obtain an advantage over its
competitors or which COMPANY is ethically obligated to protect from
unauthorized sources. None of the Confidential Information shall be deemed
to be in the public domain.
2. Agreement is Condition of Employment. The parties agree that the terms and
conditions of this Agreement and the protection of COMPANY's Confidential
Information is a condition of the EMPLOYEE's future and/or continued
employment. The EMPLOYEE is not to reveal any of COMPANY's Confidential
Information to any third party, within or outside COMPANY except to the
extent required by his or her normal job duties. The EMPLOYEE agrees not to
discuss or provide Confidential Information to anyone outside COMPANY or
its affiliated entities including, without limitation, at conferences,
seminars, meetings of professional or governmental organizations, or by
publication in journals, or granting of interviews to journalists or other
members of the news media.
3. Protection of COMPANY's Property. All records, files, manuals, lists of
customers, lists of accounts, blanks, forms, materials, supplies, computer
programs, and other materials furnished to the EMPLOYEE by COMPANY or an
affiliate of COMPANY, used by EMPLOYEE on behalf of COMPANY or an affiliate
of COMPANY, or generated or obtained by EMPLOYEE during the course of his
or her employment or any other work product produced or developed by the
EMPLOYEE in the performance of his or her employment duties shall be and
remain the property of the COMPANY. The EMPLOYEE acknowledges that this
property is confidential and is not readily accessible to COMPANY's
competitors. Upon termination of employment hereunder, the EMPLOYEE shall
immediately deliver to COMPANY or its authorized representative, all
property,
<PAGE> 38
including all copies, remaining in the EMPLOYEE's possession or control.
4. Enforcement of this Agreement. If the EMPLOYEE breaches or threatens to
breach the provisions of this Agreement, COMPANY shall be entitled to an
injunction restraining the EMPLOYEE from disclosing in whole or in part the
Confidential Information, or from using any of COMPANY's property or the
property of COMPANY's affiliates. Nothing herein shall be construed as
prohibiting company from pursuing any other remedies available to it due to
the breach or threatened breach by the EMPLOYEE, including the recovery of
damages from the EMPLOYEE.
5. Counterparts. The Agreement may be executed in one or more parts, all of
which taken together shall constitute one instrument.
6. Interpretation. Whenever any word is used in the Agreement in the masculine
gender, it shall also be construed as being used in the feminine and neuter
genders, and singular usage shall include the plural and vice versa, all as
the context shall require.
7. Marginal Headings. The marginal headings of the paragraphs of this
Agreement are for convenience only, and are not to be considered a part of
the Agreement or used in determining its content or context.
8. Modification. Any modification or amendment of the Agreement shall be in
writing and shall be executed by all parties.
9. Partial Invalidity. If any provision of the Agreement is held to be invalid
or unenforceable, all the remaining provisions shall nevertheless continue
in full force and effect.
10. Secession of Benefits. The provisions of the Agreement shall inure to the
benefit of and be binding upon the parties hereto, their heirs, executors,
administrators and assignees.
11. Waiver. Any waiver by any party of a breach of any provision of the
Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.
12. Good Faith - Attorney's Fees and Costs. The parties desire that each raise
only good faith disputes for arbitration and litigation. In the event of
any action initiated by EMPLOYEE or COMPANY in connection with a breach of
the terms of the Agreement, the prevailing party shall be entitled to
recover from the losing party all of the prevailing party's court costs and
reasonable attorney's fees.
13. Applicable Law. The Agreement shall be subject to and governed by the laws
of the State of Arizona, regardless of the fact that one or more of the
parties now is or may become a resident of a different state. All lawsuits
under this Agreement shall be filed in Maricopa County, Arizona.
In witness whereof, the parties have hereunto set their hand.
LIFEMARK CORPORATION EMPLOYEE
By:
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Its:
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