<PAGE> 1
EXHIBIT 10.3
RFS NO.: 329.00-011
CONTRACT
BETWEEN THE
STATE OF TENNESSEE, DEPARTMENT OF CORRECTION
AND
MHM SERVICES, INC.
THIS CONTRACT, by and between the State of Tennessee, Department of
Correction, hereinafter referred to as the "State" and MHM SERVICES, INC.
hereinafter referred to as the "Contractor", is for the provision of mental
health services as further defined in the "SCOPE OF SERVICES" below.
WHEREAS, the State provides mental health services to the inmate
population confined within twenty-one (21) Tennessee correctional facilities. It
is projected that there will be twenty-two (22) TDOC facilities operational by
June 1998. These facilities are located in the East, Middle, and West Regions of
Tennessee and are as follows:
<TABLE>
<S> <C> <C>
EAST MIDDLE WEST
REGION 1 REGION 2 REGION 3
*Brushy Mountain State *Middle Tennessee *Cold Creek Correctional
Penitentiary Reception Center Facility
*Carter County Work Camp *Nashville Community Service *Lake County Regional
*Chattanooga Community Center Correctional Facility
Service Center *Riverbend Maximum Security *Mark Luttrell Reception Center
*Knoxville Community Service Institution *Northwest Correction Center
Center *Turney Center Industrial Prison *Wayne County Boot Camp
*Morgan County Regional and Farm *West Tennessee High
Correctional Center *Tennessee Prison for Women Security Facility
*Northeast Correctional Center *Tennessee Correction Academy *Lauderdale County Facility
*Southeast Tennessee State *Tennessee Correctional Work (ANTICIPATED CONSTRUCTION
Regional Correctional Facility Center 1997)
</TABLE>
REGION 4: LOIS M. DEBERRY SPECIAL NEEDS
FACILITY
THEREFORE, the State desires to contract with a vendor(s) who are
capable of providing quality mental health care in a cost effective manner. The
State wishes to reduce the number of contracts so as to improve the continuity
of service delivery throughout the correctional system. The State intends to
award an at-risk capitated rate contract for the services outlined in the Scope
of Services (Section A) below.
WITNESSETH, in consideration of the mutual promises herein contained,
the parties have agreed and do hereby enter into this Contract according to the
provisions set out herein:
A. SCOPE OF SERVICES:
1. GENERAL
A. All mental health services provided under this
contract shall be in conformance with ALL TDOC
policies as they may be amended from time to
time. (Only TDOC Mental Health Policies are
attached for the
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RFS No.: 329.00-011
convenience of the proposer.) Other TDOC
Policies may be reviewed through a coordinated
effort with the Department's Central Office.
1) Said policies are available for
review in the historical data and
statistics section of this document.
2) The TDOC shall be responsible for
notifying the Contractor in writing
of any policy changes that will
impact the Contractor.
3) At the institutional level, the
Contractor('s) clinicians shall
administratively respond to the TDOC
Warden or Warden's Designee. Clinical
matters are the sole responsibility
of the licensed psychiatrist/
psychologist. The State's Director of
Mental Health shall assist in the
statewide coordination of services,
monitoring and continuous
developmental aspects of the terms
outlined in this contract.
B. The Contractor's service system shall provide a
uniform and consistent continuum of quality
mental health service delivery statewide. The
Contractor shall work in concert with existing
TDOC mental and medical professionals, and
other contract entities, if applicable, in
providing mental health care.
C. The Contractor shall measure various clinical/
programmatic mental health outcomes. At a
minimum, the State shall require the Contractor
to evaluate response to prescribed psychiatric
medications, improvement in mental health
status, patient functioning/sense of well-
being, etc. The State in a cooperative effort
shall assist in the development of additional
outcome measures. The Contractor shall abide by
the following milestone schedule for the
development, standardization, and reporting
requirements of the outcome measures.
Within 90 days from Contract Execution: The
Contractor shall propose in writing to the
Director of Mental Health Services draft
standardized outcome measures to be utilized
regionally/state wide.
Within 120 days from Contract Execution: The
Contractor shall have revised and developed, in
consultation with the Director of Mental Health
Services, functional outcome measurement
instruments that can be used regionally/state
wide. The instruments will be applied and data
gathered in such a manner as to allow the
collection of both time-series and cross-
sectional data. The instruments may vary based
upon the treatment objectives and geographical
location,(i.e. DeBerry Special Needs Facility)
but the instrument must be universal enough to
report meaningful information to both the
Director of Mental Health Services and the
Director of Contracts Administration.
Failure to meet these milestones will be
considered an incident of non-compliance for
each week they are not performed. The mechanism
outlined in E.15. "Special Terms and
Conditions" may be applied in the event the
milestones are not met (See Attachment A).
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RFS No.: 329.00-011
D. The Contractor shall adhere to the specific
performance measures outlined in Attachment A.
The State shall reserve the right to expand
upon the performance measures denoted in
Attachment A. The State's Director of Mental
Health Services may solicit the expertise of
the Contractor in the development of any new
performance measure(s). The State shall
commence the assessment of damages as it
relates to performance measures 60 days from
the date of contract execution.
The Contractor shall report to the Director of
Mental Health Services and the Director of
Contracts Administration the results of any
approved and functional performance/outcome
measures. The information will be provided in
both electronic and paper formats. The utilized
for service delivery comparisons such as, but
not limited to, effectiveness of service
delivery. During the developmental stage, a
distinction will be made as to whether the
performance measure is determining the outcome
of a specific program intervention or the
performance expectation of the contractor.
E. Upon approved written consent, conduct or
participate in the development of research
studies in conjunction with state and/ or any
other professional entity deemed appropriate by
the TDOC.
F. The contract providers will actively
participate, when applicable, with the State's
Quality Assurance/Improvement program as it
relates to mental health service delivery.
G. When applicable, the appropriately licensed
clinician will provide clinical supervision to
psychological internship or practicum students.
H. The TDOC shall, when applicable, provide
specialized training for sexual offender
treatment programs. The contractor shall follow
the program philosophy and design standards as
presented by the TDOC.
I. The Contractor shall provide technical
assistance to the TDOC Director of Mental
Health Services in developing a standard anger
mmanagement/violent offender treatment program
that is to be implemented at selected TDOC
sites. Implementation date and treatment sites
to be determined.
J. The Contractor shall designate an individual
with the overall responsibility for this
contract. This person shall be available to
consult and coordinate service delivery with
the State's Director of Mental Health and/or
other designated state officials.
K. When required, the Contractor shall enter
specific service delivery information into the
Tennessee Offender Management Information
System (TOMIS). Training and access to
equipment shall be provided by the TDOC.
L. The Contractor shall insure adequate backup
coverage to address the clinical service needs
of any TDOC facility.
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RFS No.: 329.00-011
2. PSYCHIATRIC SERVICES
A. Psychiatric services shall be provided by
licensed physicians who are board eligible or
board certified in psychiatry. Standards of
practice shall be according to those of the
community and in compliance with state and
federal laws.
B. Evaluate and diagnose in accordance with the
current DSM criteria those inmates referred by
the Mental Health Treatment Team or other
health care staff.
C. Complete psychiatric evaluations/assessments as
necessary and provide an individual treatment
plan specific for those patients requiring
psychiatric intervention to include medication.
D. Patients shall have a documented physical
assessment prior to the prescribing of a
psychotropic medication.
E Provide that all medications shall be reviewed,
and orders renewed if necessary, at least every
thirty days as specified by policy.
F. Patients receiving psychiatric medications
shall receive a direct assessment from a
psychiatrist prior to ninety (90) days
elapsing.
G. Prescribe only those medications approved in
the TDOC's formulary, unless otherwise approved
as TDOC procedure dictates.
H. Provide consultation to mental health service
staff and administrative staff and participatein
the treatment team reviews when clinically
necessary.
I. Provide accessibility for twenty-four (24)
hours per day, seven (7) days per week per
calendar year emergency consultation with the
mental health and health care staff. Such
availability may be by telephone unless
circumstances necessitate on-site delivery.
J. Provide a direct assessment to a patient within
72 hours from the time a telephone order was
given for cases involving restrictive
therapeutic dispositions.
K. Provide clinical recommendations/consultations
and coordination of patient referrals to other
specialized TDOC programs, or designated
contract hospitals. The contractor(s) must
secure appropriate privileges at the designated
hospital to provide services if required. Said
services may be provided in a written format
and/or visual presentation, role play,
teleconferencing medium, etc.
L. Provide an appropriate level of psychiatric
monitoring of patients requiring psychotropic
medication intervention.
M. When applicable, provide or assist in the
provision of a mental health education program
to other institutional staff that shall
include, but not be limited to, the following:
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RFS No.: 329.00-011
(1) Early detection of potential mental
health problems, i.e., signs and
symptoms of mental illness,
retardation, and chemical dependency.
(2) Crisis intervention/suicide precaution
programs.
(3) Said services may be provided in a
written format, audio/visual
presentation, role play,
teleconferencing medium, etc.
3. PSYCHOLOGICAL SERVICES
A. The delivery of doctoral level psychological
services shall be provided by psychologists with
health service provider designation who are
licensed by the State of Tennessee or who have
legal reciprocity to practice in the state of
Tennessee. Standards of practice shall be
according to those of the community and with
State and Federal laws.
B. Evaluate and diagnose in accordance with the
current DSM criteria those inmates referred by
the Mental Health Treatment Team or other health
care staff.
C. Complete psychological evaluations/assessments
as necessary and provide an individual
treatment plan specific for those patients
requiring psychological intervention(s).
D. When clinically programmatically deemed
appropriate, provide individual and/or group
therapy/consultation.
E. Participate in the treatment team reviews when
necessary.
F. Be responsible for twenty-four (24) hours per
day, seven (7) days per week per calendar year
emergency consultation with the health care or
other mental health staff. Such availability may
be by telephone unless circumstances necessitate
on-site delivery.
G. Provide clinical recommendations and
coordination of referrals of patients to DeBerry
Special Needs Facility or other specialized TDOC
treatment units.
H. Provide clinical supervision and/or consultation
to institutional psychological examiner(s),
mental health program specialist(s), alcohol and
drug counselors, and health care staff.
I. The Contractor shall provide or assist in the
provision of mental health education programs to
other institutional staff that shall include but
not be limited to the following:
(1) Early detection of potential mental
health problems, i.e., signs and
symptoms of mental illness,
retardation, and chemical dependency.
(2) Crisis intervention/suicide precaution
programs.
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RFS No.: 329.00-011
(3) Provide consultation supervisory
services to mental health staff
involved in special programs. Said
services may be provided in a written
format and/or visual presentation,
role play, teleconferencing medium,
etc.
J. Complete the initial thirty (30) and ninety (90)
day mental health staff health assessments on
specially segregated inmates as policy dictates.
Review findings documented by other licensed
professionals.
K. Provide psychological evaluations upon the
request of the Board of Paroles.
L. Provide psychological evaluations to all newly
hired correctional officer/probation officers
with the Tennessee Department of Corrections.
Said evaluations shall be,
1) Centrally provided at the Tennessee
Correctional Academy located in
Tullahoma, Tennessee. The TDOC may, in
the future decentralize the evaluation
process.
2) The test battery shall minimally
consist of the MMPI II, but may include
the IPI and a stress management
inventory. Equivalent assessment
measures/inventories may be utilized as
clinically deemed appropriate.
3) The Contractor may utilize
psychological examiners who are
licensed in the State of Tennessee to
assist in providing psychological
evaluations to all newly hired
correctional officers/probation
officers employed with the Tennessee
Department of Correction. Standards of
practice shall be in accordance to
those of the community and with state
and federal laws.
B. PAYMENT TERMS AND CONDITIONS:
1. The Contractor shall be compensated based upon the
capitated rates as follows:
Capitated Annual Rate
July 1997 - December 1997 $129.94
January 1998 - December 1998 $133.19
January 1999 - December 1999 $136.52
January 2000 - December 2000* $139.93
January 2001 - December 2001* $143.43
* Option Years
Each month, the State will provide information to the
Contractor regarding inmate population. The
Contractor will use TDOC's information to prepare its
monthly invoice to the State.
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RFS No.: 329.00-011
2. The Capitated Rate in Paragraph 1 of this Section,
shall constitute the entire compensation due the
Contractor for the Service and all of the
Contractor's obligations hereunder regardless of the
difficulty, materials or equipment required. The
Capitated Rate include, but are not limited to, all
applicable taxes, fees, overheads, profit and all
other direct and indirect costs incurred or to be
incurred, by the Contractor. The cost of medications
issued from Central Pharmacy will be deducted from
the Capitated Rate Payment.
3. The Capitated Rates in Paragraph 1 of this Section
are firm for the duration of the Contract and are
not subject to escalation for any reason, unless
amended. In the event of changes in the anticipated
scope of services, governmental regulations or other
circumstances, the State or the Contractor may
submit a written request for amendment. If, within
thirty (30) days thereafter the parties are unable
in good faith to negotiate satisfactory
modifications, the party submitting the request may
terminate this Contract by giving sixty (60) days
notice.
4. The Contractor shall submit all invoices, in a form
acceptable to the State with all of the necessary
supporting documentation, prior to any reimbursement
of allowable costs.
5. The Payment of an invoice by the State shall not
prejudice the State's right to object to or question
any invoice or matter in relation thereto. Such
payment by the State shall neither be construed as
acceptance of any part of the work or service
provided nor as an approval of any of the costs
invoiced therein. Contractor's invoice shall be
subject to reduction for amounts included in any
invoice or payment theretofore made which are
determined by the State, on the basis of audits
conducted in accordance with the terms of this
contract, not to constitute allowable costs. Any
payment shall be reduced for over-payments, or
increased for under-payments on subsequent invoices.
6. The State reserves the right to deduct from amounts
which are or shall become due and payable to the
Contractor under this or any contract between the
parties any amounts which are or shall become due
and payable to the State by the Contractor.
7. In no event shall the maximum liability to the State
under this contract exceed SEVEN MILLION FOUR
HUNDRED SEVENTY-THREE THOUSAND THREE HUNDRED FOUR
DOLLARS ($7,473,304.00).
8. The Contractor shall complete and sign an
"Authorization Agreement for Automatic Deposits (ACH
Credits) Form". This form shall be provided to the
Contractor by the State. Once this form has been
completed and submitted to the State by the
Contractor, all payments to the Contractor, under
this or any other contract the Contractor has with
the State, shall be made through the State's
Automated Clearing House wire transfer system. The
Contractor shall not commence work or invoice the
State for services until he has completed this form
and submitted it to the State. The debit entries to
correct errors authorized by the "Authorization
Agreement for Automatic Deposits Form" shall be
limited to those errors detected prior to the
effective date of the credit entry. The remittance
advice shall note that a correcting entry was made.
All corrections shall be made within two banking
days of the effective date of the original
transaction. All other errors detected at a later
date shall take the form of a
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RFS No.: 329.00-011
refund, or in some instances, a credit memo if
additional payments are to be made
C. TERM:
This Contract shall be effective for a period of 36 months,
commencing on July 1, 1997 and ending on June 30, 2000. The
State shall have no obligation for services rendered by the
Contractor which are not performed within the specified
period. The State shall have the option to renew the contract
for two additional one (1) year periods.
D. STANDARD TERMS AND CONDITIONS:
l. The State is not bound by this Contract until it is
executed by the appropriate parties and is approved
by the appropriate State officials as indicated on
the signature page of this Contract.
2. This Contract may be modified only by a written
amendment which has been executed and approved by the
appropriate state officials as indicated on the
signature page of this Contract.
3. The State may terminate this Contract by giving the
Contractor at least sixty (60) calendar days written
notice before the effective termination date. The
Contractor shall be entitled to receive equitable
compensation for satisfactory authorized services
completed as of termination date. Said termination
shall not be deemed a breach of contract.
4. If the Contractor fails to properly perform its
obligations under this Contract or violates any terms
of this Contract, the State shall have the right to
immediately terminate the Contract and withhold
payments in excess of fair compensation for completed
services. The Contractor shall not be relieved of
liability to the State for damages sustained by the
virtue of any breach of this Contract by the
Contractor.
5. The Contractor shall not assign this Contract or
enter into a subcontract for any of the services
performed under this Contract without obtaining the
prior written approval of the State. If such
subcontracts are approved by the State, they shall
contain, at a minimum, Paragraphs D.6 and D.8 of this
Contract.
6. The Contractor warrants that no part of the total
Contract amount shall be paid directly or indirectly
to any employee or official of the State of Tennessee
as wages, compensation, or gifts in exchange for
acting as officer, agent, employee, subcontractor, or
consultant to the Contractor in connection with any
work contemplated or performed relative to this
Contract.
7. The Contractor shall maintain documentation for all
charges against the State under this Contract. The
books, records, and documents of the Contractor,
insofar as they relate to work performed or money
received under this Contract, shall be maintained for
a period of three (3) full years from the date of the
final payment, and shall be subject to audit, at any
reasonable time and upon reasonable notice, by the
State agency or the Comptroller of the Treasury, or
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RFS No.: 329.00-011
their duly appointed representatives. The Financial
Statements shall be prepared in accordance with
generally accepted accounting principles.
8. No person on the ground of handicap or disability,
age, race, color, religion, sex, national origin, or
any other classification protected by Federal and/or
Tennessee State constitutional and/or statutory law
shall be excluded from participation in, or be denied
benefits of, or be otherwise subjected to
discrimination in the performance under this
Contract, or in the employment practices of the
Contractor. The Contractor shall, upon request show
proof of such non- discrimination, and shall post in
conspicuous places, available to all employees,
applicants, visitors and offenders notices of
non-discrimination.
9. The Contractor, being an independent Contractor,
agrees to carry adequate public liability and other
appropriate forms of insurance. The Contractor shall
show proof of such insurance coverage.
10. The Contractor agrees to pay all taxes incurred in
the performance of this Contract.
11. The State shall have no liability except as
specifically provided in the Contract.
12. The Contractor shall comply with all applicable
Federal and State laws and regulations in the
performance of this Contract.
13. This Contract shall be governed by laws of the State
of Tennessee.
E. SPECIAL TERMS AND CONDITIONS:
l. Should any of these special terms and conditions
conflict with any other terms and conditions of this
Contract, these special terms and conditions shall
control.
2. Where a term in the Contract differs from the RFP
and/or the proposal, the Contract shall rule. Where
a term in the RFP differs from the proposal, the RFP
shall rule.
3. The Contractor shall maintain confidentiality of all
records in acceptance with state and federal law; and
TDOC policy.
4. This Contract and any extension of the terms of this
Contract are subject to appropriation and
availability of State and/or Federal funds. In the
event that the funds are not appropriated or are
otherwise unavailable, the State reserves the right
to terminate this Contract upon written notice to the
Contractor. Upon receipt of the written notice, the
Contractor shall cease all work associated with the
Contract. Should such an event occur, the Contractor
shall be entitled to compensation for all authorized
services satisfactorily completed as of the
termination date.
5. Upon expiration or early termination of this
Contract, the Contractor agrees to cooperate with
any treatment successor to effect an orderly and
therapeutically efficient transition for those
patients actively receiving care.
6. The Contractor agrees to indemnify and hold harmless
the State as well as its officers, agents and
employees from all claims, losses or suits accruing
or
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RFS No.: 329.00-011
resulting to any person, firm, corporation or other
entity which may be injured or damaged as a result of
acts or omissions of the Contractor relating to this
Contract. The State shall give the Contractor written
notice of each such claim or suit and full right and
opportunity to conduct the Contractor's own defense.
7. The sovereign immunity of the State shall not apply
to the Contractor nor any subcontractor, agent,
employee, or insurer of the Contractor. Neither
Contractor nor any subcontractor, agent, employee, or
insurer of the Contractor may plead the defense of
sovereign immunity in any action arising out of the
performance or failure to perform any responsibility
or duty under this Contract.
8. The Contractor shall be responsible for the correct
use, maintenance and protection of all equipment
furnished by the State under this Contract. Upon
termination of this Contract, all equipment furnished
shall be returned to the State in good order and
condition as when received, reasonable use and wear
thereof excepted. Should the equipment be destroyed,
lost or stolen, the Contractor shall be responsible
to the State for the residual value of the equipment
at the time of loss.
9. The Contractor shall document mental health services
provided utilizing an approved TDOC format. The
Contractor in concert with TDOC institutional staff
shall enter service codes into the Tennessee Offender
Management Information System (TOMIS). This automated
process shall serve as a data collection mechanism
for each contract provider.
10. The Contractor shall submit to the institutional
Warden or Warden's designee a hard copy of their TDOC
Services Provided Encounter Log as supporting
documentation.
11. If requested by the State, the Contractor must agree
to random background checks which shall include
fingerprinting by the State's internal affairs
department. If requested by the State, the Contractor
must submit copies of driver's licenses and/or social
security cards to be on file with the State. If
background checks are requested, such checks shall be
at the expense of the Contractor. Results of such
checks shall be provided to the State.
12. The Contractor shall at all times honor the security
of the TDOC Tennessee Offender Management Information
System (TOMIS) information and shall not misuse,
abuse, alter, or attempt to alter the information
contained within TOMIS, except as pertains to the use
and data entry requirements necessary to fulfill the
Contractor's obligations under the terms of this
Contract.
13. The Contractor shall be duly licensed to conduct
business within the State of Tennessee.
14. The Contractor shall establish a performance bond in
the amount of $100,000.00 for regional contracts or
$400,000.00 for a statewide contract. Said
performance bond shall be in the form of a bond
issued by an insurance company or other reputable
bonding agent that is acceptable to the State. The
following shall be the contractual terms controlling
this performance bond.
a. Said performance bond shall be in force for the
duration of the Contract.
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RFS No.: 329.00-011
b. Should the State terminate this Contract
under Section D.3., the Contractor shall
continue to fully provide the services required
under this Contract during the sixty (60) day
termination period as provided by Section D.6.
of this Contract in its entirety.
c. Should the Contractor fail to provide these
services during the sixty (60) day termination
period, then the State shall be entitled to
recover actual damages against the performance
bond.
15. The State's Director of Mental Health and Director of
Contracts Administration shall review mental health
performance/outcome measures to determine compliance,
effectiveness and quality of service delivery. If
services designated to the Contractor are deemed
non-compliant, the State's Directors shall submit to
the Contractor a written warning citing the specific
non-compliant issue(s). If upon reinspection the
non-compliant item(s) remain deficient, a stipulated
liquidated damages value shall be assessed per
non-compliant item(s) for the reporting period
identified (See Attachment A). The contractor's
payment shall be reduced by the amount of accumulated
liquidated damages within thirty (30) days from the
point of receiving the second written notice.
16. Prior to the end of the first contract year, the
Contractor shall submit for TDOC approval a mental
health service delivery recommendation plan. The plan
shall be prepared with the assistance of the State's
Director of Mental Health. The plan should include a
method for determining the types and levels of
service needs; a method for determining resource
needs; alternative service technology; etc. Upon
approval of the plan, the state then reserves the
right to renegotiate the Contract provisions with the
existing Contractor.
17. The parties agree that due to the complicated nature
of the Contractor's obligations under this Contract,
it would be difficult to specifically designate a
monetary amount for a breach by Contractor designated
in Attachment A as said amounts are likely to be
uncertain and not easily proven. Contractor hereby
represents and convenants that it has carefully
reviewed the liquidated damages contained in
Attachment A and agree that said amounts are the
liquidated damages resulting from agreement between
the parties, represent a reasonable relationship
between the amount and what might reasonably be
expected in the event of breach, and are a reasonable
estimate of the damages that would occur from a
breach.
18. It is hereby agreed between the parties that the
liquidated damages represent solely the damages and
injuries sustained by the State in losing the benefit
of the bargain with Contractor and do not include any
injury or damage sustained by a third party and
Contractor agrees that the liquidated damage amount
is in addition to any amounts the Contractor may owe
the State pursuant to the indemnity provision
contained in Section E (6) or otherwise.
19. The State may continue to withhold the liquidated
damages or a portion thereof until the Contractor
cures the breach or the State terminates the
Contract.
20. The State is not obligated to assess liquidated
damages before availing itself of any other remedy.
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RFS No.: 329.00-011
21. The State agrees to provide Contractor thirty (30)
days notice to cure in the event Contractor fails to
properly perform its obligations under this Contract
or violates any terms of this Contract.
22. The State may choose to discontinue liquidated
damages and avail itself of any other remedy
available under this Contractor or at law or equity;
provided, however, Contractor shall receive a credit
for said liquidated damages previously withheld.
23. The Contractor shall not publish any outcomes based
on data obtained from the operation of this Contract
without prior written consent of the TDOC.
24. The Contractor shall be responsible for the costs of
all medications prescribed by the Contractor's
providers and said costs shall be a part of the
capitated rate. The TDOC will forward to the
Contractor a monthly statement itemizing the drugs
prescribed by the Contractor's providers and
detailing the direct deductions made from the
Contractor's payments. The Contractor's providers
shall utilize the TDOC formulary for the purpose of
prescribing medications. The TDOC central pharmacy
shall be responsible for packaging and distribution
of psychopharmacological prescriptions. Provided
that, with the consent of TDOC, Contractor, at its
own cost, may utilize other reasonable alternatives
for purchasing, packaging and distribution of
psychopharmacological prescriptions, provided that
the TDOC pharmacy first shall be given the
opportunity to match any alterative proposal for the
purchase, packaging and distribution of
psychopharmacological prescriptions which Contractor
is considering.
25. TDOC may delegate or authorize other parties in
writing to perform any of the services or functions
specified in this contract as being the
responsibility of TDOC. TDOC may, upon written notice
to the contractor, delegate or authorize the services
of functions to be performed by another party.
26. The State may require the Contractor to modify
staffing provisions if, upon review, the provisions
of services are deemed unacceptable in meeting the
clinical or program needs at any given TDOC facility.
27. The Contract shall be governed by the laws of the
State of Tennessee. Any legal proceedings against the
State regarding this Contract shall be brought in the
State of Tennessee administrative or judicial forum.
Request shall be in Davidson County, Tennessee.
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RFS No.: 329.00-011
MHM SERVICES, INC.
BY: /s/ MIKE PINKERT
----------------------------- ----------
MIKE PINKERT, PRESIDENT DATE
FED I. D. NO. 521223048
-----------------
STATE OF TENNESSEE
DEPARTMENT OF CORRECTION
BY: /s/ DONAL CAMPBELL 7/2/97
----------------------------- ---------
DONAL CAMPBELL, COMMISSIONER DATE
APPROVED:
TENNESSEE DEPARTMENT OF FINANCE AND ADMINISTRATION
BY: /s/ JOHN D. FERGUSON RR JUL 11 1997
------------------------------ -----------
JOHN D. FERGUSON, COMMISSIONER DATE
APPROVED:
COMPTROLLER OF THE TREASURY
BY:/s/ WILLIAM R. SNODGRASS 7-15-97
----------------------------- ------------
WILLIAM R. SNODGRASS, COMPTROLLER DATE
13
<PAGE> 14
[STATE OF TENNESSEE SEAL]
STATE OF TENNESSEE
DEPARTMENT OF CORRECTION
4TH FLOOR RACHEL JACKSON BLDG.
320 SIXTH AVENUE NORTH
NASHVILLE, TENNESSEE 37243-0465
October 6, 1998
Mr. Mike Pinkert, President
MHM Services, Inc.
8000 Towers Crescent Drive
Suite 810
Vienna, Virginia 22182
Dear Mr. Pinkert:
RE: Contract Amendment No. 2
between the State of Tennessee, Department of Correction
and MHM Services, Inc.
CONTRACT NO.: FA-98-12426-02
Enclosed is your fully executed copy of the amendment to the contract between
the State of Tennessee, Department of Correction, and MHM Services, Inc.
Thank you for your continued interest in providing services for the Tennessee
Department of Correction.
Sincerely,
/s/ LORRAINE M. REA
Lorraine M. Rea
Administrative Services Assistant 3
Enclosure (1)
pc: Bill Dalton, Assistant Commissioner
Fred Hix, Director of Budget/Fiscal
Ray Register, Director/Contracts Administration
Lenny Lococo, Director/Mental Health Services
<PAGE> 15
AMENDMENT TWO
TO CONTRACT FA-98-12426-00
BETWEEN THE STATE OF TENNESSEE,
DEPARTMENT OF CORRECTION
AND
MHM SERVICES, INC.
This Contract, by and between the State of Tennessee, Department of Correction,
hereinafter referred to as the State, and MHM Services, Inc., hereinafter
referred to as the Contractor, is hereby amended as follows:
1. Delete following Section in its entirety:
B.1. The Contractor shall be compensated based upon the capitated
rates as follows:
Capitated Annual Rate
July 1997 - December 1997 $129.94
January 1998 - December 1998 $133.19
January 1999 - December 1999 $136.52
January 2000 - December 2000* $139.93
January 2000 - December 2001* $143.43
* Option Years
Each month, the State will provide information to the
Contractor regarding inmate population. The Contractor will
use TDOC's information to prepare its monthly invoice to the
State.
and insert the following in its place:
B.l. The Contractor shall be compensated based upon the annual
fixed capitated rate times the projected inmate population,
plus the annual variable capitated rate times the actual
inmate population. This sum shall be divided by 12 (twelve) to
adjust for monthly payments. The Projected Inmate Population
and the Annual Capitated Rates are as follows:
<TABLE>
<CAPTION>
Annual Annual Total
Projected Fixed Variable Annual
Inmate Capitated Capitated Capitated
Period Population Rate Rate Rate
------ ---------- ---- ---- ----
<S> <C> <C> <C> <C>
Jun/97-Dec/97 14,406 $96.86 38.92 $135.78
Jan/98-Dec/98 15,482 $99.28 39.89 $139.17
Jan/99-Dec/99 15,946 $101.76 40.89 $142.65
Jan/00-Dec/00* 16,425 $104.31 41.91 $146.22
Jan/01-Jun/01* 16,916 $106.92 42.96 $149.88
*Option Years
</TABLE>
<PAGE> 16
Each month, the State will provide information to the
Contractor regarding inmate population. Any excess of the
actual inmate population over the projected inmate population
shall require the negotiation of a new capitated rate and an
amendment to this contract. The Contractor will use TDOC's
information to prepare its monthly invoice to the State.
2. Delete following Section in its entirety:
B.7. In no event shall the maximum liability of the State
under this Contract exceed SEVEN MILLION FOUR HUNDRED
SEVENTY-THREE THOUSAND THREE HUNDRED FOUR DOLLARS
($7,473,304.00).
and insert the following in its place:
B.7. In no event shall the maximum liability of the State
under this Contract exceed SIX MILLION SIX HUNDRED
EIGHT THOUSAND ONE HUNDRED EIGHTY-TWO DOLLARS
($6,608,181.00).
3. Delete following Section in its entirety:
E.24. The Contractor shall be responsible for the costs of
all medications prescribed by the Contractor's
providers and said costs shall be a part of the
capitated rate. The TDOC will forward to the
Contractor a monthly statement itemizing the drugs
prescribed by the Contractor's providers and
detailing the direct deductions made from the
Contractor's payments. The Contractor's providers
shall utilize the TDOC formulary for the purpose of
prescribing medications. The TDOC central pharmacy
shall be responsible for packaging and distribution
of psychopharmacological prescriptions. Provided
that, with the consent of TDOC, Contractor, at its
own cost, may utilize other reasonable alternatives
for purchasing, packaging and distribution of
psychopharmacological prescriptions, provided that
the TDOC pharmacy first shall be given the
opportunity to match any alternative proposal for the
purchase, packaging and distribution of
psychopharacological prescriptions which Contractor
is considering.
and insert the following in its place:
E.24. The Contractor shall be responsible for the costs of
all medications prescribed by the Contractor's
providers and said costs shall be a part of the
capitated rate. The TDOC will forward to the
Contractor a monthly statement itemizing the drugs
prescribed by the Contractor's providers and
detailing the direct deductions made from the
Contractor's payments. The Contractor's providers
shall utilize the TDOC formulary for the purpose of
prescribing medications. The TDOC central pharmacy
shall be responsible for packaging and distribution
of psychopharmacological prescriptions.
The other terms and conditions of this Contract not amended hereby
shall remain in full force and effect.
<PAGE> 17
IN WITNESS WHEREOF:
MHM SERVICES, INC.:
/s/ MIKE PINKERT DATE: 8/17/98
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Mike Pinkert, President
DEPARTMENT OF CORRECTION:
/s/ DONAL CAMPBELL DATE: 8/18/98
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Donal Campbell, Commissioner
APPROVED:
DEPARTMENT OF FINANCE AND ADMINISTRATION:
/s/ JOHN D. FERGUSON DATE: 9/4/98
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John D. Ferguson, Commissioner
COMPTROLLER OF THE TREASURY:
/s/ WILLIAM R. SNODGRASS DATE: 9/15/98
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William R. Snodgrass, Comptroller
