Audit Engagement TI
AUDIT ENGAGEMENT
SERVICES, FEES, ANDRAYMENT TERMS & CONDITIONS
Date: January 18, 2011
Re: Third Party Administrator Claim Audit and 'Performance' Evaluation
Services
Client: City of Miami Beach
Plans: Self- Funded Medical and Pharmacy Benefit Plans Plans')
Third Party Administrators: Humana
I. Audit Services
Pursuant to its Medical and Prescription Plan Claims - Administration Audit proposal of
August 12, 2011, which is incorporated herein by reference, CTI Claim Audit
Technologies Corp. dba Claim Technologies Incorporated ( "CTI ") and its affiliated
pharmacy .benefit subcontractor The Burchfield Group will perform claims administration
audit, rebate review and consulting services on behalf of The City of Miami Beach ( "The
City ") as set forth below.
A. Comprehensive Audits of self- funded medical benefit plan claims administered
by Humana:
1. Electronic Screening and Analysis (ESAS®) of claims paid and eligibility
during the 24 -month period ending December 31, 2010;
2. Statistical Sample Field Audit of 252 claims processed during the 12-
month period ending December 31,12010;,
3. Rebate Review.
4. Operational Review;
5. Individual Claim Audits as referred by The City or a City employee.
6. Eligibility Screening of claims paid during the most recent 24 -month
period.
B. Optional Recovery or Follow -Up Audit and Consulting Services, as authorized by
written amendment to this Agreement.
C. Other claim audits upon request, subject to The City's approval of specifications,
fees and schedule for each audit as set forth in written amendment(s) to this
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Agreement. Fees shall be no greater than the fees listed in this Agreement,
subject to the terms of VII. F.
11. Audit Fees
A. Comprehensive Audit of Medical Plan including Rebate Analysis $
W /Optional Eligibility Screening $ 2,495
B. Operational Review $ 5,399
C. Individual Claim Audits $ 145 first
hour; firm quote to follow upon authorization from the City:
D. Optional In- Person Presentation of Results $ 1,000
•TOTAL AUDIT FEES: $ 63,101 plus.fee for individual claim audits
III. Optional Recovery, Post Audit Follow -Up Consulting or focused Audit Fees
CTI's audit activities may identify potential categories of overpayments, either in the
form of lists of claims, specific claims, or based on the results of auditor testing and
analysis. The City and CTI both retain the right not to pursue potential recoveries of
overpayments identified — categorically or individually. All categories of potential
recoveries identified by CTI may be pursued byThe City without the involvement of
CTI and no fee shall be payable to CTI on any such recoveries. If The City chooses
-to pursue such recoveries with CTI's involvement, The City will be given a choice of
hourly or fee -for- service options under which it may further engage CTI to do so.
Additionally, CTI's audit activities may identify needs or opportunities. for Post Audit
Follow -Up Consulting, Focused Audits, Depositions or Expert Testimony. CTI's
above- referenced proposal specifies deliverables and a presentation and review of
audit results to be provided respectively during the audit and upon the audit's
completion, including 10 hours of post - audit consulting services. If additional
activities or services are requested by The City after its receipt of the deliverables
specified in Section II. of this Engagement Agreement and any clarifications thereof,
The City will be given a .choice of hourly or fee - for - service options under which it
may have CTI perform said activities or services.
CTI's performance of Optional Recovery, Post Audit Follow -:Up Consulting, or.
Focused Audit services is subject to written amendment to this Agreement.
IV. Payment Terms and Conditions
A.. Audit Fees are billable in 'three equal installments. The first installment shall be
billed upon execution of this Engagement Agreement and the final installment
shall be billed upon delivery of final reports.
Fees for Individual Claim Audits, Optional Recovery or Follow -Up Audit and
Consulting Services. billable monthly as incurred.
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B. Payment due within 30 days from receipt of invoice. Outstanding account
balances of over 30 days from receipt of invoice subject to 0.5 % per month
carrying charge.
C. Data preparation /conversion costs charged by Humana (if any) shall be borne by
The City.
V. Service Terms and Conditions
A. In performing electronic screening and analysis (ESAS medical claim
administration audits and /or consulting services pertaining to the claim
administration of the benefit plans covered by this Agreement, CTI will review
electronic claims data, as well as certain benefit plan documents, claim
documents, claim paying procedures, claim payments, and the appropriate files
and records pertaining to the Plans. Samples of various claim files will be
examined. Procedures.will be performed and deliverables will be provided
pursuant to., CTI's. proposal and the schedule .of Services, Fees and Payment
Terms and . .Conditions in this Agreement.
B. To perform the ESAS claim administration audits, and /or consulting services
specified, CTI will require access to complete electronic claims data, and
eligibility data; all applicable claim documents, claim histories, procedures; and
other files and documents which pertain to claim payments and administration.
The City hereby agrees to provide CTI with reasonable access to such materials
and to take such steps as are reasonably necessary to require the plan
administrator to make such data and records available to CTI. The City will make
staff available to provide clarification to CTI of relevant Plan policies and,
procedures as is reasonably required by CTI. The City, warrants that it has the
right and power to appoint CTI as its agent and hereby appoints CTI and as its
authorized agent solely with respect to the subject matter of this Agreement,
pursuant to the Plan's members' authorization to release medical records and
insurance information. The information provided to CTI and the reports prepared
by CTI shall be confidential and shall be used by CTI solely for the purpose of
conducting its .claim administration audits and /or consulting services for and on
behalf of The City and the Plans. Further, as `Business Associates of the Plans
(as more fully described in paragraph H., below), CTI shall, in all events, comply
with all applicable provisions of the regulations promulgated by the United States
Department of Health and Human Services ( "HHS ") with respect to the privacy
and security of "Protected Health Information" (as such term is defined in such
regulations).
C. The services performed by CTI and the resulting fees will be based upon the
preceding sections I, and II. The parties agree that CTI's audit services and
associated audit reports as specified in this Agreement will be completed and
delivered to The City no laterthan approximately 120 days from the date each
audit begins (defined as the date of the initial planning conference with the claims
administrators), provided that the parties may agree to an extension of these
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periods if reasonably necessary, due.to force majeure, administrator
requirements, administrator delays, or other delays caused by circumstances
reasonably beyond CTI's control.
D. In examining the claim paying process, CTI will utilize its best efforts to identify
recovery opportunities, problems, and areas of potential improvement; and to
recognize areas of outstanding performance. No .assurance is given that CTI will
identify any or all potential recoveries, problems, .or areas of potential
improvement.
E. The Plans' policies may be governed by various state and federal laws and
administrative regulations. Such laws and regulations may impose duties,
including fiduciary duties, upon Third Party Claim Administrators, sponsors and
others. In performing its claim administration audits and /or consulting services
on behalf of the Plan(s), CTI is not acting-as a Plan Fiduciary or accepting any
fiduciary responsibilities. Certain decisions with regard to the claim paying
process are or may be reserved, by law, for the claim administrator or other
.fiduciaries. In performing its Third Party Claim Administration audits, pharmacy
benefit management audits, and /or consulting services, CTI does not accept any
delegation of that responsibility. Rather, CTI's medical. claim administration
audits and /or consulting services are to provide information to The City and /or
the Plans' claims- administrators with respect to the Plans that may be used by'
such entity or entities to improve the claims paying process, consistent, in, all
events, with the requirements set forth in the Plan's policies and /or the
requirements of applicable federal and /or state. law.
F. The parties hereto agree that in the event of material changes in the scope of
services herein specified, which changes are outside the scope and control of
CTI, CTI is responsible: (i) for providing The City with written notification in a
timely manner, (ii) for providing detailed information as to additional costs (if any),
and (iii) for seeking The City' approval in the form of a written Change Order.
The City reserves the right not to authorize any Change Order, in which case it.
may terminate CTI's services. In the event that CTi's services are terminated,
CTI is authorized to bill The City and The City agrees to pay for the authorized
work performed, by CTI prior to the date the Change Order is issued.
G. The Medical Plan is a "Covered Entity" and CTI is a "Business Associate" under
the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the
Privacy and Security Regulations promulgated by HHS with respect thereto in 45
CFR Parts 160 and 164 (the "Applicable Regulations "). For purposes of this
paragraph G., "Covered Entity" shall mean The City's medical benefit plans.
Under the Applicable Regulations, the Covered Entity is required to maintain: (i)
the confidentiality of Protected Health Information (hereinafter "PHI ") and (ii)
effective April 20, 2005, the security of electronic PHI, both of which maybe
contained inapplicable records- and /or documents pertaining to the Plan(s). The
City and CTI have entered into a Business Associate Agreement setting forth the
applicable and respective obligations under the privacy and security
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requirements of HIPAA, as set forth in the Applicable Regulations. In
accordance with the aforementioned Business Associate Agreements, The City
and CTI understand and agree that:
1. CTI will not disclose any PHI (including, but not limited ato, confidential patient
data and /or claim document(s)) revealed in any claim audit except as
provided in, and consistent with, the Applicable Regulations.
2. CTI and The City will - not disclose any mental health, information revealed in
any claim audit unless written approval has been obtained from the affected
individual (or as otherwise provided under the Applicable Regulations and /or
other applicable law).
3. CTI will ensure that each of its reports or any other summaries prepared in
connection with their services contain no individually identifiable information
other than such information necessary to convey the results of the audit to
The City.
H. CTI agrees that it will indemnify and hold harmless: The City; each of the
respective officers, directors, subcontractors, agents and employees of The City;
and each person, if any, who may be deemed, under applicable law, to control
The City ( "The City Related Persons ") from and against any and all losses,
claims, damages, and liabilities, including all reasonable legal fees or other
expenses of defending any claims, action, suit or proceeding, whether or not
resulting in any liability, to which The City and /or any The City Related Person
may be subject in connection with or arising out of any of the transactions and /or
services identified herein and /or that results from CTI's any CTI - Related Person's
respective breach of this Agreement, negligence and /or willful misconduct.
I. If any provision herein is found to be prohibited or unenforceable in any
jurisdiction, such provision shall be ineffective only in such jurisdiction and only to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any such prohibition or unenforceability in any
jurisdiction shall not, by itself, invalidate or render unenforceable such provision
in any other jurisdiction.
J. Any disputes arising out of or as a result of this Agreement may be submitted to
arbitration. The parties agree to the selection of an arbitrator a panel
provided through the American Arbitration Association. The selection of the
arbitrator and the rules which govern the arbitration proceedings shall be in
accordance with the rules of the American Arbitration Association. The arbitrator
shall have no power to alter, add to or subtracted from the terms of this
Agreement. The fees and expenses of the arbitrator shall be shared equally by
The City and CTI as may apply.
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K. Upon knowledge of a material breach or violation of the terms of this Agreement
by- the other party, The City or CTI shall provide written notice to the other party
and either: -
1. Provide an opportunity for the other party to cure the breach or end the
violation and terminate this Agreement if the breach or violation is not cured
within thirty (30) days, or such other reasonable time period as may be
mutually agreed to by The City and CTI in writing: or
2. Terminate this Agreement immediately if a material term of this Agreement
has been breached and cure is not possible.
L. No party to this Agreement may assign its rights or obligations hereunder without
the express written consent of the other party hereto, which shall not be
unreasonably withheld.
M. This "Agreement shall not be amended except by written instrument executed by
CTI and The City. This Agreement and the applicable Business Associate
Agreements contain the entire understanding and agreement.of CTI and The City
with respect to all matters referred to herein; all prior negotiations and
understandings are hereby merged into this Agreement and the aforementioned,
Business Associate Agreements. The agreement hereby established shall be
governed by applicable Federal law and the laws of the State of Florida without
regard to conflicts of laws principles, and shall be considered to have been
-entered into and performable by CTI and the Plan(s) in the State of Florida.
Venue for any litigation or arbitration proceeding arising from our under this
Agreement shall be in Miami -Dade County, Florida.
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N. Nothing express or implied in this Agreement is intended to confer,' nor shall
anything herein confer, any rights and /or remedies whatsoever on any person
other than a party to this Agreement and /or a respective successor or assign of a
party.
Agreed by
CTI Claim Audit Technologies Corp. dba Claim Technologies Incorporated
By: Printed Name: PGA (GUS'
Title:
Date: 1
The City of Miami Beach
By: Printed Name:
Title: _Matti Herrera Bower j
Mayor
Date:
ATTEST
C t T c
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION
°t �t me
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