2016-29249 Reso RESOLUTION NO. 2016-29249
A RESOLUTION OF THE MAYOR AND CITY COMMISSION FOR THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING, IN SUBSTANTIAL FORM, THE
ATTACHED AMENDMENT NO. 2 TO THE PLAN MANAGEMENT AGREEMENT
BETWEEN THE CITY AND HUMANA INSURANCE COMPANY ("HUMANA"),
HAVING AN EFFECTIVE DATE OF JANUARY 1, 2009, FOR THE
ADMINISTRATION OF THE CITY'S GROUP HEALTH (MEDICAL) PLAN AND
EMPLOYEE ASSISTANCE PROGRAM; SAID AMENDMENT CLARIFYING
CERTAIN CLAIMS PROCESSING PROVISIONS CONTAINED IN THE
AGREEMENT, AS SET FORTH THEREIN, SUBJECT TO FINAL NEGOTIATION
BETWEEN HUMANA AND THE CITY ADMINISTRATION, AND REVIEW AND
FORM APPROVAL BY THE CITY ATTORNEY'S OFFICE; AND FURTHER
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL
NEGOTIATED AMENDMENT.
WHEREAS, on July 15, 2009, pursuant to RFP No. 10-2589 for group employee benefits, the
City Commission adopted Resolution No. 2009-27136, authorizing the City to enter into an
agreement with Humana Insurance Company and Humana Lifesynch (collectively Humana) for the
administration of the City's group health (medical) plan and Employee Assistance Program; and
WHEREAS, the City and Humana executed a Plan Management Agreement, effective as of
January 1, 2009, for the administration of the City's Group Health (Medical) Plan and Employee
Assistance Program (the Humana Agreement); and
WHEREAS, the City and Humana executed an Amendment to Plan Management Agreement,
dated January 1, 2012, clarifying the relationship between the parties and certain claims
procedures; and
WHEREAS, the parties would like to make additional changes to the claims processing
procedures, as more fully set forth in Amendment No. 2; and
WHEREAS, the Administration recommends that the City Commission approve Amendment
No. 2 to the Humana Agreement, substantially in the form attached hereto and incorporated herein
as Exhibit "1", subject to final negotiations by the Administration and final review and form approval
by the City Attorney's Office.
NOW, THEREFORE, BE IT DULY RESOLVED THAT THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the City Commission hereby
approve, in substantial form, the attached Amendment No. 2 to the Plan Management Agreement
between the City and Humana Insurance Company ("Humana"), having an effective date of
January 1, 2009, for the administration of the City's Group Health (Medical) Plan and Employee
Assistance Program; said amendment clarifying certain claims processing provisions contained in
the agreement, as set forth therein, subject to final negotiation between Humana and the City
Administration, and subject to review and form approval by the City Attorney's Office; and further
authorize the Mayor and City Clerk to execute the final negotiated amendment.
PASSED and ADOPTED this /3 day of .Jai/ka/ 2016.
ATTEST: /`
Raf•el 4' -nado, ity lerk Phil': ayor
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City Attorney r Dote
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The Mayor And City Commission For The City Of Miami Beach, Florida, Approving,-In
Substantial Form, The Attached Amendment No. 2 To The Plan Management Agreement Between The
City And Humana Insurance Company ("Humana"), Having An Effective Date Of January 1, 2009, For
The Administration Of The City's Group Health (Medical) Plan And Employee Assistance Program;
Said Amendment Clarifying Certain Claims Processing Provisions Contained In The Agreement, As Set
Forth Therein, Subject To Final Negotiation Between Humana And The City Administration, And
Review And Form Approval By The City Administration, And Review And Form Approval By The City
Attorney's Office; And Further Authorizing The Mayor And City Clerk To Execute The Final Negotiated
Amendment.
Key Intended Outcome Supported:
• Ensure Expenditure Trends Are Sustainable Over The Long Term
Supporting Data (Surveys, Environmental Scan, etc.): N/A
Item Summary/Recommendation:
On July 15, 2009, pursuant to RFP No. 10-2589 for group employee benefits, the City Commission
adopted Resolution No. 2009-27136, authorizing the City to enter into an agreement with Humana
Insurance Company and Humana Lifesynch (collectively Humana) for the administration of the City's
group health (medical) plan and Employee Assistance Program. The City and Humana executed a Plan
Management Agreement, effective as of January 1, 2009, for the administration of the City's Group Health
(Medical) Plan and Employee Assistance Program (the Humana Agreement).
The City and Humana executed an Amendment to Plan Management Agreement, dated January 1, 2012,
clarifying the relationship between the parties and certain claims procedures; and the parties would like to
make additional changes to the claims processing procedures, as more fully set forth in Amendment No.
2.
The Administration recommends that the City Commission approve Amendment No. 2 to the Humana
Agreement, substantially in the form attached hereto and incorporated herein as Exhibit "1", subject to
final negotiations by the Administration and final review and form approval by the City Attorney's Office.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Amount Account Approved
Funds: 1
2
3
OBPI Total
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Sylvia Crespo-Tabak, Human Resources
Sign-Offs:
Department Director Assistan ,: . Manager ag
City M y er
� r
SCTSC-1 !': % , JLM
Agenda Item G 73
Date /-13--/C,
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSI 1+N MEMORANDUM
TO: Philip Levine, Mayor and Members of e City C,,mmission
FROM: Jimmy L. Morales, City Manager ;-
DATE: January 13,13 2016 )
SUBJECT: A RESOLUTION OF THE MAYOR D CITY COMMISSION FOR THE CITY
OF MIAMI BEACH, FLORIDA, APP"OVING, IN SUBSTANTIAL FORM, THE
ATTACHED AMENDMENT NO. 2 TO THE PLAN MANAGEMENT
AGREEMENT BETWEEN THE CITY AND HUMANA INSURANCE
COMPANY ("HUMANA"), HAVING AN EFFECTIVE DATE OF JANUARY 1,
2009, FOR THE ADMINISTRATION OF THE CITY'S GROUP HEALTH
(MEDICAL) PLAN AND EMPLOYEE ASSISTANCE PROGRAM; SAID
AMENDMENT CLARIFYING CERTAIN CLAIMS PROCESSING PROVISIONS
CONTAINED IN THE AGREEMENT, AS SET FORTH THEREIN, SUBJECT
TO FINAL NEGOTIATION BETWEEN HUMANA AND THE CITY
ADMINISTRATION, AND REVIEW AND FORM APPROVAL BY THE CITY
ATTORNEY'S OFFICE; AND FURTHER AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE THE FINAL NEGOTIATED AMENDMENT.
BACKGROUND
On July 15, 2009, pursuant to RFP No. 10-2589 for group employee benefits, the City
Commission adopted Resolution No. 2009-27136, authorizing the City to enter into an
agreement with Humana Insurance Company and Humana Lifesynch (collectively
Humana) for the administration of the City's group health (medical) plan and Employee
Assistance Program. The City and Humana executed a Plan Management Agreement,
effective January 1, 2009, for the administration of the City's Group Health (Medical)
Plan and Employee Assistance Program (the Humana Agreement).
The City and Humana executed an Amendment to Plan Management Agreement, dated
January 1, 2012, clarifying the relationship between the parties and certain claims
procedures; and the parties would like to make additional changes to the claims
processing procedures, as more fully set forth in Amendment No. 2. These Plan
Management Agreements are routine throughout the life of a long-term relationship with
a Plan Administrator as the medical plan document changes to reflect current practices.
RECOMMENDATION
The Administration recommends that the City Commission approve Amendment No. 2 to
the Humana Agreement, substantially in the form attached hereto and incorporated
herein as Exhibit "1", subject to final negotiations by the Administration and final review
and form approval by the City Attorney's Office.
Attachment
JLM/JMT/SC-T
AMENDMENT NO. 2 TO PLAN MANAGEMENT AGREEMENT
This Amendment No. 2 ("Amendment") to the Plan Management Agreement between Humana
Insurance Company ("Plan Manager"), and City of Miami Beach ("Client") effective on January 1,
2009 as amended by the Amendment to the Plan Management Agreement, executed on January 1, 2012
(the Plan Management Agreement and Amendment to Plan Management Agreement shall be collectively
referred to here as the"Agreement") is entered into on this day of , 2016
and hereby amends the Agreement in accordance with Article 16.7 of the Agreement and for good and
valuable consideration, as follows:
1. The Agreement is hereby modified (deleted items/struek—through'nand inserted items underlined) as
follows:
•
6yryKrtx
A. Effective retroactively, as of January 1, 2014, Sectionj34 ofArticle III, General Duties of Client,
is hereby deleted in its entirety and replaced with tl'e>xfollowing:R x
3.1 The Client will identify and describe the Plan as to'type on Exhibit "A" of this
Agreement. � v..
B. Effective retroactively, as of January 1, 2013, Section Article III, General Duties of Client,
is hereby deleted in its entirety and replaced with the,following: 5.
3.5 The Client shall use reasonable�efforts.to ensure current copies of the documents
describing the Plan will be.:provided ;"timely to theRPlan Manager along with other
appropriate materials governing,the administration of the' Plan. These documents and
materials:xmay include employees booklets. summary descriptions, employee
Apr �,a
communications significantly affecting the Plan, and any amendments or revisions. If the
Plan Manager drafts'`and provides'any of these documents to the Client as part of the
services offered;underthis:.Agreement the Client agrees to review, edit and provide its
signature approving theme documents in a timely manner. The Client understands that if the
Plan'Manager does'7not receive the=Client';s review and signature on these documents, the
Plan Manager cannot`:treat them as-:final. If these documents are not finalized and
distributed to Participants, ythe Client may be responsible for fines levied by the federal•
''':::;;;*::government when`it requires�these documents to be distributed timely to Plan Participants
t..,.�y.� Y P
tiff pursuant to federal law. ry
C. Effective retroactively, •as.••„of January 1, 2014, Article V, Claims Administration, is hereby
amended to includestheITOtlowing:
�roar,
5.12 Payment of covered expenses for services rendered by a provider is subject to the Plan
Manager's claims processing edits. The amount determined to be payable under the Plan
Manager's claims processing edits depends on the existence and interaction of several
factors. Because the mix of these factors may be different for every claim, the amount
paid for a covered expense may vary depending on the circumstances. Accordingly, it is
not feasible to provide an exhaustive description of the claims processing edits that will
be used to determine the amount payable for a covered expense, but examples of the most
commonly used factors are:
• The intensity and complexity of a service;
EXHIBIT
i
• Whether a service is one of multiple services performed at the same service session such
that the cost of the service to the provider is less than if the service had been provided in
a separate service session. For example:
Two or more surgeries occurring at the same service session that do not require
two preparation times; or
Two or more radiologic imaging views performed on the same body part;
• Whether an assistant surgeon, physician assistant, registered nurse, certified operating
room technician or any other health care professional who is billing independently is
involved;
• When a charge includes more than one claim line;,,whether any service is part of or
incidental to the primary service that was provided, or if these services cannot be
performed together; `a9Rtiy
• If the service is reasonably expected,to%;be;:provided for the diagnosis reported;
• Whether a service was performed specifically the Participant;
• Whether services can be billed„'as a complete etbof services under one billing
code.
•��va�s�y.s yyy
S� s �yY�z_+t�s,-y
The Plan Manager develops claims processing edits based on review ,of one or more of the
following sources, including but not limited
�y
• Medicare laws, regulations, manuals and°other related guidance; q ,
• Appropriate billing practices,
• National Uniform Billing:.Committee NUBC ;
• American Medical Association(AMA=)/Current Procedural Technology(CPT);
• UB-04 Data Specifications Manual;
• InternationalaClassification of biseases,of the 1U.S. Department of Health and Human
Servicesand the Diagnostic and'Statistical Manual oLMental Disorders;
• Medical-and surgical`specialty certification boards;
• The Plan`1Vlinager's medical coverage`;policies; and/or
• .Generally accepted°standards:,of medical, behavioral health and dental practice based on
4 t;credible,scientific evidence'brecognizedin published peer reviewed medical or dental
1 iterature=rte q
Changes to any and f;the sources.,may or may not lead the Plan Manager to modify current or
adoptV,new claims processing
Non participating providers=;may bill°Participant for any amount this Plan does not pay even if
such amount;%exceeds these claims processing edits. Any amount that exceeds the claims
processing edis;',paid by the`P
artici ant will not apply to deductibles, out-of-pocket ocket limits or Plan
maximum out-ofpocket:i imits,
if applicable. The Participant will also be responsible for any
applicable deductible;coinsurance amount or copayment.
D. Effective retroactively, as of January 1, 2014, the fifth sentence of Section 6.4 of Article VI,
Reports, Records and Audits, is hereby deleted in its entirety and replaced with the following:
6.4 Audits for Clients that have terminated their Plan Administration with the Plan Manager
must be conducted within one(1)year of the last day of the Plan year to be audited.
2
E. Effective retroactively, as of January 1, 2014, Section 7.1 of Article VII, Additional
Administrative Services, is hereby deleted in its entirety and replaced with the following:
7.1 Upon reasonable request by the Client or the Plan Administrator, the Plan Manager will
provide a sample Summary Plan Description(SPD)or standard language concerning Plan
benefits to assist the Plan Administrator in the preparation of the SPD. This service will
be available at the commencement of this Agreement and on an as needed basis
throughout the Plan year to assist the Client when language changes are made necessary
from changes in Plan design, new federal legislation or other governmental requirements.
The Plan Manager will also provide, upon reasonable request by the Client, a Summary
of Benefits and Coverage ("SBC") document for the:o.Client's yearly enrollment period.
Notwithstanding the above, the Client understands that any language provided by the
Plan Manager to the Client or the Plan Administrator shall not be construed as legal
advice nor as a compliance delegation to the:Plan Manager for the Client's SPD or SBC
obligations under applicable law.
F. Effective retroactively, as of January ,i1 V,,2014, Section 7.12 rof<Article VII, Additional
Administrative Services, is hereby deleted inn:its.,entirety. :' .,�
G. Effective retroactively, as of January,1, 2014, Section of Article XVI, Miscellaneous, is
hereby deleted in its entirety and°4.eplaced with the following:
`e
16.3 Assignment and Delegation °i Neither th Plan Manager nor the Client may assign or
k
otherwiseetransferr�its rights arid-:obligations under this°A`greement to any other person or
4 a'=,•'�5,"n-�°`'Y ''aS.. 1rx S, 4� ,�:'`-R y..e�yp,:��..4y
entity without the prior written consent of�the`other,party. However, the functions to be
perforn`ied., by the Plan Managermay"at any time be transferred, subcontracted or
delegatedYto an affiliate,of the Plan'Manager. The Plan Manager retains final authority to
provide oversight ou•those affiliatesh,vendors and subcontracted entities. The Plan
Manager will ing delegated functions to the Client if
k, requestedL,Any other attempted assign ment, subcontracting or delegation shall render
this Agreement voidable,at the option.of the non-assigning party.
�•;�k�,Yx� °� .4
H. Effective retroactively, as of January''1, 2014, Section 16.9 of Article XVI, Miscellaneous, is
hereby deleted"in its entirety:
Effective retroactively ,'}'as of January 1, 2013, Section C2.9 of Exhibit C, Clinical Program
Services, is hereby deleted in its entirety and replaced with the following:
C2.9 The Plan Manager will provide or arrange for the provision of the following additional
services, under applicable Plan provisions.
(a) HumanaFirst® Nurse Advice Line: A toll-free', 24-hour medical information
line, staffed by registered nurses who are available to answer health-related
questions and help Participants decide where to best seek treatment.
HumanaFirst® offers two lines to support Participant needs, including a line for
immediate medical concerns and another for health planning and support.
3
(b) HumanaBeginnings®: The HumanaBeginnings® program educates and guides
expectant mothers to make the best choices to achieve a healthy pregnancy and,
ultimately, a healthy baby. Participants are offered guidance by phone from the
time the Plan Manager is notified of the pregnancy through baby's first months.
Neonatal Intensive Care Unit (NICU) Management : Specially trained case
managers promote the highest standards of care for NICU infants and work with
Participants throughout the NICU stay to help them prepare for a smooth
transition home.
(d) Gaps in Care: The Plan Manager's clinical rules engine leverages expert
medical opinions to identify gaps in care that address potential medical errors and
instances of sub-optimal medical treatment. The established clinical rules
compare a patients' pharmacy, laboratory and claims data to industry standard
Quality of Care guidelines in order to identify patients at risk of highly specific
patient-centric problems. Examples include: a misdiagnosis, a flawed surgical
treatment or medical management, and lack of follow-up care or preventive
treatment. In addition, a variety of preventive and pharmacy rules are included
such as drug-to-drug interactions and drug-to-disease interactions. When gaps in
care, drug to drug interaction, drug to disease interaction or a preventive
reminder is identified, an alert and a message, if appropriate, are generated to
communicate the findings through physician and member messaging.
fie) Preventive Reminders, proactive, targeted campaigns that deliver messages to
Participants of primary prevention care. Messages are delivered in a variety of
methods including phone calls (live and voice activated), mail, text message or
emails. Topics include mammography screenings, vaccinations, immunizations
and more.
Chronic Condition Management programs support the physician/patient
relationship and care plan, emphasize education, promote self-management,
evaluate outcomes to improve Participant overall health and offer nurse support.
Disease management programs have been developed to help Participants manage
specific chronic medical conditions. Clinicians are available 24 hours a day to
provide individual guidance through coaching, support and service coordination,
to help lessen the day-to-day impact of chronic illnesses. Specific programs may
change at the Plan Manager's sole discretion.
This Plan's disease management programs include:
1. Asthma
2. Cancer(active treatment only)
3. Chronic Obstructive Pulmonary Disease
4. Congestive Heart Failure
5. Coronary Artery Disease
6. Diabetes
7. End-Stage Renal Disease/Chronic Kidney Disease
4
8. Rare Diseases (Cystic Fibrosis, Hemophilia, Multiple Sclerosis,
Myasthenia Gravis, Systemic Lupus Erythematosis, Amyotrophic Lateral
Sclerosis (a.k.a. Lou Gehrig's Disease), Chronic Inflammatory
Demyelinating Polyradiculoneuropathy (CUM), Dermatomyositis,
Parkinson's Disease, Polymyositis, Rheumatoid Arthritis, Scleroderma
and Sickle Cell Anemia).
Personal Nurse: In addition to disease-specific programs, the Plan Manager
also offers Personal Nurse, which supports Participants with long-term, ongoing
health needs and/or any chronic condition. Personal Nurses offer Participants
dealing with a condition or illness, following treatment plans, or needing
.xx9,,rey
continued guidance in reaching their long-term health goals, the opportunity to
develop a long-term partnership with an'experienced registered nurse.
° V*,$>;fi x°
(g) Managed Behavioral Health,which=applies arutilization management process to
behavioral health conditions:(mental health and °substance abuse) to produce
better outcomes and cost effective care.
(h) MyHumana, a personal ,password-protected home, page located at
www.humana.com. Participants:°;can log,:im anytime to,4ind a participating
provider, look up.benefits or ch4k9x.the:status of a claim. 'Additional features
include: prescription drug information, information on specific health
conditions, financial"tools. to help with,budgeting for health care and more.
MyHumana Mobile allo`wsA Participants `quick access to important information
using their mobilekdevice's°xo4browser, including member ID card detail
information and an urgent care finder k v;
I uanana Health Assessments a confidential, online lifestyle survey located at
Myllumana.com. Upon completion of the assessment, Participants will receive
an'individuatized health score and an action plan on how they can improve their
health. Responses may also result in a referral to another clinical program.
W,ellness''iCalendar Program is=0.`an electronic package that the Employer will
receive each month with a dedicated focus on a wellness topic.
� :(k) Health.Fair Facilitation services to help Employers plan and run a health fair
event. A Health Fair='Facilitator works with the Employer to understand their
»k:ys
wants andaneeds, such as what topics to cover and a budget. The Facilitator will
' ":*connect with local resources and providers for content and fair participation and
'.will provideonsite coordination at the Health Fair. Fees from third party vendors
are notbincluded in this service.
(1) Bariatric Management Program (Standard HMO Plan only), which provides
uidance to Partici s ants under•oin• bariatric sur e . The Bariatric
Management Team guides Participants to facilities and qualified practitioners
designated by the Plan Manager as approved bariatric services providers. They
also provide precertification, a list of approved bariatric surgeries/procedures,
inpatient care management and six months of post-surgical follow-up.
(m) Transition of Care: Changing health care plans can be stressful, especially for
those who are going through intense medical treatment, such as chemotherapy.
The transition of care process helps Participant's make a smooth transition to
5
Humana from their current health care plan with the least amount of disruption to
their care.
1'J Continuity of Care: If a provider ceases being a participating provider,
Participants may be able to continue treatment with the same provider for up to
90 calendar days if they are undergoing active treatment for a chronic or acute
medical condition after the provider's termination with the participating
provider's network. For pregnancy, if the Participant is in the 2nd or 3rd
trimester, continuity of care is available through a 6 week postpartum period.
Continuity of care is available only if the provider continues to practice in the
geographical area of the network and they,termination of the participating
,��r.gig,�,
provider's contract was not due to misconducton the part of the provider.
Employee Assistance Program>x>x<b(EA1 k provides confidential, personal
assistance to employees and their
,,,,,;,•,,amily members to address personal and work-
b'y. 1. Y ,.
life issues. The EAP also provides employers consultative services to effectively
manage performance challenges`°` 4"`<�',,
Participant support includesi; t4,$,,
1. Face-to-face counseling sessions.=with an EAP counselor, up to 5 sessions
per issue:per year. , ,- n , �,�•
2. Unlimited.telephone assistance,'24 hours a day, 7 days a week, 365 days
a year. 9, `y '%
`
3. Telephon cand onl ne,EAP and Work-Life services for the following
issues: •�` ; , +.
,\ l Ka-, Life issues such�akstress, anxiet
y, depression, addiction and
{ . '° recovery;relationslips,°griefand loss.
'"`�," b. Legal issues\such as estate'planning and legal forms (wills,
9rtip *� 4 power of attorney and final arrangements). Free initial legal
'''',13,:',',i':;:,.• .-,' consultation`arid 25% discount from standard legal fees for
f 'y L°Ynk�' 4:r ' Yy4♦b -,,x.,,,
+ '�� � subsequent servces for a network attorney.
,:: mama c,'-, ,_��� Financial :=issuesb'' such as budgeting, tax planning, debt
�'x' =management; retirement planning, insurance, home buying and
a , :refinancing and identity theft.
' ds�, i
Famly issues such as childcare resources, summer school or
=°T:: �tia:,., vacation camp, child development, parenting, college planning,
dAt z adoption, emergency and back-up care and caring for older
* :ski adults.
4 gib.h;a�
, e;av; Work issues such as co-worker relationships, job stress,
yx<;y
balancing work and personal life, change and transition,
=�:,,. communication, relocation and business travel.
f. Everyday issues such as consumer information, big-ticket
purchases, home remodeling and repair, pet care resources and
home and car buying.
4. Additional resource tools including a comprehensive website with
calculators,tip sheets,videos, articles, locators and more.
5. Follow-up.
Employer support includes: ,
1. Management consultation.
2. Regulatory assistance.
6
3. Monthly webinar training.
4. Promotional materials.
5. Quarterly reports.
6. Critical Incident Stress Debriefing(CISD) or training hours.
J. Effective retroactively, as of January 1, 2013 and through and including December 31, 2013,
Exhibit D,Networks, is hereby amended to include the following Section D3.4:
D3.4 The Client agrees that the Plan Manager may utilize various methods of contracting
discounts with Health Care Providers by building and maintaining Networks in an effort
to reduce the Client's claims costs. Common methods include, but may not be limited to,
discounts off of charged amounts, fee schedules and results-based reimbursements. The
Plan Manager agrees to disclose and account for discounts via Client access to claims
detail, access to reporting or through special billing. The Client agrees to pay claims or
special bills according to the other provisions of this Agreement.
K. Effective retroactively, as of January 1, 2014, Section D3.4 of Exhibit D, Networks, is hereby
deleted in its entirety and replaced with the following:
D3.4 The Client agrees that the Plan Manager may utilize various methods of contracting with
Health Care Providers to build and maintain Networks in an effort to reduce the Client's
claims costs. Such methods are utilized for all clients with an administrative services
only arrangement with the Plan Manager, and are identical to the methods Humana
Insurance Company uses to reduce claims costs in its fully-insured networks. Common
methods include, but may not be limited to, discounts off of charged amounts, fee
schedules and performance arrangements. If a Health Care Provider or vendor
participates in any of the Plan Manager's programs in which performance incentives,
rewards or bonuses ("Performance Payments") are earned and conditioned on the
achievement of certain goals, outcomes or performance standards adopted by the Plan
Manager, the Performance Payments will be paid the same as other medical costs. The
Client shall fund Performance Payments as soon as the Plan Manager makes the
determination that the Health Care Provider or vendor is entitled to receive the payment
under the Health Care Provider or vendor's contract. Such Performance Payments may
be charged to the Client on an "as-earned" basis and will be clearly itemized on the
Client's reconciliation. All arrangements will be transparent to the Client and the Plan
Manager shall provide the Client with access to reports describing the amount of these
Performance Payments made on behalf of the Client's Plan.
L. Effective retroactively, as of October 1, 2014, Section F1.1 of Exhibit F, Schedule of Fees, is
hereby deleted in its entirety and replaced with the following:
F1.1 The monthly fees presented in this Exhibit "F" are valid for the period of time beginning
January 1, 2013 and ending on December 31, 2013 and beginning January 1, 2014 and
ending on September 30, 2014 and beginning October 1, 2014 and ending on September
30, 2015,except as otherwise stated.
7
M. Effective retroactively, as of October 1, 2014, Section F2.1 of Exhibit F, Schedule of Fees, is
hereby deleted in its entirety and replaced with the following:
F2.1 General:
Administrative Fees:
January 1,2013 through Per Employee Per Family
December 31,2013
,.,;x0N,-,:,;;; ,,:,,
Medical and Prescription Drug $4.0-*Wx-:-;;:e,:, $40.31
, . .,'.c;,:,-
,,..
i',;::;,
,-,,::
^•4-;',-!,,'.."';,'',,''' '';=';',;,::::,:
,,,
January 1,2014 through .,,...,,,.;;:.,Per Employee ,f*.-.?:::;;, Per Family
,„.,„ ::-.,:,-;:,
September 30,2014 ',:k?-",:-,, ''''..,w-,,,.
'''. _ ,-,N,..
<,,,,,,x,, •,v,:,,..>:
a',..•,. .s0M- ':.N,.:..,,N,,,
, 'V
;
Medical and Prescription Drug-:.;-. .*;-,;::;-,,,,, 41:6$38 ,;:
• , $38.46
\.:i',';',..,....,
''`..:4-,
,,,,.;.N,,,,, ,,,;p0,...,„;,,,,.,,,,, •,,,,, ;„
.,..,:, *•,,.
October 1,:-:2014:ithfough ,,,,,,,,:,,,
,:,... . Per Employee ,., Per Family
SepteMber 30,2015 '4.,
.
,,. .
Medical and Prescription Drug ,,, ':'::':.:,;-:':$39.48 $39.48
,,,;;:l.%;.::: :,:-;:::;•,:,,,
..,:!:;c:;-;z;: ''..::::4-A..-. ''°•%-:::::„-:,,, ,%:i:;i:x:i. ..,„ ''''
Services NOT included in thAdministratiVe Fees Listed Above*:
,. ,1,,', ':,x,,,:,•.„,„,
.•',V1 , ',%,:',7,,
•:,:,,,:,; :',:, :;.%
*Administrative fees if-ideated belbWare only applicable October 1, 2014—September 30, 2015.
t.;•1,-:'•,:'' ::';;„-:-X,,,
c •
PrescriptiOra)rug: Standa4 E)(it Reports consisting of Prior Authorizations, Claims History and
.y,,,.,,,,,,, :-,----,,,,:
Deductible Accifmulators.*Exit reports requested upon termination of this Agreement must be in
,
a standard Humanalorrnatand pricing will be negotiated at time of request.
Open File Transfer of:Mail Order Prescriptions. File transfers requested upon termination of this
Agreement must be in a standard Humana format and pricing will be negotiated at time of
request.
All external review vendor costs related to an external claim appeal will be the responsibility of
the Client. An additional $50 administration fee by the Plan Manager will also apply.
Ad-hoc Reporting $150 Per Hour
8
Employee Assistance Program(EAP)—Work-Life
Face to Face 5 Visits $1.50 per employee per month
Asthma, Disease Management Program:
Moderate Acuity—Educational Program Telephonic $86 per case
High Acuity—Telephonic $86 per case
High Acuity—Ongoing $86 per participant per month
Cancer, Disease Management Program:
Telephonic A,.° $86 per participant per month
i °
Congestive Heart Failure,Disease Management Program,:: .
Telephonic ° ;,,a $86 per participant per month
spy �,' '<,:,,,:'.,M,,,
Coronary Artery Disease, Disease Management�P�rogram: °.zxr
Telephonic °� $861per participant per month
Diabetes, Disease Management Program: ', p=' a, `nti�`'°
Telephonic <n �°:, ..§M:-. $86 per participant per month
-:• .=:� .w fir. ';` ;.
End Stage Renal Disease, Disease Management Program:'°''
Onsite °tea, °"' $86 per participant per month
Telephonic R k. � :.. $86 per participant per month
Rare Diseases, Disease'Management Program ".;, ti;,
High Intensity Disease- Interactive, ��,�x,,` �:4:�{ $86 per participant per month
Low Intensity Disease i=,Interactive ��' z`i '' $86 per participant per month
Low Intensity, Disease=:Self-directed=°, $86 per participant per month
External StopyLoss Interface 40 . "V.:, , $750 Per Month
u 44, �`�'', ,, ,<,t,, ,,,::,. ,'a te *
N. Effective retroactive,` as of Janu°a 1, 2013, Section F3.1 (b) of Exhibit F, Schedule of Fees, is
t. y,,-..;.e ,
hereby;deleted in its entirety and replaced with the following:
1;' r'iyo-snR., •',44xa°
(b) Witli respect to access to provider networks in accordance with Article 7.8 of this
Agreement or otherkw"similar provider arrangements arranged through the Plan Manager,
the Client zundersTaWas that a special access fee may be payable, depending upon the
network orarrangement. The Client and the Plan Manager agree that the Client will be
obligated to p4`any special fee under this Exhibit"F3.1(b)"only.
9
O. Effective retroactively, as of January 1, 2014, Exhibit G—Persons Authorized to Receive Private
Health Information, is hereby deleted in its entirety and replaced with a copy of which is attached
hereto and incorporated herein by reference.
P. Effective retroactively, as of October 1, 2014, Exhibit H , Pharmacy Management, is hereby
deleted in its entirety and replaced with Amended Exhibit H,a copy of which is attached hereto
and incorporated herein by reference.
2. Except as amended herein, all other terms and conditions of the Agreement shall remain unchanged
and in full force and effect. In the event there is a conflict between the provisions of this Agreement
and the Amendment,the provisions of this Amendment shall govern.
IN WITNESS WHEREOF, the Plan Manager and the Client have executed this
Amendment on , 20
ATTEST: CITY OF MIAMI BEACH
Miami Beach, Florida
By: By:
Rafael E. Granado Philip Levine
City Clerk Mayor.
ATTEST: HUMANA INSURANCE COMPANY
Green Bay, Wisconsin
Name By:
Gerald L. Ganoni
Title President
10
Amended
EXHIBIT G
Persons Authorized to Receive
Private Health Information
Name: Sylvia Crespo-Tabak
Title: Human Resources Director
Company: City of Miami Beach
Address: 1700 Convention Center Drive
Miami Beach,FL 33139
Telephone: (305)673-7524
Fax: (786)786-394-4070
Email: SylviaCrespo-Tabak @miamibeachfl.gov
Name: Jose Del Risco
Title: Assistant Human Resources Director
Company: City of Miami Beach
Address: 1700 Convention Center Drive
Miami Beach,FL 33139
Telephone: (305)673-7524
Fax: (786)394-4448
Email: JoseDelRisco @miamibeachfl.gov
Name: Sonia Bridges
Title: Division Director, Risk&Benefits
Company: City of Miami Beach
Address: 1700 Convention Center Drive
Miami Beach, FL 33139
Telephone: (305)673-7524
Fax: (305).673-7023
Email: Soniabridges @miamibeachfl.gov
Name: Frank Estevez
Title: HR Administrator 1/Benefits
Company: City of Miami Beach
Address: 1700 Convention Center Drive
Miami Beach, FL 33139
Telephone: (305)673-7524
Fax: (305)673-7023
Email: Frankestevez @miamibeachfl.gov
Name: Sandra Sicily
Title: HR Specialist
Company: City of Miami Beach
Address: 1700 Convention Center Drive
Miami Beach, FL 33139 '
Telephone: (305)673-7524
Fax: (786)394-4145
Email: SandraSicily @miamibeachfl.gov
z9�
Name: Sandra Dellacasa-D�"azN
Title: HR Specialist g`,x,•:, •
Company: City of Miami each;.
e ,roc:pa Yeq,ryf-i,P
Address: 1700 Convention Center.Drive •
MiamiBeach, FL 33139: °a
Telephone: (305)i673-7524
Fax: (7586)'394-4145 °~°
Email: SandraDLellacasa-Diaz @miamib�eachfl.gov
Name: Sara Patino:r ti ;-•s •,..,<•;,,,.
Title:ii z: s,, Financial Analyst�III °=
Company:°:.. ,„City of Miami Beach
Address%s ,1�.700.ConventionxCenter Drive
§• ky .M,, iaM',i,;Beach, FL`33:N9
Telephone: •sli*\;(305)673 47000,Ext 6497
1 :;,Fax: x4786)394;5N,9$,;:, ;;.,
Email: saraPatino @miamiheachfl.gov
• yyf Name:°'. Garrett.Moore
• k ;A:0,4:, .-•:,,,,,..
N : Title; �' b „ Sr. Benefits Consultant
• ”onpany: e - Gallagher�Beneft Services,ces, Inc.^; s '`� d• ' M Address. One Boca Place
q
; N 2255'Glades Road, Suite 200E
x ,,,,:•.,,,,,,,,,,
Boca Raton,FL 33431
,
• � ° ‘Telephone:';,: .,:, (561)998-6743
_` :��. Fax (5 6 1)995-6731
P '=a t Email: Garrett_Moore@ajg.com
‘:,•,,,,,,,,,,,•-
°,`_Y• Name: Kelly Dunn
-': s,`•Title: Sr. Account Manager
',:,,<i.Company: Gallagher Benefit Services, Inc.
Address: One Boca Place
2255 Glades Road, Suite 400E
Boca Raton, FL 33431
Telephone: (561)998-6734
Fax: (561)995-6731
Email: Kelly_Dunn @ajg.com
Name: Glen R.Volk
Company: Gallagher Benefit Services
Address: One Boca Place, Suite 200E
2255 Glades Road
Boca Raton, FL 33431
Telephone: (561)998-6755
Fax: (561)995-6731
Email: Glen_Volk@ajg.com
Name: Eric Hicks
Title: Stop Loss Carrier
Company: Symetra Financial
ti,AY,a
Address: 7300 Corporate Center Drive, Suite 205
Miami, FL 3°3126 ;t,,
4 'iTelephone: (305)715-;6x5 ''..:§§:.:;..
Name: Symetra,Financial ":. x
Title: Stop,Loss Carrier
Address: 73'00'°Corporate Center Drive'Suite 205
Miami,.FL 33126 ,;
Telephone: (305) 71:54-,6145,< :. ,�
Name ^ GallagherBeneft Services, Inc. '
Title: ,$:���,`:: Broker 4 ,.
Address: x';,: X1;900;West Loop South, Suite 1600
��`q, Houston ;,TX 7702Z*
,Z"....,, ;;;;,..;:,..1:.,,, ..qp
S
C: ','.,. Y
t x:
':'," t,.R4 Y+nbk6T 4,.
"'t xat \‘'X'4,,,.
F
�''yam ▪f.?L , ' ,, "°�" ' R,;* � `Y�°y e
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Amended
EXHIBIT H
Pharmacy Management
DEFINITIONS
H1.1 "90-Day Retail Network" means the Plan Manager provides for prescriptions with a greater than
eighty-three(83)days' supply.
H1.2 "Average Wholesale Price" or "AWP" means the average wholesale price of a Covered Drug on
the date the Covered Drug is processed according to the most;current information provided to the
titi'm4xc 4'�
Plan Manager by Medispan National Drug Data File=xeepprting source, if available or another
nationally recognized source in the prescription drug industryand approved by the Client. Under
the Retail Pharmacy Program, AWP is based on the°actual package size dispensed. Under the
,.size q;;purchased. The Plan Manager
shall not use or allow AWPs of licensed re packagers where the data reporting source identifies
an AWP price greater than the AWP price`'reported by the drug manufacturer who manufactured
the product. The applicable AWP for:,Prescription Drug Claims $f lxled at a Participating
Pharmacy, including retail Prescription Drug Claims, retail ion-line Prescription Drug Claims, and
Member Submitted Claims, will be the AWP:fk,then actual eleven digit'National Drug Code
k<
(NDC)package size used by the Participating Pharmacy to,11 p D g
, to�fill the Prescri tion�Dru Claim.
H1.3 "Brand Drug(s)" means single-source and/or multi-sourcejnon-generic prescription drugs as set
forth in Medispan National Drug Data File askthe primaryssource, and/or such other nationally
recognized source adopted by the Plan i' anager ,,
H1.4 "Copayment" means',that portion of the charge,f,Ofite4,prescriPtion or refill of a Covered Drug
(which amount:also•may be characterized oas comsuran'e'or other similar term) dispensed to a
Member that is the„responsibility of the Mernber' ".,�9°'
Y.', •Ya�•y ���a a� �,
H1.5 "Covered Drug(s)” means those°prescription drugs, supplies, and other items that are covered
under the P un
lan which, demstateor federal la v equire a prescription or the Client is required by
law toM`cover under the'Plan.or as mutually agreed to by the Client and the Plan Manager for
Nk b
purposes of this Agreement:T
H1.6 "Dispensing Limit", i`f applicable under the Client's Plan, means the monthly drug dosage limit
and/or:=the:,number of months the drug":=:usage is usually needed to treat a particular condition, as
Manager.
determine Mana
d,by the Plan
H1.7 "Drug List" meansxa list of;prescription drugs, medicines, medications and supplies specified by
";5yrrzq
the Plan Managery rRb:Th s list indicates applicable Dispensing Limits and/or any Prior
Authorization requirements, if any. This list is subject to change without notice. Drugs may be
subject to specific time'constraints.
H1.8 "Formulary" means the lists of drugs and supplies and/or the list of FDA-approved prescription
drugs and supplies developed by the Plan Manager's Pharmacy and Therapeutics Committee.
H1.9 "Generic Drug(s)" means a single and/or multi-source non-brand prescription drug, whether
identified by its chemical, proprietary or non-proprietary name, as set forth in Medispan National
Drug Data File as the primary source, and/or such other nationally recognized source adopted by
the Plan Manager.
•
H1.10 "Mail Service Pharmacy" means a duly licensed pharmacy operated by the Plan Manager or its
subsidiaries or affiliates, where prescriptions are filled and delivered to Members via the mail
service.
H1.11 "Maximum Allowable Cost" or "MAC" consists of a list of off-patent Brand Drugs and all other
Generic Drugs subject to maximum allowable cost payment schedules developed or selected by
the Plan Manager. The payment schedules specify the maximum unit ingredient cost payable by
the Client for drugs on the MAC list.
H1.12 "Member" means each person who is eligible as determined solely by the Client to receive
prescription drug benefits under the Plan.
ic..e•xr4d�w
"Member 'Dxl'e�r�•� �•k�
H1.13 Member Submitted Claim"means: (i)a claim for reimbursement submitted to the Plan Manager
y�.
hks'sx•per*s`y a.
by a Member for Covered Drugs dispensed by a pharmacy other than a Participating Pharmacy or
Mail Service Pharmacy; (ii) a claim for reimbursement,§submitted to the Plan Manager for
Covered Drugs filled at a Participating Pharmacy for whclix„the Member paid cash; or (iii)
subrogation claims for Covered Drugs submitted,by the United States.or any state under Medicaid
or similar government health care programss ,�• ``;w �
H1.14 "Participating Pharmacy” means a pharmacy' that has entered into an agreement with or has been
designated by the Plan Manager to provide services;to Members. =,•�,,s
H1.15 "Prescription Drug Claim" means n(i) ,a Member Submitted Claim; (ii) any other prescription
claims processed through the Plan Manager's claims adjudication systems or otherwise processed
by the Plan Manager in accordanc'-.;;;k7..,.,,witli the�a:terms of this:Agreement in connection with the
Client's Plan. °��. � �,•
y 3 gyp a6
ty
H1.16 "Prior Authorization", if applicable under:the Cli'ent's Pl'ankmeans the required prior approval
from the Plan Manager for the coverage of certain prescription drugs, medicines and medications,
including the dosage,quantity and duration.°p,;. ;W
H1.17 "Program Pricking Terms"mean the `° i)financial`or pricing terms and allowances set forth in this
Agreement, and(ii)the Rebates set forth'in thisxAgreement.
H1.18 "Single-Source Genericx,Drug" means a Generic Drug that has either recently come off patent
and does not generate 'discounts traditionally delivered by Generic Drugs, or has an exclusive
pharmaceutical manufacturer:
k-, aM
H1.19 "Specialty Drug":,,means a pharmaceutical drug that is used in the management of chronic and or
,,,tax,:, -:,,,,:w
genetic disease thati:is defied as having at least three of the following characteristics: (i) limited
or exclusive product distribution; (ii) the need for comprehensive Member training prior to and
therapy,
throughout y, �including the importance of medication adherence; (iii) specialized
g P
medication handling, shipping, and storage requirements; (iv) risk of significant waste which may
correlate to higher costs to the Client. The list of Specialty Drugs is subject to change as new
drugs become available. The Plan Manager will provide the list of Specialty Drugs upon request.
141.20 "Usual and Customary Price" or "U&C" means the actual retail price charged by a Participating
Pharmacy for a specific drug in a cash transaction on the date the drug is dispensed as reported to
the Plan Manager by the Participating Pharmacy.
H1.21 "Wholesale Acquisition Cost" or "WAC" means the suggested wholesale price for a given
pharmaceutical product as published and used by the Plan Manager in the latest update of
Medispan. In the event Medispan ceases publishing WAC and a new industry recognized source
for WAC is chosen by the Plan Manager, then the Plan Manager will provided thirty (30)
calendar days advance written notice of the new pricing source. The price will be updated at least
once a week beginning with an initial update in January 1 of each year.
H1.22 "Zero Balance Claim" or "ZBC" means any pharmacy claim transaction that is equal to or less
than the Member pay amount.
DRUG LIST AND PHARMACY PR®;GRAMS
H2.1 Pharmacy Management administers a standard DrugLists-thatis updated on an annual basis, or as
appropriate, as drugs enter or exit the market. Changes may°xalso,occur as Brand Drugs lose their
patents. Annual changes are effective Janua 1 pf each year. Additional fees may be assessed to
P g rYa���� .,�����;9;=
Clients that opt out of the annual changes,, In addition, rebates w-i�ll be impacted if annual Drug
List changes are not implemented. The additional charge will be calculated separately from the
fees provided in Exhibits"F2.1"and"H6.1" ,
1-12.2 Pharmacy Management administers the Dispensing Limits and Prior Authorization/Step Therapy
Programs. These programs are designed to promote lower cost alternatives and patient safety.
`` REBA I'ES q;
H3.1 Rebates are defined'°as revenue receivedkfrom pharmaceutical manufacturers for the placement of
their product within the PlanyManager's Drug;„0-s't and for.the°market share that product achieved
within its therapeutic;class. Rebates have been converted into a"per employee per month" credit
against the administration
H3.2 Rebates can``he impacted byVgovernment;regulatory or pharmaceutical industry action or the loss
;oftia drug's patent protection In the event changes impact the Plan Manager's pharmacy
rebate program, the Plan.,Managerreserves the right to calculate the impact these changes have on
guaranteed rebates.
H3.3 The Plan'`Manager's rebatekare dependent upon the Client using the Plan Manager's standard
Drug List and;:clinical edits; therefore if the Client opts out of these standards, rebates will be
impacted.
ti.�.z<yS�yn�x•aXbpA,ssge cs
H3.4 The Plan Manager's'rebate offer provided in this Exhibit"H" is based upon the pharmacy benefit
plan design proposed and subsequently agreed upon or altered during the implementation process.
A material modification of the plan design or program specifications may result in pricing
modifications by the Plan Manager.
H3.5 The Client agrees to receive the value of the rebates due to them in the form of a credit to their
administration fee. Amounts earned by the Plan Manager above this level may be retained by the
Plan Manager as reasonable compensation for services under this Agreement.
METHODOLOGY
H4.1 Pricing Benchmarks: The parties understand that pricing indices historically used, (and that are
the basis in this Agreement), are outside the control of the Client and the Plan Manager. The
parties also understand there is extra-market industry, legal, governmental and regulatory
activities which may lead to changes relating to, or elimination of, these pricing indices that could
alter the financial positions of the parties as intended under this Agreement. The parties agree
that, upon entering into this Agreement and thereafter, their mutual intent has been, and is to
maintain, pricing stability as intended and not to advantage either party to the detriment of the
other. Accordingly, to preserve this mutual intent, if the Plan Manager undertakes any of the
following:
(a) Changes the AWP source across its book of business (e.g., from MediSpan to another
nationally recognized source in the prescriptionkxdrugyindustry); or
(b) Maintains AWP as the pricing index,°;in`�=the event :the AWP methodology and/or its
calculation is changed, whether by the existing or alternative or
(c) Transitions the pricing index from mAWP to another°index or benchmark (e.g., to
Wholesale Acquisition Cost) ' ` °4e°
then Participating Pharmacy, Specialty Drug and`Mail Service Pharmacy "rates=and guarantees, as
applicable, will be modified as reasonably and equitably xnecessary to maintainthe pricing intent
under this Agreement. The Plan Manager shall provide the Client with at least sixty (60) day
notice of the change(or if such notice is not practicable.as;much notice as is reasonable under the
circumstances) and written illustration of then financial\irripact of the pricing source or index
change (e.g., specific drug examplese).e, If the Mient disputesbFthe illustration of the financial
��. *. k w
impact of the pricing soource,the parties agree to cooperate in goodkfaith to resolve such disputes.
�� �,��
PHARMACY NETWORK DISCOUNTS AND DISPENSING FEES
H5.1 The Plan Manager will assume all of ythe risks associated with negotiating and contracting with
paitic pating'pharmacies and;pharmaceutrcal=manufacturers. In accordance with the pricing listed
herein, the Plan` Manager xwrille be responsible for any amounts that it owes participating
pharmacies that exceeds the reimbursement it receives. The Plan Manager will also retain any
amounts.that it receives��athat are in.excess of the amounts it is obligated to pay. These amounts
pry
will he;4ed to contribute to the cost of administering the pharmacy and rebate program as well as
corporate margin goals. A
H5.2 RETAIL BRAND DRUG AND GENERIC DRUG DISCOUNT GUARANTEES IDENTIFIED
IN THE CHART BELOW WILL ADHERE TO THE FOLLOWING CRITERIA
(a) Retail Brand Drug Discount Guarantees: The overall Brand Drug discount guarantees
must be based on Non-secondary claims, using the actual eleven (11)digit National Drug
Code (NDC), submitted by a Participating Pharmacy at the time of adjudication for
Federal Legend Drug at the decimal-level quantity dispensed, excluding Compound
Prescriptions. Usual and Customary (U&C) claims will be excluded in the discount
guarantee calculations. Single-Source Generic Drug claims are included in the Brand
Drug discount. The financial impact(e.g. difference in cost between the Brand Drug and
Generic Drug plus copay) of additional Member ,paayments that apply to multi-source
drug claims due to specific mandatory Generic Drug penalties will be excluded from the
discount guarantee calculations, but the actual'xd,iscount on the Generic Drug claims
excluding any penalty amount will be include, Y'-loam,=,
Zero Balance Claims (ZBCs) are included in the discount,guarantee calculation, where
ZBCs are measured at the Plan Manager-calculated discounted,ingredient cost.
(b) Retail Generic Drug Discount Guarantees: The overall Generi&Vrug discount guarantees
must be based on Non-secondary claims;Busing the actual eleven (11)'digit National Drug
Code (NDC), submitted-aby a Participating Pharmacy at the time ot adjudication for
Federal Legend Drug at:'therdecimal-level? quantity dispensed, excluding Compound
Prescriptions. Usual and Customary (U&C)�claims will be excluded in the discount
guarantee calculations. Single-S°ourcea.Generic `Drug.,claims are included in the Brand
Drug discount. Specific eleven (11)-digit:,multi-sourceRdrug claims when Brand Drugs
are dispen0411i,be excluded from the Generic Drug discount guarantee calculations.
Zero Balance Claims(ZBCs) are included in the'discount guarantee calculation, where
ZBCs are measured atthe Plan Manager-calculated discounted ingredient cost.
H5.3 MAIL:SERVICE PHARMACY 4BRAND DRUG AND GENERIC DRUG DISCOUNT
GUARANTEES i IDENTIFIED IN `THE „CHART BELOW WILL ADHERE TO THE
FOLLOWING CRITERIA:
(a) 9x,Mail Service Pharmacy Brand Drug Discount Guarantees: The overall Brand Drug
�'�di`scount guarantees9:must be.based on Non-secondary claims, at the time of adjudication
1 r Federal Legend.. rugs at the decimal-level quantity dispensed, excluding Compound
Prescriptions. Multi source drug claims when Generic Drugs are dispensed will be
excluded from tleOrand Drug discount guarantee calculations. Usual and Customary
(U&C) claims{*,be excluded in the discount guarantee calculations. Single-Source
Generic Drug?cl`aims are included in the Brand Drug discount. The financial impact(e.g.
difference in cost between the Brand Drug and Generic Drug plus copay) of additional
Member payments that apply to multi-source drug claims due to specific mandatory
Generic Drug penalties will be excluded from the discount guarantee calculations, but the
actual discount on the Brand Drug claims excluding any penalty amounts will be
included.
Zero Balance Claims (ZBCs) are included in the discount guarantee calculation, where
ZBCs are measured at the Plan Manager-calculated discounted ingredient cost.
(b) Mail Service Pharmacy Generic Drug Discount Guarantees: The overall Generic Drug
discount guarantees must be based on Non-secondary claims, using the actual eleven(11)
digit National Drug Code(NDC), at the time of adjudication for Federal Legend Drugs at
the decimal-level quantity dispensed, excluding Compound Prescriptions. Usual and
Customary(U&C) claims will be excluded in the discount guarantee calculations. Single-
Source Generic Drug claims are included in the Brand Drug discount. Specific eleven
(11) digit multi-source drug claims when Brand Drugs are dispensed will be excluded
from the discount guarantee calculations.
Zero Balance Claims (ZBCs) are included in the discount guarantee calculation, where
ZBCs are measured at the Plan Manager-calculated discounted ingredient cost.
H5.4 Annual Calculation of the Guaranteed Pharmacy Network`and Mail Service Pharmacy AWP
Discounts and Dispensing Fees. The following calcul'ationsgapply to retail Brand Drug, retail
Generic Drug, Mail Service Pharmacy Brand DritW,and Mail Service Pharmacy Generic Drug
claims (collectively referred to herein as "Pricing Components"):,,where certain types of drug
e
claims (e.g. U&C, ZBC) may be included or -xcl`uded from individual;.calculations as required by
the definitions of specific guarantees as set forth in this Exhibit
(a) AWP Discount Calculations. The actualyRpaid amount by the Clent,;will be calculated
separately for each of the;Pricing Components byaggregating each Prroing Component's
total discounted AWP`lbilled«to the Client for'drug claims incurred during the Contract
Year. The guaranteed AWP discount for each Pricing Component will be calculated by
multiplying the AWP for each drugaclaim dispensed during the Contract Year by one (1)
cam. -'g:•,.
minus the applicable discount;as set`��forth•.in the Program Pricing Terms table in this
Exhibit H" °. For reference this:Rcan be expressed for each Pricing Component as AWP*
(one(l: -guaranteed discount as set.forth n the P ogram Pricing Terms table)).
..e,•s'. ,+k Ring'+° .
(b) Dispensing Fee Calculations. No explicit Dispensing Fee will be charged for drug claims
paid at U&Cx:,Separately for each Pricing Component, the actual average dispensing fee
billed to the�`Chent. will -bye calculated: by summing the dispensing fee paid on all
•
qualifying Prescription Drug Claims divided by the number of qualifying claims.
Dispensing fee guarantees will be'°calculated by multiplying the number of qualifying
claims by the,applicable fee as set forth in the Program Pricing Terms table in this
Exhibit"H".
True=.up Procedure',:'„
i. The.results for (a) and (b) above will be calculated for each Pricing Component.
If pan ;individual calculation results in a negative number (e.g. actual AWP
discount°or dispensing fee did not meet the guarantee to the Client referenced in
this Exhibit "H"), that Pricing Component will be deemed "in Deficit". Any
Pricing Component in Deficit based on the guarantee will be aggregated for
payment to the Client in accordance with Section (d) below. Any Pricing
Component calculation that results in a positive number (e.g. actual discount or
dispensing fee exceeded the guarantee to the Client referenced in this Exhibit
"H"), that Pricing Component will be deemed "in Surplus." No payment will be
due to the Plan Manager by the Client for"in Surplus"amounts.
ii. If the true-up process reveals a disparity in findings between the Client's auditor
and those of the Plan Manager, the Plan Manager shall provide to the Client
and/or the Client's auditor, upon request and at no cost, a claim summary file of
the disparate claims for each of the Pricing Components subcategorized by
analysis rationale (e.g. Brand Drug vs. Generic Drug classification, Single-
Source Generic Drug status, OTC status, etc.). The claim summary file must
contain at least the following data elements for each subcategory of each Pricing
Component: total number of claims, total dispensing fee, total ingredient cost
and total AWP.
iii. Annually, upon request, the Plan Manager will provide a utilization report of
aggregate discounts and dispensing fees for Mail Service Pharmacy and retail
pharmacy claims utilization.
(d) Payments Under Guarantees. Upon request within ninety (90) days following the end of
the Contract Year, the calculations described as set forth in this Exhibit "H5.4" shall be
made and will be consistent with the other requirements or exclusions provided for in this
Exhibit"H" or elsewhere in the Agreement. If the calculations above result in a negative
number (e.g., actual AWP discounts or dispensing fees did not meet the guaranteed
amounts), then the Plan Manager shall credit or pay the absolute value of the negative
number within thirty (30) days from the date of mutual agreement by the parties of the
reconciliation amount due. If credits apply after termination of this Agreement, then
amounts will be reimbursed to the Client by check. If the result of the calculation is
positive (e.g., actual AWP discounts and dispensing fees were better than the guaranteed
amounts), no amounts shall be due to the Plan Manager from the Client.
Retail Pharmacy Retail Pharmacy Network Brand
Brand Drug AWP Drug AWP discount guarantee
Retail Pharmacy Retail Pharmacy Network
Generic Drug Generic Drug AWP discount
AWP guarantee
Retail Network Brand Drug .„,6:%,=..:
.
Dispensing Fee guarantee, {°=. :V:.
Retail Pharmacy '=ss
Dispensing Fees ,,:-.:4.:,,,,,,N,' z°°>s�
Retail Pharmacy Network ' . `R�Surpluses and deficits will
Generic Drug Dispensing Fee '`:,,cross apply(offset).
guarantee �`m,'4,'$:;*'Y N',,,,$;,';,';,'p
w ''''' ',':',''',',.,i:%
Mail Service Mail Service Pharmacy Brand' �x`. = `°,
Pharmacy Brand Dr-ug AWP discount,:: b° .,: i°>.:
Drug AWP ; ` x,., :;
"t°v a anti
Mail Service Mail Service Pharmacy Generic ;,;
Pharmacy Geneeric Drug AWPAdiscourit guarantee ` e:
Drug AWP K� ' �,,.
Mail Service Pharmacy
°Mair-Service ? : Dispensing Fee guarantee
.,.yz 7 _' ti -: , °tip:
:', Pharmacy .cx-:
a.
Dispensing Fees
- : Mail;Service Pharmacy Generic
Drug Dispensing Fee guarantee
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-
H5.5 The Plan Manager will charge the Client for pharmacy network claims at the lowest of the
following less Member Corp yments or deductibles:
4.=„b.;;, w
(a) Participating Pharmacies U&C price; or
(b) Negotiated ingredient cost plus dispensing fee; or
(c) MAC plus the dispensing fee, if applicable.
H5.6 The Plan Manager shall provide a pharmacy network whereby the Members are always charged
the lowest of the following:
(a) Participating Pharmacies U&C price; or
(b) Negotiated ingredient cost plus dispensing fee; or
(c) Copayment.
FINANCIAL TERMS
H6.1 January 1,2013—December 31,2013 ,,s' =:ii,T
GUARANTEE PHARMACY NETWORK DISCOUNTS
<, x
RETAIL SERVICES: ..� ,> ,, ., Pty
Average Whole Sale Price(AWP)Discorunts`A 9,',°
°�:� may, �;.„ ����,on.
Brand Discount x 14 00% <'
Generic Non-MAC Discount:tix � 40 % ..;'....$i*-
a
.:. . . ,.ors
Generic MAC Discount 't°�°:�'`°s°9Z-:„,,,, 67 00%
Dispensing Fee: .. � . �W
Brand ,:,."1-",;,,,:-..,x,,,,7,*.,,,,, •4>: $61a 80. ; �, ,
Generic n ` ..; '' °'' $1.86',.. .i!,;:,:'y
MAIL SERVICES° �� k�
%.__ -$tie:
Average Whole Sale Price`(AWP)Discounts
Brand Discount-' \ 19.00%
p x
Generic Non-MAC Discount :` .. 19.00%
*4�a. ,. ,,w,Ar.
Generic'MAC Discount E.�=y; ', "'`p��"z"
x 67.00%
SPECIAL W SERVICES%
Average Whole\Sale P.ricey;(AWP)Discounts:
"°9�,
Brand Discount '.%` 12.50%
?:e
Mail Order Discount 13.00%
Dispensing Fee:
Brand $1.80
Mail Order $0.00
January 1,2014—September 30,2015
AWP DISCOUNTS AND DISPENSING FEES
Blended Retail Mail Service Pharmacy
Brand Drug AWP Discount 15.60% Brand Drug AWP Discount 20.50%
•
Brand Drug Dispensing Fee $1.42 Brand Drug Dispensing Fee $0.00
•
Specialty Drug AWP 16.70% -Specialty DrugeAWP 17.20%
Discount � ';;. Discount x_
Specialty Drug Dispensing $1.42 Specialty Drug Dispensing" $0.00
Fee Fee
Generic Drug MAC 72 00% ` �a Generic Drug MAC 72.00%
Discount � ? .":Discount
;x`
Generic Drug Dispensing ;$1.53 �; ' Generic Drug Dispensing $0.00
Fee .xy Fee
44�
REBATES
(These have been converted into "per employee per month"(PEPM)credit and are
included in the administration fees referenced above.)
Rebate'Basis:`z=,'" Retail Pharmacy Mail Service Pharmacy
Per Paid Claim $2.89 $8.67
H7.1 Subsidiary Pharmacies:
The Plan Manager has several licensed pharmacy subsidiaries, including our specialty pharmacy.
These entities may maintain product purchase discount arrangements and/or fee-for-service
arrangements with pharmaceutical manufacturers and wholesale distributors. These subsidiary
pharmacies contract for these arrangements on their own account in support of their various
pharmacy operations. Many of these subsidiary arrangements relate to services provided outside
of PBM arrangements, and are entered into irrespective of whether the particular drug is on one
of the Plan Manager's national formularies. Discounts and fee-for-service payments received by
the Plan Manager's subsidiary pharmacies are not part of the PBM Formulary or market share
rebates paid to the Plan Manager in connection with the Plati/Manager's PBM Formulary rebate
programs. In addition, these subsidiary pharmacy arrangements are negotiated separately from
the Plan Manager's PBM Formulary rebate contracts.,,_As such, they are not eligible for payment
to the Plan Manager's clients and are used as part of the operation of these subsidiary pharmacies.
H8.1 Emergencies:
skiax
The Plan Manager will allow immediatexreflls of medications to any4Participant located in an
"emergency area," defined as the area in Whichq the President or the state use Governor has declared
a major disaster or the Secretary of the Department of Health and Human Services (DHHS) has
declared a public health emergency For those'Participants residing in the emergency area, the
Plan Manager will remove all "refill too soon" editsfor the period of the emergency declaration.
Additionally, because the following`xconditions might: exist during an emergency: a limited
number of operational pharmacies limitations onf transportation and travel, and the disruption of
U.S. mail, the Plan Manager may allow an affected Participant;to obtain the maximum extended
day supply, if requested and available at the timeof4 refill The manner in which policy and
reaction to a crisis administered is within the sole"•discretion of the Plan Manager.
PHARMACY=FINANCIALASSUMPTIONS AND QUALIFICATIONS
1-19.1 The Plarma*Managementl;Program assumes the-following:
ti ,
(a)r:;;„ Retail guarantee exclud'es claims from non-traditional providers such as Long Term Care,
Home InfusioQ;Veteran, Military and Indian tribal and urban providers who may be
.::contracted to provide serviceunder Medicare Part D.
(b) The°=Client recognizes the Plan Manager as its Preferred Pharmacy Benefit Management
ProviderMra9sAt no:•litne will the Client designate more than one Pharmacy Benefits
ManagementaProvider as Preferred.
(c) The Client is responsible for more than 50%of the aggregate annual drug costs.
(d) Mail Service Pharmacy pricing includes handling and postage expense of Mail Service
Pharmacy prescriptions. Any increase in postage rates may cause modification of the
Mail Service Pharmacy pricing to reflect the increase.
(e) If the Client wishes to change the Plan Manager's standard approach to pharmacy plan
management (e.g., quantity limits, step therapy and Prior Authorization lists) then the
Plan Manager reserves the right to analyze the impact those changes may have on rebates
or administration fees and to make those changes accordingly. No change however will
be made to either the administration of the plan or the financial arrangement without
mutual agreement.
(f) High deductible health plan (HDHP) designs, flat coinsurance plans and RxImpact are
not eligible for rebates.
H9.2 The Plan Manager may exclude the following from any pricing guarantee:
(a) Specialty Drugs with limited or exclusive product distribution;
(b) 100% Member-paid plans including indemnification plans and/or health savings accounts
and claims paid at 100%at the point of sale;
(c) Compound drugs; and/or
(d) Vaccines, if covered under the prescription drug benefits, in those cases where the
purchase price includes both the ingredient cost and the cost to administer the vaccine.