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Amendment No. 2 to Plan Management Agreement 20 1(6 -292.44 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 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 1st day of October , 2015 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 as follows: A. Effective retroactively,as of January 1,2014, Section 3.1 of Article III, General Duties of Client, is hereby deleted in its entirety and replaced with the following: 3.1 The Client will identify and describe the Plan as to type on Exhibit "A" of this Agreement. B. Effective retroactively,as of January 1,2013, Section 3.5 of Article III, General Duties of Client, is hereby deleted in its entirety and replaced with the following: 3.5 The Client shall use reasonable efforts to ensure that current copies of the documents describing the Plan will be provided timely to the Plan Manager along with other appropriate materials governing the administration of the Plan. These documents and materials ma include em a to ee booklets summa descri•tions em•lo ee communications significantly affecting the PIan,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 under this Agreement, the Client agrees to review, edit and provide its signature approving the documents in a timely manner. The Client understands that if the Plan Manager does not 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, the Client may be responsible for fines levied by the federal government when it requires these documents to be distributed timely to PIan Participants pursuant to federal law. C. Effective retroactively, as of January 1, 2014, Article V, Claims Administration, is hereby amended to include the following: 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: 1 iI • The intensity and complexity of a service; • 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; • If the service is reasonably expected to be provided for the diagnosis reported; • Whether a service was performed specifically for the Participant; • Whether services can be billed as a complete set of services under one billing code. The Plan Manager develops claims processing edits based on review of one or more of the following sources, including but not limited to: • Medicare laws,regulations,manuals and other related guidance; • Appropriate billing practices; • National Uniform Billing Committee(NUBC); • American Medical Association(AMA)/Current Procedural Technology(CPT); • UB-04 Data Specifications Manual; • International Classification of Diseases of the U.S. Department of Health and Human Services and the Diagnostic and Statistical Manual of Mental Disorders; • Medical and surgical specialty certification boards; • The Plan Manager's medical coverage policies; and/or • Generally accepted standards of medical,behavioral health and dental practice based on credible scientific evidence recognized in published peer reviewed medical or dental literature. Changes to any one of the sources may or may not lead the Plan Manager to modify current or adopt new claims processing edits. 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 edits paid by the Participant will not apply to deductibles, out-of-pocket limits or Plan maximum out-of-pocket limits, 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 rovide a sample S .• Plan Descri.tion SPD or standard lan. • e concernin t 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 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 1, 2014, Section 7.12 of Article VII, Additional Administrative Services,is hereby deleted in its entirety. G. Effective retroactively, as of January 1, 2014, Section 16.3 of Article XVI, Miscellaneous, is hereby deleted in its entirety and replaced with the following: 16.3 Assignment and Delegation. Neither the Plan Manager nor the Client may assign or otherwise transfer its rights and obligations under this Agreement to any other person or entity without the prior written consent of the other party. However, the functions to be performed by the Plan Manager may at any time be transferred, subcontracted or delegated to an affiliate of the Plan Manager. The Plan Manager retains final authority to provide oversight over those affiliates, vendors and subcontracted entities. The Plan Manager will make available information regarding delegated functions to the Client if requested. Any other attempted assignment, subcontracting or delegation shall render this Agreement voidable at the option of the non-assigning party. 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. fa) 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. Participants are offered guidance by phone from the time the Plan Manager is notified of the pregnancy through baby's first months. fc) 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. 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. () Preventive Reminders, proactive, targeted campaigns that deliver messages to Participants ofprimary 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-managements 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 Demvelinating Polvradiculoneuropathy (CIDP), 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 continued guidance in reaching their long-term health goals, the opportunity to develop a long-term partnership with an experienced registered nurse. ig) Managed Behavioral Health,which applies a utilization management process to behavioral health conditions (mental health and substance abuse) to produce better outcomes and cost effective care. lei MvHumana, a personal, password protected home page located at www.humana.com. Participants can log-in anytime to find a participating provider, look up benefits or check 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 allows Participants quick access to important information using their mobile device's browser, including member ID card detail information and an urgent care finder. U) Humana Health Assessment a confidential, online lifestyle survey located at MvHumana.com. Upon completion of the assessment, Participants will receive an individualized health score and an action plan on how they can improve their health. Responses may also result in a referral to another clinical program. Wellness Calendar Program is an electronic package that the Employer will receive each month with a dedicated focus on a wellness topic. ,� 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 wants and needs, 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 provide onsite coordination at the Health Fair. Fees from third party vendors are not included in this service. Bariatric Management Program (Standard HMO Plan only), which provides guidance to Participants undergoing bariatric surgery. 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. 5 (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 Humana from their current health care plan with the least amount of disruption to, their care. f p) 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 the termination of the participating provider's contract was not due to misconduct on the part of the provider. Employee Assistance Program LEAP) provides confidential, personal assistance to employees and their family members to address personal and work- life issues. The EAP also provides employers consultative services to effectively manage performance challenges. Participant support includes: 1. Face-to-face counseling sessions with an EAP counselor,up to 5 sessions per issue per year. 2. Unlimited telephone assistance, 24 hours a day, 7 days a week, 365 days a year. 3. Telephonic and online EAP and Work-Life services for the following issues: a. Life issues such as stress, anxiety. depression, addiction and recovery,relationships.grief and loss. b. Legal issues such as estate planning and legal forms (wills, ower of attorne and final arran!ements . Free initial le l al consultation and 25% discount from standard legal fees for subsequent services for a network attorney. c. Financial issues such as budgeting, tax planning, debt management, retirement planning, insurance, home buying and refinancing and identity theft. d. Family issues such as childcare resources, summer school or vacation camp, child development, parenting, college planning, adoption, emergency and back-up care and caring for older adults. e. Work issues such as co-worker relationships, job stress, 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. 6 5. Follow-up. Employer support includes: 1. Management consultation. 2. Regulatory assistance. 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. 7 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. 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 Medical and Prescription Drug $40.31 $40.31 January 1,2014 through Per Employee Per Family September 30,2014 Medical and Prescription Drug $38.46 $38.46 October 1,2014 through Per Employee Per Family September 30,2015 Medical and Prescription Drug $39.48, $39.48 Services NOT included in the Administrative Fees Listed Above*: *Administrative fees indicated below are only applicable October 1,2014--September 30,2015. Prescription Drug: Standard Exit Reports consisting of Prior Authorizations, Claims History and Deductible Accumulators. Exit reports requested upon termination of this Agreement must be in a standard Humana format and pricing will be negotiated at time of request. 8 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 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 $86 per participant per month Congestive Heart Failure,Disease Management Program: Telephonic $86 per participant per month Coronary Artery Disease,Disease Management Program: Telephonic $86 per participant per month Diabetes,Disease Management Program: Telephonic $86 per participant per month End Stage Renal Disease,Disease Management Program: Onsite $86 per participant per month Telephonic $86 per participant per month Rare Diseases,Disease Management Program: High Intensity Disease-Interactive $86 per participant per month Low Intensity Disease-Interactive $86 per participant per month Low Intensity Disease—Self-directed $86 per participant per month External Stop Loss Interface $750 Per Month N. Effective retroactively, as of January 1, 2013, Section F3.1 (b) of Exhibit F, Schedule of Fees, is hereby deleted in its entirety and replaced with the following: th With respect to access to provider networks in accordance with Article 7.8 of this Agreement or other similar provider arrangements arranged through the Plan Manager, the Client understands that a special access fee may be payable, depending upon the network or arrangement. The Client and the Plan Manager agree that the Client will be obligated to pay 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 Amended Exhibit G, 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 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 Fe brk a 7 1 et ,20 X. • ATTEST: � \"B '"44 CITY OF MIAMI BEA y ��. • ..•.'9�'�4 lams Beach,Florid. lort>" , BY: 1. % = NCORP tOR ATED' 'afae .G • •do is , �4) Phil':p�Le e/ H2 TITLE: City Clerk ''��,......' T _;� r ATTEST: HUMANA It;SURAN • :MPANY Gr.en Bay,7iscons• BY: BY: _ • Tami Qu' . TITLE: TITLE: Segment Vice president and President, Large and Small Group APPROVED AS TO FORM&LANGUAGE &FOR EXECUTION 10 City Attomeyu Dote 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 'amibeachfl. ov � g 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: 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 Name: Sandra Dellacasa-Diaz 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: SandraDellacasa-Diaz@miamibeachfl.gov Name: Allison Williams Title: CFO,Finance Department Company: City of Miami Beach Address: 1700 Convention Center Drive Miami Beach,FL 33139 Telephone: (305)673-7000, ext.6608 Fax: (305)673-7795 Email: allisonwilliams @miamibeachfl.gov Name: Sara Patino Title: Financial Analyst ill Company: City of Miami Beach Address: 1700 Convention Center Drive Miami Beach,FL 33139 Telephone: (305)673-7000,Ext. 6497 Fax: (786)394-5369 Email: sarapatino @miamibeachfl.gov Name: Frank Estevez,Employee Benefits Manager Company: City of Miami Beach Address: 1700 Convention Center Drive Miami Beach,FL 33139 Telephone: (305)673-7000,ext.6209 Fax: (786)394-4935 Email: frankestevez@miamibeachfl.gov Name: Garrett Moore, Sr.Benefits Consultant Company: Gallagher Benefit Services Address: 2255 Glades Road,Suite 200E Boca Raton,FL 33431 Telephone: (561)998-6743 Fax: (561)995-6731 Email: garrett_moore@ajg.com Name: Eric Hicks Title: Stop Loss Carrier Company: Symetra Financial Address: 7300 Corporate Center Drive, Suite 205 Miami,FL 33126 Telephone: (305)715-6145 Name: Symetra Financial Title: Stop Loss Carrier Address: 7300 Corporate Center Drive, Suite 205 Miami,FL 33126 Telephone: (305)715-6145 Name: Glen Volk Title: Area Vice-President,Consulting Actuary Company: Gallagher Benefit Services,Inc. Address: 2255 Glades Road, Suite 200E Boca Raton,FL 33431 Phone: (561)998-6755 Fax: (561)998-6731 Email: glen_volk@ajg.com Name: Kelly Dunn, Sr.Account Manager Company: Gallagher Benefit Services Address: 2255 Glades Road, Suite 200E Boca Raton,FL 33431 Telephone: (561)998-6734 Fax: (561)995-6731 Email: Kelly_dunn @ajg.com 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. 111.2 "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 Plan Manager by Medispan National Drug Data File reporting source, if available or another nationally recognized source in the prescription drug industry and approved by the Client. Under the Retail Pharmacy Program, AWP is based on the actual package size dispensed. Under the Mail Service Pharmacy Program, AWP is based on package size 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 filled at a Participating Pharmacy,including retail Prescription Drug Claims,retail on-line Prescription Drug Claims, and Member Submitted Claims, will be the AWP for the actual eleven digit National Drug Code (NDC)package size used by the Participating Pharmacy to fill the Prescription Drug Claim. HI.3 "Brand Drug(s)" means single-source and/or multi-source non-generic prescription drugs 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. H1.4 "Copayment"means that portion of the charge for each prescription or refill of a Covered Drug (which amount also may be characterized as coinsurance or other similar term) dispensed to a Member that is the responsibility of the Member. H1.5 "Covered Drug(s)" means those prescription drugs, supplies, and other items that are covered under the Plan which,under state or federal law,require a prescription or the Client is required by law to cover under the Plan or as mutually agreed to by the Client and the Plan Manager for purposes of this Agreement. H1.6 "Dispensing Limit", if 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 determined by the Plan Manager. H1.7 "Drug List" means a list of prescription drugs, medicines, medications and supplies specified by the Plan Manager. This 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. HI.13 "Member Submitted Claim"means: (i)a claim for reimbursement submitted to the Plan Manager 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 which 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 programs. 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. HI.15 "Prescription Drug Claim" means: (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 accordance with the terms of this Agreement in connection with the Client's Plan. H1.16 "Prior Authorization", if applicable under the Client's Plan, means the required prior approval from the Plan Manager for the coverage of certain prescription drugs,medicines and medications, including the dosage,quantity and duration. H1.17 "Program Pricing Terms"mean the: (i)financial or pricing terms and allowances set forth in this Agreement,and(ii)the Rebates set forth in this Agreement. H1.18 "Single-Source Generic 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. H1.19 "Specialty Drug" means a pharmaceutical drug that is used in the management of chronic and or genetic disease that is defined 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 throughout therapy, including the importance of medication adherence; (iii) specialized 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. H1.20 "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. 111.22 "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 PROGRAMS H2.1 Pharmacy Management administers a standard Drug List that is updated on an annual basis,or as appropriate, as drugs enter or exit the market. Changes may also occur as Brand Drugs lose their patents. Annual changes are effective January 1 of each year. Additional fees may be assessed to Clients that opt out of the annual changes. In addition, rebates will 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". H2.2 Pharmacy Management administers the Dispensing Limits and Prior Authorization/Step Therapy Programs. These programs are designed to promote lower cost alternatives and patient safety. REBATES H3.1 Rebates are defined as revenue received from pharmaceutical manufacturers for the placement of their product within the Plan Manager's Drug List 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 fee. H3.2 Rebates can be impacted by government,regulatory or pharmaceutical industry action or the loss of a drug's patent protection. In the event that changes impact the Plan Manager's pharmacy rebate program,the Plan Manager reserves the right to calculate the impact these changes have on guaranteed rebates. H3.3 The Plan Manager's rebates are 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. 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 prescription drug industry); 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 sources;or (c) Transitions the pricing index from AWP to another index or benchmark (e.g., to Wholesale Acquisition Cost) then Participating Pharmacy, Specialty Drug and Mail Service Pharmacy rates and guarantees, as applicable, will be modified as reasonably and equitably necessary to maintain the 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 the financial impact of the pricing source or index change (e.g., specific drug examples). If the Client disputes the illustration of the financial impact of the pricing source,the parties agree to cooperate in good faith to resolve such disputes. PHARMACY NETWORK DISCOUNTS AND DISPENSING FEES H5.1 The Plan Manager will assume all of the risks associated with negotiating and contracting with participating pharmacies and pharmaceutical manufacturers. In accordance with the pricing listed herein, the Plan Manager will 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 that are in excess of the amounts it is obligated to pay. These amounts will be used to contribute to the cost of administering the pharmacy and rebate program as well as corporate margin goals. 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 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 Generic Drug claims excluding any penalty amount 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) Retail 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), 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. Specific eleven (11) digit multi-source drug claims when Brand Drugs are dispensed will be excluded from the Generic Drug 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. H5.3 MAIL SERVICE PHARMACY BRAND DRUG AND GENERIC DRUG DISCOUNT GUARANTEES IDENTIFIED IN THE CHART BELOW WILL ADHERE TO THE FOLLOWING CRITERIA: (a) Mail Service Pharmacy Brand Drug Discount Guarantees: The overall Brand Drug discount guarantees must be based on Non-secondary claims, at the time of adjudication for Federal Legend Drugs at the decimal-level quantity dispensed, excluding Compound Prescriptions. Multi-source drug claims when Generic Drugs are dispensed will be excluded from the Brand Drug discount guarantee calculations. 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 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 calculations apply to retail Brand Drug, retail Generic Drug, Mail Service Pharmacy Brand Drug and Mail Service Pharmacy Generic Drug claims (collectively referred to herein as "Pricing Components") where certain types of drug claims(e.g.U&C,ZBC)may be included or excluded from individual calculations as required by the definitions of specific guarantees as set forth in this Exhibit"H5.4". (a) AWP Discount Calculations. The actual paid amount by the Client will be calculated separately for each of the Pricing Components by aggregating each Pricing Component's total discounted AWP billed 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 drug claim dispensed during the Contract Year by one(1) minus the applicable discount as set forth in the Program Pricing Terms table in this Exhibit"H". (For reference,this can be expressed for each Pricing Component as AWP* (one(1)-guaranteed discount as set forth in the Program Pricing Terms table)). (b) Dispensing Fee Calculations. No explicit Dispensing Fee will be charged for drug claims paid at U&C. Separately for each Pricing Component, the actual average dispensing fee billed to the Client will be 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". (c) True-up Procedure. i. The results for(a) and(b) above will be calculated for each Pricing Component. If an 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) Pa ents Under Guarantees. U.on request within nine 90 da s followin. 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 exclusionsprovided 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 Mana'er shall credit or •a the absolute value of the ne.ative 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 Dispensing Fee guarantee Retail Pharmacy Dispensing Fees Retail Pharmacy Network Surpluses and deficits will Generic Drug Dispensing Fee cross apply(offset). guarantee Mail Service Mail Service Pharmacy Brand Pharmacy Brand Drug AWP discount Drug AWP Mail Service Mail Service Pharmacy Generic Pharmacy Generic Drug AWP discount guarantee Drug AWP Mail Service Pharmacy Mail Service Dispensing Fee guarantee Pharmacy Dispensing Fees Mail Service Pharmacy Generic Drug Dispensing Fee guarantee H5.5 The Plan Manager will charge the Client for pharmacy network claims at the lowest of the following less Member Copayments or deductibles: (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 116.1 January 1,2013—December 31,2013 GUARANTEE PHARMACY NETWORK DISCOUNTS RETAIL SERVICES: Average Whole Sale Price(AWP)Discounts: Brand Discount 14.00% Generic Non-MAC Discount 14.00% Generic MAC Discount 67.00% Dispensing Fee: Brand $1.80 Generic $1.80 MAIL SERVICES: Average Whole Sale Price(AWP)Discounts: Brand Discount 19.00% Generic Non-MAC Discount 19.00% Generic MAC Discount 67.00% SPECIALTY SERVICES: Average Whole Sale Price(AWP)Discounts: Brand Discount 12.50% 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 Drug AWP 17.20% Discount Discount Specialty Drug Dispensing $1.42 Specialty Drug Dispensing $0.00 Fee Fee Generic Drug MAC 72.00% Generic Drug MAC 72.00% Discount Discount Generic Drug Dispensing $1.53 Generic Drug Dispensing $0.00 Fee Fee REBATES (These have been converted into a"per employee per month"(PEPM)credit and are included in the administration fees referenced above.) Rebate Basis Retail Pharmacy Mail Service Pharmacy • Per Paid Claim $2.89 $8.67 H7.I 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 Plan 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: The Plan Manager will allow immediate refills of medications to any Participant located in an "emergency area,"defined as the area in which the President or the state's 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" edits for the period of the emergency declaration. Additionally, because the following conditions might exist during an emergency: a limited number of operational pharmacies, limitations on 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 time of refill. The manner in which policy and reaction to a crisis is administered is within the sole discretion of the Plan Manager. PHARMACY FINANCIAL ASSUMPTIONS AND QUALIFICATIONS H9.1 The Pharmacy Management Program assumes the following: (a) Retail guarantee excludes claims from non-traditional providers such as Long Term Care, Home Infusion, Veteran, Military and Indian tribal and urban providers who may be contracted to provide service under Medicare Part D. (b) The Client recognizes the Plan Manager as its Preferred Pharmacy Benefit Management Provider. At no time will the Client designate more than one Pharmacy Benefits Management Provider 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.