As filed with the Securities and Exchange Commission on October 9, 2001
Registration No. 333-
Delaware 6324 04-1406317
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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7711 Carondelet Avenue, Suite 800
Saint Louis, Missouri 63105
(314) 725-4477
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Michael F. Neidorff
Centene Corporation
7711 Carondelet Avenue, Suite 800
Saint Louis, Missouri 63105
(314) 725-4477
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
John L. Gillis, Jr., Esq. Mark L. Johnson, Esq.
Armstrong Teasdale LLP Hale and Dorr LLP
One Metropolitan Square, Suite 2600 60 State Street
Saint Louis, Missouri 63102-2740 Boston, Massachusetts 02109
Telephone: (314) 621-5070 Telephone: (617) 526-6000
Fax: (314) 612-2248 Fax: (617) 526-5000
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Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [_]
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] 333-
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] 333-
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] 333-
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [_]
CALCULATION OF REGISTRATION FEE
Proposed Maximum Amount of
Title of Each Class of Securities to be Registered Aggregate Offering Price(1) Registration Fee
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Common stock, par value $.001........... $57,500,000 $14,375
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 9, 2001
PROSPECTUS
Shares
[LOGO] Centene Logo
Common Stock
This is an initial public offering of shares of common stock of Centene Corporation. We expect that the initial public offering price will be between $ and $ per share.
We have applied for approval for trading and quotation of our common stock on the Nasdaq National Market under the symbol "CNTE."
Our business involves significant risks. These risks are described under the caption "Risk Factors" beginning on page 8.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per Share Total
Public offering price................. $ $
Underwriting discounts and commissions $ $
Proceeds, before expenses, to Centene. $ $
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The underwriters may also purchase from the selling stockholders named on page 55 up to an additional shares of common stock at the public offering price, less the underwriting discounts and commissions, to cover over-allotments. We will not receive any of the proceeds of the sale of shares by the selling stockholders.
SG COWEN
THOMAS WEISEL PARTNERS LLC
CIBC WORLD MARKETS
, 2001
[Graphic depicting maps of Wisconsin, Indiana and Texas. Appearing near each state are (a) the logo of our plan in that state and (b) membership, counties served and provider information for the plan in that state.]
TABLE OF CONTENTS
Page
Prospectus Summary..................... 4
Risk Factors........................... 8
Forward-Looking Statements............. 18
Use of Proceeds........................ 19
Dividend Policy........................ 19
Capitalization......................... 20
Dilution............................... 21
Selected Consolidated Financial Data... 22
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 23
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Page
Business.................................. 30
Management................................ 43
Related Party Transactions................ 52
Principal and Selling Stockholders........ 54
Description of Capital Stock.............. 56
Shares Eligible for Future Sale........... 58
Underwriting.............................. 61
Legal Matters............................. 63
Experts................................... 63
Where You Can Find Additional Information. 63
Index to Consolidated Financial Statements F-1
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You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different. We are offering to sell and seeking offers to buy shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.
Until , which is 25 days after the date of this prospectus, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
"CENTENE" and "NURSEWISE" are our registered service marks, the Centene logo is our service mark and "CONNECTIONS" is our trademark. We have also filed an application with the U.S. Patent and Trademark Office to register "START SMART FOR YOUR BABY" as our trademark. This prospectus also contains trademarks, service marks and trade names of other companies.
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the risk factors and the consolidated financial statements and related notes included in this prospectus, before you decide to invest in our common stock.
Centene Corporation
We provide managed care programs and related services to individuals receiving benefits under Medicaid, including Supplemental Security Income, and the State Children's Health Insurance Program. We have health plans in Wisconsin, Indiana and Texas. In each of our service areas we have more Medicaid members than any other managed care entity. We believe our local approach to managing our health plans, including provider and member services, enables us to provide accessible, high quality, culturally-sensitive healthcare services to our members. Our disease management, educational and other initiatives are designed to help members best utilize the healthcare system to ensure they receive appropriate, medically necessary services and effective management of routine health problems, as well as more severe acute and chronic conditions. We combine our decentralized local approach with centralized finance, information systems, claims processing and medical management support functions. In order to focus on Medicaid and the State Children's Health Insurance Program, we do not offer Medicare or commercial products. For the six months ended June 30, 2001, we generated $150.9 million in revenues and $5.4 million in net income.
Our Industry
Medicaid is a health insurance program for low-income individuals and individuals with disabilities. In 1998, Medicaid covered 15% of the total U.S. population, or 40.6 million people. Historically, children have represented the largest eligibility group for Medicaid, accounting for approximately 46% of the covered individuals in 1998. The State Children's Health Insurance Program was established to provide coverage for low-income children not otherwise covered by Medicaid or other insurance programs. All states have adopted the State Children's Health Insurance Program.
Since the early 1980s, increasing healthcare costs combined with significant growth in the number of Medicaid recipients have led many states to establish Medicaid managed care initiatives. State premium payments to managed care plans are financed in part by the federal government and increased from $700 million in 1988 to $13.2 billion in 1998. Recently, a growing number of states have mandated that their Medicaid recipients enroll in managed care plans.
Our Approach
Our approach to managed care is based on the following key attributes:
. Medicaid Expertise. Over the last 17 years, we have developed a specialized Medicaid expertise that has helped us establish and maintain strong relationships with our constituent communities of members, providers and state governments. We achieve savings for state governments and improve medical outcomes for members by reducing inappropriate emergency room use, inpatient days and high cost interventions, as well as by managing care of chronic illnesses.
. Localized Services, Support and Branding. We provide access to healthcare services through local networks of providers and staff who focus on the cultural norms of their individual communities. We use locally recognized plan names, and we tailor our materials and processes to meet the needs of the communities and the state programs we serve.
. Physician-Driven Approach. We have implemented a physician-driven approach designed to eliminate unnecessary costs, improve service to our members and simplify the administrative burdens on our providers. This approach has enabled us to strengthen our provider networks through improved physician recruitment and retention that, in turn, have helped to increase our membership base.
. Efficiency and Scalability of Business Model. The combination of our decentralized local approach to operating our health plans and our centralized finance, information systems, claims processing and medical management support functions allows us to quickly and economically integrate new business opportunities.
. Specialized Systems and Technology. Through our specialized information systems, we are able to strengthen our relationships with providers and states, which helps us to grow our membership base. These systems also help us identify needs for new healthcare programs. Physicians use our claims, utilization and membership data to manage their practices more efficiently, and they benefit from our timely and accurate payments. State agencies use data from our information systems to demonstrate that their Medicaid populations are receiving quality healthcare in an efficient manner.
. Complementary Business Lines. We have begun to broaden our service offerings to address areas that we believe have been traditionally underserved by Medicaid managed care organizations. We believe other business lines, such as our NurseWise triage program, will allow us to provide innovative healthcare management solutions while diversifying our sources of revenue.
Our Strategy
Our objective is to become the leading national Medicaid managed care organization. We intend to achieve this objective by implementing the following key components of our strategy:
. increase penetration of existing state markets;
. develop and acquire additional state markets;
. diversify our business lines; and
. leverage our information technologies to enhance operating efficiencies.
Corporate Information
We were organized in Wisconsin in 1993 as Coordinated Care Corporation, and we changed our corporate name to Centene Corporation in 1997. We initially were formed to serve as a holding company for a Medicaid managed care line of business that has been operating in Wisconsin since 1984. We will reincorporate in Delaware immediately before the closing of this offering. Our corporate office is located at 7711 Carondelet Avenue, Suite 800, Saint Louis, Missouri 63105, and our telephone number is (314) 725-4477. The address of our Web site is www.centene.com. The information on our Web site is not part of this prospectus.
The Offering
Common stock we are offering...................... shares
Common stock to be outstanding after this offering shares
Underwriters' over-allotment option............... shares
Use of proceeds................................... We intend to use our net proceeds of this offering
to repay $4.0 million in principal amount of
subordinated notes and for general corporate
purposes, including working capital and potential
acquisitions. See "Use of Proceeds."
Proposed Nasdaq National Market symbol............ CNTE
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The number of shares of common stock to be outstanding after this offering is based on shares of common stock outstanding as of October 5, 2001. This number includes shares to be issued upon conversion of our outstanding preferred stock and the exercise of outstanding warrants at or before the closing of this offering. It excludes:
. shares subject to stock options outstanding as of October 5, 2001 at a weighted average exercise price of $ per share; and
. additional shares reserved as of October 5, 2001 for future issuance under our stock-based compensation plans.
Except where we state otherwise, the information we present in this prospectus reflects:
. no exercise of the underwriters' over-allotment option;
. a -for- common stock split to be effected on , 2001;
. the automatic conversion of our outstanding preferred stock into common
stock immediately before the closing of this offering;
. the exercise of outstanding warrants to purchase common stock before the
closing of this offering; and
. our reincorporation in Delaware immediately before the closing of this offering, which will result in changes in our charter and by-laws and in the conversion of our outstanding Series A voting common stock and Series B non-voting common stock into a single class of common stock.
Summary Consolidated Financial and Operating Data
(dollars in thousands, except per share data)
The following summary consolidated statement of operations data are derived from, and qualified by reference to, the consolidated financial statements and related notes appearing elsewhere in this prospectus. The pro forma share information included in the consolidated statement of operations data have been computed as described in note 22 of those notes.
Six Months Ended
Year Ended December 31, June 30,
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1998 1999 2000 2000 2001
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Statement of Operations Data:
Premiums (1)......................................... $149,577 $200,549 $ 216,414 $100,959 $ 150,682
Administrative services fees......................... 861 880 4,936 2,064 182
Total revenues..................................... 150,438 201,429 221,350 103,023 150,864
Medical services costs............................... 132,199 178,285 182,495 85,514 125,039
General and administrative expenses.................. 25,066 29,756 32,335 15,517 18,406
Total operating expenses........................... 157,265 208,041 214,830 101,031 143,445
Income (loss) from continuing operations (2)......... (4,739) (5,484) 7,728 2,370 5,412
Net income (loss).................................... (6,962) (9,411) 7,728 2,370 5,412
Pro forma net income per common share:
Basic.............................................. $ 1.14 $ 0.80
Diluted............................................ $ 1.13 $ 0.70
Pro forma weighted average common shares outstanding:
Basic.............................................. 6,775,866 6,783,247
Diluted............................................ 6,819,595 7,748,825
Operating Data:
Medical loss ratio (3)............................... 88.4% 88.9% 84.3% 84.7% 83.0%
General and administrative expenses ratio (4)........ 16.7% 14.8% 14.6% 15.1% 12.2%
EBITDA from continuing operations (5)................ $ (4,403) $ (3,844) $ 8,830 $ 3,172 $ 10,101
Members at end of period............................. 135,600 142,300 194,200 179,300 213,200
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The following table summarizes our balance sheet data at June 30, 2001:
. on an actual basis;
. on a pro forma basis to reflect the conversion of outstanding preferred stock into common stock, as described in note 22 of the notes to the consolidated financial statements included elsewhere in this prospectus; and
. on a pro forma as adjusted basis to also reflect the exercise of outstanding warrants before the closing of this offering, our sale of the shares offered by us at an assumed public offering price of $ per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and the application of our estimated net proceeds.
June 30, 2001
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Pro Forma
Actual Pro Forma As Adjusted
------- --------- -----------
Balance Sheet Data:
Cash, cash equivalents and short-term investments $50,779 $50,779 $
Total assets 92,431 92,431
Long-term debt, net of current portion 4,000 4,000 --
Redeemable convertible preferred stock 19,124 -- --
Total stockholders' equity (deficit) (3,890) 15,234
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RISK FACTORS
You should carefully consider the risks described below before making an investment decision. The trading price of our common stock could decline due to any of these risks, in which case you could lose all or part of your investment. You should also refer to the other information in this prospectus, including our consolidated financial statements and related notes. The risks and uncertainties described below are those that we currently believe may materially affect our company. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial also may become important factors that affect our company.
Risks Related to Being a Regulated Entity
Reductions in Medicaid funding could substantially reduce our profitability.
Nearly all of our revenues come from Medicaid premiums. The base premium rate paid by each state differs, depending on a combination of factors such as defined upper payment limits, a member's health status, age, gender, county or region, benefit mix and member eligibility categories. Future levels of Medicaid premium rates may be affected by continued government efforts to contain medical costs and may further be affected by state and federal budgetary constraints. Changes to Medicaid programs could reduce the number of persons enrolled or eligible, reduce the amount of reimbursement or payment levels, or increase our administrative or healthcare costs under those programs. States periodically consider reducing or reallocating the amount of money they spend for Medicaid. We believe that additional reductions in Medicaid payments could substantially reduce our profitability. Further, our contracts with the states are subject to cancellation by the state immediately or after a short notice period in the event of unavailability of state funds.
If state governments do not renew our contracts with them, our business will suffer.
We provide healthcare services through five contracts with the regulatory entities in the jurisdictions in which we operate. These contracts expire on various dates between December 31, 2001 and December 31, 2002. Two of those contracts accounted for 74% of our revenues for the six months ended June 30, 2001. Four of our contracts are subject to a re-bidding process. We are subject to a re-bidding process in each of our three Texas markets every five years and in our Indiana market every two years. If any of our contracts is not renewed, is renewed on less favorable terms or is terminated for cause, our business will suffer. Termination or non-renewal of any one contract could materially affect our operating results.
Changes in government regulations designed to protect providers and members rather than our stockholders could force us to change how we operate and could harm our business.
Our business is extensively regulated by the states in which we operate and by the federal government. The applicable laws and regulations are subject to frequent change and generally are intended to benefit and protect health plan providers and members rather than stockholders. Changes in existing laws and rules, the enactment of new laws and rules, and changing interpretations of these laws and rules could, among other things:
. force us to restructure our relationships with providers within our network;
. require us to implement additional or different programs and systems;
. mandate minimum medical expense levels as a percentage of premiums revenues;
. restrict revenue and enrollment growth;
. require us to develop plans to guard against the financial insolvency of our providers;
. increase our healthcare and administrative costs;
. impose additional capital and reserve requirements; and
. increase or change our liability to members in the event of malpractice by our providers.
For example, Congress currently is considering various forms of legislation commonly known as the Patients' Bill of Rights. We cannot predict the impact of this legislation, if adopted, on our business.
Regulations may decrease the profitability of our health plans.
Our Texas plans are required to pay a rebate to the state in the event profits exceed established levels. This regulatory requirement, changes in this requirement or the adoption of similar requirements by our other regulators may limit our ability to increase our overall profits as a percentage of revenues. In addition, states may attempt to reduce their contract premium rates if regulators perceive our medical loss ratio as too low. Any of these regulatory actions could harm our operating results.
Failure to comply with government regulations could subject us to civil and criminal penalties.
Violation of the laws or regulations governing our operations could result in the imposition of sanctions, the cancellation of our contracts to provide services, or the suspension or revocation of our licenses. For example, failure to pay our providers promptly could result in the imposition of fines and other penalties.
The Health Insurance Portability and Accountability Act of 1996, or HIPAA, broadened the scope of fraud and abuse laws applicable to healthcare companies. HIPAA created civil penalties for, among other things, billing for medically unnecessary goods or services. HIPAA established new enforcement mechanisms to combat fraud and abuse, including a whistle blower program. Further, a new regulation promulgated pursuant to HIPAA imposes civil and criminal penalties for failure to comply with the privacy standards set forth in the regulation relating to health records. In the press release related to the new regulation, the Department of Health and Human Services, or HHS, called on Congress to enact legislation to "fortify" penalties and to create a private right of action under HIPAA, which would entitle patients to seek monetary damages for violations of the regulation.
The federal government has enacted, and state governments are enacting, other fraud and abuse laws. Our failure to comply with HIPAA or these other laws could result in criminal or civil penalties and exclusion from Medicaid or other governmental healthcare programs and could lead to the revocation of our licenses. These penalties or exclusions, were they to occur, would negatively impact our ability to operate our business.
Compliance with new government regulations may require us to make unanticipated expenditures.
In August 2000, HHS issued a new regulation under HIPAA requiring the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically. We are required to comply with the new regulation by October 16, 2002, and Texas has indicated that it may impose an earlier compliance deadline. Also in August 2000, HHS proposed a regulation that would require healthcare participants to implement organizational and technical practices to protect the security of electronically maintained or transmitted health-related information. In December 2000, HHS issued a new regulation mandating heightened privacy and confidentiality protections under HIPAA that became effective on April 14, 2001. Compliance with this regulation will be required by April 15, 2003, unless the Bush administration revises the regulation or defers the implementation date.
In January 2001, the federal Centers for Medicare and Medicaid Services, or CMS (then the Health Care Financing Administration), published new regulations regarding Medicaid managed care. CMS subsequently delayed the effective date of these regulations until August 16, 2002. In August 2001, CMS proposed new regulations that would replace the January regulations in their entirety. If enacted, these regulations would implement the requirements of the Balanced Budget Act of 1997 that are intended to give states more flexibility in their administration of Medicaid managed care programs, provide new patient protections for Medicaid managed care enrollees and require states to meet new actuarial soundness requirements.
The Bush administration's review of the HIPAA and other newly published regulations, the states' ability to promulgate stricter rules, and uncertainty regarding many aspects of the regulations make compliance with the relatively new regulatory landscape difficult. Our existing programs and systems would not enable us to comply in all respects with these new regulations. In order to comply with the regulatory requirements, we will be required to employ additional or different programs and systems, the costs of which are unknown to us at this time. Further, compliance with these pervasive regulations would require changes to many of the procedures we currently use to conduct our business, which may lead to additional costs that we have not yet identified. We do not know whether, or the extent to which, we will be able to recover our costs of complying with these new regulations from the states. The new regulations and the related compliance costs could have a material adverse effect on our business.
Changes in healthcare law may reduce our profitability.
Numerous proposals relating to changes in healthcare law have been introduced, some of which have been passed by Congress and the states in which we operate or may operate in the future. Changes in applicable laws and regulations are continually being considered, and interpretations of existing laws and rules may also change from time to time. We are unable to predict what regulatory changes may occur or what effect any particular change may have on our business. These changes could reduce the number of persons enrolled or eligible for Medicaid and reduce the reimbursement or payment levels for medical services. More generally, we are unable to predict whether new laws or proposals will favor or hinder the growth of managed healthcare.
A recent example is state and federal legislation that would enable physicians to collectively bargain with managed healthcare organizations. The legislation, as currently proposed, generally contains an exemption for public sector managed healthcare organizations. If legislation of this type were passed without this exemption, it would negatively impact our bargaining position with many of our providers and might result in an increase in our cost of providing medical benefits.
We cannot predict the outcome of these legislative or regulatory proposals or the effect that they will have on us. Legislation or regulations that require us to change our current manner of operation, provide additional benefits or change our contract arrangements may seriously harm our operations and financial results.
If we are unable to participate in SCHIP programs our growth rate may be limited.
The State Children's Health Insurance Program is a relatively new federal initiative designed to provide coverage for low-income children not otherwise covered by Medicaid or other insurance programs. The programs vary significantly from state to state. Participation in SCHIP programs is an important part of our growth strategy. If states do not allow us to participate or if we fail to win bids to participate, our growth strategy may be materially and adversely affected.
If state regulators do not approve payments of dividends and distributions by our subsidiaries to us, we may not have sufficient funds to implement our business strategy.
We principally operate through our health plan subsidiaries. If funds normally available to us become limited in the future, we may need to rely on dividends and distributions from our subsidiaries to fund our operations. These subsidiaries are subject to regulations that limit the amount of dividends and distributions that can be paid to us without prior approval of, or notification to, state regulators. If these regulators were to deny our subsidiaries' request to pay dividends to us, the funds available to our company as a whole would be limited, which could harm our ability to implement our business strategy.
Risks Related to Our Business
Receipt of inadequate premiums would negatively affect our revenues and profitability.
Nearly all of our revenues are generated by premiums consisting of fixed monthly payments per member. These premiums are fixed by contract, and we are obligated during the contract periods to provide healthcare services as established by the state governments. We use a large portion of our revenues to pay the costs of healthcare services delivered to our customers. If premiums do not increase when expenses related to medical services rise, our earnings would be affected negatively. In addition, our actual medical services costs may exceed our estimates. The premiums we receive under our current contracts may therefore be inadequate to cover all claims, which would cause our medical loss ratio to increase and our profits to decline. In addition, it is possible for a state to increase the rates payable to the hospitals without granting a corresponding increase in premiums to us. If this were to occur, or if other states were to take similar actions, our profitability would be harmed.
Failure to effectively manage our medical costs or related administrative costs would reduce our profitability.
Our profitability depends, to a significant degree, on our ability to predict and effectively manage expenses related to health benefits. We have less control over the costs related to medical services than we do over our general and administrative expenses. Historically, our expenses related to medical services as a percentage of premiums revenues, known as the medical loss ratio, have fluctuated. For example, our medical loss ratio was 83.0% for the six months ended June 30, 2001 and 84.7% for 2000, but was 88.9% for 1999 and 88.4% for 1998. Because of the narrow margins of our health plan business, relatively small changes in our medical loss ratio can create significant changes in our financial results. Changes in healthcare regulations and practices, the level of use of healthcare services, hospital costs, pharmaceutical costs, major epidemics, new medical technologies and other external factors, including general economic conditions such as inflation levels, are beyond our control and could reduce our ability to predict and effectively control the costs of providing health benefits. We may not be able to manage costs effectively in the future. If our costs related to health benefits increase, our profits could be reduced or we may not remain profitable.
Failure to accurately predict our medical expenses could negatively affect our reported results.
Our medical expenses include estimates of medical expenses incurred but not yet reported, or IBNR. We estimate our IBNR medical expenses monthly based on a number of factors. Adjustments, if necessary, are made to medical expenses in the period during which the actual claim costs are ultimately determined or when criteria used to estimate IBNR change. We cannot be sure that our IBNR estimates are adequate or that adjustments to those estimates will not harm our results of operations. Our failure to accurately estimate IBNR may also affect our ability to take timely corrective actions, further harming our results.
Difficulties in executing our acquisition strategy could adversely affect our business.
Historically, the acquisition of Medicaid contract rights and related assets of other health plans, both in our existing service areas and in new markets, has accounted for a significant amount of our growth. For example, our acquisition of contract rights from Humana in February 2001 accounted for 88% of the increase in our net premium revenues for the six months ended June 30, 2001 compared to the same period in 2000. Many of the other potential purchasers of Medicaid assets have greater financial resources than we have. In addition, many of the sellers are interested either in (1) selling, along with their Medicaid assets, other assets in which we do not have an interest or (2) selling their companies, including their liabilities, as opposed to the assets of their ongoing businesses.
We generally are required to obtain regulatory approval from one or more state agencies when making acquisitions. In the case of an acquisition of a business located in a state in which we do not currently operate, we would be required to obtain the necessary licenses to operate in that state. In addition, even if we may already operate in a state in which we acquire a new business, we would be required to obtain additional regulatory approval if the acquisition would result in our operating in an area of the state in which we did not operate previously. We cannot assure you that we would be able to comply with these regulatory requirements for an acquisition in a timely manner, or at all. In deciding whether to approve a proposed acquisition, state regulators may consider a number of factors outside our control, including giving preference to competing offers made by locally owned entities or by not-for-profit entities. Furthermore, we expect to enter into a credit facility that will prohibit some acquisitions without the consent of our bank lender.
In addition to the difficulties we may face in identifying and consummating acquisitions, we will also be required to integrate and consolidate any acquired business or assets with our existing operations. This may include the integration of:
. additional personnel who are not familiar with our operations and corporate culture;
. existing provider networks, which may operate on different terms than our existing networks;
. existing members, who may decide to switch to another healthcare plan; and
. disparate administrative, accounting and finance, and information systems.
Accordingly, we may be unable to successfully identify, consummate and integrate future acquisitions or operate acquired businesses profitably. We also may be unable to obtain sufficient additional capital resources for future acquisitions. If we are unable to effectively execute our acquisition strategy, our future growth will suffer and our results of operations could be harmed.
Failure to achieve timely profitability in any business would negatively affect our results of operations.
Start-up costs associated with a new business can be substantial. For example, in order to obtain a certificate of authority in most jurisdictions, we must first establish a provider network, have systems in place and demonstrate our ability to obtain a state contract and process claims. If we were unsuccessful in obtaining the necessary license, winning the bid to provide service or attracting members in numbers sufficient to cover our costs, any new business of ours would fail. We also could be obligated by the state to continue to provide services for some period of time without sufficient revenue to cover our ongoing costs or recover start-up costs. In addition, we may not be able to effectively commercialize any new programs or services we seek to market to third parties. The expenses associated with starting up a new business could have a significant impact on our results of operations if we are unable to achieve profitable operations in a timely fashion.
We derive all of our revenues from operations in three states, and our operating results would be materially affected by a decrease in revenues or profitability in any one of those states.
Operations in Wisconsin, Indiana and Texas account for all of our revenues. If we were unable to continue to operate in each of those states or if our current operations in any portion of one of those states were significantly curtailed, our revenues would decrease materially. Our reliance on operations in a limited number of states could cause our revenue and profitability to change suddenly and unexpectedly, depending on legislative actions, economic conditions and similar factors in those states. Our inability to continue to operate in any of the states in which we operate would harm our business.
If we fail to effectively manage our growth, our results of operations, financial condition and business may be negatively affected.
Depending on acquisition and other opportunities, we expect to continue to grow rapidly. Continued growth could place a significant strain on our management and on other resources. We anticipate that continued growth, if any, will require us to continue to recruit, hire, train and retain a substantial number of new and highly-skilled medical, administrative, information technology, finance and support personnel. The execution of our business plan depends upon our ability to implement and improve operational, financial and management information systems on a timely basis and to expand, train, motivate and manage our work force. If we continue to experience rapid growth, our personnel, systems, procedures and controls may be inadequate to support our operations, and our management may fail to anticipate adequately all demands that growth will place on our resources. In addition, due to the initial costs incurred upon the acquisition of new businesses, rapid growth could adversely affect our short-term profitability. If we are unable to manage growth effectively, our business could suffer.
Competition may limit our ability to increase penetration of the markets that we serve.
We compete for members principally on the basis of size and quality of provider network, benefits provided and quality of service. We compete with numerous types of competitors, including other health plans and traditional state Medicaid programs that reimburse providers as care is provided. Subject to limited exceptions by federally approved state applications, the federal government requires that there be choices for Medicaid recipients among managed care programs. Voluntary programs and mandated competition may limit our ability to increase our market share.
Some of the health plans with which we compete have greater financial and other resources and offer a broader scope of products than we do. In addition, significant merger and acquisition activity has occurred in the managed care industry, as well as in industries that act as suppliers to us, such as the hospital, physician, pharmaceutical, medical device and health information systems industries. To the extent that competition intensifies in any market that we serve, our ability to retain or increase members and providers, or maintain or increase our revenue growth, pricing flexibility and control over medical cost trends may be adversely affected.
In addition, in order to increase our membership in the markets we currently serve, we believe that we must continue to develop and implement community-specific products, alliances with key providers and localized outreach and educational programs. If we are unable to develop and implement these initiatives, or if our competitors are more successful than us in doing so, we may not be able to further penetrate our existing markets.
If we are unable to maintain satisfactory relationships with our provider networks, our profitability will be harmed.
Our profitability depends, in large part, upon our ability to contract favorably with hospitals, physicians and other healthcare providers. Our provider arrangements with our primary care physicians,
specialists and hospitals generally may be cancelled by either party without cause upon 90 to 120 days' prior written notice. We cannot assure you that we will be able to continue to renew our existing contracts or enter into new contracts enabling us to service our members profitably. We will be required to establish acceptable provider networks prior to entering new markets. We may be unable to enter into agreements with providers in new markets on a timely basis or under favorable terms. If we are unable to retain our current provider contracts or enter into new provider contracts timely or on favorable terms, our profitability will be harmed.
We may be unable to attract and retain key personnel.
We are highly dependent on our ability to attract and retain qualified personnel to operate and expand our Medicaid managed care business. If we lose one or more members of our senior management team, including our chief executive officer, Michael F. Neidorff, who has been instrumental in developing our mission and forging our business relationships, our business and operating results could be harmed. We do not have an employment agreement with Mr. Neidorff, and we cannot assure you that we will be able to retain his services. Our ability to replace any departed members of our senior management or other key employees may be difficult and may take an extended period of time because of the limited number of individuals in the Medicaid managed care industry with the breadth of skills and experience required to operate and expand successfully a business such as ours. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these personnel.
Negative publicity regarding the managed care industry may harm our business and operating results.
Recently, the managed care industry has received negative publicity. This publicity has led to increased legislation, regulation, review of industry practices and private litigation in the commercial sector. These factors may adversely affect our ability to market our services, require us to change our services, and increase the regulatory burdens under which we operate. Any of these factors may increase the costs of doing business and adversely affect our operating results.
Claims relating to medical malpractice could cause us to incur significant expenses.
Our providers and employees involved in medical care decisions may be subject to medical malpractice claims. In addition, some states, including Texas, have adopted legislation that permits managed care organizations to be held liable for negligent treatment decisions or benefits coverage determinations. Claims of this nature, if successful, could result in substantial damage awards against us and our providers that could exceed the limits of any applicable insurance coverage. Therefore, successful malpractice or tort claims asserted against us, our providers or our employees could adversely affect our financial condition and profitability. Even if any claims brought against us are unsuccessful or without merit, they would still be time-consuming and costly and could distract our management's attention. As a result, we may incur significant expenses and may be unable to operate our business effectively.
Growth in the number of Medicaid-eligible persons during economic downturns could cause our operating results and stock prices to suffer if state and federal budgets decrease or do not increase.
Less favorable economic conditions may cause our membership to increase as more people become eligible to receive Medicaid benefits. During such economic downturns, however, state and federal budgets could decrease, causing states to attempt to cut healthcare programs, benefits and rates. In particular, the terrorist acts of September 11, 2001 have created an uncertain economic environment, and we cannot predict the impact of these events, other acts of terrorism or related military action, on federal or state
funding of healthcare programs or on the size of the Medicaid-eligible population. If federal funding were decreased or unchanged while our membership was increasing, our results of operations would suffer.
Growth in the number of Medicaid-eligible persons may be countercyclical, which could cause our operating results to suffer when general economic conditions are improving.
Historically, the number of persons eligible to receive Medicaid benefits has increased more rapidly during periods of rising unemployment, corresponding to less favorable general economic conditions. Conversely, this number may grow more slowly or even decline if economic conditions improve. Therefore, improvements in general economic conditions may cause our membership levels to decrease, thereby causing our operating results to suffer, which could lead to decreases in our stock price during periods in which stock prices in general are increasing.
We intend to expand primarily into markets where Medicaid recipients are required to enroll in managed care plans.
We expect to continue to focus our business in states in which Medicaid enrollment in managed care is mandatory. Currently, there are a number of states, or portions of states, that require health plan enrollment for Medicaid-eligible participants. The programs are voluntary in other states. Because we concentrate on markets with mandatory enrollment, we expect the geographic expansion of our business to be limited to those states.
If we are unable to integrate and manage our information systems effectively, our operations could be disrupted.
Our operations depend significantly on effective information systems. The information gathered and processed by our information systems assists us in, among other things, monitoring utilization and other cost factors, processing provider claims, and providing data to our regulators. Our providers also depend upon our information systems for membership verifications, claims status and other information.
Our information systems and applications require continual maintenance, upgrading and enhancement to meet our operational needs. Moreover, our acquisition activity requires frequent transitions to or from, and the integration of, various information systems. We regularly upgrade and expand our information systems capabilities. If we experience difficulties with the transition to or from information systems or are unable to properly maintain or expand our information systems, we could suffer, among other things, from operational disruptions, loss of existing members and difficulty in attracting new members, regulatory problems and increases in administrative expenses. In addition, our ability to integrate and manage our information systems may be impaired as the result of events outside our control, including acts of nature, such as earthquakes or fires, or acts of terrorists.
Risks Relating to This Offering and Ownership of Our Common Stock
Volatility of our stock price could cause you to lose all or part of your investment.
The market price of our common stock, like that of the common stock of others in our industry, may be highly volatile. The stock market in general has recently experienced extreme price and volume fluctuations, and this volatility has affected the market prices of securities of other companies for reasons frequently unrelated, or disproportionate, to the operating performance of those companies. The market price of our common stock may fluctuate significantly in response to the following factors, some of which are beyond our control:
. state and federal budget decreases;
. changes in securities analysts' estimates of our financial performance;
. changes in market valuations of similar companies, including commercial managed care organizations;
. variations in our quarterly operating results;
. acquisitions and strategic partnerships;
. adverse publicity regarding managed care organizations;
. government action regarding Medicaid eligibility;
. changes in state mandatory Medicaid programs;
. changes in our management;
. broad fluctuations in stock market prices and volume; and
. general economic conditions, including inflation and unemployment rates.
Investors may not be able to resell their shares of our common stock following periods of volatility because of the market's adverse reaction to the volatility. We cannot assure you that our stock will trade at the same levels as the stock of other companies in our industry or that the market in general will sustain its current prices.
We cannot guarantee that an active trading market for our common stock will develop or be sustained.
Prior to this offering, you could not buy or sell our common stock publicly. An active public market for our common stock may not develop or be sustained after this offering. We will negotiate the initial public offering price with the representatives of the underwriters based on several factors. This price may not be indicative of prices that will prevail in the trading market after this offering. If an active trading market fails to develop or be sustained, you may be unable to sell your shares of common stock at or above the initial offering price.
Future sales of common stock by our existing stockholders could cause our stock price to fall.
Sales of substantial amounts of our common stock in the public market after the completion of this offering, or the perception that those sales could occur, could adversely affect the market price of our common stock and could materially impair our future ability to raise capital through offerings of our common stock. Based on shares outstanding as of September 30, 2001, a total of shares of common stock may be sold in the public market by existing stockholders. The holders of these shares are contractually restricted from selling their shares for 180 days from the date of this prospectus, but SG Cowen Securities Corporation may release these shares from these contractual restrictions at any time in its discretion.
Our officers and directors and their affiliates may be able to control the outcome of most corporate actions requiring stockholder approval.
After this offering, our directors and officers and their affiliates will beneficially own % of our outstanding common stock. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock.
We may allocate the net proceeds from this offering in ways with which you may not agree.
Our business plan is general in nature and is subject to change based upon changing conditions and opportunities. Our management has broad discretion in applying $ million of the total $ million in net proceeds we estimate we will receive in this offering. Because this portion of the net proceeds is not required to be allocated to any specific investment or transaction, you cannot determine at this time the value or propriety of our application of the proceeds. Moreover, you will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use our proceeds. As a result, you and other stockholders may not agree with our decisions.
Our corporate documents and provisions of Delaware law may prevent a change in control or management that stockholders may consider desirable.
Section 203 of the Delaware General Corporation Law, laws of states in which we operate, and our charter and by-laws contain provisions that might enable our management to resist a takeover of our company. These provisions could have the effect of delaying, deferring, or preventing a change in control of Centene or a change in our management that stockholders may consider favorable or beneficial. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors and take other corporate actions. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock.
You will pay a much higher price per share than the book value of our common stock.
If you purchase our common stock in this offering, you will incur immediate and substantial dilution, which means that:
. assuming a public offering price of $ , you will pay a price per share that exceeds by $ the per share book value of our assets immediately following the offering after subtracting our liabilities; and
. the purchasers in the offering will have contributed % of the total amount to fund us but will own only % of our outstanding shares.
In the past, we issued options to acquire common stock at prices significantly below the public offering price of this offering. To the extent these outstanding options are ultimately exercised, you will experience further dilution.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that relate to future events or our future financial performance. We have attempted to identify these statements by terminology including "believe," "anticipate," "plan," "expect," "estimate," "intend," "seek," "goal," "may," "will," "should," "can," "continue" or the negative of these terms or other comparable terminology. These statements include statements about our market opportunity, our growth strategy, competition, expected activities and future acquisitions and investments, and the adequacy of our available cash resources. These statements may be found in the sections of this prospectus entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." Investors are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, regulatory, competitive and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions.
Actual results may differ from projections or estimates due to a variety of important factors. Our results of operations and projections of future earnings depend in large part on accurately predicting and effectively managing health benefits and other operating expenses. A variety of factors, including competition, changes in health care practices, changes in federal or state laws and regulations or their interpretations, inflation, provider contract changes, new technologies, government-imposed surcharges, taxes or assessments, reduction in provider payments by governmental payors, major epidemics, disasters and numerous other factors affecting the delivery and cost of healthcare, such as major healthcare providers' inability to maintain their operations, may in the future affect our ability to control our medical costs and other operating expenses. Governmental action or business conditions could result in premium revenues not increasing to offset any increase in medical costs and other operating expenses. Once set, premiums are generally fixed for one year periods and, accordingly, unanticipated costs during such periods cannot be recovered through higher premiums. The expiration, cancellation or suspension of our Medicaid managed care contracts by the state governments would also negatively impact us. Due to these factors and risks, we cannot assure you with respect to our future premium levels or our ability to control our future medical costs.
USE OF PROCEEDS
We estimate that our net proceeds of our sale of the shares of common stock offered by us will be approximately $ million, assuming a public offering price of $ per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds of the sale of shares of common stock by the selling stockholders to the underwriters to cover over-allotments, if any.
The principal purposes of this offering are to obtain additional capital, to create a public market for our common stock and to facilitate future access to public debt and equity markets. We expect to use $4.0 million of our net proceeds to repay all of the principal amount of our outstanding subordinated notes at or shortly after the closing of this offering. The subordinated notes bear interest at a fixed rate of 8.5% per year and mature in two equal installments in September 2003 and 2004. We can repay the notes at any time without premium or penalty. We issued these notes in September 1998 to refinance notes that had been issued in 1993 to fund expansion opportunities and statutory net worth requirement needs. An aggregate of $2.5 million of the subordinated notes are held by Greylock Limited Partnership, which owns 31.1% of our common stock and is an affiliate of our director, Howard E. Cox, Jr., and $235,499, $205,352 and $7,980 of the notes, respectively, are held by Claire W. Johnson, Richard P. Wiederhold and Michael F. Neidorff, each of whom is one of our directors. Mr. Neidorff is also our President and Chief Executive Officer.
We intend to use the remainder of our net proceeds for working capital and other general corporate purposes, which may include acquisitions of businesses, assets and technologies that are complementary to our business. For example, we may use proceeds to acquire Medicaid and SCHIP contract rights and related assets to increase our membership and to expand our business into new service areas. Although we have evaluated possible acquisitions from time to time, we currently have no commitments or agreements to make any acquisitions, and we cannot assure you that we will make any acquisitions in the future. We also may apply proceeds to fund working capital to:
. increase market penetration within our current service areas;
. pursue opportunities for the development of new markets;
. expand services and products available to our members; and
. strengthen our capital base by increasing the statutory capital of our health plan subsidiaries.
We have not determined the amount of net proceeds to be used specifically for the foregoing purposes, other than for repayment of our subordinated notes. As a result, our management will have broad discretion to allocate our net proceeds of this offering. Pending application of our net proceeds, we intend to invest our net proceeds in short-term, investment-grade, interest-bearing instruments, repurchase agreements and high-grade corporate notes.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock. We currently anticipate that we will retain any future earnings for the development, operation and expansion of our business. Accordingly, we do not anticipate declaring or paying any cash dividends in the foreseeable future. Also, we expect to enter into a credit facility that will prohibit us from paying dividends without the consent of our lender.
CAPITALIZATION
The following table shows our capitalization as of June 30, 2001:
. on an actual basis;
. on a pro forma basis to reflect the conversion of our outstanding preferred stock into common stock, as described in note 22 of the notes to the consolidated financial statements included elsewhere in this prospectus; and
. on a pro forma as adjusted basis to also reflect (a) the exercise of outstanding warrants and our reincorporation in Delaware, all to occur before the closing of this offering, and (b) our sale of the shares of common stock offered by us at an assumed public offering price of $ per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and the application of our estimated net proceeds.
You should read this table in conjunction with the consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus.
June 30, 2001
-----------------------------
Pro Forma
Actual Pro Forma As Adjusted
------- --------- -----------
(in thousands)
Long-term debt, net of current portion:
Subordinated debt....................................................... $ 4,000 $ 4,000 $ --
------- ------- -------
Series D redeemable convertible preferred stock, $.167 par value; 4,000,000
shares authorized and 3,718,000 shares issued and outstanding, actual; no
shares authorized, issued or outstanding, pro forma and pro forma as
adjusted................................................................. 19,124 -- --
------- ------- -------
Stockholders' equity:
Series A, B and C convertible preferred stock, $.167 par value;
4,300,000 shares authorized and 2,156,340 shares issued and
outstanding, actual; no shares authorized, issued or outstanding,
pro forma or pro forma as adjusted.................................... 360 -- --
Undesignated preferred stock, $.001 par value; no shares authorized,
issued or outstanding, actual or pro forma; 10,000,000 shares
authorized and no shares issued or outstanding, pro forma as adjusted. -- -- --
Series A and B common stock, $.003 par value; 17,000,000 shares
authorized and 912,526 shares issued and outstanding, actual;
17,000,000 shares authorized and 6,786,866 shares issued and
outstanding, pro forma; no shares authorized, issued or outstanding,
pro forma as adjusted................................................. 3 20 --
Common stock, $.001 par value; no shares authorized, issued or
outstanding, actual or pro forma; 40,000,000 shares authorized and
shares issued and outstanding, pro forma as adjusted............... -- --
Additional paid-in capital.............................................. 30 19,497
Net unrealized loss on investments, net of tax.......................... (164) (164) (164)
Accumulated deficit..................................................... (4,119) (4,119) (4,119)
------- ------- -------
Total stockholders' equity (deficit)................................ (3,890) 15,234
------- ------- -------
Total capitalization............................................... $19,234 $19,234 $
======= ======= =======
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DILUTION
Our pro forma net tangible book value as of June 30, 2001 was $ million, or $ per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the pro forma number of shares of common stock outstanding after giving effect to the conversion of our preferred stock into common stock to occur before the closing of this offering. After giving effect to our sale of shares of common stock in this offering at an assumed public offering price of $ per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our adjusted pro forma net tangible book value as of June 30, 2001 would have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of $ per share to new investors purchasing shares in this offering. The following table illustrates this dilution on a per share basis:
Assumed public offering price per share................................. $
Pro forma net tangible book value per share as of June 30, 2001...... $
Increase per share attributable to new investors.....................
-----
Adjusted pro forma net tangible book value per share after this offering
--
Dilution per share to new investors..................................... $
==
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If the underwriters exercise their option to purchase additional shares in this offering, our adjusted pro forma net tangible book value at June 30, 2001 would have been $ million, or $ per share, representing an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of $ per share to new investors purchasing shares in this offering.
The following table summarizes on a pro forma basis as of June 30, 2001, after giving effect to the conversion of our preferred stock into common stock and the expected exercise of warrants to acquire common stock to occur at or before the closing of this offering, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors, based upon an assumed public offering price of $ per share and before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us:
Shares Purchased Total Consideration
---------------- ------------------- Average Price
Number Percent Amount Percent Per Share
------ ------- ------ ------- -------------
Existing stockholders % $ % $
New investors........
---- ------ -- ------
Total............. 100.0% 100.0%
==== ====== == ======
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The above discussion and tables assume no exercise of stock options, except as described above, after June 30, 2001. As of June 30, 2001, we had outstanding options to purchase a total of shares of common stock at a weighted average exercise price of $ per share. To the extent any of these options are exercised, there will be further dilution to new investors.
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in connection with, and are qualified by reference to, the consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus. The data for the years ended December 31, 1998, 1999 and 2000 and as of December 31, 1999 and 2000 are derived from consolidated financial statements audited by Arthur Andersen LLP and included elsewhere in this prospectus. The data for the years ended December 31, 1996 and 1997 and as of December 31, 1996, 1997 and 1998 are derived from audited consolidated financial statements not included in this prospectus. The data for the six months ended June 30, 2000 and 2001 and as of June 30, 2001 are derived from unaudited consolidated financial statements appearing elsewhere in this prospectus. The unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of our management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information set forth therein. Operating results for the six months ended June 30, 2001 are not necessarily indicative of operating results to be expected for the full year. The pro forma share information included in the consolidated statement of operations data have been computed as described in note 22 of the notes to consolidated financial statements included elsewhere in this prospectus.
Year Ended December 31,
--------------------------------------------------------
1996 1997 1998 1999 2000
---------- ---------- ---------- -------- ----------
(in thousands, except share data)
Statement of Operations Data:
Revenues:
Premiums $ 72,595 $ 114,531 $ 149,577 $200,549 $ 216,414
Administrative services fees -- 719 861 880 4,936
---------- ---------- ---------- -------- ----------
Total revenues 72,595 115,250 150,438 201,429 221,350
---------- ---------- ---------- -------- ----------
Operating expenses:
Medical services costs 59,532 95,994 132,199 178,285 182,495
General and administrative expenses 11,041 19,799 25,066 29,756 32,335
---------- ---------- ---------- -------- ----------
Total operating expenses 70,573 115,793 157,265 208,041 214,830
---------- ---------- ---------- -------- ----------
Income (loss) from operations 2,022 (543) (6,827) (6,612) 6,520
Other income (expense):
Investment and other income, net 898 1,207 1,794 1,623 1,784
Interest expense (592) (854) (771) (498) (611)
Equity in income (losses) from joint ventures -- (356) (477) 3 (508)
---------- ---------- ---------- -------- ----------
Income (loss) from continuing operations before income taxes 2,328 (546) (6,281) (5,484) 7,185
Income tax expense (benefit) 821 (39) (1,542) -- (543)
---------- ---------- ---------- -------- ----------
Income (loss) from continuing operations 1,507 (507) (4,739) (5,484) 7,728
Loss from discontinued operations, net -- (808) (2,223) (3,927) --
---------- ---------- ---------- -------- ----------
Net income (loss) 1,507 (1,315) (6,962) (9,411) 7,728
Accretion of redeemable preferred stock -- -- (122) (492) (492)
---------- ---------- ---------- -------- ----------
Net income (loss) attributable to common stockholders $ 1,507 $ (1,315) $ (7,084) $ (9,903) $ 7,236
========== ========== ========== ======== ==========
Net income (loss) from continuing operations per common share:
Basic $ 1.47 $ (0.48) $ (4.65) $ (6.63) $ 8.03
Diluted $ 0.45 $ (0.48) $ (4.65) $ (6.63) $ 1.06
Net income (loss) per common share:
Basic $ 1.47 $ (1.23) $ (6.78) $ (10.99) $ 8.03
Diluted $ 0.45 $ (1.23) $ (6.78) $ (10.99) $ 1.06
Weighted average common shares outstanding:
Basic 1,023,363 1,066,068 1,044,434 900,944 901,526
Diluted 3,337,554 1,066,068 1,044,434 900,944 6,819,595
Pro forma net income per common share:
Basic $ 1.14
Diluted $ 1.13
Pro forma weighted average common shares outstanding:
Basic 6,775,866
Diluted 6,819,595
|
Six Months Ended
June 30,
----------------------
2000 2001
---------- ----------
Statement of Operations Data:
Revenues:
Premiums $ 100,959 $ 150,682
Administrative services fees 2,064 182
---------- ----------
Total revenues 103,023 150,864
---------- ----------
Operating expenses:
Medical services costs 85,514 125,039
General and administrative expenses 15,517 18,406
---------- ----------
Total operating expenses 101,031 143,445
---------- ----------
Income (loss) from operations 1,992 7,419
Other income (expense):
Investment and other income, net 985 1,897
Interest expense (303) (196)
Equity in income (losses) from joint ventures (304) --
---------- ----------
Income (loss) from continuing operations before income taxes 2,370 9,120
Income tax expense (benefit) -- 3,708
---------- ----------
Income (loss) from continuing operations 2,370 5,412
Loss from discontinued operations, net -- --
---------- ----------
Net income (loss) 2,370 5,412
Accretion of redeemable preferred stock (246) (246)
---------- ----------
Net income (loss) attributable to common stockholders $ 2,124 $ 5,166
========== ==========
Net income (loss) from continuing operations per common share:
Basic $ 2.36 $ 5.68
Diluted $ 0.31 $ 0.67
Net income (loss) per common share:
Basic $ 2.36 $ 5.68
Diluted $ 0.31 $ 0.67
Weighted average common shares outstanding:
Basic 901,526 908,907
Diluted 6,776,566 7,748,825
Pro forma net income per common share:
Basic $ 0.80
Diluted $ 0.70
Pro forma weighted average common shares outstanding:
Basic 6,783,247
Diluted 7,748,825
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December 31,
------------------------------------------
June 30,
1996 1997 1998 1999 2000 2001
------- ------- ------- -------- ------- --------
(in thousands)
Balance Sheet Data:
Cash, cash equivalents and short-term investments $ 9,759 $17,976 $17,777 $ 23,663 $26,423 $50,779
Total assets..................................... 25,313 39,330 45,727 52,207 66,017 92,431
Long-term debt, net of current portion........... 4,000 4,000 4,000 4,000 4,000 4,000
Redeemable convertible preferred stock........... -- -- 17,700 18,386 18,878 19,124
Total stockholders' equity (deficit)............. 3,765 2,495 (6,196) (16,367) (8,834) (3,890)
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains forward-looking statements based upon current expectations and related to future events and our future financial performance that involve risks and uncertainties. Our actual results and timing of events could differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Risk Factors," "Forward-Looking Statements," "Business" and elsewhere in this prospectus.
Overview
We provide managed care programs and related services to individuals receiving benefits under Medicaid, including Supplemental Security Income, and the State Children's Health Insurance Program. We have health plans in Wisconsin, Indiana and Texas.
Revenues
We generate revenues primarily from premiums we receive from the states in which we operate to provide health benefits to our members. We receive a fixed premium per member per month pursuant to our state contracts. We generally receive premiums in advance of providing services and recognize premium revenue during the period in which we are obligated to provide services to our members. We also generate administrative services fees for providing services to SSI members on a non-risk basis.
The primary driver of our increasing revenues has been membership growth. We have increased our membership through both internal growth and acquisitions. From December 31, 1998 to June 30, 2001, we have grown our membership by 57%. The following table sets forth our membership by service area, excluding members related to the commercial operations that we discontinued in 1999:
December 31,
----------------------- June 30,
1998 1999 2000 2001
------- ------- ------- --------
Wisconsin 37,600 36,600 60,200 103,000
Indiana.. 93,500 102,200 108,000 54,600
Texas.... -- 3,500 26,000 55,600
Illinois. 4,500 -- -- --
------- ------- ------- -------
Total. 135,600 142,300 194,200 213,200
======= ======= ======= =======
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In the first half of 2001, our membership in Indiana declined due to a subcontracting provider organization terminating a percent-of-premium arrangement, which was our only contract of that type. Separately, we entered into agreements with Humana that resulted in the transfer to us of 35,000 members in Wisconsin and 30,000 members in Texas.
In 2000, a competitor in our Wisconsin market terminated its participation in the Medicaid program benefiting our enrollment growth. Our membership growth in the northern and central regions of Indiana was offset by our decision to reduce our participation in the less profitable southern region. Our El Paso health plan achieved sizable growth because we were named the default health plan in this area and enrolled a majority of the members who failed to select a specific plan.
In 1999, we terminated our commercial operations in Wisconsin and Indiana to further concentrate our efforts in government supported health care. Changes effected by the Balanced Budget Act of 1997 enabled
us to terminate these operations. Our El Paso market became operational as the state of Texas converted the fee-for-service market to a mandatory Medicaid managed care market. Also, we sold our Illinois operation to focus our business on states where Medicaid enrollment in managed care is mandatory.
Operating Expenses
Our operating expenses include medical services costs and general and administrative expenses.
Our medical services costs include payments to physicians, hospitals, and other providers for healthcare and specialty product claims. Medical service costs also include estimates of medical expenses incurred but not yet reported, or IBNR. Monthly, we estimate our IBNR based on a number of factors, including inpatient hospital utilization data and prior claims experience. As part of this review, we also consider the costs to process medical claims, and estimates of amounts to cover uncertainties related to fluctuations in physician billing patterns, membership, products and inpatient hospital trends. These estimates are adjusted as more information becomes available. We utilize the services of independent actuarial consultants who are contracted to review our estimates periodically. While we believe that our process for estimating IBNR is actuarily sound, we cannot assure you that healthcare claim costs will not exceed our estimates.
Our results of operations depend on our ability to manage expenses related to health benefits and to accurately predict costs incurred. The table below depicts our medical loss ratio, which represents medical services costs as a percentage of premium revenues and reflects the direct relationship between the premium received and the medical services provided. Our stabilization in the ratio primarily reflects member reductions in our southern Indiana market, improved provider contract terms and premium rate increases in our markets served.
Six Months Ended
Year Ended December 31, June 30,
---------------------- ---------------
1998 1999 2000 2000 2001
---- ---- ---- ---- ----
Medical loss ratio 88.4% 88.9% 84.3% 84.7% 83.0%
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Our general and administrative expenses primarily reflect wages and benefits and other administrative costs related to our employee base, including those fees incurred to provide services to our members. These expenses are funded by our management contract fees. Some of these services are provided locally, while others are delivered to our health plans from a centralized location. This approach provides the opportunity to control both direct and indirect costs. The major centralized functions are claims processing, information systems, finance and administration. The following table sets forth the general and administrative expense ratio, which represents general and administrative expenses as a percent of total revenues and reflects the relationship between revenues earned and the costs necessary to drive those revenues. The improvement in the ratio reflects growth in membership and leveraging of our overall infrastructure.
Six Months Ended
Year Ended December 31, June 30,
---------------------- ---------------
1998 1999 2000 2000 2001
---- ---- ---- ---- ----
General and administrative expenses ratio 16.7% 14.8% 14.6% 15.1% 12.2%
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Other Income
Other income consists principally of investment and other income, interest expense, and equity in income (loss) from joint ventures.
. Investment income is derived from our cash, cash equivalents and investments. Information about our investments is presented below under "Liquidity and Capital Resources."
. Interest expense primarily reflects interest paid on our subordinated notes, which we intend to repay in full from our net proceeds of this offering.
. Equity in income (loss) from joint ventures principally represents our share of operating results from Superior HealthPlan, which we formed with Community Health Centers Network in 1997. We owned 39% of the capital stock of Superior from 1997 through 2000, and then increased our ownership to 90% on January 1, 2001. While we held 39% of the equity of Superior, we reported our interest in Superior as equity in income (loss) from joint ventures, using the equity method of accounting. Commencing January 1, 2001, we are using consolidation accounting to reflect our majority ownership of Superior. We therefore no longer reflect any operations of Superior in equity in income (loss) from joint ventures and we eliminate in consolidation all administrative fees from Superior. The minority stockholder of Superior has the right to require that, within 20 days after completion of this offering, we acquire the remaining 10% equity interest in Superior for $100,000 in cash or in shares of our common stock, based on the public offering price.
Results of Operations
Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000
Revenues
Premiums for the six months ended June 30, 2001 increased $49.7 million, or 49.2%, to $150.7 million from $101.0 million for the six months ended June 30, 2000. This increase was due to the Humana contract purchases, the consolidation of our El Paso market and membership growth, net of the termination of our Indiana sub-contract arrangement.
Administrative services fees for the six months ended June 30, 2001 decreased $1.9 million, or 91.2%, to $182,000 from $2.1 million for the six months ended June 30, 2000 as a result of our acquisition of a majority share of Superior HealthPlan, as described above.
Operating Expenses
Medical services costs. Medical services costs for the six months ended June 30, 2001 increased $39.5 million, or 46.2%, to $125.0 million from $85.5 million for the six months ended June 30, 2000. This increase was due to the Humana contract purchases, the consolidation of our El Paso market and membership growth, net of the termination of our Indiana sub-contract arrangement.
General and administrative expenses. General and administrative expenses for the six months ended June 30, 2001 increased $2.9 million, or 18.6%, to $18.4 million from $15.5 million for the six months ended June 30, 2000. The increase was primarily due to a higher level of wages and related expenses for additional staff to support our membership growth.
Other income
Other income for the six months ended June 30, 2001 increased $1.3 million, or 350%, to $1.7 million from $378,000 for the six months ended June 30, 2000. This primarily reflects a significant increase in investment income due to a significant increase in cash, cash equivalents and investments. This increase was offset in part by a change in our accounting due to our acquisition of a majority share of Superior HealthPlan, as described above.
Income tax expense
In the first six months of 2001, we recorded $3.7 million of income tax expense based on a 40.7% effective tax rate. In the first six months of 2000, we recorded no income tax expense or benefit as the change in our valuation allowance related to deferred tax assets offset the income tax provision.
Year Ended December 31, 2000 Compared to Year Ended December 31, 1999
Revenues
Premiums for the year ended December 31, 2000 increased $15.9 million, or 7.9%, to $216.4 million from $200.5 million in 1999. This increase was primarily due to membership growth in our Wisconsin market and rate increases in Wisconsin and Indiana.
Administrative services fees for the year ended December 31, 2000 increased $4.0 million, or 460.9%, to $4.9 million from $880,000 in 1999 due to membership increases in our El Paso market.
Operating expenses
Medical services costs. Medical services increased $4.2 million, or 2.4%, to $182.5 million for the year ended December 31, 2000 from $178.3 million in 1999. The increase was primarily due to the net increase in membership.
General and administrative expenses. General and administrative expenses for the year ended December 31, 2000 increased $2.6 million, or 8.7%, to $32.3 million from $29.8 million in 1999. The increase was primarily due to a higher level of wages and related expenses for additional staff to support our membership growth.
Other Income
Other income for the year ended December 31, 2000 decreased $463,000, or 40.7%, to $665,000 from $1.1 million in 1999. This decrease primarily reflects an increase in equity in losses from our El Paso start-up market.
Income tax benefit
In 2000, we recorded an income tax benefit of $543,000 as a result of the reversal of our valuation allowance related to deferred tax assets, as it became apparent that it was more likely than not that the benefits of our net operating losses would be realized. In 1999, we recorded a tax benefit offset by a valuation allowance, resulting in no benefit or provision for the year.
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
Revenues
Premiums for the year ended December 31, 1999 increased $51.0 million, or 34.1%, to $200.5 million from $149.6 million in 1998. The increase was due to increases in membership that occurred in Indiana during the second half of 1998.
Administrative services fees remained relatively flat year over year.
Operating expenses
Medical services costs. Medical services costs for the year ended December 31, 1999 increased $46.1 million, or 34.9%, to $178.3 million from $132.2 million in 1998. The increase was primarily due to a full year of increased membership that had occurred in Indiana in the latter half of 1998.
General and administrative expenses. General and administrative expenses for the year ended December 31, 1999 increased $4.7 million, or 18.7%, to $29.8 million from $25.1 million in 1998. The increase was primarily due to a higher level of wages and related expenses for additional staff to support our membership growth.
Other Income
Other income for the year ended December 31, 1999 increased $582,000, or 106%, to $1.1 million in 1998 primarily due to a reduction in equity in losses from joint ventures as a result of the sale of our Illinois plan.
Income tax expense (benefit)
For the year ended December 31, 1999, we recorded a tax benefit offset by a valuation allowance resulting in no benefit or provision for the year. For the year ended December 31, 1998, we recorded a tax benefit of $1.5 million as a result of our loss from operations.
Liquidity and Capital Resources
Historically, we have financed our operations and growth through private equity and debt financings and internally generated funds. Since 1993, we have raised $22.4 million, consisting of $18.4 million through the issuance of equity securities and $4.0 million through subordinated debt financing. Our liquidity requirements have arisen primarily from statutory capital requirements in the states in which we operate.
Our operating activities used cash of $7.5 million in 1998 and provided cash of $5.1 million in 1999, $13.5 million in 2000 and $28.0 million in the six months ended June 30, 2001. The increased cash flow in 1999 was due to an increase in average monthly membership. The growth in 2000 was due to increased membership and improved profitability. The increase in cash provided by operating activities in 2001 was due to the timing of capitation payments, as well as an increase in membership.
Our investing activities used cash of $2.2 million in 1998, $2.9 million in 1999, $14.6 million in 2000 and $555,000 in the six months ended June 30, 2001. Our investment policies are designed to provide liquidity, preserve capital and maximize total return on invested assets. As of June 30, 2001, our investment portfolio consisted primarily of fixed-income securities with an average maturity of 3.2 years. Cash is invested in investment vehicles such as municipal bonds, commercial paper, U.S. government-backed agencies and U.S. Treasury instruments. The states in which we operate prescribe the types of instruments in which our subsidiaries may invest their cash. The average portfolio yield was 7.3%, as of December 31, 2000 and 3.4%, as of June 30, 2001.
Our financing activities provided cash of $9.5 million in 1998 and $2.5 million in 1999, used cash of $2.4 million in 2000 and provided cash of $17,000 in the six months ended June 30, 2001. Financing cash flows consisted of borrowings under a credit facility and issuances of preferred stock.
We have received a commitment letter from a commercial bank for a $5.0 million revolving line of credit. The line of credit will bear interest at the bank's prime rate or a LIBOR-based rate. The line of credit
will mature one year from closing. Amounts borrowed under this facility will be secured by a pledge of all of the stock of our subsidiaries. The definitive agreement for the line of credit will include requirements that, among other things, we maintain minimum specified levels of interest coverage, earnings before income tax, depreciation and amortization, and tangible net worth. It will prohibit us from incurring additional indebtedness or paying dividends without prior bank approval.
In addition, we have raised capital from time to time to fund planned geographic and product expansion, necessary regulatory reserves, and acquisitions of healthcare contracts. In the six months ended June 30, 2001, we purchased the rights to the Humana Medicaid contracts with the states of Texas and Wisconsin for $1.2 million and spent $1.8 million on purchases of furniture, equipment and leasehold improvements due to the addition of the Austin and San Antonio markets and the expansion of the Wisconsin market. For the six months ended December 31, 2001, and the year ended December 31, 2002, we anticipate purchasing $1.0 million and $3.0 million, respectively, of new software, software and hardware upgrades, and furniture, equipment and leasehold improvements related to office and market expansions.
At June 30, 2001, we had working capital of $(10.9) million as compared to $7.3 million at December 31, 1998, $(7.2) million at December 31, 1999 and $(5.3) million at December 31, 2000. Our working capital is often negative due to our efforts to increase investment returns through purchases of long-term investments, which have maturities of greater than one year. Our investment policies are also designed to provide liquidity and preserve capital. We manage our short-term and long-term investments to ensure that a sufficient portion is held in investments that are highly liquid and can be sold to fund working capital as needed.
Cash, cash equivalents and short term investments were $26.4 million at December 31, 2000 and $50.8 million at June 30, 2001. Long-term investments were $14.5 million at December 31, 2000, and $23.7 million at June 30, 2001. Based on our operating plan, we expect that our available cash, cash equivalents and investments, net proceeds of this offering, and cash from our operations will be sufficient to finance our operations and capital expenditures for at least 12 months from the date of this prospectus.
Regulatory Capital and Dividend Restrictions
Our operations are conducted through our subsidiaries. As managed care organizations, our subsidiaries are subject to state regulations that, among other things, may require the maintenance of minimum levels of statutory capital, as defined by each state, and restrict the timing, payment and amount of dividends and other distributions that may be paid to us.
Our subsidiaries are required to maintain minimum quarterly capital requirements prescribed by various regulatory authorities in each of the states in which we operate. As of June 30, 2001, our subsidiaries had aggregate statutory capital and surplus of $11.2 million, compared with the required minimum aggregate statutory capital and surplus requirements of $7.2 million.
The National Association of Insurance Commissioners has adopted rules which, to the extent that they are implemented by the states, will set new minimum capitalization requirements for insurance companies, managed care organizations and other entities bearing risk for healthcare coverage. The requirements take the form of risk-based capital rules. The change in rules for insurance companies became effective as of December 31, 1998. The new managed care organization rules, which may vary from state to state, are currently being considered for adoption. Wisconsin and Texas adopted various forms of the rules as of December 31, 1999. The managed care organization rules, if adopted by other states in their proposed form, may increase the minimum capital required for our subsidiaries.
Recent Accounting Pronouncements
In July 2001, SFAS No. 141, Business Combinations, was issued which requires that the purchase method of accounting be used for all business combinations completed after June 30, 2001.
In July 2001, SFAS No. 142, Goodwill and Other Intangible Assets, was issued which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested annually for impairment. We will adopt SFAS No. 142 effective January 1, 2002.
Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2001, we had short-term investments of $4.3 million and long-term investments of $23.7 million. The short-term investments consist of highly liquid securities with maturities between three and 12 months. The long-term investments consist of municipal bonds, commercial paper, U.S. government-backed agencies and U.S. Treasury instruments, and have original maturities greater than one year. These investments are subject to interest rate risk and will decrease in value if market rates increase. We have the ability to hold these short-term investments to maturity, and as a result, we would not expect the value of these investments to decline significantly as a result of a sudden change in market interest rates. Declines in interest rates over time will reduce our investment income.
Inflation
Although the general rate of inflation has remained relatively stable and healthcare cost inflation has stabilized in recent years, the national healthcare cost inflation rate still exceeds the general inflation rate. We use various strategies to mitigate the negative effects of healthcare cost inflation. Specifically, our health plans try to control medical and hospital costs through contracts with independent providers of healthcare services. Through these contracted care providers, our health plans emphasize preventive healthcare and appropriate use of specialty and hospital services.
While we currently believe our strategies to mitigate healthcare cost inflation will continue to be successful, competitive pressures, new healthcare and pharmaceutical product introductions, demands from healthcare providers and customers, applicable regulations or other factors may affect our ability to control the impact of healthcare cost increases.
Compliance Costs
The new federal and state regulations promulgated under HIPAA mandating uniform standards for electronic transactions and confidentiality requirements of patient information are currently unsettled, making certainty of compliance impossible at this time. Due to the uncertainty surrounding the regulatory requirements, we cannot be sure that the systems and programs that we plan to implement will comply adequately with the regulations that are ultimately approved. Implementation of additional systems and programs may be required, the cost of which is unknown to us at this time. Further, compliance with these regulations would require changes to many of the procedures we currently use to conduct our business, which may lead to additional costs that we have not yet identified. We do not know whether, or the extent to which, we will be able to recover our costs of complying with these new regulations from the states.
BUSINESS
Overview
We provide managed care programs and related services to individuals receiving benefits under Medicaid, including Supplemental Security Income or SSI, and the State Children's Health Insurance Program or SCHIP. We have health plans in Wisconsin, Indiana and Texas. In each of our service areas, we have more Medicaid members than any other managed care entity.
Medicaid Managed Care Market
From the 1930s until the 1970s, healthcare in the United States generally was provided on a fee-for-service basis, with financial support from private health insurance. By the early 1970s, however, there was concern that indemnity insurance could not contain costs or support benefits required by the U.S. population. In 1973, Congress passed the Federal Health Maintenance Organization Act in order to encourage the creation of managed care organizations, such as health maintenance organizations, that might address the shortcomings of the indemnity insurance system. Managed care organizations finance and deliver healthcare services for their members through contracts with selected physicians, hospitals and other providers.
After additional federal legislation in 1976 and 1979, the number and size of managed care organizations began to grow dramatically. The federal Centers for Medicare and Medicaid Services, or CMS, reports that, U.S. healthcare costs grew from $73.0 billion in 1970 to $1.2 trillion in 1999, and projects that those costs will continue to grow at a rate that is in excess of 7% per year to $2.6 trillion in 2010. In light of this significant growth in membership and healthcare spending, many managed care organizations have chosen to narrow their focus to enable them to tailor appropriate programs to meet members' medical needs. Some organizations have chosen to offer a limited range of services, such as dental care or behavioral healthcare. Other managed care organizations have chosen to focus on targeted populations by, for example, offering commercial and Medicare plans and leaving the Medicaid market.
Medicaid provides health insurance to low-income families and individuals with disabilities. Each state establishes its own eligibility standards, benefit packages, payment rates and program administration within federal standards. As a result, there are 56 Medicaid programs - one for each state, each territory and the District of Columbia. Medicaid eligibility is based on a combination of income and asset requirements subject to federal guidelines. Financial requirements are most often determined by an income level relative to the federal poverty level. Medicaid covered 15% of the total U.S. population in 1998. The number of persons covered by Medicaid increased from 23.5 million in 1989 to 40.6 million in 1998, including 18.7 million children. Historically, children have represented the largest eligibility group, and in 1995, 39% of all births in the United States were covered by Medicaid.
SSI covers low-income aged, blind and disabled persons. SSI beneficiaries represent a growing portion of all Medicaid recipients, with the proportion of disabled enrollees increasing from 11% of recipients in 1973 to 18% in 1998. In addition, SSI recipients typically utilize more services because of their more critical health issues. In 1998, average expenditures for disabled SSI recipients were $9,558, compared to $1,892 for other adult Medicaid recipients. Since the late 1980s Medicaid has been used by the federal and state governments as the vehicle for providing coverage to uninsured persons. These efforts culminated in the Balanced Budget Act of 1997 which created SCHIP to help states expand coverage primarily to children whose families earn too much to qualify for Medicaid, yet not enough to afford private health insurance.
SCHIP is the single largest expansion of health insurance coverage for children since the enactment of Medicaid and some states are expanding their SCHIP coverage to include adults. States can use SCHIP funds to provide coverage through three options: separate health programs, expansion of Medicaid coverage, or a combination of both of these strategies. In the federal fiscal year ended September 30, 2000, 2.3 million of the 3.3 million SCHIP recipients were served through separate SCHIP programs.
Unlike Medicare, which is financed entirely by the federal government, the states and the federal government jointly finance the Medicaid and SCHIP programs. The federal matching assistance percentage is based on the average per capita income in each state and typically, exceeds 50%.
While Medicaid programs have directed funds to many individuals who could not afford or otherwise maintain health insurance coverage, they did not initially address the inefficient and costly manner in which the Medicaid population tends to access healthcare. Medicaid recipients typically have not sought preventive care or routine treatment for chronic conditions, such as asthma and diabetes. Rather, they have sought healthcare in hospital emergency rooms, which tend to be more expensive. As a result, many states have found that the costs of providing Medicaid benefits have increased while the medical outcomes for the recipients remained unsatisfactory.
In the early 1980s, states began pursuing Medicaid managed care initiatives when the combination of rising Medicaid costs and national recession put pressure on states to control spending growth. Throughout the 1990's, states significantly expanded enrollment in Medicaid managed care programs. In 1991, less than 10% of all Medicaid enrollees were covered under managed care plans. By 1998, nearly 54% (21.9 million) of the Medicaid population was enrolled in some type of managed care plan. Medicaid's premium payments to Medicaid managed care plans rose from $700 million in 1988 to $13.2 billion in 1998. A growing number of states have mandated that their Medicaid recipients enroll in managed care plans. While some states have included SSI beneficiaries in their managed care programs, others are planning to do so in the near future.
Historically, commercial managed care organizations contracted with states to provide healthcare benefits to Medicaid enrollees. Many of these organizations encountered difficulties in adapting their commercial approaches and infrastructures to address the Medicaid market in a cost-effective manner. Some commercial plans have chosen to exit all or a portion of their Medicaid markets. As a result, a significant market opportunity exists for managed care organizations with operations and programs focused on the distinct socio-economic, cultural and healthcare needs of the Medicaid and SCHIP populations.
The Centene Approach
We provide managed care programs and related services to individuals receiving benefits under Medicaid, including SSI, and SCHIP. We operate in Wisconsin, Indiana and Texas. In each of our service areas, we have more Medicaid members than any other managed care organization. Unlike many managed care organizations that attempt to serve the general commercial population, as well as Medicare and Medicaid populations, we are focused exclusively on the Medicaid, including SSI, and SCHIP populations.
Our approach to managed care is based on the following key attributes:
. Medicaid Expertise. Over the last 17 years, we developed a specialized Medicaid expertise that has helped us establish and maintain strong relationships with our constituent communities of members, providers and state governments.
Our expertise in care coordination allows us to achieve savings by reducing inappropriate emergency room use, inpatient days and high cost interventions, as well as by managing care of chronic illnesses. We recruit and train staff and providers who are attentive to the needs of our members and who are experienced in working with culturally diverse, low income Medicaid populations. Our close relationships with state regulators help us efficiently implement and deliver our programs and services and allow us to provide input on Medicaid industry practices and policies.
. Localized Services, Support and Branding. We provide access to healthcare services through local networks of providers and staff who focus on the cultural norms of their individual communities. Our systems and procedures have been designed to address these community-specific challenges through outreach, education, transportation and other member support activities. For example, our community outreach program employs former Medicaid recipients to work with our members and their communities to promote health, and to promote self-improvement through employment and higher education. We use locally recognized plan names, and we tailor our materials and processes to meet the needs of the communities and state programs which we serve. Our approach to community-based service results in local accountability and solidifies our decentralized management and operational structure.
. Physician-Driven Approach. We have implemented a physician-driven approach designed to eliminate unnecessary costs, improve service to our members and simplify the administrative burdens on our providers. This approach has enabled us to strengthen our provider networks through improved physician recruitment and retention that, in turn, have helped to increase our membership base. Our physicians are proactively engaged in developing and implementing our healthcare delivery policies and strategies and are instrumental in supporting our member services. Our local Boards of Directors have significant provider representation in each of our principal geographic markets and help shape the character and quality of our organization. Our approach grants a greater degree of autonomy to providers in healthcare decisions and patient management.
. Efficiency and Scalability of Business Model. We designed our business model to allow us to readily add new members in our existing markets and expand into new regions in which we may choose to operate. The combination of our decentralized local approach to operating our health plans and our centralized finance, information systems, claims processing and medical management support functions allows us to seek additional business opportunities without being impaired by many of the logistical and financial obstacles customarily faced by growing companies. For example, we integrated 65,000 former Humana members within 75 days after acquiring Humana's Medicaid contracts in Wisconsin and Texas. Because of our business model, we believe we would be able to quickly recover from a disaster in one of our plan locations by moving member and physician services to one of our other locations.
. Specialized Systems and Technology. Through our specialized information systems, we are able to strengthen our relationships with providers and states, which helps us to grow our membership base. These systems also help us identify needs for new healthcare programs. These systems provide the physicians with claims information, timely and accurate payment, utilization data, and membership eligibility which enables providers to more efficiently manage their practices and focuses them on specific patient needs. Our information systems also closely track and manage utilization data for the state which demonstrates that their Medicaid populations are receiving quality healthcare in an efficient manner. This information enables us to accommodate the expansion of our membership base.
. Complementary Business Lines. We have begun to broaden our service offerings to address areas we believe have been traditionally underserved by Medicaid managed care organizations. We believe other business lines, such as our NurseWise triage program, will allow us to provide innovative healthcare management solutions while diversifying our sources of revenue.
Strategy
Our objective is to become the leading national Medicaid managed care organization. We intend to achieve this objective by implementing the following key components of our strategy:
. Increase penetration of existing state markets. We intend to increase our membership in states in which we currently operate through development and implementation of community-specific products, alliances with key providers, outreach efforts and acquisitions. For example, in Indiana, where the state assigns members to physicians, we have increased our membership by recruiting additional physicians. We may also increase membership by acquiring Medicaid contracts and other related assets from our competitors in our existing markets. In Texas, we recently completed the acquisition of Humana's Medicaid contracts in Austin and San Antonio, which resulted in the addition of 30,000 new members.
. Develop and acquire additional state markets. We intend to leverage our experience in identifying and developing new markets by seeking both to acquire existing businesses and to build our own operations. We expect to focus our expansion on states where Medicaid recipients are mandated to enroll in managed care organizations and in which we believe we can be the market leader.
. Diversify our business lines. We seek to broaden our business lines into areas that complement our business to enable us to grow our revenue stream and decrease our dependence on Medicaid reimbursement. In addition to NurseWise, we are considering services such as behavioral health, transportation and dental care. We believe we may have opportunities to offer these services to other managed care organizations and states.
. Leverage our information technologies to enhance operating efficiencies. We intend to continue to invest in our centralized information systems to further streamline our processes and drive efficiencies in our operations and to add functionality to improve the service we provide to our members. Our information systems are scalable and enable us to add members and markets quickly and economically.
Member Programs and Services
We recognize the importance of member-focused services in the delivery of quality managed care services. Our locally based staff assists members in accessing care, coordinating referrals to related health and social services, and addressing member concerns and questions. Our health plans provide the following services:
. primary and specialty physician care;
. inpatient and outpatient hospital care;
. emergency and urgent care;
. prenatal care;
. laboratory and x-ray services;
. home health and durable medical equipment;
. behavioral health and substance abuse services;
. after hours nurse advice line;
. transportation assistance;
. health status calls to coordinate care;
. vision care; and
. prescriptions and limited over-the-counter drugs and inoculations.
We also provide the following education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services in an efficient manner.
. CONNECTIONS is designed to create a link between the member and the provider and help identify potential challenges or risk elements to a member's health, such as abuse risks, nutritional challenges and health education shortcomings. CONNECTIONS representatives, many of whom are former Medicaid enrollees, also contact new members by phone or mail to discuss managed care, the Medicaid program and our services. They make home visits, conduct educational programs and represent the plan at community events such as health fairs.
. NurseWise provides a toll-free nurse triage line between the hours of 5:00
p.m. and 8:00 a.m. each weekday and 24 hours on weekends and holidays. Our
members can call one number and reach a bilingual nursing staff who can
provide triage advice and referrals, and if necessary, arrange for
treatment and transportation and contact qualified behavioral health
professionals for assessments.
. START SMART For Your Baby is a prenatal and infant health program designed to increase the percentage of pregnant women receiving early prenatal care, reduce the incidence of low birth weight babies, identify high risk pregnancies, increase participation in the federal Women, Infant, and Children program, and increase well-child visits. The program includes risk assessments, education through face-to-face meetings and materials, behavior modification plans and assistance in selecting a provider for the infant and scheduling newborn follow-up visits.
. EPSDT Case Management is a preventive care program designed to educate our members on the benefits of Early and Periodic Screening, Diagnosis and Treatment, or EPSDT, services. We have a systematic program of communication, tracking, outreach, reporting, and follow-through that promotes state EPSDT programs.
. Disease Management Programs are designed to help members understand their disease and treatment plan, and improve or maintain their quality of life. These programs address medical conditions that are common within the Medicaid population such as asthma, diabetes and prenatal care.
Providers
For each of our service areas, we establish a provider network consisting of primary and specialty care physicians, hospitals and ancillary providers. As of September 30, 2001, our health plans had the following numbers of physicians and hospitals:
Wisconsin Indiana Texas Total
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Primary Care Physicians.. 2,281 515 891 3,687
Specialty Care Physicians 3,360 448 1,071 4,879
Hospitals................ 60 23 25 108
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The primary care physician is a critical component in care delivery, and also in the management of costs and the attraction and retention of new members. Primary care physicians include family and general practitioners, pediatricians, internal medicine physicians and OB/GYNs. Specialty care physicians provide medical care to members generally upon referral by the primary care physicians.
We work closely with physicians to help them operate efficiently by providing financial and utilization information, physician and patient educational programs and disease and medical management programs, as well as adhering to a prompt payment policy. Our programs are also designed to help the physicians coordinate care outside of their offices.
We believe our collaborative approach with physicians gives us a competitive advantage in entering new markets. Our physicians serve on local committees that assist us in implementing preventive care methods, managing costs and improving the overall quality of care delivered to our members, while assuming responsibility for medical policy decision-making. The following are among the services we provide to support physicians.
. Customized Utilization Reports provide our contracted physicians with information that enables them to run their practices more efficiently and focuses them on specific patient needs. For example, quarterly fund-detail reports update physicians on their status within their risk pools. Equivalency reports provide physicians with financial comparisons of capitated versus fee-for service arrangements.
. Case Management Support helps the physician coordinate specialty care and ancillary services for patients with complex conditions and direct members to appropriate community resources to address both their health and socio-economic needs.
. Web-based Claims and Eligibility Resources are being tested in selected markets to provide physicians with on-line access to perform claims and eligibility inquiries.
Our physicians also benefit from several of the services offered to our members, including the CONNECTIONS program, EPSDT case management and disease management programs.
We provide access to healthcare services for our members primarily through non-exclusive contracts with our providers. The majority of our primary care physicians share in our Medicaid reimbursement risk as well as in the success of efficient and appropriate management of care.
Our contracts with primary and specialty care physicians and hospitals usually are for one to two year periods and automatically renew for successive one year terms, but generally are subject to termination by either party upon 90 to 120 days' prior written notice. In the absence of a contract, we typically pay providers at state Medicaid reimbursement levels. We pay physicians under a capitated or fee-for-service arrangement.
. Under our capitated contract, primary care physicians are paid a monthly capitation rate for each of our members assigned to his or her practice and are at risk for all costs related to primary and specialty physician and emergency room services. In return for this payment, these physicians provide all requested, covered primary care and preventive services, including EPSDT services, and primary care office visits. If these physicians also provide non-capitated services to their assigned members, they may bill and be paid under fee-for-service arrangements at Medicaid rates.
. Under our capitated contracts with physicians, particularly specialty care physicians, we pay the physicians a negotiated fee for covered services. This model is characterized as having no financial risk for the physician.
We also contract with ancillary providers on a negotiated fee arrangement for physical therapy, mental health and chemical dependency care, home healthcare, vision care, diagnostic laboratory tests, x-ray examinations, ambulance services and durable medical equipment. Additionally, we contract with dental vendors in markets where routine dental care is a covered benefit. We have a capitated arrangement with a national pharmacy vendor that provides a pharmacy network in our markets where prescription and limited over-the-counter drugs are a covered benefit.
Health Plans
We have three health plan subsidiaries offering healthcare services in Wisconsin, Indiana and Texas. We have never been denied a contract renewal from the states in which we do business. The table below provides certain highlights to the markets we currently serve.
Wisconsin Indiana Texas
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Local Health Plan Name Managed Health Services Managed Health Services Superior HealthPlan
First Year of Operations 1984 1995 1999
Counties Licensed 19 92 5
Membership at September 30,
2001 108,126 61,840 54,901
Ownership 100% 100% 90%
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States
Our ability to establish and maintain our position as a leader in the markets we serve results primarily from our demonstrated success in providing quality care while reducing and managing costs for, and our customer-focused approach to working with, state governments. Among the benefits we are able to provide to the states with which we contract are:
. timely and accurate reporting;
. responsible collection and dissemination of encounter data;
. cost saving outreach and disease management programs;
. improved medical outcomes; and
. expertise in Medicaid managed care.
Quality Management
Our medical management program focuses on improving quality of care in areas that have the greatest impact on our members. We employ strategies including disease management and complex case management that are fine-tuned for implementation in our individual markets by a system of physician committees chaired by local physician leaders. This process promotes physician participation and support, both critical factors in the success of any clinical quality improvement program.
We have implemented specialized information systems to support our medical quality management activities. Information is drawn from our data warehouse, AMISYS and the clinical databases as sources to identify opportunities to improve care and to track the outcomes of the interventions implemented to achieve those improvements. Some examples of these intervention programs include:
. a prenatal case management program to help women with high-risk pregnancies deliver full-term, healthy infants;
. a program to reduce the number of inappropriate emergency room visits; and
. a disease management program to decrease the need for emergency room visits and hospitalizations for asthma patients.
Additionally, we provide extensive quality reporting on a regular basis using our data warehouse. State and Health Employer Data and Information Set, or HEDIS, reporting constitutes the core of the information base that drives our clinical quality performance efforts. This reporting is monitored by Plan Quality Improvement Committees and our corporate medical management team.
In order to ensure the quality of our provider networks, we verify the credentials and background of our providers using standards that are supported by the National Committee for Quality Assurance.
Additionally, we provide feedback and evaluations to our providers on quality and medical management in order to improve the quality of care, increase their support of our programs and enhance our ability to attract and retain providers.
Management Information Systems
The ability to access data and translate them into meaningful information is essential to operating across a multi-state service area in a cost-effective manner. Our centralized information systems located in Saint Louis, Missouri, support our core processing functions under a set of integrated databases and are designed to be both replicable and scalable to accommodate internal growth and growth from acquisitions. We have the ability to leverage the platform we have developed for one state for configuration into new states or health plan acquisitions. This integrated approach helps to assure that consistent sources of claim and member information are provided across all of our health plans. The system is currently configured and is supporting claims auto adjudication rates that exceed 85% in all markets. Our current AMISYS production system is capable of supporting over a million members.
The following table summarizes our information systems and their functions:
System/Program Platform Function
-------------- -------- --------
AMISYS HP3000 Series 997/400 Core Managed Care Functions: Claims;
IMAGE Eligibility; Claims Payable
Clinical Case Management Systems HP Netserver/SQL2000 Core Medical Management: Case
Management; Authorizations; Medical
Records
InterQual HP Netserver/SQL2000 Clinical Guideline Assessment
Distributed Reporting System ASP/Oracle Data Warehouse: HEDIS; Provider
Profiling; Member Profiling
E-Commerce HP Netserver/SQL2000 Internet Inquiry: Claims Payment Status;
Member Eligibility; Authorization Status
NurseWise HP Netserver/SQL 2000 Nurse Triage; After Hours Authorizations
Scanning/Imaging HP Netserver/SQL2000 Hospital Claims Scanning; Medical
Claims Scanning; Workflow
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We have a disaster recovery and business resumption plan developed and implemented in conjunction with Sungard Planning. This plan allows us complete access to the business resumption centers and hot-site facilities provided by Sungard. We have contracted with Sungard to provide us with annual plan updates through 2005.
Competition
In the Medicaid business, our principal competitors for state contracts, members and providers consist of the following types of organizations:
Primary Care Case Management Programs are programs established by the states through contracts with primary care providers. Under these programs, physicians provide primary care services to the Medicaid recipient, as well as limited oversight over other services.
National And Regional Commercial Managed Care Organizations have Medicaid and Medicare members in addition to members in private commercial plans.
Medicaid managed care organizations focus solely on providing healthcare services to Medicaid recipients, the vast majority of which operate in one city or state. Many of these plans are owned by providers, especially hospitals. Their membership is small relative to the infrastructure that is required for them to do business. There are a few multi-state Medicaid-only organizations that tend to be larger in size and therefore are able to leverage their infrastructure over larger membership.
We will continue to face varying levels of competition as we expand in our existing service areas or enter new markets. Healthcare reform proposals may cause a number of commercial managed care organizations already in our service areas to decide to enter or exit the Medicaid market. However, the licensing requirements and bidding and contracting procedures in some states present barriers to entry into the Medicaid managed healthcare industry.
We compete with other managed care organizations for state contracts. In order to win a bid for or be awarded a state contract, state governments consider many factors, which include providing quality care, satisfying financial requirements, demonstrating an ability to deliver services, and establishing networks and infrastructure. Some of the factors may be outside our control. For example, state regulators may prefer competitors with substantial local ownership or entities formed as not-for-profit organizations.
We also compete to enroll new members and retain existing members. People who wish to enroll in a managed healthcare plan or to change healthcare plans typically choose a plan based on the quality of care and service offered, ease of access to services, a specific provider being part of the network and the availability of supplemental benefits.
We also compete with other managed care organizations to enter into contracts with physicians, physician groups and other providers. We believe the factors that providers consider in deciding whether to contract with us include existing and potential member volume, reimbursement rates, medical management programs, timeliness of reimbursement and administrative service capabilities.
Regulation
Our healthcare operations are regulated at both state and federal levels. Government regulation of the provision of healthcare products and services is a changing area of law that varies from jurisdiction to jurisdiction. Regulatory agencies generally have discretion to issue regulations and interpret and enforce laws and rules. Changes in applicable laws and rules also may occur periodically.
Managed Care Organizations
Our three health plan subsidiaries are licensed to operate as health maintenance organizations in each of Wisconsin, Indiana and Texas. In each of the jurisdictions in which we operate, we are regulated by the relevant health, insurance and/or human services departments that oversee the activities of managed care organizations providing or arranging to provide services to Medicaid enrollees.
The process for obtaining authorization to operate as a managed care organization is a lengthy and involved process and requires demonstration to the regulators of the adequacy of the health plan's organizational structure, financial resources, utilization review, quality assurance programs and complaint procedures. Under both state managed care organization statutes and state insurance laws, our health plan subsidiaries must comply with minimum net worth requirements and other financial requirements, such as minimum capital, deposit and reserve requirements. Insurance regulations may also require the prior state approval of acquisitions of other managed care organizations' businesses and the payment of dividends, as well as notice requirements for loans or the transfer of funds. Our subsidiaries are also subject to periodic reporting requirements. In addition, each health plan must meet numerous criteria to secure the approval of
state regulatory authorities before implementing operational changes, including the development of new product offerings and, in some states, the expansion of service areas.
Medicaid
In order to be a Medicaid managed care organization in each of the states in which we operate, we must enter into a contract with the state's Medicaid agency. States generally use either a formal proposal process, reviewing a number of bidders, or award individual contracts to qualified applicants that apply for entry to the program.
The contractual relationship with the state is generally for a period of one to five years. The contracts with the states and regulatory provisions applicable to us generally set forth in great detail the requirements for operating in the Medicaid sector including provisions relating to:
. eligibility, enrollment and disenrollment processes;
. covered services;
. eligible providers;
. subcontractors;
. record-keeping and record retention;
. periodic financial and informational reporting;
. quality assurance;
. marketing;
. financial standards;
. timeliness of claims payment;
. health education and wellness and prevention programs;
. safeguarding of member information;
. fraud and abuse detection and reporting;
. grievance procedures; and
. organization and administrative systems.
A health plan's compliance with these requirements is subject to monitoring by state regulators and by CMS. A health plan is subject to periodic comprehensive quality assurance evaluation by a third party reviewing organization and generally by the insurance department of the jurisdiction that licenses the health plan. A health plan must also submit many reports to various regulatory agencies, including quarterly and annual statutory financial statements and utilization reports.
HIPAA
In 1996, Congress enacted the Health Insurance Portability and Accountability Act of 1996, or HIPAA. The Act is designed to improve the portability and continuity of health insurance coverage and simplify the administration of health insurance claims. One of the main requirements of HIPAA is the implementation of standards for the processing of health insurance claims and for the security and privacy of individually identifiable health information.
In August 2000, the Department of Health and Human Services, or HHS, issued new standards for submitting electronic claims and other administrative healthcare transactions. The new standards were designed to streamline the processing of claims, reduce the volume of paperwork and provide better service. The administrative and financial healthcare transactions covered include:
. health claims and equivalent encounter information;
. enrollment and disenrollment in a health plan;
. eligibility for a health plan;
. healthcare payment and remittance advice;
. health plan premium payments;
. healthcare claim status; and
. referral certification and authorization.
In general, healthcare organizations will be required to comply with the new standards by October 2002. The regulation's requirements apply only when a transaction is transmitted using "electronic media." Because "electronic media" is defined broadly to include "transmissions that are physically moved from one location to another using magnetic tape, disk or compact disk media," many communications will be considered electronically transmitted. In addition, health plans will be required to have the capacity to accept and send all standard transactions in a standardized electronic format. The regulation sets forth other rules that apply specifically to health plans as follows:
. a plan may not delay processing of a standard transaction (that is, it must complete transactions using the new standards at least as quickly as it had prior to implementation of the new standards);
. there should be "no degradation in the transmission of, receipt of, processing of, and response to" a standard transaction as compared to the handling of a non-standard transaction;
. if a plan uses a healthcare clearinghouse to process a standard request, the other party to the transaction may not be charged more or otherwise disadvantaged as a result of using the clearinghouse;
. a plan may not reject a standard transaction on the grounds that it contains data that is not needed or used by the plan;
. a plan may not adversely affect (or attempt to adversely affect) the other party to a transaction for requesting a standard transaction; and
. if a plan coordinates benefits with another plan, then upon receiving a standard transaction, it must store the coordination of benefits data required to forward the transaction to the other plan.
On December 28, 2000, HHS published a final regulation setting forth new standards for protecting the privacy of individually identifiable health information in any medium. Compliance with these rules will be required by April 2003. The new regulation is designed to protect medical records and other personal health information maintained and used by healthcare providers, hospitals, health plans and health insurers, and healthcare clearinghouses. Among numerous other requirements, the new standards:
. limit both the routine and non-routine non-consensual use and release of private health information, and require patient authorizations for most uses and disclosures of such information;
. give patients new rights to access their medical records and to know who else has accessed them;
. limit most disclosure of health information to the minimum needed for the intended purpose;
. establish procedures to ensure the protection of private health information;
. establish new criminal and civil sanctions for improper use or disclosure of health information; and
. establish new requirements for access to records by researchers and others.
The preemption provisions of the regulation provide that the federal law will preempt a contrary state law. However, a state (or any person) may submit a request to the Secretary of HHS that a provision of state law be excepted from the preemption rules. The Secretary may grant an exception if one or more of a number of conditions are met, including:
. the state law is necessary to prevent fraud and abuse related to the provision of and payment for healthcare;
. the state law will ensure appropriate state regulation of insurance and health plans, the state law is necessary to state reporting on healthcare delivery or costs; or
. the state law related to the privacy of health information is more stringent than the federal law.
In addition, on August 12, 1998, HHS published proposed regulations relating to the security of individually identifiable health information. These rules would require healthcare providers, health plans and healthcare clearinghouses to ensure the privacy and confidentiality of such information when it is electronically stored, maintained or transmitted through such devices as user authentication mechanisms and system activity audits. These regulations have not been finalized.
We are in the process of assessing the impact that these new regulations will have on us, given their complexity and the likelihood that they will be subject to changing, and perhaps conflicting, interpretation.
New Medicaid Managed Care Regulations
On January 19, 2001, HHS issued final Medicaid managed care regulations to implement certain provisions of the Balanced Budget Act of 1997, or BBA. Since the publication of this final rule, CMS delayed the rule's effective date three times, the most recent of which delays the effective date of the final rule to August 16, 2002. In addition, on August 20, 2001, CMS proposed a new Medicaid managed care rule that is intended to eventually replace the final rule published on January 19, 2001.
The proposed rule would implement BBA provisions intended to (1) give states the flexibility to enroll certain Medicaid recipients in managed care plans without a federal waiver if the state provides the recipients with a choice of managed care plans; (2) establish protections for members in areas such as quality assurance, grievance rights and coverage of emergency services; and (3) eliminate certain requirements viewed by the states as impediments to the growth of managed care programs, such as the enrollment composition requirement, the right to disenroll without cause at any time, and the prohibition against enrollee cost-sharing. The rule would also establish requirements intended to ensure that state Medicaid managed care capitation rates are actuarially sound. According to HHS, this requirement would eliminate the generally outdated regulatory ceiling on what states may pay managed care plans, a particularly important provision as more state Medicaid programs include people with chronic illnesses and disabilities in managed care. CMS will accept comments on the proposed rule until October 16, 2001, and the Secretary of HHS has indicated an intent to finalize the regulations by early 2002.
Because the final content of the rule has not yet been determined, we cannot predict what requirements it will ultimately entail, nor when such requirements will become effective. Changes to the regulations
affecting our business, including these proposed regulations, could increase our healthcare costs and administrative expenses, reduce our reimbursement rates, and otherwise adversely affect our business, results of operations, and financial condition.
Patients' Rights Legislation
The United States Senate and House of Representatives passed two versions of patients' rights legislation in May and August 2001, respectively. Both versions include provisions that specifically apply protections to participants in federal healthcare programs, including Medicaid beneficiaries. Either version of this legislation could expand our potential exposure to lawsuits and increase our regulatory compliance costs. Depending on the final form of any patients' rights legislation, such legislation could, among other things, expose us to liability for economic and punitive damages for making determinations that deny benefits or delay beneficiaries' receipt of benefits as a result of our medical necessity or other coverage determinations. According to published reports, Congress may convene a conference committee shortly to attempt to resolve differences between the Senate and House bills, including such matters as the amount of allowable damages, whether cases would be governed by federal or state law, and whether such actions could be brought in federal or state courts. We cannot predict whether patients' rights legislation will be enacted into law or, if enacted, what final form such legislation might take.
Other Fraud and Abuse Laws
Investigating and prosecuting healthcare fraud and abuse became a top priority for law enforcement entities in the last decade. The focus of these efforts has been directed at participants in public government healthcare programs such as Medicaid. The laws and regulations relating to Medicaid fraud and abuse and the contractual requirements applicable to plans participating in these programs are complex and changing and will require substantial resources.
Properties
Our headquarters occupy approximately 36,000 square feet of office space in Saint Louis, Missouri under a lease expiring in 2010. We currently are subleasing approximately 4,000 square feet of this space. Our claims center occupies approximately 14,000 square feet of office space in Farmington, Missouri under a lease expiring in 2009. We also lease space in Wisconsin, Indiana and Texas where our health plans are located. We are required by various insurance and Medicaid regulatory authorities to have offices in the service areas where we provide Medicaid benefits. We believe our current facilities are adequate to meet our operational needs for the foreseeable future.
Employees
As of September 30, 2001, we had 401 employees, of whom 88 were employed at our Saint Louis headquarters, 91 at our Farmington claims center, 57 by our Indiana plan, 79 by our Wisconsin plan and 86 by our Texas plans. Our employees are not represented by a union. We believe our relationships with our employees are good.
Legal Proceedings
In the normal course of our business, we may be a party to legal proceedings. We are not currently a party to any material legal proceedings.
MANAGEMENT
The following table sets forth information regarding our executive officers, key employees and directors as of September 30, 2001:
Name Age Position
---- --- --------
Executive Officers and Directors
Michael F. Neidorff............. 58 President, Chief Executive Officer, Treasurer and Director
Joseph P. Drozda, Jr., M.D...... 56 Senior Vice President, Medical Affairs
Catherine M. Halverson.......... 52 Senior Vice President, Business Development
Mary O'Hara..................... 51 Senior Vice President, Operations Services
Brian G. Spanel................. 46 Senior Vice President and Chief Information Officer
Karey L. Witty.................. 37 Senior Vice President, Chief Financial Officer and Secretary
Claire W. Johnson (1)........... 59 Chairman of the Board of Directors
Samuel E. Bradt (1)............. 63 Director
Walter E. Burlock, Jr........... 38 Director
Edward L. Cahill (2)............ 48 Director
Howard E. Cox, Jr. (2).......... 57 Director
Robert K. Ditmore (2)........... 67 Director
Richard P. Wiederhold (1)....... 58 Director
Key Employees
Kathleen R. Crampton............ 57 President and Chief Executive Officer, Managed Health
Services Wisconsin
Rita Johnson-Mills.............. 42 President and Chief Executive Officer, Managed Health
Services Indiana
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Michael F. Neidorff has served as our President, Chief Executive Officer and Treasurer and as a member of our board of directors since May 1996. From 1995 to 1996, Mr. Neidorff served as a Regional Vice President of Coventry Corporation, a publicly traded managed care organization, and as the President and Chief Executive Officer of one of its subsidiaries, Group Health Plan, Inc. From 1985 to 1995, Mr. Neidorff served as the President and Chief Executive Officer of Physicians Health Plan of Greater St. Louis, a subsidiary of United Healthcare Corp., a publicly traded managed care organization now known as UnitedHealth Group Incorporated.
Joseph P. Drozda, Jr., M.D. has served as our Senior Vice President, Medical Affairs since November 2000 and served as our part-time Medical Director from January 2000 through October 2000. From June 1999 to October 2000, Dr. Drozda was self-employed as a consultant to managed care organizations, physician groups, hospital networks and employer groups on a variety of managed care delivery and financing issues. From 1996 to April 1999, Dr. Drozda served as the Vice President of Medical Management of SSM Health Care, a health services network. From 1994 to 1996, Dr. Drozda was the Vice President and Chief Medical Officer of PHP, Inc., a health maintenance organization based in North Carolina. From 1987 until 1994, Dr. Drozda served as Medical Director of Physicians Health Plan of Greater St. Louis, a health plan that he co-founded.
Catherine M. Halverson has served as our Senior Vice President, Business Development since September 2001. From March 2001 to September 2001, Ms. Halverson was self-employed as a consultant to a pharmaceutical benefit management company and Medicaid managed care plans. From 1993 to March
2001, Ms. Halverson was the Vice President and Director of Medicaid Programs of UnitedHealth Group Incorporated.
Mary O'Hara has served as our Senior Vice President, Operations Services since January 1999. From December 1998 to January 1999, Ms. O'Hara served as our Chief Contracting Officer. From March 1997 to October 1998, Ms. O'Hara was the Chief Contracting Officer of Unity Health Network, a network of hospitals and physicians in Missouri and Illinois. From 1990 to February 1997, Ms. O'Hara was the Director of Managed Care for Virginia Mason Medical Center, an integrated healthcare delivery system, in Seattle, Washington.
Brian G. Spanel has served as our Senior Vice President and Chief Information Officer since December 1996. From 1988 to 1996, Mr. Spanel served as President of GBS Consultants, a healthcare consulting and help desk software developer. From 1987 to 1988, Mr. Spanel was Director of Information Services for CompCare, a managed care organization. From 1984 to 1987, Mr. Spanel was Director of Information Services for Peak Health Care, a managed care organization.
Karey L. Witty has served as our Senior Vice President and Chief Financial Officer since August 2000 and as our Secretary since February 2000. From March 1999 to August 2000, Mr. Witty served as our Vice President of Health Plan Accounting. From 1996 to March 1999, Mr. Witty was Controller of Heritage Health Systems, Inc., a healthcare company in Nashville, Tennessee. From 1994 to 1996, Mr. Witty served as Director of Accounting for Healthwise of America, Inc., a publicly traded managed care organization.
Claire W. Johnson has served as a member of our board of our directors since 1987 and served as our Acting President and Chief Executive Officer from 1995 to April 1996. Mr. Johnson served as the Chief Executive Officer of Group Health Cooperative of Eau Claire, Wisconsin, a health maintenance organization, from 1972 to 1994.
Samuel E. Bradt has served as a member of our board of directors since 1993 and served as our Secretary from 1993 to July 2000. Mr. Bradt is President of Merganser Corporation, a business advisory and venture capital firm he founded in 1980.
Walter E. Burlock, Jr. has served as a member of our board of directors since September 1998. Mr. Burlock has been a Managing Director of Origin Capital Management, a private venture capital firm located in San Francisco, California, since July 2000. From 1990 to June 2000, Mr. Burlock was a Managing Director of Soros Fund Management LLC, a hedge fund manager.
Edward L. Cahill has served as a member of our board of directors since September 1998. Mr. Cahill has been a Partner of HLM, a private venture capital firm located in Boston, Massachusetts, since April 2000. From 1995 to April 2000, Mr. Cahill was a partner at Cahill Warnock Strategic Partners Fund, L.P., a venture capital firm he co-founded. From 1981 to 1995, Mr. Cahill was employed by Alex, Brown & Sons, an investment banking and brokerage firm.
Howard E. Cox, Jr. has served as a member of our board of directors since 1993. Mr. Cox is a partner of Greylock Limited Partnership, a national venture capital firm headquartered in Waltham, Massachusetts and San Mateo, California, with which he has been associated since 1971. Mr. Cox also currently serves as a director of Stryker Corporation in Michigan and Landacorp, Inc. in Atlanta.
Robert K. Ditmore has served as a member of our board of directors since April 1996. From 1985 to 1991, Mr. Ditmore was the President and Chief Operating Officer of United Healthcare Corp., a publicly traded managed care organization now known as UnitedHealth Group Incorporated.
Richard P. Wiederhold has served as a member of our board of directors since 1993. Mr. Wiederhold has served since 1992 as President of Managed Health Services, Inc. d/b/a the Elizabeth A. Brinn Foundation, a charitable foundation. From 1973 to 1985, Mr. Wiederhold held several positions, most recently Corporate Treasurer, with Allen-Bradley Company, a manufacturer of industrial motor controls and electronic and magnetic components.
Kathleen R. Crampton has served as the President and Chief Executive Officer of Managed Health Services Insurance Corp., our health plan in Wisconsin, since June 2000. From November 1999 to May 2000, Ms. Crampton was a Senior Consultant for PricewaterhouseCoopers LLC. From June 1996 to October 1999, Ms. Crampton served as Vice President of the Patterson Group, a private consulting firm serving health maintenance organizations and their service providers and medical manufacturers. From 1993 to 1996, Ms. Crampton served as Vice President of Marketing for Healthtech Services Corporation, a home care robotics and telemedicine information systems company.
Rita Johnson-Mills has served as the President and Chief Executive Officer of Managed Health Services Indiana, Inc., our health plan in Indiana, since April 2001. From March 2000 to April 2001, Ms. Johnson-Mills served as the Chief Operating Officer of Managed Health Services Indiana, Inc. From July 1999 to March 2000, Ms. Johnson-Mills was a Senior Vice President and the Chief Operating Officer of Medical Diagnostic Management. From 1995 to March 1999, Ms. Johnson-Mills served as Senior Vice President and Chief Operating Officer of DC Chartered Health Plan, Inc., a health maintenance organization.
Classified Board of Directors
We currently have eight directors, four of whom were elected as directors under a stockholders' agreement that will automatically terminate upon the closing of this offering. At our request, all directors elected to the board of directors pursuant to the stockholders' agreement have agreed to remain on the board following this offering. There are no family relationships among any of our directors or executive officers.
Our charter includes a provision establishing a classified board of directors. Upon the closing of this offering, our board will be divided into three classes, each of whose members will serve for a staggered three-year term. The division of the three classes, the initial directors and their respective election dates are as follows:
. the class 1 directors will be Samuel E. Bradt, Walter E. Burlock, Jr. and Michael F. Neidorff, and their term will expire at the annual meeting of stockholders to be held in 2002;
. the class 2 directors will be Edward L. Cahill, Howard E. Cox, Jr. and Robert K. Ditmore, and their term will expire at the annual meeting of stockholders to be held in 2003; and
. the class 3 directors will be Claire W. Johnson and Richard P. Wiederhold, and their term will expire at the annual meeting of stockholders to be held in 2004.
At each annual meeting of stockholders after the initial classification, a class of directors will be elected to serve for a three-year term to succeed the directors of the same class whose terms are then expiring. The authorized number of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as early as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control or management of our company. See "Description of Capital Stock-Anti-Takeover Effects of Provisions of Delaware Law and Our Charter and By-Laws."
Board Committees
We have established an audit committee and a compensation committee of our board of directors.
Audit Committee. Our audit committee consists of Samuel E. Bradt, Claire W. Johnson and Richard P. Wiederhold. The audit committee assists the board in fulfilling its oversight responsibilities by reviewing all audit processes and fees, the financial information that will be provided to our stockholders and our systems of internal financial controls. The audit committee shares with the board the authority and responsibility to select, evaluate and, where appropriate, replace the independent public accountants.
Compensation Committee. Our compensation committee consists of Edward L. Cahill, Howard E. Cox, Jr., and Robert K. Ditmore. The compensation committee reviews, and makes recommendations to the board of directors regarding, the compensation and benefits of our executive officers and key managers. The compensation committee also administers the issuance of stock options and other awards under our stock plans and establishes and reviews policies relating to the compensation and benefits of our employees and consultants.
Director Compensation
Our non-employee directors receive an annual fee from us of $4,000 and a fee of $1,000 for each meeting of the board of directors he or she attends in person and $250 for each meeting attended by means of conference telephone call. In addition, each member of our audit and compensation committees receives $500 from us for each committee meeting he or she attends in person and $200 for each meeting attended by means of conference telephone call. Directors are reimbursed for expenses incurred in connection with their service.
In addition, we may, in our discretion, grant stock options and other equity awards to our employee and non-employee directors under our stock plans.
We have granted the following non-qualified stock options shares to our non employee directors:
. In January 1996, we granted options to purchase shares at an exercise price of $ per share to Claire W. Johnson.
. In September 1997, we granted options to purchase shares at an exercise price of $ per share to each of Samuel E. Bradt, Howard E. Cox, Jr., Mr. Johnson and Richard P. Wiederhold.
. In 2000, we granted options to purchase shares to each of Messrs.
Bradt, Cox, Johnson, Wiederhold, Walter E. Burlock, Jr. and Edward L.
Cahill. Half of these options were granted in January and have an exercise
price of $ per share, and the balance of the options were granted in
October and have an exercise price of $ per share.
All of the above options vest ratably over five years from the date of grant.
Compensation Committee Interlocks And Insider Participation
None of our executive officers serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or compensation committee. None of the current members of our compensation committee has ever been an employee of Centene.
Executive Compensation
Compensation Earned
The following summarizes the compensation earned during the fiscal year ended December 31, 2000 by our chief executive officer and our four other most highly compensated executive officers who were serving as executive officers on December 31, 2000 and whose total compensation exceeded $100,000. We refer to these individuals as our "named executive officers."
Summary Compensation Table
Long-Term
Compensation
------------
Annual Compensation Securities
------------------- Underlying
Name and Principal Position Salary Bonus Options
--------------------------- -------- -------- ------------
Michael F. Neidorff........................... $300,000 $160,000
President and Chief Executive Officer
Mary O'Hara................................... 230,000 60,000
Senior Vice President, Operations Services
Karey L. Witty................................ 149,615 75,000
Senior Vice President and Chief
Financial Officer
Brian G. Spanel............................... 148,249 43,000
Senior Vice President and Chief
Information Officer
Joseph P. Drozda, Jr., M.D.................... 97,981 35,000
Senior Vice President, Medical Affairs
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Option Grants
The following table sets forth information concerning the individual grants of stock options to each of the named executive officers who received grants during the fiscal year ended December 31, 2000. The exercise price per share of each option was equal to the fair market value of the common stock on the date of grant, as determined by the board of directors. We have never granted any stock appreciation rights. The potential realizable value is calculated based on the term of the option at its time of grant, which is ten years. This value is based on assumed rates of stock appreciation of 5% and 10% compounded annually from the date the options were granted until their expiration date. These numbers are calculated based on the requirements of the SEC and do not reflect our estimate of future stock price growth. Actual gains, if any, on stock option exercises will depend on the future performance of the common stock and the date on which the options are exercised.
Option Grants In Year Ended December 31, 2000
Individual Grants Value
-----------------------
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation
Underlying Granted to Exercise for Option Term
Options Employees in Price Per Expiration ---------------------
Name Granted Fiscal Year Share Date 5% 10%
---- ---------- ------------- --------- ---------- ------- --------
Michael F. Neidorff........ 7.5% $ 10/20/10 $86,583 $137,847
Mary O'Hara................ 0.6 10/20/10 6,499 10,349
Karey L. Witty............. 3.8 10/20/10 43,292 68,924
Brian G. Spanel............ 0.9 10/20/10 10,823 17,231
Joseph P. Drozda, Jr., M.D. 6.6 01/03/10 75,760 120,616
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Option Exercises and Holdings
None of our named executive officers exercised options during 2000. The following table sets forth certain information regarding the number and value of unexercised options held by each of the named executive officers as of December 31, 2000. There was no public market for our common stock as of December 31, 2000. Accordingly, amounts described in the following table under the heading "Value of Unexercised In-The-Money Options at Year End" are determined by multiplying the number of shares underlying the options by the difference between an assumed public offering price of $ per share and the per share option exercise price.
Aggregated 2000 Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-The-Money Options at
Fiscal Year End Year End
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Michael F. Neidorff........ $ $
Mary O'Hara................
Karey L. Witty.............
Bria G. Spanel.............
Joseph P. Drozda, Jr., M.D.
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Stock options that are otherwise unvested may be exercised for shares which are subject to vesting and a repurchase option at the exercise price. Except for shares subject to an option granted to Mr. Neidorff in 1997, all shares subject to options vest ratably over 5 years. The option granted to Mr. Neidorff in 1997 will vest in full on the fifth anniversary of the date of grant. Fifty percent of shares underlying options granted under our 1994 Stock Plan, 1996 Stock Plan and 1998 Stock Plan vest automatically upon a change of control. Shares underlying options granted under our 1999 Stock Plan and 2000 Stock Plan vest automatically in full upon a change in control.
Employee Benefit Plans
Stock Plans
We have five stock plans: the 1994 Stock Plan, 1996 Stock Plan, 1998 Stock Plan, 1999 Stock Plan and 2000 Stock Plan. The stock plans have the same basic terms.
General. We have reserved for issuance under the plans an aggregate maximum of shares of common stock. As of September 30, 2001, options to purchase shares of our common stock were
outstanding and shares of common stock had been issued upon the exercise of options under the plans. If an award granted under the plan expires or is terminated, the shares of common stock underlying the award will be available for issuance under the plans.
Types of Awards. The following awards may be granted under the plans:
. stock options, including incentive stock options and non-qualified stock options;
. stock bonuses; and
. the opportunity to make direct purchases of stock.
Administration. The plans are administered by the board of directors, which may designate a committee to administer the plans. The board or committee may, subject to the provisions of the plans, determine the persons to whom awards will be granted, the type of award to be granted, the number of shares to be made subject to awards, the exercise price and other terms and conditions of the awards, and interpret the plans and prescribe, amend and rescind rules and regulations relating to the plans.
Eligibility. Awards may be granted under the plans to our employees, directors and consultants or employees, directors and consultants of any of our subsidiaries, as selected by the board of directors or committee.
Terms and Conditions of Options. Stock options may be either "incentive stock options," as that term is defined in Section 422 of the Internal Revenue Code, or non-qualified stock options. The exercise price of a stock option granted under the plan is determined by the board or committee at the time the option is granted, but the exercise price of an incentive stock option may not be less than the fair market value per share of common stock on the date of grant. Stock options are exercisable at the times and upon the conditions that the board or committee may determine, as reflected in the applicable option agreement. The exercise period may not extend beyond ten years from the date of grant.
The option exercise price must be paid in full at the time of exercise, and is payable by any one of the following methods or a combination thereof:
. in cash or cash equivalents or, at the discretion of the board or committee;
. by surrender of previously acquired shares of our common stock with a fair market value, as determined by the board of directors, equal to the exercise price;
. by delivery of the optionee's personal recourse promissory note with interest payable at a rate approved by the board of directors; or
. through a specified "broker cashless exercise" procedure.
Stock Bonuses. The plans provide that the board or committee, in its discretion, may award shares of common stock to plan participants.
Purchase Opportunity. The plans provide that the board or committee, in its discretion, may authorize plan participants to purchase shares of common stock.
Director Awards. The board or committee, in its discretion, may grant awards under the plan to both employee and nonemployee directors. The terms of the awards granted to directors are to be generally consistent with the terms of awards granted to other participants under the plan.
Termination of Employment. If a participant ceases to be an employee or perform services for us or one of our affiliates for any reason other than death or disability, his or her option will expire one month
after the date of termination or such lesser period, or greater period in the case of nonqualified options, as the board or committee shall determine. If such termination is as a result of death or disability, the options will be terminate three months after the date of termination, unless the board or committee determines a shorter period. No option may, however, be exercised after the date of its expiration, and may be exercised after termination only to the extent it was exercisable on the date of termination. The options granted to date each provide that options are fully exercisable on the date of grant, but shares subject to the options vest ratably over five years. Fifty percent of shares underlying options granted under our 1994 Stock Plan, 1996 Stock Plan and 1998 Stock Plan vest automatically upon a "change of control" as defined in the option agreements. Shares underlying options granted under our 1999 Stock Plan and 2000 Stock Plan vest automatically in full upon a "change in control" as defined in the option agreements. If an option holder leaves our employ for any reason or, in the case of an option holder who is a non-employee director, ceases to be a member of our board of directors, we may repurchase from such holder all unvested shares acquired by him or her at the option exercise price.
Amendment and Termination of Plans. The board of directors may modify or terminate the plans or any portion of the plans at any time, except that shareholder approval is required for any amendment that would increase the total number of shares reserved for issuance under a plan, materially increase the plan benefits available to participants, materially modify the plan eligibility requirements, or otherwise as required to comply with applicable law. No awards may be granted under any plan after the day prior to the tenth anniversary of its adoption date.
Employment Agreements
Joseph P. Drozda serves as our Senior Vice President, Medical Affairs pursuant to an employment agreement dated October 30, 2000. We have agreed to pay Dr. Drozda an annual salary of $180,000, which may be adjusted by our President. Dr. Drozda may also receive an annual bonus in the discretion of our President. Dr. Drozda has agreed not to disclose confidential information about our business, and not to compete with us during the term of his employment and for nine months thereafter. Dr. Drozda's employment may be terminated by us for cause or permanent disability. If we terminate Dr. Drozda without cause, he will be entitled to receive one year's salary continuation, and we will be obligated to pay premiums for the health and dental coverage to which he would be entitled under the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, for 12 months. If, after a change in control, Dr. Drozda's position is eliminated, his salary is reduced or he is asked and refuses to relocate outside of the Saint Louis metropolitan area, he will, upon termination, be entitled to the above benefits, but his one year salary will be paid either in a lump sum or as salary continuance, at his option.
Mary O'Hara serves as our Senior Vice President, Operations Services pursuant to an employment agreement dated December 16, 1998. This agreement had an initial term of one year and renews automatically on an annual basis unless we provide 30 days' prior written notice of non-renewal. We have agreed to pay Ms. O'Hara an annual salary of $200,000, which may be adjusted by our President. Ms. O'Hara may also receive an annual bonus in an amount to be determined by the board of directors. Ms. O'Hara has agreed not to disclose confidential information about our business or, during the term of her employment and for a period of one year thereafter, solicit any of our customers, suppliers, employees or agents. Ms. O'Hara has also agreed not to compete with us during the term of her employment or for a period of six months thereafter. Ms. O'Hara's employment may be terminated by us for cause or permanent disability. If we terminate Ms. O'Hara without cause, Ms. O'Hara will be entitled to receive one year's salary continuation and COBRA coverage for 12 months.
Brian G. Spanel serves as our Senior Vice President and Chief Information Officer pursuant to an employment agreement dated August 6, 2001. This agreement has an initial term of one year and renews automatically on an annual basis unless we provide 30 days' prior written notice of non-renewal. We have agreed to pay Mr. Spanel an annual salary of $175,000, which may be adjusted by our President. Mr. Spanel may also receive an annual bonus in the discretion of our President. Mr. Spanel has agreed not to disclose confidential information about our business. Mr. Spanel has also agreed not to compete with us during the term of his employment and for nine months thereafter. Mr. Spanel's employment may be terminated by us for cause or permanent disability. If we terminate Mr. Spanel without cause, he will be entitled to receive 39 weeks salary continuation and COBRA coverage for nine months. If, within 24 months after a change in control, Mr. Spanel is involuntarily terminated or voluntarily resigns due to a reduction in his compensation, a material adverse change in his position with us or the nature or scope of his duties or a request that he relocate outside of the Saint Louis metropolitan area, he will be entitled to receive one year's salary, either in a lump sum or as salary continuance, at his option, COBRA coverage for 18 months and the use of an outplacement service.
Karey L. Witty serves as our Senior Vice President and Chief Financial Officer pursuant to an employment agreement dated as of January 1, 2001. This agreement has an initial term of one year and renews automatically unless we provide 30 days' prior written notice of non-renewal. We have agreed to pay Mr. Witty an annual salary of $175,000, which may be adjusted by our President. Mr. Witty may also receive an annual bonus to be determined by our President. Mr. Witty has agreed not to disclose confidential information about our business or, during the term of his employment and for a period of six months thereafter, not to compete with us. Mr. Witty's employment may be terminated by us for cause or permanent disability. If we terminate Mr. Witty without cause, Mr. Witty will be entitled to receive one year's salary continuation and COBRA coverage for 12 months. If, after a change in control, Mr. Witty is involuntarily terminated or voluntarily resigns due to a reduction in his compensation, a material adverse change in his position with us or the nature or scope of his duties or a request that he relocate outside of the Saint Louis metropolitan area, he will be entitled to receive one year's salary, either in a lump sum or as salary continuance, at his option, COBRA coverage for 18 months and the use of an outplacement service.
Limitation of Liability of Directors and Indemnification of Directors and Officers
As permitted by the Delaware General Corporation Law, our charter provides that our directors shall not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by Delaware law as it now exists or as it may be amended. As of the date of this prospectus, Delaware law permits limitations of liability for a director's breach of fiduciary duty other than liability for (1) any breach of the director's duty of loyalty to us or our stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) unlawful payments of dividends or unlawful stock repurchases or redemptions, or (4) any transaction from which the director derived an improper personal benefit. In addition, our by-laws provide that we will indemnify all of our directors, officers, employees and agents for acts performed on our behalf in such capacity.
RELATED PARTY TRANSACTIONS
Since January 1, 1998, we have engaged in the following transactions with our directors, officers and holders of more than five percent of our voting securities and affiliates of our directors, officers and five percent stockholders.
Issuances of Series D Convertible Preferred Stock
In September 1998, we sold 3,680,000 shares of series D preferred stock at a price of $5.00 per share for gross proceeds of $18,400,000.
. We sold 2,000,000 of the shares to Strategic Investment Partners, Ltd. for a total price of $10,000,000. Strategic Investment Partners, Ltd. is a five percent stockholder.
. We sold 947,500 of the shares to Cahill Warnock Strategic Partners Fund, L.P. for a total price of $4,737,500. Cahill Warnock Strategic Partners Fund, L.P. is a five percent stockholder with which Edward L. Cahill, one of our directors, is affiliated.
. We sold 600,000 of the shares to Greylock Limited Partnership for a total price of $3,000,000. Greylock Limited Partnership is a five percent stockholder.
. We sold 52,500 of the shares to Strategic Associates, L.P. for a total price of $262,500. Mr. Cahill, one of our directors, is affiliated with Strategic Associates, L.P.
. We sold 40,000 of the shares to D.L. Associates for a total price of $200,000. Robert K. Ditmore, one of our directors, is affiliated with D.L. Associates.
. We sold 20,000 of the shares to Claire W. Johnson for a total price of $100,000. Mr. Johnson is one of our directors.
. We sold 5,000 of the shares to a trust for the benefit of Richard P. Wiederhold for a total price of $25,000. Mr. Wiederhold is one of our directors.
In May 1999, we sold 40,000 shares of series D preferred stock at a price of $5.00 per share for gross proceeds of $200,000. We sold 25,000 of the shares to Michael F. Neidorff and 5,000 of the shares to Brian G. Spanel, both of whom are our executive officers.
Registration Rights
The holders of shares of our common stock are entitled to rights to register their shares under the Securities Act. These rights are provided under the terms of an agreement between us and the holders of registrable securities, who are former holders of some series of our common and preferred stock. These holders include:
. Greylock Limited Partnership, which has registration rights covering shares of common stock;
. Strategic Investment Partners, Ltd., which has registration rights covering shares of common stock;
. Cahill Warnock Strategic Partners Fund, L.P., which has registration rights covering shares of common stock;
. Mr. Johnson, who has registration rights covering shares of common stock; . Mr. Neidorff, who has registration rights covering shares of common stock; |
. Strategic Associates, L.P., which has registration rights covering shares of common stock;
. D.L. Associates, which has registration rights covering shares of common stock; and . Mr. Spanel, who has registration rights covering shares of common stock. |
The registration rights:
. are held by all persons and entities that purchased series A common stock and series A, series B and series D preferred stock;
. allow holders to require us to register their shares under the Securities Act; and
. allow holders to include their shares in registration statements filed by us.
For a more detailed description of the registration rights, see "Description of Capital Stock--Registration Rights."
Employment Agreements
We have entered into employment agreements with and Joseph P. Drozda, Mary O'Hara, Brian G. Spanel and Karey L. Witty. For a more detailed description of these employment agreements, including severance provisons, see "Management--Employment Agreements."
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common stock as of September 30, 2001, as adjusted to reflect the sale of the shares of common stock offered in this offering, for:
. each person, entity or group of affiliated persons or entities known by us to own beneficially more than 5% of our outstanding common stock;
. each of our named executive officers and directors;
. all of our executive officers and directors as a group; and
. each of the selling stockholders.
Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include shares of common stock issuable upon the exercise of stock options or warrants that are immediately exercisable or exercisable within 60 days. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws. The address of our officers and directors is in care of Centene Corporation, 7711 Carondelet Avenue, Suite 800, Saint Louis, Missouri 63105.
Percentage ownership calculations are based on shares outstanding as of September 30, 2001. All of the following information gives effect to the conversion of all of our outstanding convertible preferred stock into common stock upon the closing of this offering and the exercise of outstanding warrants to purchase common stock before the closing of this offering.
To the extent that any shares are exercised on exercise of options to acquire shares of our capital stock, there may be further dilution to new public investors.
Beneficial Ownership Prior to Offering
-------------------------------------------
Shares Issuable
Pursuant to
Number of Options Number of
Shares Exercisable Shares of
Beneficially within 60 days of Common Stock
Name of Beneficial Owner Owned September 30, 2001 Percentage Being Offered
------------------------ ------------ ------------------ ---------- -------------
5% Stockholders: %
Greylock Limited Partnership...................... -- --
One Federal Street, 26th Floor Boston,
Massachusetts 02110
Strategic Investment Partners, Ltd................ -- --
c/o Soros Fund Management LLC
888 Seventh Avenue, 33rd Floor
New York, New York 10016
Cahill Warnock Strategic Partners Fund, L.P....... -- --
c/o Cahill, Warnock & Company
One South Street, Suite 2150 Baltimore, Maryland
21202
Named Executive Officers and Directors:
Michael F. Neidorff............................... --
Karey L. Witty.................................... --
Brian Spanel...................................... --
Joseph P. Drozda, Jr., M.D........................ --
Claire W. Johnson................................. (1) --
Samuel E. Bradt................................... (1) --
Walter E. Burlock, Jr............................. --
Edward L. Cahill.................................. --
Howard E. Cox, Jr................................. (2) -- --
Robert K. Ditmore................................. -- --
Richard P. Wiederhold............................. (1) --
All directors and executive officers as a group
(13 persons).....................................
Selling Stockholders (3):
William P. Jollie................................. (1) --
Thomas M. Gazzana................................. --
Jerome M. Fritsch................................. --
Leon K. Rusch..................................... --
Raymond C. Brinn.................................. (1) --
Kathleen A. Tordik................................ --
Tracey Klein...................................... (4) --
Richard S. Nemitz................................. --
Elaine E. Laverenz................................ --
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Beneficial Ownership
After Offering
-----------------------
Number of
Shares
Beneficially
Name of Beneficial Owner Owned Percentage
------------------------ ------------ ----------
5% Stockholders: %
Greylock Limited Partnership......................
One Federal Street, 26th Floor Boston,
Massachusetts 02110
Strategic Investment Partners, Ltd................
c/o Soros Fund Management LLC
888 Seventh Avenue, 33rd Floor
New York, New York 10016
Cahill Warnock Strategic Partners Fund, L.P.......
c/o Cahill, Warnock & Company
One South Street, Suite 2150 Baltimore, Maryland
21202
Named Executive Officers and Directors:
Michael F. Neidorff...............................
Karey L. Witty....................................
Brian Spanel......................................
Joseph P. Drozda, Jr., M.D........................
Claire W. Johnson.................................
Samuel E. Bradt...................................
Walter E. Burlock, Jr.............................
Edward L. Cahill..................................
Howard E. Cox, Jr.................................
Robert K. Ditmore.................................
Richard P. Wiederhold.............................
All directors and executive officers as a group
(13 persons).....................................
Selling Stockholders (3):
William P. Jollie.................................
Thomas M. Gazzana.................................
Jerome M. Fritsch.................................
Leon K. Rusch.....................................
Raymond C. Brinn..................................
Kathleen A. Tordik................................
Tracey Klein......................................
Richard S. Nemitz.................................
Elaine E. Laverenz................................
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DESCRIPTION OF CAPITAL STOCK
Upon completion of this offering, we will be authorized to issue 40,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. Shares of each class will have a par value of $0.001 per share. The following description summarizes information about our capital stock. You can obtain more comprehensive information about our capital stock by consulting our charter and by-laws, as well as the Delaware General Corporation Law.
Common Stock
As of September 30, 2001, our charter provided for two series of common stock, which were held as follows:
. Series A voting common stock, of which 277,247 shares were issued and outstanding held by ten holders of record; and
. Series B non-voting common stock, of which 624,279 shares were issued and outstanding held by six holders of record.
Each share of Series A and Series B common stock will convert into one share of common stock upon our reincorporation in Delaware immediately prior to the time we close this offering.
Each share of our common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. Subject to any preference rights of holders of preferred stock, the holders of common stock are entitled to receive dividends, if any, declared from time to time by the directors out of legally available funds. See "Dividend Policy." In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after the payment of liabilities, subject to any rights of holders of preferred stock to prior distribution.
The common stock has no preemptive or conversion rights or other subscription rights. No redemption or sinking fund provisions apply to the common stock. All outstanding shares of common stock are fully paid and nonassessable, and the shares of common stock to be issued upon the completion of this offering will be fully paid and nonassessable.
Preferred Stock
As of September 30, 2001, our charter provided for four series of preferred stock, which were held as follows:
. Series A preferred stock, of which 733,850 shares were issued and outstanding held by nine holders of record;
. Series B preferred stock, of which 864,640 shares were issued and outstanding held by one holder of record;
. Series C preferred stock, of which 557,850 shares were issued and outstanding held by five holders of record; and
. Series D preferred stock, of which 3,716,000 shares were issued and outstanding held by 15 holders of record.
Each share of preferred stock will convert into shares of common stock immediately upon the closing of this offering.
The board of directors will have the authority, without action by the stockholders, to designate and issue up to an aggregate of 10,000,000 shares of preferred stock, in one or more series, each series to have
the voting rights, dividend rights, conversion rights, liquidation preferences and redemption privileges as shall be determined by the board of directors. The rights of the holders of common stock will be affected by, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock. The effects of issuing preferred stock could include one or more of the following:
. restricting dividends on the common stock;
. diluting the voting power of the common stock;
. impairing the liquidation rights of the common stock; or
. delaying or preventing changes in control or management of Centene.
Anti-Takeover Effects of Provisions of Delaware Law and Our Charter and By-Laws
Delaware law and our charter and by-laws could make it more difficult to acquire us by means of a tender offer, a proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.
We must comply with Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years following the date the person became an interested stockholder, unless the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Generally, a "business combination" includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to an interested stockholder. An "interested stockholder" includes a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation's voting stock. The existence of this provision generally will have an anti-takeover effect for transactions not approved in advance by the board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders.
Upon the closing of this offering, our charter and by-laws will require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of the stockholders and may not be effected by a consent in writing. In addition, upon the completion of this offering, special meetings of our stockholders may be called only by the board of directors or some of our officers. Our charter and by-laws also provide that, effective upon the completion of this offering, our board of directors will be divided into three classes, with the classes serving staggered three-year terms. These provisions may have the effect of deterring hostile takeovers or delaying or preventing changes in our control or management.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Mellon Investor Services LLC.
Nasdaq National Market Listing
We expect our common stock to be approved for quotation on the Nasdaq National Market under the symbol "CNTE."
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for our common stock. We cannot provide any assurance that an active public market for our common stock will develop or be sustained after the closing of this offering.
Future sales in the public markets of substantial amounts of our common stock, including shares issued on the exercise of outstanding options, could adversely affect the prevailing market price of our common stock. It could also impair our ability to raise additional capital through future sales of equity securities.
Upon the closing of this offering, a total of shares of our common stock will be outstanding assuming (1) no exercise of the underwriters' over-allotment option and no exercise of options outstanding as of September 30, 2001 or granted thereafter and (2) the conversion upon the closing of this offering of all of our outstanding preferred stock into common stock and the exercise of outstanding warrants to purchase common stock at or before the closing of this offering. Of these shares, all of the shares of common stock sold in this offering will be freely transferable without restriction or further registration under the Securities Act, except for any shares acquired by "affiliates" as that term is defined in Rule 144 under the Securities Act.
Shares acquired by affiliates and the remaining shares held by existing stockholders are "restricted securities" as that term is defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144, which is summarized below.
Lock-Up Agreements
Our executive officers, directors and stockholders have entered into lock-up agreements pursuant to which they have agreed, with limited exceptions, not to dispose of or hedge any of their common stock for 180 days following the date of this prospectus without the written consent of SG Cowen Securities Corporation. We have also agreed that, without the prior written consent of SG Cowen Securities Corporation, we will not, directly or indirectly, offer, sell or otherwise dispose of any shares of common stock or any securities that may be converted into or exchanged for shares of common stock for a period of 180 days from the date of this prospectus.
Upon the closing of this offering, options to purchase shares of common stock will be held by existing optionees, based on options outstanding on September 30, 2001. Under the terms of their option agreements, holders of all of these options have agreed to be bound by the 180-day lock-up.
We intend to file with the SEC a registration statement on Form S-8 as soon as practicable after the closing of this offering registering shares of common stock reserved for future issuance under our stock plans or subject to presently outstanding options. This registration statement will allow holders of shares of common stock issued under our stock plans to resell those shares in the public market, without restriction under the Securities Act, subject to the lock-up agreements and, in the case of affiliates, Rule 144 limitations.
As a result of the lock-up agreements, the Form S-8 registration statement, the provisions of Rule 144 and Rule 701 under the Securities Act, the common shares outstanding upon the closing of this offering, including shares subject to presently outstanding options, will be eligible for resale in the public market in the United States as follows, subject in some cases to Rule 144 limitations:
Number of Shares Date
---------------- ----
After completion of this offering, freely tradable shares sold in this offering
After 180 days from the closing of this offering, the 180-day lock-up will be released, and
these shares will be eligible for sale in the public market under Rule 144 (subject, in some
cases, to volume limitations), Rule 144(k) or Rule 701
After 180 days from the closing of this offering, restricted securities that have been held for
less than one year and are not eligible for sale in the public market under Rule 144
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Rule 144
In general, under Rule 144, as in effect on the date of this prospectus, any person, including any of our affiliates, who has beneficially owned restricted common shares for at least one year, would be entitled to sell, within any three-month period, a number of shares that, together with sales of any common shares with which such person's sales must be aggregated, does not exceed the greater of:
. 1% of the total number of shares of common stock then outstanding, or
. the average weekly trading volume of the common stock on the Nasdaq National Market during the four calendar weeks preceding the date on which the notice of the sale on Form 144 is filed with the SEC.
Sales of restricted securities under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. Persons who are our affiliates must also comply with the restrictions and requirements of Rule 144, other than the one-year holding period requirement, in order to sell common shares in the public market that are not restricted securities. We are unable to estimate the number of shares that will be sold under Rule 144, as this will depend on the market price for our common stock, the personal circumstances of the sellers and other factors.
Rule 144(k)
Under Rule 144(k), a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner that was not an affiliate, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
Rule 701
In general, under Rule 701, as in effect on the date of this prospectus, our employees, directors, officers, consultants or advisors who purchase shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this prospectus may rely on Rule 701 to resell those shares 90 days after the effective date of this prospectus.
Rule 701 permits non-affiliates to sell their Rule 701 shares in reliance on Rule 144 without having to comply with the holding period, public information, volume limitation or notice provisions of Rule 144. Rule 701 permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling those shares.
Registration Rights
Pursuant to a shareholders' agreement dated September 23, 1998, the holders of approximately shares of common stock will be entitled to require us to register their shares under the Securities Act. Under this agreement, if we propose to register any of our securities under the Securities Act for our account, other than for employee benefit plans and business acquisitions or corporate restructurings, the holders of the registration rights are entitled to written notice of the registration and to include their shares of common stock in the registration. In addition, such holders may on up to two occasions, or three occasions under some circumstances, require us to register their shares of common stock under the Securities Act, and we are required to use our best efforts to effect any such registration. These registration rights are subject to conditions and limitations, including (1) the right of the underwriters of an offering to limit the number of shares included in such registration and (2) the right of the underwriters to lock-up the shares of such holders for a period of 120 days after the effective date of any registration statement filed by us. We have the right to defer the filing of any registration statement for up to 180 days if our board of directors determines that the filing would be seriously detrimental to us and our stockholders. We are responsible for paying the expenses of any registration pursuant to the shareholders' agreement, other than any underwriters' discounts and commissions.
UNDERWRITING
We, the selling stockholders and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to the terms and conditions of the underwriting agreement, the underwriters named below have severally agreed to purchase from us the number of shares set forth opposite their names on the table below at the public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus. SG Cowen Securities Corporation, Thomas Weisel Partners LLC and CIBC World Markets Corp. are acting as the representatives of the several underwriters named below.
Number of
Name Shares
---- ---------
SG Cowen Securities Corporation
Thomas Weisel Partners LLC.....
CIBC World Markets Corp........
----
Total.......................
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The underwriting agreement provides that the obligations of the several underwriters to purchase the shares of common stock offered hereby are conditional and may be terminated at their discretion based on their assessment of the state of the financial markets. The obligations of the underwriters may also be terminated upon the occurrence of other events specified in the underwriting agreement. The underwriters are severally committed to purchase all of the shares of common stock being offered by us if any shares are purchased, other than those covered by the over-allotment option described below.
The underwriters propose to offer the shares of common stock to the public at the public offering price set forth on the cover of this prospectus. The underwriting fee will be an amount equal to the offering price to the public less the amount paid per share by the underwriters to us. The underwriters may offer to securities dealers, and those dealers may re-allow, a concession not in excess of $ per share. After the shares of common stock are released for sale to the public, the underwriters may vary the offering price and other selling terms from time to time.
The selling stockholders have granted to the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to purchase up to an aggregate of additional shares of common stock at the public offering price set forth on the cover page of this prospectus less the underwriting discounts and commissions. The underwriters may exercise this option only to cover over-allotments, if any, made in connection with the sale of the common stock offered hereby. If the underwriters exercise their over-allotment option, the underwriters have severally agreed to purchase shares from the selling stockholders in approximately the same proportion as shown in the table above.
We estimate that our share of the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $ .
We and the selling stockholders have agreed to indemnify the underwriters against certain civil liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties contained in the underwriting agreement, and to contribute to payments the underwriters may be required to make in respect of any such liabilities.
Our directors, executive officers, stockholders and optionholders have agreed with the underwriters, or are otherwise subject to agreements which provide, that for a period of 180 days following the date of this prospectus, they will not dispose of or hedge any shares of common stock or any securities convertible into or exchangeable for shares of common stock. SG Cowen Securities Corporation may, in its sole discretion, at any time without prior notice, release all or any portion of the shares from the restrictions in any such agreement to which SG Cowen Securities Corporation is a party. We have entered into a similar agreement with the representatives of the underwriters, provided we may grant options and sell shares pursuant to our stock plans without such consent. There are no agreements between SG Cowen Securities Corporation and any of our stockholders or affiliates releasing them from these lock-up agreements prior to the expiration of the 180-day period.
The representatives of the underwriters have advised us that the underwriters do not intend to confirm sales to any account over which they exercise discretionary authority.
The representatives of the underwriters may engage in over-allotment, stabilizing transactions, syndicate covering transactions, penalty bids and passive market making in accordance with Regulation M under the Securities Exchange Act. Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the shares of common stock in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the shares of common stock originally sold by such syndicate member is purchased in a syndicate covering transaction to cover syndicate short positions. Penalty bids may have the effect of deterring syndicate members from selling to people who have a history of quickly selling their shares. In passive market making, market makers in the shares of common stock who are underwriters or prospective underwriters may, subject to certain limitations, make bids for or purchases of the shares of common stock until the time, if any, at which a stabilizing bid is made. These stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the shares of common stock to be higher than it would otherwise be in the absence of these transactions. These transactions may be effected on the Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.
Prior to this offering, there has been no public market for shares of our common stock. Consequently, the initial public offering price will be determined by negotiations between us and the underwriters. The various factors to be considered in these negotiations will include prevailing market conditions, the market capitalizations and the states of development of other companies that we and the underwriters believe to be comparable to us, estimates of our business potential, our results of operations in recent periods, the present state of our development and other factors deemed relevant.
At our request, the underwriters have reserved for sale, at the initial public offering price, up to five percent of the offered shares for employees, family members of employees, business associates and other third party vendors. The number of shares of our common stock available for sale to the general public will be reduced to the extent these reserved shares are purchased. Any reserved shares not purchased will be offered by the underwriters to the general public on the same terms as the other shares in this offering.
Thomas Weisel Partners LLC, one of the representatives of the underwriters, was organized and registered as a broker-dealer in December 1998. Since December 1998, Thomas Weisel Partners LLC has been named as a lead or co-manager on numerous public offerings of equity securities.
SG Cowen Securities Corporation provides financial advisory services to us from time to time in the ordinary course of its business.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be passed upon for us by Armstrong Teasdale LLP, Saint Louis, Missouri. Legal matters in connection with the offering will be passed upon for the underwriters by Hale and Dorr LLP, Boston, Massachusetts.
EXPERTS
The consolidated financial statements and schedule included in this prospectus and elsewhere in the registration statement to the extent and for the periods indicated in their reports, have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in giving said reports.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
This prospectus constitutes a part of a registration statement on Form S-1 (together with all amendments, supplements, schedules and exhibits to the registration statement, referred to as the registration statement) that we have filed with the SEC under the Securities Act . This prospectus does not contain all the information that is in the registration statement. We refer you to the registration statement for further information about our company and the securities offered by this prospectus. Statements contained in this prospectus concerning the provisions of documents filed as exhibits are not necessarily complete, and reference is made to the copy filed, each such statement being qualified in all respects by such reference. You can inspect and copy the registration statement and the reports and other information on file with the SEC at the SEC's public reference room at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site which provides on-line access to reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at the address http://www.sec.gov.
Upon the effectiveness of the registration statement, we will become subject to the information requirements of the Securities Exchange Act. We will then file reports, proxy statements and other information under the Securities Exchange Act with the SEC. You can inspect and copy these reports and other information of our company at the locations set forth above or download these reports from the SEC's Web site.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Centene Corporation and Subsidiaries:
Report of Independent Public Accountants............................................................ F-2
Consolidated Balance Sheets at December 31, 1999 and 2000, and June 30, 2001 (Unaudited)............ F-3
Consolidated Statements of Operations for the Years Ended December 31, 1998, 1999 and 2000 and the
Six Months Ended June 30, 2000 and 2001 (Unaudited)............................................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1998, 1999 and 2000
and the Six Months Ended June 30, 2001 (Unaudited)................................................ F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1999 and 2000 and the
Six Months Ended June 30, 2000 and 2001 (Unaudited)............................................... F-6
Notes to Consolidated Financial Statements.......................................................... F-7
|
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Centene Corporation:
We have audited the accompanying consolidated balance sheets of Centene Corporation (a Wisconsin corporation) and subsidiaries as of December 31, 1999 and 2000, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects the financial position of Centene Corporation and subsidiaries as of December 31, 1999 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 2, 2001
|
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
-----------------
1999 2000
-------- -------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................................. $ 22,532 $19,023
Premium and related receivables, net of allowances of $1,245, $1,866 and $2,034,
respectively............................................................................. 11,451 15,538
Short-term investments, at fair value (amortized cost $1,131, $7,404 and $4,242,
respectively)............................................................................ 1,131 7,400
Other current assets...................................................................... 2,854 2,170
Deferred income taxes..................................................................... 1,010 2,585
-------- -------
Total current assets.................................................................... 38,978 46,716
LONG-TERM INVESTMENTS, at fair value (amortized cost $7,898, $14,326 and
$24,000, respectively)..................................................................... 7,593 14,459
INVESTMENTS IN JOINT VENTURES............................................................... 1,833 2,422
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net........................................ 1,528 1,360
INTANGIBLE ASSETS........................................................................... 571 347
DEFERRED INCOME TAXES....................................................................... 1,704 713
-------- -------
Total assets............................................................................ $ 52,207 $66,017
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Medical claims liabilities................................................................ $ 37,339 $45,805
Unearned premiums......................................................................... 3,601 --
Accounts payable and accrued expenses..................................................... 2,898 6,168
Note payable.............................................................................. 2,350 --
-------- -------
Total current liabilities............................................................... 46,188 51,973
SUBORDINATED DEBT........................................................................... 4,000 4,000
-------- -------
Total liabilities....................................................................... 50,188 55,973
-------- -------
SERIES D REDEEMABLE PREFERRED STOCK, $.167 par value; authorized 4,000,000
shares; 3,718,000 shares issued and outstanding historical, and no shares pro forma
(liquidation value of $18,590)............................................................. 18,386 18,878
-------- -------
STOCKHOLDERS' EQUITY:
Preferred stock, $.167 par value; authorized 4,300,000
Series A convertible, authorized 2,400,000 shares; 733,850 shares issued and
outstanding historical, and no shares pro forma......................................... 123 123
Series B convertible, authorized 1,050,000 shares; 864,640 shares issued and
outstanding historical, and no shares pro forma......................................... 144 144
Series C convertible, authorized 850,000 shares; 557,850 shares issued and outstanding
historical, and no shares pro forma..................................................... 93 93
Common stock, $.003 par value; authorized 17,000,000 shares--
Series A, authorized 16,000,000 shares; 277,247, 277,247 and 288,247 shares at
December 31, 1999, 2000 and June 30, 2001 issued and outstanding historical,
respectively, and 6,162,587 shares pro forma............................................ 1 1
Series B, authorized 1,000,000 shares; 624,279 shares issued and outstanding historical
and pro forma........................................................................... 2 2
Additional paid-in capital................................................................ 7 7
Net unrealized gain (loss) on investments, net of tax..................................... (216) 81
Accumulated deficit....................................................................... (16,521) (9,285)
-------- -------
Total stockholders' equity (deficit).................................................... (16,367) (8,834)
-------- -------
Total liabilities and stockholders' equity.............................................. $ 52,207 $66,017
======== =======
|
Pro Forma
June 30, June 30,
2001 2001
-------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................................. $46,479
Premium and related receivables, net of allowances of $1,245, $1,866 and $2,034,
respectively............................................................................. 8,351
Short-term investments, at fair value (amortized cost $1,131, $7,404 and $4,242,
respectively)............................................................................ 4,300
Other current assets...................................................................... 1,688
Deferred income taxes..................................................................... 1,533
-------
Total current assets.................................................................... 62,351
LONG-TERM INVESTMENTS, at fair value (amortized cost $7,898, $14,326 and
$24,000, respectively)..................................................................... 23,688
INVESTMENTS IN JOINT VENTURES............................................................... --
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net........................................ 2,663
INTANGIBLE ASSETS........................................................................... 2,650
DEFERRED INCOME TAXES....................................................................... 1,079
-------
Total assets............................................................................ $92,431
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Medical claims liabilities................................................................ $61,868
Unearned premiums......................................................................... --
Accounts payable and accrued expenses..................................................... 11,329
Note payable.............................................................................. --
-------
Total current liabilities............................................................... 73,197
SUBORDINATED DEBT........................................................................... 4,000
-------
Total liabilities....................................................................... 77,197
-------
SERIES D REDEEMABLE PREFERRED STOCK, $.167 par value; authorized 4,000,000
shares; 3,718,000 shares issued and outstanding historical, and no shares pro forma
(liquidation value of $18,590)............................................................. 19,124 $ --
------- -------
STOCKHOLDERS' EQUITY:
Preferred stock, $.167 par value; authorized 4,300,000
Series A convertible, authorized 2,400,000 shares; 733,850 shares issued and
outstanding historical, and no shares pro forma......................................... 123 --
Series B convertible, authorized 1,050,000 shares; 864,640 shares issued and
outstanding historical, and no shares pro forma......................................... 144 --
Series C convertible, authorized 850,000 shares; 557,850 shares issued and outstanding
historical, and no shares pro forma..................................................... 93 --
Common stock, $.003 par value; authorized 17,000,000 shares--
Series A, authorized 16,000,000 shares; 277,247, 277,247 and 288,247 shares at
December 31, 1999, 2000 and June 30, 2001 issued and outstanding historical,
respectively, and 6,162,587 shares pro forma............................................ 1 18
Series B, authorized 1,000,000 shares; 624,279 shares issued and outstanding historical
and pro forma........................................................................... 2 2
Additional paid-in capital................................................................ 30 19,497
Net unrealized gain (loss) on investments, net of tax..................................... (164) (164)
Accumulated deficit....................................................................... (4,119) (4,119)
------- -------
Total stockholders' equity (deficit).................................................... (3,890) $15,234
------- =======
Total liabilities and stockholders' equity.............................................. $92,431
=======
|
The accompanying notes are an integral part of these balance sheets.
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
Six Months
Ended
Year Ended December 31, June 30,
-------------------------------- ----------------------
1998 1999 2000 2000 2001
---------- -------- ---------- ---------- ----------
(Unaudited)
REVENUES:
Premiums....................................................... $ 149,577 $200,549 $ 216,414 $ 100,959 $ 150,682
Administrative services fees................................... 861 880 4,936 2,064 182
---------- -------- ---------- ---------- ----------
Total revenues................................................ 150,438 201,429 221,350 103,023 150,864
---------- -------- ---------- ---------- ----------
EXPENSES:
Medical services costs......................................... 132,199 178,285 182,495 85,514 125,039
General and administrative expenses............................ 25,066 29,756 32,335 15,517 18,406
---------- -------- ---------- ---------- ----------
Total operating expenses...................................... 157,265 208,041 214,830 101,031 143,445
---------- -------- ---------- ---------- ----------
Income (loss) from operations................................. (6,827) (6,612) 6,520 1,992 7,419
OTHER INCOME (EXPENSE):
Investment and other income, net............................... 1,794 1,623 1,784 985 1,897
Interest expense............................................... (771) (498) (611) (303) (196)
Equity in income (losses) from joint ventures.................. (477) 3 (508) (304) --
---------- -------- ---------- ---------- ----------
Income (loss) from continuing operations before income taxes.. (6,281) (5,484) 7,185 2,370 9,120
INCOME TAX EXPENSE (BENEFIT)..................................... (1,542) -- (543) -- 3,708
---------- -------- ---------- ---------- ----------
Income (loss) from continuing operations...................... (4,739) (5,484) 7,728 2,370 5,412
LOSS FROM DISCONTINUED OPERATIONS, net........................... (2,223) (3,927) -- -- --
---------- -------- ---------- ---------- ----------
Net income (loss)............................................. (6,962) (9,411) 7,728 2,370 5,412
ACCRETION OF REDEEMABLE PREFERRED STOCK.......................... (122) (492) (492) (246) (246)
---------- -------- ---------- ---------- ----------
Net income (loss) attributable to common stockholders......... $ (7,084) $ (9,903) $ 7,236 $ 2,124 $ 5,166
========== ======== ========== ========== ==========
INCOME (LOSS) PER COMMON SHARE, BASIC:
Continuing operations.......................................... $ (4.65) $ (6.63) $ 8.03 $ 2.36 $ 5.68
Discontinued operations........................................ (2.13) (4.36) -- -- --
Net income (loss) per common share............................. (6.78) (10.99) 8.03 2.36 5.68
INCOME (LOSS) PER COMMON SHARE, DILUTED:
Continuing operations.......................................... $ (4.65) $ (6.63) $ 1.06 $ 0.31 $ 0.67
Discontinued operations........................................ (2.13) (4.36) -- -- --
Net income (loss) per common share............................. (6.78) (10.99) 1.06 0.31 0.67
SHARES USED IN COMPUTING PER SHARE AMOUNTS:
Basic.......................................................... 1,044,434 900,944 901,526 901,526 908,907
Diluted........................................................ 1,044,434 900,944 6,819,595 6,776,566 7,748,825
|
Six Months
Year Ended Ended
December 31, June 30,
2000 2001
------------ ----------
(Unaudited)
PRO FORMA NET INCOME PER COMMON SHARE INFORMATION (Note 22):
Net income attributable to common stockholders................. $ 7,236 $ 5,166
Pro forma adjustment to eliminate Series D preferred accretion. 492 246
---------- ----------
Pro forma net income.......................................... $ 7,728 $ 5,412
========== ==========
Basic pro forma net income per share........................... $ 1.14 $ 0.80
Diluted pro forma net income per share......................... $ 1.13 $ 0.70
Shares used in computing pro forma per common share amounts--
Basic......................................................... 6,775,866 6,783,247
Diluted....................................................... 6,819,595 7,748,825
|
The accompanying notes are an integral part of these statements.
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
Preferred Stock Common Stock
---------------------------------------------- --------------------------------
Additional
Series A Series B Series C Series A Series B Paid-in
-------------- -------------- --------------- ---------------- --------------- Capital
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
------- ------ ------- ------ -------- ------ -------- ------ ------- ------ ----------
BALANCE, December 31, 1997 796,350 $ 133 864,640 $ 144 664,950 $ 111 406,363 $ 1 676,472 $ 2 $ 962
Net loss -- -- -- -- -- -- -- -- -- -- --
Net unrealized gain during
the year on investments
available for sale -- -- -- -- -- -- -- -- -- -- --
Comprehensive loss
Issuance of common stock and
warrants -- -- -- -- -- -- 1,000 -- 12,499 -- 80
Redemption of stock (20,000) (3) -- -- -- -- (15,000) -- -- -- --
Purchase of stock (42,500) (7) -- -- (107,100) (18) (118,511) -- (64,766) -- (1,041)
Series D preferred stock
accretion -- -- -- -- -- -- -- -- -- -- --
------- ----- ------- ----- -------- ----- -------- --- ------- --- -------
BALANCE, December 31, 1998 733,850 123 864,640 144 557,850 93 273,852 1 624,205 2 1
Net loss -- -- -- -- -- -- -- -- -- -- --
Net unrealized loss during
the year on investments
available for sale -- -- -- -- -- -- -- -- -- -- --
Comprehensive loss
Issuance of common stock -- -- -- -- -- -- 3,395 -- 74 -- 6
Series D preferred stock
accretion -- -- -- -- -- -- -- -- -- -- --
------- ----- ------- ----- -------- ----- -------- --- ------- --- -------
BALANCE, December 31, 1999 733,850 123 864,640 144 557,850 93 277,247 1 624,279 2 7
Net income -- -- -- -- -- -- -- -- -- -- --
Net unrealized gain during
the year on investments
available for sale -- -- -- -- -- -- -- -- -- -- --
Comprehensive earnings
Series D preferred stock
accretion -- -- -- -- -- -- -- -- -- -- --
------- ----- ------- ----- -------- ----- -------- --- ------- --- -------
BALANCE, December 31, 2000 733,850 123 864,640 144 557,850 93 277,247 1 624,279 2 7
Net income (unaudited) -- -- -- -- -- -- -- -- -- -- --
Net unrealized loss during
the period on investments
available for sale
(unaudited) -- -- -- -- -- -- -- -- -- -- --
Comprehensive earnings
(unaudited)
Issuance of common stock
(unaudited) -- -- -- -- -- -- 11,000 -- -- -- 17
Stock compensation expense
(unaudited) -- -- -- -- -- -- -- -- -- -- 6
Series D preferred stock
accretion (unaudited) -- -- -- -- -- -- -- -- -- -- --
------- ----- ------- ----- -------- ----- -------- --- ------- --- -------
BALANCE, June 30, 2001
(unaudited) 733,850 $ 123 864,640 $ 144 557,850 $ 93 288,247 $ 1 624,279 $ 2 $ 30
======= ===== ======= ===== ======== ===== ======== === ======= === =======
|
Net
Unrealized Accumulated
Gain (Loss) Earnings
on Investments (Deficit) Total
-------------- ----------- --------
----------- --------
BALANCE, December 31, 1997 $ 12 $ 1,130 $ 2,495
Net loss -- (6,962) (6,962)
Net unrealized gain during
the year on investments
available for sale 46 -- 46
--------
Comprehensive loss (6,916)
Issuance of common stock and
warrants -- -- 80
Redemption of stock -- -- (3)
Purchase of stock -- (664) (1,730)
Series D preferred stock
accretion -- (122) (122)
----- -------- --------
BALANCE, December 31, 1998 58 (6,618) (6,196)
Net loss -- (9,411) (9,411)
Net unrealized loss during
the year on investments
available for sale (274) -- (274)
--------
Comprehensive loss (9,685)
Issuance of common stock -- -- 6
Series D preferred stock
accretion -- (492) (492)
----- -------- --------
BALANCE, December 31, 1999 (216) (16,521) (16,367)
Net income -- 7,728 7,728
Net unrealized gain during
the year on investments
available for sale 297 -- 297
--------
Comprehensive earnings 8,025
Series D preferred stock
accretion -- (492) (492)
----- -------- --------
BALANCE, December 31, 2000 81 (9,285) (8,834)
Net income (unaudited) -- 5,412 5,412
Net unrealized loss during
the period on investments
available for sale
(unaudited) (245) -- (245)
--------
Comprehensive earnings
(unaudited) 5,167
Issuance of common stock
(unaudited) -- -- 17
Stock compensation expense
(unaudited) -- -- 6
Series D preferred stock
accretion (unaudited) -- (246) (246)
----- -------- --------
BALANCE, June 30, 2001
(unaudited) $(164) $ (4,119) $ (3,890)
===== ======== ========
|
The accompanying notes are an integral part of these statements.
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
----------------------------
1998 1999 2000
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................. $ (6,962) $ (9,411) $ 7,728
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities--
Depreciation and amortization..................................... 1,107 1,142 1,034
Stock compensation expense........................................ -- -- --
Loss on disposal of equipment..................................... -- 10 --
(Gain) loss on sale of investments................................ (276) (55) 40
Equity in (income) losses from joint ventures..................... 477 (3) 508
Changes in assets and liabilities--
(Increase) decrease in premium and related receivables............ (2,244) 35 (4,087)
(Increase) decrease in other current assets....................... (1,835) (212) 684
Decrease (increase) in deferred income taxes...................... 835 -- (584)
Increase in medical claims liabilities............................ 3,797 13,815 8,466
Increase (decrease) in unearned premiums.......................... 244 (1,144) (3,601)
(Decrease) increase in accounts payable and accrued expenses...... (2,643) 950 3,270
-------- -------- --------
Net cash provided by (used in) operating activities.............. (7,500) 5,127 13,458
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment.............................................. (610) (861) (642)
Proceeds from sale of equipment.................................... -- 34 --
Purchase of investments............................................ (11,848) (11,286) (20,260)
Sales and maturities of investments................................ 8,652 9,019 7,382
Contract acquisition............................................... (58) -- --
Investments in joint ventures...................................... 1,658 178 (1,097)
-------- -------- --------
Net cash used in investing activities............................ (2,206) (2,916) (14,617)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of note payable............................. -- 2,500 --
Payment of note payable............................................ (6,467) (150) (2,350)
Proceeds from sale of common stock................................. 80 -- --
Proceeds from sale of preferred stock.............................. 17,578 200 --
Purchase/redemption of stock....................................... (1,727) (6) --
Deferred financing costs........................................... 43 -- --
-------- -------- --------
Net cash provided by (used in) financing activities.............. 9,507 2,544 (2,350)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents............. (199) 4,755 (3,509)
-------- -------- --------
CASH AND CASH EQUIVALENTS, beginning of period....................... 17,976 17,777 22,532
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of period............................. $ 17,777 $ 22,532 $ 19,023
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid...................................................... $ 684 $ 80 $ 531
Income taxes paid.................................................. $ 827 $ 146 $ 310
|
Six Months Ended
June 30,
-----------------
2000 2001
------- --------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................. $ 2,370 $ 5,412
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities--
Depreciation and amortization..................................... 499 631
Stock compensation expense........................................ -- 6
Loss on disposal of equipment..................................... -- --
(Gain) loss on sale of investments................................ 43 (49)
Equity in (income) losses from joint ventures..................... 304 --
Changes in assets and liabilities--
(Increase) decrease in premium and related receivables............ (5,150) 10,882
(Increase) decrease in other current assets....................... 1,501 2,104
Decrease (increase) in deferred income taxes...................... (68) 925
Increase in medical claims liabilities............................ 1,878 2,784
Increase (decrease) in unearned premiums.......................... (3,601) --
(Decrease) increase in accounts payable and accrued expenses...... 190 5,299
------- --------
Net cash provided by (used in) operating activities.............. (2,034) 27,994
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment.............................................. (384) (1,793)
Proceeds from sale of equipment.................................... -- --
Purchase of investments............................................ (2,176) (15,918)
Sales and maturities of investments................................ 1,997 10,455
Contract acquisition............................................... -- (1,000)
Investments in joint ventures...................................... (460) 7,701
------- --------
Net cash used in investing activities............................ (1,023) (555)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of note payable............................. -- --
Payment of note payable............................................ (1,275) --
Proceeds from sale of common stock................................. -- 17
Proceeds from sale of preferred stock.............................. -- --
Purchase/redemption of stock....................................... -- --
Deferred financing costs........................................... -- --
------- --------
Net cash provided by (used in) financing activities.............. (1,275) 17
------- --------
Net increase (decrease) in cash and cash equivalents............. (4,332) 27,456
------- --------
CASH AND CASH EQUIVALENTS, beginning of period....................... 22,532 19,023
------- --------
CASH AND CASH EQUIVALENTS, end of period............................. $18,200 $ 46,479
======= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid...................................................... $ 52
Income taxes paid.................................................. $ -- $
|
The accompanying notes are an integral part of these statements.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share data)
1. Organization and Operations:
Centene Corporation (Centene or the Company) provides managed care programs and related services to individuals receiving benefits under Medicaid, including Supplemental Security Income (SSI) and State Children's Health Insurance Program, (SCHIP). Centene operates under its own state licenses in Wisconsin, Indiana and Texas and contracts with other managed care organizations to provide risk and nonrisk management services.
Centene's managed care organization (MCO) subsidiaries include Managed Health Services Insurance Corp. (MHSIC), a wholly owned Wisconsin corporation; Coordinated Care Corporation Indiana, Inc. (CCCI), a wholly owned Indiana corporation; and Superior HealthPlan, Inc. (Superior), a 39% owned Texas corporation (90% after January 1, 2001).
2. Summary of Significant Accounting Policies:
The accompanying consolidated financial statements include the accounts of Centene Corporation and all majority owned subsidiaries. All material intercompany balances and transactions have been eliminated. The investments in minority owned joint ventures are accounted for under the equity method.
The accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, needed to present the financial results for these interim periods fairly.
Cash and Cash Equivalents
Investments with original maturities of three months or less at the date of acquisition are considered to be cash equivalents. Cash equivalents consist of commercial paper, money market mutual funds and bank insured savings accounts.
Investments
Short-term and long-term investments available for sale are carried at market value. Any changes in fair value due to market conditions are reflected as a separate component of equity, net of any tax benefit or expense.
Short-term investments include securities with original maturities between three months and one year. Long-term investments include securities with original maturities greater than one year.
Furniture, Equipment and Leasehold Improvements
Furniture, equipment and leasehold improvements are carried at cost less accumulated depreciation. Depreciation for furniture and equipment, other than computer equipment, is calculated using the straight-line method based on the estimated useful lives of the assets ranging between five and seven years. Depreciation for computer equipment is calculated using the straight-line method based on a three-year life. Software is stated at cost in accordance with Statement of Position 98-1, Accounting for the Costs of Software Developed or Obtained for Internal Use. Software is amortized over its estimated useful life of
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
three years using the straight-line method. Depreciation for leasehold improvements is calculated using the straight-line method based on the shorter of the estimated useful lives of the asset or the term of the respective leases, ranging between three and ten years.
Intangible Assets
Intangible assets consist primarily of goodwill, representing the excess of aggregate purchase price over the estimated fair value of net assets acquired, and are amortized using a straight-line method over a 60 month period. Accumulated amortization of goodwill as of December 31, 1999 and 2000, was $530 and $754, respectively. Amortization expense was $221, $235 and $224 for the years ended December 31, 1998, 1999 and 2000, respectively.
The Company reviews goodwill and other long-lived assets for impairment whenever events and changes in business circumstances indicate the carrying value of the assets may not be recoverable. The Company recognizes impairment losses if expected undiscounted future cash flows from the related assets are less than their carrying value. An impairment loss represents the amount by which the carrying value of an asset exceeds the fair value of the asset. The Company did not recognize any impairment losses for the periods presented.
Medical Claims Liabilities
Medical services costs include claims paid, claims adjudicated but not yet paid, estimates for claims received but not yet adjudicated, estimates for claims incurred but not yet received and estimates for the costs necessary to process unpaid claims.
The estimates of medical claims liabilities are developed using actuarial methods based upon historical data for payment patterns, cost trends, product mix, seasonality, utilization of healthcare services and other relevant factors including product changes. These estimates are continually reviewed and adjustments, if necessary, are reflected in the period known.
Premium Revenue
Premium revenue is recognized as earned over the covered period of services. Premiums collected in advance are recorded as unearned premiums.
Significant Customers
Centene receives the majority of its revenues under contracts or subcontracts with state Medicaid managed care programs. The contracts which expire on various dates between December 31, 2001, and December 31, 2002, are expected to be renewed.
Reinsurance
Centene's MCO subsidiaries have purchased reinsurance to cover eligible healthcare services. The current reinsurance agreements generally cover 80% of healthcare expenses in excess of an annual deductible of $50 to $75 per member, up to a lifetime maximum of $2,000. The subsidiaries are responsible for inpatient charges in excess of an average daily per diem.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
Reinsurance recoveries were approximately $1,484, $1,182 and $1,454 in 1998, 1999 and 2000, respectively. Reinsurance expenses were approximately $2,030, $2,708 and $3,391 in 1998, 1999 and 2000, respectively. Reinsurance recoveries, net of expenses, are included in medical services costs.
Income Taxes
Centene recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of the tax rate change.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties
The Company's profitability depends in large part on accurately predicting and effectively managing medical services costs. The Company continually reviews its premium and benefit structure to reflect its underlying claims experience and revised actuarial data; however, several factors could adversely affect the medical services costs. Certain of these factors, which include changes in healthcare practices, inflation, new technologies, major epidemics, natural disasters and malpractice litigation, are beyond any health plan's control and could adversely affect the Company's ability to accurately predict and effectively control healthcare costs. Costs in excess of those anticipated could have a material adverse effect on the Company's results of operations.
Recent Accounting Pronouncements
In July 2001, Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, was issued which requires that the purchase method of accounting be used for all business combinations completed after June 30, 2001. The Company has adopted SFAS 141.
In July 2001, SFAS No. 142, Goodwill and Other Intangible Assets, was issued which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested annually for impairment. The Company will adopt SFAS No. 142 effective January 1, 2002.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
3. Discontinued Operations:
During 1999, the Company decided to exit its commercial line of business. The results of these activities have been reflected as discontinued operations in the accompanying consolidated financial statements for all periods presented. The operating results of discontinued operations are as follows:
1998 1999
------- -------
Total revenues.......................... $21,534 $15,054
Pretax loss from discontinued operations (2,390) (3,927)
Income tax benefit...................... (167) --
Net loss from discontinued operations... (2,223) (3,927)
Basic and diluted net loss per share.... (2.13) (4.36)
|
There were no assets attributable to the commercial line of business as of December 31, 1999.
4. Investments:
Investments available for sale by investment type as of December 31 consist of the following:
1999
-----------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
U.S. Treasury securities and obligations of U.S. government
corporations and agencies................................ $7,798 $-- $(295) $7,503
Commercial paper........................................... 931 -- -- 931
State/municipal securities and other....................... 300 -- (10) 290
------ --- ----- ------
Total................................................... $9,029 $-- $(305) $8,724
====== === ===== ======
|
2000
-----------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ---------
U.S. Treasury securities and obligations of U.S. government
corporations and agencies................................ $14,041 $133 $-- $14,174
Commercial paper........................................... 7,211 2 (6) 7,207
State/municipal securities and other....................... 478 -- -- 478
------- ---- --- -------
Total................................................... $21,730 $135 $(6) $21,859
======= ==== === =======
|
The contractual maturity of investments as of December 31, 2000, is as follows:
Estimated
Amortized Market
Cost Value
--------- ---------
One year or less............ $ 7,404 $ 7,400
One year through five years. 5,066 5,149
Five years through ten years 9,260 9,310
------- -------
$21,730 $21,859
======= =======
|
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
Following is a summary of net investment income for the years ended December 31:
1998 1999 2000
------ ------ ------
Commercial paper........................................... $ 179 $ 217 $ 759
U.S. Treasury securities and obligations of U.S. government
corporation and agencies................................. 573 243 370
States/municipal securities and other...................... 10 13 (2)
Money market and other..................................... 813 951 1,035
------ ------ ------
$1,575 $1,424 $2,162
====== ====== ======
|
Various state statutes require MCO's to deposit or pledge minimum amounts of investments to state agencies. At December 31, 1999 and 2000, securities with a book value of $713 and $693, respectively, were deposited or pledged to state agencies by Centene's MCO subsidiaries.
5. Furniture, Equipment and Leasehold Improvements:
Furniture, equipment and leasehold improvements at December 31 consist of the following:
1999 2000
------- -------
Furniture and office equipment...................... $ 2,891 $ 3,014
Computer software................................... 938 1,293
Leasehold improvements.............................. 307 287
Construction in process............................. 11 --
------- -------
4,147 4,594
Less--Accumulated depreciation and amortization..... (2,619) (3,234)
------- -------
Furniture, equipment and leasehold improvements, net $ 1,528 $ 1,360
======= =======
|
6. Income Taxes:
Centene files a consolidated federal income tax return while Centene and each subsidiary file separate state income tax returns.
The consolidated income tax expense (benefit) consists of the following:
Six Months
Year Ended December 31, Ended
---------------------- June 30,
1998 1999 2000 2001
------- ---- ------- -----------
(Unaudited)
Current:
Federal......................... $ (869) $-- $ 629 $3,272
State........................... 227 -- 625 888
------- --- ------- ------
Total current............... (642) -- 1,254 4,160
Deferred........................... (1,067) -- (1,797) (452)
------- --- ------- ------
Total expense (benefit)..... $(1,709) $-- $ (543) $3,708
======= === ======= ======
|
For the year ended December 31, 1998, the income tax benefit was $1,542 for continuing operations and $167 for discontinued operations.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
The following is a reconciliation of the expected income tax expense (benefit) as calculated by multiplying pretax income by federal statutory rates and Centene's actual income tax benefit:
Six Months
Year Ended December 31, Ended
------------------------- June 30,
1998 1999 2000 2001
------- ------- ------- -----------
(Unaudited)
Expected federal income tax expense (benefit).......... $(2,948) $(3,199) $ 2,443 $3,101
State income taxes, net of federal income tax benefit.. 150 160 761 777
Equity in (income) losses of joint ventures, net of tax 161 (1) 175 --
Change in valuation allowance.......................... 833 2,926 (3,764) --
Other, net............................................. 95 114 (158) (170)
------- ------- ------- ------
Income tax expense (benefit)........................ $(1,709) $ -- $ (543) $3,708
======= ======= ======= ======
|
Temporary differences that give rise to deferred tax assets and liabilities are presented below:
December 31,
--------------- June 30,
1999 2000 2001
------- ------ -----------
(Unaudited)
Medical claims liabilities and other accruals $ 342 $1,539 $1,555
Net operating loss carryforward.............. 5,167 1,132 --
Allowance for doubtful accounts.............. 461 690 753
Unearned premiums............................ 266 -- --
Depreciation................................. 51 246 280
Other........................................ 244 189 546
------- ------ ------
Total deferred tax assets................. 6,531 3,796 3,134
------- ------ ------
Prepaid asset................................ 44 -- --
Other........................................ 9 498 522
------- ------ ------
Total deferred tax liabilities............ 53 498 522
------- ------ ------
Valuation allowance.......................... (3,764) -- --
------- ------ ------
Net deferred tax assets and liabilities... $ 2,714 $3,298 $2,612
======= ====== ======
|
The Company is required to record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management believes that a valuation allowance is no longer necessary for its federal net operating loss carryforward as of December 31, 2000. As a result, the income tax benefit recorded for 2000 includes the reversal of $3,764 of deferred tax valuation allowance.
7. Note Payable and Subordinated Debt:
In September 2000, the Company entered into a $1,500 unsecured revolving credit agreement with a bank. The agreement bears interest at a rate of prime due and payable monthly. Direct borrowings under this agreement total $-0- at December 31, 2000. The prime rate at December 31, 2000, was 9.5%. The average prime rate for the year ended December 31, 2000, was 9.23%.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
Note payable at December 31, 1999, consisted of a term note payable to a bank in the amount of $2,350 bearing interest at a rate of prime plus 1%. The note was paid in full in September 2000.
Subordinated debt at December 31 consists of the following:
1999 2000
------ ------
$4,000 subordinated promissory notes dated September 1998. Interest is due and payable
annually in September at a rate of 8.5% and a default rate of 10.5%. Principal on this note is
due and payable in two equal installments September 2003 and September 2004................... $4,000 $4,000
|
During 1999 and 2000 the Company was in default due to late interest payments and, therefore, recorded interest at the 10.5% rate. In February, 2001 all accrued interest was paid and the interest rate reverted back to 8.5%.
Current subordinated debt holders include stockholders, directors and past and present employees.
8. Redeemable Preferred Stock:
Series D preferred stock is redeemable for cash at the option of the holder for up to 50% of that holder's Series D preferred stock outstanding on each of September 1, 2003, and September 1, 2004, at a price equal to the sum of (1) $5.50 per share plus (2) an amount equal to any dividends declared or accrued but unpaid on such shares. The number of shares of Series D preferred stock to be redeemed from each holder on a redemption date shall be equal to 50% of the total number of shares initially held by such holder less the number of shares of Series D preferred stock for which the holder has exercised its conversion right.
Series D preferred stock is convertible, at the option of the holder, into Series A common stock at an initial conversion rate of one common share for each preferred share and is automatically converted at an initial public offering. Series D preferred stock is entitled to an initial liquidation preference in the amount of $5.00 per share and then participates on an as-converted basis.
Redeemable preferred stock is summarized as follows:
Series D
Shares Amount
--------- -------
Balance, December 31, 1997............... -- $ --
Issuance of preferred stock........... 3,680,000 17,578
Preferred stock accretion............. -- 122
--------- -------
Balance, December 31, 1998............... 3,680,000 17,700
Issuance of preferred stock........... 40,000 200
Purchase of stock..................... (2,000) (6)
Preferred stock accretion............. -- 492
--------- -------
Balance, December 31, 1999............... 3,718,000 18,386
Preferred stock accretion............. -- 492
--------- -------
Balance, December 31, 2000............... 3,718,000 18,878
Preferred stock accretion (unaudited). -- 246
--------- -------
Balance, June 30, 2001 (unaudited)....... 3,718,000 $19,124
========= =======
|
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
9. Stockholders' Equity:
Series A and Series B preferred stock is convertible, at the option of the holder or on the date at which the Company effects an initial public offering, into Series A common stock at an initial conversion rate of one common share for each preferred share. Series C preferred stock is mandatorily convertible upon a change of ownership or at an initial public offering. In addition, each share of Series B preferred stock is convertible into one share of Series A preferred stock. Series A, Series B and Series C preferred stock are entitled to a liquidation preference in the amount of $.44 per share.
10. Statutory Net Worth Requirements:
Various state laws require Centene's MCO subsidiaries to maintain a minimum statutory net worth. At December 31, 1999 and 2000, Centene's MCO subsidiaries are in compliance with the various required minimum statutory net worth requirements.
11. Dividend Restrictions:
Under the laws of the states of which we operate, our managed care subsidiaries are required to obtain approval for dividends from the appropriate state regulatory body. No dividends were declared in 1998, 1999 or 2000.
12. Warrants:
Centene currently has 60,000 Series D preferred warrants outstanding. Each warrant entitles the holder to purchase one share of the Company's Series D preferred stock at an exercise price of $5.00 per share. These warrants will expire upon the earliest of the following: 1) September 23, 2003, 2) a date of "change in control" or 3) the date on which the Company effects an initial public offering.
There are currently 7,432 warrants outstanding to purchase shares of the
Company's Series B common stock on a one-to-one basis at an exercise price of
$2.40 per share. These warrants will expire upon the earliest of the following:
1) September 7, 2002, 2) a date of "change in control" or 3) the date on which
the Company effects an initial public offering.
13. Stock Option Plans:
As of December 31, 2000, Centene has five stock option plans (the Plans) for issuance of common stock. The Plans allow for the granting of options to purchase either Series A common stock and/or Series B common stock at the market price at the date of grant for key employees, consultants, and other individual contributors of or to Centene. Both incentive options and nonqualified stock options can be awarded under the Plans. Each option awarded under the Plans is exercisable as determined by the Board of Directors upon grant. Further, depending on the type of grant, no option will be exercisable for longer than either five (incentive options) or ten (all other options) years after date of grant. The Plans have reserved 2,000,000 shares for option grants. Options outstanding generally vest over a five year period. Vesting generally begins on the anniversary of the date of grant and quarterly or annually thereafter.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
Option activity for the years ended December 31, follows:
1998 1999 2000
----------------- ------------------ -------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------- -------- -------- -------- --------- --------
Options outstanding, beginning of
year........................... 478,249 $2.54 522,249 $2.50 955,992 $1.91
Granted.......................... 82,000 2.24 583,500 1.49 531,000 1.26
Exercised........................ (1,000) 2.40 (3,395) 1.39 --
Canceled......................... (37,000) 2.40 (146,362) 2.34 (76,952) 1.69
------- -------- ---------
Options outstanding, end of year. 522,249 2.50 955,992 1.91 1,410,040 1.68
======= ======== =========
Weighted Average Remaining Life.. 5.9 years 7.3 years 7.7 years
Weighted Average Fair Value of
Options granted................ $0.51 $0.21 $0.39
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The Company accounts for the Plans in accordance with the intrinsic value based method of Accounting Principles Board Opinion No. 25 as permitted by SFAS No. 123. Accordingly, compensation cost related to stock options issued to employees is calculated on the date of grant only if the current market price of the underlying stock exceeds the exercise price. Compensation expense is then recognized on a straight-line basis over the years the employees' services are received (over the vesting period), generally five years. No compensation cost related to the Plans has been charged against income during 1998, 1999 or 2000. Had compensation cost for the Plans been determined based on the fair value method at the grant dates as specified in SFAS No. 123, Centene's net income would have decreased $69, $74 and $131 in 1998, 1999 and 2000, respectively. Diluted net income (loss) per common share would have been $(6.85), $(11.07) and $1.04 in 1998, 1999 and 2000, respectively.
The fair value of each option grant is estimated on the date of grant using an option pricing model with the following assumptions: no dividend yield and expected volatility of 1% for all years, risk-free interest rates of 4.5%, 6.4% and 5.3% and expected lives of 5.9, 7.3 and 7.7 for the years 1998, 1999 and 2000, respectively.
During the period ended June 30, 2001, the Company recognized $6 (unaudited) in noncash compensation expense related to the issuance of stock options to employees.
14. Retirement Plan:
Centene has a defined contribution plan (Retirement Plan) which covers substantially all employees who work at least 1,000 hours in a twelve consecutive month period and are at least twenty-one years of age. Under the Retirement Plan, eligible employees may contribute a percentage of their base salary, subject to certain limitations. Centene may elect to match a portion of the employee's contribution. In addition, Centene may make a profit sharing contribution to the Retirement Plan covering all eligible employees. Expenses under the Retirement Plan were $112, $144 and $203 during the years ended December 31, 1998, 1999 and 2000, respectively.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
15. Related-Party Transactions:
Certain members of Centene's Board of Directors performed consulting services for the Company. Consulting fees paid in 1998, 1999 and 2000, totaled $7, $5 and $36, respectively. Legal fees of $242, $50 and $48 were paid in 1998, 1999 and 2000, respectively, to a law firm affiliated through a stockholder of the Company.
16. Commitments:
Centene and its subsidiaries lease office facilities and various equipment under noncancellable operating leases. In addition to base rental costs, Centene and its subsidiaries are responsible for property taxes and maintenance for both facility and equipment leases. Rental expense included in the accompanying consolidated financial statements is $1,662, $1,268 and $1,383 for the years ended December 31, 1998, 1999 and 2000, respectively. The significant annual noncancelable lease payments over the next five years and thereafter are as follows:
2001...... $ 1,261
2002...... 1,135
2003...... 1,336
2004...... 1,125
2005...... 1,149
Thereafter 4,478
-------
$10,484
=======
|
17. Contingencies:
The Company is a party to various legal actions normally associated with the managed care industry, the aggregate effect of which, in management's opinion after consultation with legal counsel, will have no material adverse impact on the financial position or results of operations of Centene.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments in marketable securities and accounts receivable. The Company invests its excess cash in interest bearing deposits with major banks, commercial paper, government and agency securities, and money market funds. Investments in marketable securities are managed within guidelines established by the Company's Board of Directors. The Company carries these investments at fair value.
Concentrations of credit risk with respect to accounts receivable is limited due to the significant customers paying as services are rendered. Significant customers include the federal government and the states in which Centene operates. The Company has a risk of incurring loss if its allowance for doubtful collections is not adequate.
As discussed in Note 2 to the consolidated financial statements, the Company has reinsurance agreements with insurance companies. The Company monitors the insurance companies' financial ratings to determine compliance with standards set by state law. The Company has a credit risk associated with these reinsurance agreements to the extent the reinsurers are unable to pay valid reinsurance claims of the Company.
18. Joint Ventures:
At December 31, 1999 and 2000, Centene is an owner of Superior, a joint venture. Superior participates in the state of Texas medical assistance program. Superior had no enrolled membership during 1998, but became fully operational on December 1, 1999. Centene has provided surplus notes to Superior to fund its initial operations and meet the net worth requirements of the state of Texas. Surplus notes outstanding to Superior at December 31, 1999 and 2000, totaled $2,041 and $3,000, respectively, and are included in investment in joint venture. Interest accrues on the surplus notes at a rate of the greater of Prime + 2% or 10%, and is payable to Centene quarterly upon regulatory approval. Interest receivable is included in accrued investment income and totaled $52 and $352 at December 31, 1999 and 2000, respectively. Under the terms of a management agreement, a wholly owned subsidiary of Centene performs third-party administrative services for Superior. This agreement generated $-0-, $72 and $4,936 of administrative service fees during 1998, 1999 and 2000, respectively.
Summary financial information for Superior as of and for the years ended December 31 follows:
1999 2000
------ -------
Total assets................ $1,821 $ 7,284
Stockholders' deficit....... (536) (1,481)
Revenues.................... 346 34,102
Net loss.................... (457) (1,303)
Company's equity in net loss (178) (508)
|
On January 1, 2001, Centene purchased an additional 51% of Superior, increasing Centene's ownership to 90%, for $290 in cash and stock. When the change in ownership occurred, the assets and liabilities were revalued resulting in $1,600 of goodwill. The goodwill is being amortized on a straight-line basis over five years (unaudited).
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
The following unaudited pro forma summary information presents the consolidated income statement information as if the aforementioned transaction had been consummated on January 1, 2000, and does not purport to be indicative of what would have occurred had the acquisition been made at that date or of the results which may occur in the future.
Year Ended
December 31,
2000
------------
Total revenues................................ $250,516
Net income attributable to common stockholders 6,441
Diluted net income per common share........... .94
|
Centene sold its interest in another joint venture, Community Health Choice of Illinois, Inc. (Choice) to American HealthCare Providers (AHCP) on August 10, 1999. Choice was a participant in the state of Illinois medical assistance program. Choice contracted directly with healthcare providers on a fee-for-service, per diem and capitation basis. Centene maintained a 49% equity interest in Choice and accounted for the venture using the equity method. Under the terms of a management agreement, a wholly owned subsidiary of Centene performed third-party administrative services for Choice which generated $861, $808 and $-0- of administrative service fees during 1998, 1999 and 2000, respectively. Centene retained the risk for claims incurred prior to May 1, 1999, and consequently established an escrow account for the estimated claims. The balance of escrowed funds, $35, at December 31, 2000, is considered to be adequate for the remaining claims exposure. Centene reflected a net loss on the sale of Choice totaling $377 in 1999, which is included in equity income from joint ventures.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
19. Earnings Per Share:
The following table sets forth the calculation of basic and diluted net income (loss) per share:
Year Ended December 31, Six Months Ended June 30,
-------------------------------- ------------------------
1998 1999 2000 2000 2001
---------- -------- ---------- ---------- ----------
(Unaudited)
Income (loss) from continuing operations......... $ (4,739) $ (5,484) $ 7,728 $ 2,370 $ 5,412
Accretion of redeemable preferred stock.......... (122) (492) (492) (246) (246)
---------- -------- ---------- ---------- ----------
Income (loss) from continuing operations
attributable to common stockholders............ (4,861) (5,976) 7,236 2,124 5,166
Loss from discontinued operations, net........... (2,223) (3,927) -- -- --
---------- -------- ---------- ---------- ----------
Net income (loss) attributable to common
stockholders................................ $ (7,084) $ (9,903) $ 7,236 $ 2,124 $ 5,166
========== ======== ========== ========== ==========
Shares used in computing per share amounts:
Weighted average number of common shares
outstanding................................. 1,044,434 900,944 901,526 901,526 908,907
Dilutive effect of stock options and warrants
(as determined by applying the treasury
stock method) and convertible preferred
stock....................................... -- -- 5,918,069 5,875,040 6,839,918
---------- -------- ---------- ---------- ----------
Weighted average number of common shares
and potential dilutive common shares
outstanding................................. 1,044,434 900,944 6,819,595 6,776,566 7,748,825
========== ======== ========== ========== ==========
INCOME (LOSS) PER COMMON SHARE,
BASIC:
Continuing operations......................... $ (4.65) $ (6.63) $ 8.03 $ 2.36 $ 5.68
Discontinued operations....................... (2.13) (4.36) -- -- --
Net income (loss) per common share............ (6.78) (10.99) 8.03 2.36 5.68
INCOME (LOSS) PER COMMON SHARE,
DILUTED:
Continuing operations......................... $ (4.65) $ (6.63) $ 1.06 $ 0.31 $ 0.67
Discontinued operations....................... (2.13) (4.36) -- -- --
Net income (loss) per common share............ (6.78) (10.99) 1.06 0.31 0.67
|
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
20. Segment Reporting:
For the Year Ended For the Year Ended
December 31, 1998 December 31, 1999
------------------- -------------------
Medicaid Commercial Medicaid Commercial
-------- ---------- -------- ----------
Total revenues.............. $150,438 $21,534 $201,429 $15,054
Segment loss from operations (5,285) (1,677) (5,484) (3,927)
Segment assets.............. 45,727 -- 52,207 --
|
Segment information has been prepared in accordance with SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. Centene has two reportable segments: Medicaid and commercial. The segments were determined based upon types of services provided by each segment. Segment performance is evaluated based upon operating income after income taxes. Accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (Note 2).
The Medicaid segment includes operations to provide healthcare services to Medicaid eligible recipients through various federal and state supported programs.
The commercial segment includes group accident and health managed care coverage. Effective December 31, 1999, the commercial line of business was discontinued.
21. Contract Acquisitions:
In December 2000, MHSIC and Superior entered into agreements with Humana Inc. to transfer Humana's Medicaid contract with the state of Wisconsin to MHSIC and Humana's Medicaid contract with the state of Texas to Superior. Effective February 1, 2001, the state of Wisconsin approved the agreement, thereby allowing MHSIC to serve approximately 35,000 additional members in the state. Effective February 1, 2001, the state of Texas approved a management agreement between Superior and Humana Inc., thereby allowing Superior to manage approximately 30,000 additional members in Texas.
As a result of the above transactions, $1,250 (the purchase price) was recorded as an intangible, purchased contract rights. Centene is amortizing the contract rights on a straight-line basis over five years, the period expected to be benefited.
22. Common Stock Pro Forma Information (Unaudited):
On October 4, 2001, the Board of Directors authorized the Company to file a Registration Statement with the U.S. Securities and Exchange Commission for an initial public offering of its common stock. The unaudited June 30, 2001, pro forma consolidated stockholders' equity and pro forma net income per common share information for the year ended December 31, 2000, and the six months ended June 30, 2001, give effect to the conversion of all of the outstanding preferred stock into 5,874,340 shares of common stock upon the completion of the proposed offering. For purposes of the unaudited pro forma stockholders' equity, the transactions have been assumed to have occurred on June 30, 2001. For purposes of the unaudited pro forma net income per common share information, the transactions were assumed to have occurred as of January 1, 2000. The unaudited pro forma information presented does not purport to represent the financial position or net income per common share of the Company if such transactions had occurred on such dates or to project the Company's financial position or net income per common share as of any future date or for any future period.
CENTENE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Dollars in thousands, except share data)
The table below provides supporting calculations for the unaudited pro forma net income per common share.
Six Months
Year Ended Ended
December 31, June 30,
2000 2001
------------ ----------
Computation of pro forma weighted average number of common shares outstanding:
Historical................................................................. 901,526 908,907
Common shares issued on conversion of convertible preferred stock.......... 5,874,340 5,874,340
---------- ----------
Basic......................................................................... 6,775,866 6,783,247
========== ==========
Computation of pro forma weighted average number of common shares and
potentially dilutive common shares outstanding:
Historical................................................................. 6,819,595 7,748,825
Common shares issued on conversion of convertible preferred stock.......... 5,874,340 5,874,340
Elimination of effect of convertible preferred shares in historical amount. (5,874,340) (5,874,340)
---------- ----------
Diluted....................................................................... 6,819,595 7,748,825
========== ==========
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Shares
[LOGO] Centene Logo
Common Stock
SG COWEN
THOMAS WEISEL PARTNERS LLC
CIBC WORLD MARKETS
, 2001
PART II
Item 13. Other Expenses of Issuance and Distribution.
The following table indicates the expenses to be incurred in connection with the offering described in this Registration Statement, other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimates, other than the SEC registration fee and the NASD fee.
SEC registration fee.............................. $ 14,375
NASD fee.......................................... 6,250
Nasdaq National Market application and listing fee *
Accounting fees and expenses...................... 150,000
Legal fees and expenses........................... 250,000
Printing and engraving............................ 225,000
Transfer agent fees and expenses.................. 5,000
Blue sky fees and expenses........................ 15,000
Miscellaneous expenses............................ *
--------
Total.......................................... $ *
========
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Item 14. Indemnification of Directors and Officers.
Section 102 of the Delaware General Corporation Law ("DGCL"), as amended, allows a corporation to eliminate or limit the personal liability of a director of a corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.
Section 145 of the DGCL provides, among other things, that we may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by us or in our right) by reason of the fact that the person is or was one of our directors, officers, agents or employees or is or was serving at our request as a director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding. The power to indemnify applies (a) if such person is successful on the merits or otherwise in defense of any action, suit or proceeding, or (b) if such person acted in good faith and in a manner which the person reasonably believed to be in our best interest, or not opposed to our best interest, and with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. The power to indemnify applies to actions brought by us or in our right as well but only to the extent of defense expenses (including attorneys' fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his duties to us, unless the court believes that in light of all the circumstances indemnification should apply.
Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or
II-1
dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
As permitted under Delaware law, our certificate of incorporation includes a provision that eliminates the personal liability of our directors for monetary damages for breach of fiduciary duty as a director, except for liability for:
. any breach of the director's duty of loyalty to us or our stockholders;
. acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock re-purchases or redemptions; or
. any transaction from which the director derived an improper personal benefit.
Our by-laws further provide that:
. we must indemnify our directors and officers to the fullest extent permitted by Delaware law;
. we may indemnify our other employees and agents to the same extent that we indemnified our officers and directors, unless otherwise determined by our board of directors; and
. we must advance expenses, as incurred, to our directors and executive officers in connection with a legal proceeding to the fullest extent permitted by Delaware law.
The indemnification provisions contained in our certificate of incorporation and by-laws are not exclusive of any other rights to which a person may be entitled by law, agreement, vote of stockholders or disinterested directors or otherwise. In addition, we maintain insurance on behalf of our directors and executive officers insuring them against any liability asserted against them in their capacities as directors or officers or arising out of such status.
Please also see section 7 of the underwriting agreement relating to the offering, filed as Exhibit 1 to this Registration Statement, for indemnification arrangements between the underwriters, the selling stockholders and us.
Item 15. Recent Sales of Unregistered Securities.
Set forth below is a description of our sales of unregistered securities
since January 1, 1998. The sales made to investors were made in accordance with
Section 4(2) of the Securities Act and Regulation D under the Securities Act.
Sales to our employees, directors and officers were deemed to be exempt from
registration under the Securities Act in reliance on Rule 701 promulgated under
Section 3(b) of the Securities Act as transactions under compensatory benefit
plans and contracts relating to compensation provided under Rule 701.
Series D Convertible Preferred Stock
In March 1998, we sold 12,499 shares of common stock to Greylock Limited Partnership upon exercise of warrants at a price of $2.40 per share for gross proceeds of $29,998.
In September 1998, we sold 3,680,000 shares of series D preferred stock at a price of $5 per share for gross proceeds of $18,400,000. Investors included Strategic Investment Partners, Ltd., Cahill Warnock Strategic Partners Fund, L.P., Greylock Limited Partnership, Strategic Associates, L.P., D.L. Associates, Claire W. Johnson, Marshall & Ilsley Trust Company f/b/o Richard P. Wiederhold, Raymond Brinn, Robert J. Johannes and Jerome Fritsch.
II-2
In February 1999, we sold 74 common shares to an employee upon exercise of warrants at a price of $2.40 per share for gross proceeds of $178.
In May 1999, we sold 40,000 shares of shares of series D preferred stock at a price of $5.00 per share for gross proceeds of $200,000. We sold the shares to Michael F. Neidorff, Brian Spanel and some of our other employees.
Stock Options
In 1998, we granted options to purchase 50,000, 25,000 and 7,000 shares of common stock to employees pursuant to our 1994, 1996 and 1998 Stock Plans, respectively.
In 1999, we granted options to purchase 2,000, 107,000, 297,500 and 177,000 shares of common stock to employees pursuant to our 1994, 1996, 1998 and 1999 Stock Plans, respectively.
In 2000, we granted options to purchase 115,000 and 416,000 shares of common stock to employees and directors pursuant to our 1999 and 2000 Stock Plans, respectively.
In 2001, we granted options to purchase 149,500 shares of common stock to employees pursuant to our 2001 Stock Plan.
Between January 1, 1998 and September 1, 2001, 15,395 options granted pursuant to our stock plans have been exercised at exercise prices ranging from $0.803 to $2.80.
Item 16. Exhibits and Financial Statement Schedules.
a. Exhibits
Exhibit
Number Description
------ -----------
1* Underwriting Agreement
3.1 Articles of Incorporation of Centene Corporation, a Wisconsin corporation
3.2 Certificate of Incorporation of Centene Corporation, a Delaware corporation
3.3 By-laws of Centene Corporation, a Wisconsin corporation
3.4 By-laws of Centene Corporation, a Delaware corporation
4.1* Specimen certificate for shares of common stock of Centene Corporation
4.2 Amended and Restated Shareholders' Agreement, dated September 23, 1998
5* Legal opinion of Armstrong Teasdale LLP
10.1 Stock Purchase and Recapitalization Agreement by and among Community Health Centers Network,
L.P., Superior HealthPlan, Inc., Centene Corporation and TACHC GP, Inc., dated September 10,
2001
10.2 Contract for Medicaid/BadgerCare HMO Services between Managed Health Services Insurance
Corp. and Wisconsin Department of Health and Family Services, January 2000 - December 2001
10.3** Agreement between Network Health Plan of Wisconsin, Inc. and Managed Health Services Insurance
Corp., dated January 1, 2001
10.4 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan, Inc.
(El Paso Service Area), dated May 14, 1999
10.5 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan, Inc.
(Travis Service Area), dated August 9, 1999
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II-3
Exhibit
Number Description
------ -----------
10.6 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan, Inc.
(Bexar Service Area), dated August 9, 1999
10.7 Contract between the Office of Medicaid Policy and Planning, the Office of the Children's Health
Insurance Program and Coordinated Care Corporation Indiana, Inc., dated January 1, 2001
10.8 1994 Stock Plan
10.9 1996 Stock Plan
10.10 1998 Stock Plan
10.11 1999 Stock Plan
10.12 2000 Stock Plan
10.13 Form of Incentive Stock Option Agreement
10.14 Form of Non-statutory Stock Option Agreement
10.15 Executive Employment Agreement between Centene Corporation and Karey L. Witty, dated January
1, 2001
10.16 Executive Employment Agreement between Centene Corporation and Brian G. Spanel, dated August
6, 2001
10.17 Executive Employment Agreement between Centene Corporation and Joseph P. Drozda, M.D., dated
October 30, 2000
10.18 Executive Employment Agreement between Centene Management Corporation and Mary O'Hara,
dated December 16, 1998
21 List of subsidiaries
23 Consent of Independent Public Accountants
24 Power of Attorney (included on signature page of the Registration Statement)
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b. Financial Statement Schedule
Report of Independent Public Accountants and Schedule of Valuation and Qualifying Accounts
II-4
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the provisions described in Item 14, or otherwise, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by the registrant against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to provide to the underwriters at the closing certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Clayton, Missouri, on October 9, 2001.
CENTENE CORPORATION
/s/ MICHAEL F. NEIDORFF By: _________________________________ Michael F. Neidorff President and Chief Executive Officer |
POWER OF ATTORNEY
We, the undersigned officers and directors of Centene Corporation hereby severally constitute and appoint Michael F. Neidorff, Karey L. Witty and John L. Gillis, and each of them singly, our true and lawful attorneys-in-fact and agents with full power to them, to sign for us and in our names in the capacities indicated below, any and all pre-effective and post-effective amendments to the Registration Statement on Form S-1 filed herewith, and any subsequent Registration Statement for the same offering which may be filed under Rule 462(b), and generally to do all such things in our names and on our behalf in our capacities as officers and directors to enable Centene Corporation to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys-in-fact and agents, or any of them, to said amendments or to any subsequent Registration Statement for the same offering which may be filed pursuant to Rule 462(b).
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed as of October 9, 2001 by the following persons in the capacities indicated.
Name Title
---- -----
/s/ MICHAEL F. NEIDORFF President and Chief Executive Officer
|
-------------------------- (Chief Executive Officer) Michael F. Neidorff
/s/ KAREY L. WITTY Senior Vice President, Chief Financial Officer and
-------------------------- Secretary (Chief Financial and Accounting Officer)
Karey L. Witty
/s/ SAMUEL E. BRADT Director
--------------------------
Samuel E. Bradt
/s/ WALTER E. BURLOCK, JR. Director
--------------------------
Walter E. Burlock, Jr.
/s/ EDWARD L. CAHILL Director
--------------------------
Edward L. Cahill
|
------------------ Director Howard E. Cox, Jr.
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------------------------- Director Robert K. Ditmore
/s/ CLAIRE W. JOHNSON Director
-------------------------
Claire W. Johnson
/s/ RICHARD P. WIEDERHOLD Director
-------------------------
Richard P. Wiederhold
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II-7
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
1* Underwriting Agreement
3.1 Articles of Incorporation of Centene Corporation, a Wisconsin corporation
3.2 Certificate of Incorporation of Centene Corporation, a Delaware corporation
3.3 By-laws of Centene Corporation, a Wisconsin corporation
3.4 By-laws of Centene Corporation, a Delaware corporation
4.1* Specimen certificate for shares of common stock of Centene Corporation
4.2 Amended and Restated Shareholders' Agreement, dated September 23, 1998
5* Legal opinion of Armstrong Teasdale LLP
10.1 Stock Purchase and Recapitalization Agreement by and among Community Health Centers Network,
L.P., Superior HealthPlan, Inc., Centene Corporation and TACHC GP, Inc., dated September 10,
2001
10.2 Contract for Medicaid/BadgerCare HMO Services between Managed Health Services Insurance
Corp. and Wisconsin Department of Health and Family Services, January 2000 - December 2001
10.3** Agreement between Network Health Plan of Wisconsin, Inc. and Managed Health Services Insurance
Corp., dated January 1, 2001
10.4 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan. Inc.
(El Paso Service Area), dated May 14, 1999
10.5 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan, Inc.
(Travis Service Area), dated August 9, 1999
10.6 1999 Contract for Services between the Texas Department of Health and Superior HealthPlan, Inc.
(Bexar Service Area), dated August 9, 1999
10.7 Contract between the Office of Medicaid Policy and Planning, the Office of the Children's Health
Insurance Program and Coordinated Care Corporation Indiana, Inc., dated January 1, 2001
10.8 1994 Stock Plan
10.9 1996 Stock Plan
10.10 1998 Stock Plan
10.11 1999 Stock Plan
10.12 2000 Stock Plan
10.13 Form of Incentive Stock Option Agreement
10.14 Form of Non-statutory Stock Option Agreement
10.15 Executive Employment Agreement between Centene Corporation and Karey Witty, dated January 1,
2001
10.16 Executive Employment Agreement between Centene Corporation and Brian G. Spanel, dated
September 26, 2001
10.17 Executive Employment Agreement between Centene Corporation and Joseph P. Drozda, M.D., dated
October 30, 2000
10.18 Executive Employment Agreement between Centene Management Corporation and Mary O'Hara,
dated December 16, 1998
21 List of subsidiaries
23 Consent of Independent Public Accountants
24 Power of Attorney (included on signature page of the Registration Statement)
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Centene Corporation:
We have audited in accordance with auditing standards generally accepted in the United States, the financial statements of Centene Corporation and subsidiaries included in this registration statement and have issued our report thereon dated March 2, 2001. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule II is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 2, 2001
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SCHEDULE II
CENTENE CORPORATION
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
Balance Amounts Write-offs of Balance
Allowance for Beginning of Charged to Uncollectible End of
Doubtful Receivables the Year Expense Receivable Year
-------------------- ------------ ---------- ------------- -------
1998 $ -- $ 412 $ -- $ 412
1999 412 833 -- 1,245
2000 1,245 1,390 (769) 1,866
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Exhibit 3.1
RESTATED ARTICLES OF INCORPORATION
OF
CENTENE CORPORATION
The following Restated Articles of Incorporation, duly adopted pursuant to the provisions of the Wisconsin Business Corporation Law, supersede and take the place of the heretofore existing Articles of Incorporation of Centene Corporation:
from time to time may increase or decrease the number of shares of any series, but not, in the case of a decrease, to a number less than the number of shares of such series then outstanding. The Series A Common Stock, Series B Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall have the following relative rights, preferences and limitations, but except as so set forth shall be identical in every respect.
(b) Each share of Series D Preferred Stock shall automatically be converted into shares of Series A Common Stock at the then effective Conversion Rate immediately upon the closing of a public offering pursuant to an effective registration statement under the Securities Act, covering the Corporation's Series A Common Stock in a firm-commitment, underwritten public offering by a nationally recognized investment banking firm with net cash proceeds to the Corporation (after deducting underwriters' discounts, commissions and expenses) of at least $20 million and an equivalent public offering price per share of Series A Common Stock of at least $10 (as adjusted for stock splits, dividends and recapitalizations and the like).
dividends, subdivisions, split-ups, combinations or dividends, which are events covered by Sections D(5)(d), (e) and (f) of this Article II) for a consideration per share less than the Conversion Price applicable to such class or series of Preferred Stock in effect immediately prior to the issuance of such Common Stock (or other securities convertible into or exchangeable for such Common Stock), then the Conversion Price for such class or series of Preferred Stock shall forthwith be decreased immediately after such issuance to a price equal to the quotient obtained by dividing:
(i) an amount equal to the sum of
(x) the total number of shares of Common Stock
outstanding (including any shares deemed to have
been issued pursuant to subsection (C) of this
Section D(5)(a)) immediately prior to such
issuance multiplied by the Conversion Price in
effect for such class or series of Preferred
Stock immediately prior to such instance, plus
(y) the consideration received by the Corporation upon such issuance, by
(ii) the total number of shares of Common Stock outstanding (including any shares deemed to have been issued pursuant to subsection (C) of this Section D(5)(a)) immediately after such issuance of Common Stock (or other securities convertible into or exchangeable for such Common Stock).
(i) shares of Common Stock issued or issuable on or after the Filing Date upon exercise of options or other purchase rights granted to employees, officers, directors or consultants of the Corporation and approved by the Board of Directors of the Corporation (and any reissuance of such shares after repurchase thereof); and
(ii) all shares of Common Stock or other securities issued or to be issued to employees, officers, directors or consultants of the Corporation after receipt of written consent to such issuance from the holders of 50% of the then outstanding shares of Preferred Stock and approval of such issuance by the Board of Directors of the Corporation; and
(iii) all shares of Common Stock or other securities issued to an investment firm or similar person as a fee in connection with capital finance activities of the Corporation.
Shares of Excluded Stock shall not be deemed to be outstanding for purposes of the computations of Section D(5)(a) above prior to their actual issuance.
(d) For purposes of making any such calculation pursuant to this Sections D(5)(a) and (c), the shares of Common Stock issuable upon conversion of the outstanding shares of Preferred Stock, together with any other shares of the same class of capital stock deemed issued and outstanding pursuant to subsection (C) of this Section D(5)(d), shall be deemed issued and outstanding at all times. For purposes of any adjustment of the Conversion Price pursuant to this subsection (a) and (c) of this Section D(5), the following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash, the consideration received therefor shall be deemed to be the amount of cash paid therefor without deducting any discounts or commissions paid or incurred by the Corporation in connection with the issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board of Directors of the Corporation, in accordance with generally accepted accounting treatment
(iii) In the case of the issuance of (i) options to purchase or rights to subscribe for Common Stock (other than Excluded Stock), (ii) securities by their terms convertible or exchangeable for such Common Stock (other than Excluded Stock), or (iii) options to purchase or rights to subscribe for such convertible or exchangeable securities:
(A) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock shall be deemed to be issuable for a consideration equal to the consideration (determined in the manner provided in subsections (i) and (ii) above), if any, received by the Corporation upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the Common Stock covered thereby;
(B) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities, or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof, shall be deemed to be issuable for a consideration equal to the consideration received by the Corporation for any such securities and related options or rights (including any cash received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Corporation upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subsections (i) and (ii) above);
(C) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof, shall be deemed to have been issued at the time such options or rights or securities were issued, provided that the consideration for which such Common Stock is deemed to be issuable does not exceed the issuance price of securities issued in the latest bona fide round of financing by the Corporation;
(D) on any change in the number of shares of Common Stock deliverable upon exercise of any such options or rights or conversion of or exchange for such convertible or exchangeable securities, or on any change in the minimum purchase price of such options, rights or securities, other than a change resulting from the antidilution provisions of such options, rights or securities, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have obtained had the adjustment (and any subsequent adjustments) made upon (x) the basis of the issuance of such options, rights or securities not exercised, converted or exchanged prior to such change, as the case may be, been made upon the basis of such change, or (y) the basis of the issuance of the options or rights related to such securities not
converted or exchanged prior to such change, as the case may be, been made upon the basis of such change; and
(E) on the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have obtained had the adjustment (and any subsequent adjustments) made upon the basis of the issuance of such options, rights, convertible or exchangeable securities or options or rights related to such convertibIe or exchangeable securities, as the case may be, been made upon the issuance of only the number of shares of Common Stock actually issued upon the exercise of such options or rights, upon the conversion or exchange of such convertible or exchangeable securities or upon the exercise of the options or rights related to such convertible or exchangeable securities, as the case may be.
(e) If the number of shares of Common Stock outstanding at any time after the date hereof is increased by a stock dividend payable in shares of such Common Stock or by a subdivision or split-up of shares of such Common Stock, then, on the date such payment is made or such change is effective, the Conversion Price for each class or series of Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of such class or series of Preferred Stock shall be increased in proportion to such increase of outstanding shares.
(f) If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of such Common Stock, then, on the effective date of such combination, the Conversion Price for each class or series of Preferred Stock shall be appropriateIy increased so that the number of shares of Common Stock issuable on conversion of such class or series of Preferred Stock shall be decreased in proportion to such decrease in outstanding shares.
(g) If the Corporation shall declare a cash dividend upon Common Stock payable otherwise than out of retained earnings or shall distribute to holders of such Common Stock shares of another class or series of capital stock, stock or other securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options or rights (excluding options to purchase and rights to subscribe for such Common Stock or other securities of the Corporation convertible into or exchangeable for such Common Stock), then, in such case, the holders of shares of Preferred Stock shall, concurrent with the distribution to holders of such Common Stock, receive a like distribution based upon the number of shares of such Common Stock into which the shares of Preferred Stock are then convertible.
(h) In the event, at any time after the date hereof, of (i) a capital reorganization or any reclassification of the stock of the Corporation (other than a change in par value or as a result of a stock dividend or subdivision, split-up or combination of shares) or (ii)
the consolidation or merger of the Corporation with or into another person
(other than a consolidation or merger in which the Corporation is the continuing
entity and which does not result in any change in Common Stock, or (iii) the
sale or other disposition of all or substantially all the properties and assets
of the Corporation as an entirety to any other person, the shares of Preferred
Stock shall, if such event is not deemed a Liquidation Event (as defined in
Section B of this Article II), after such reorganization, reclassification,
consolidation, merger, sale or other disposition, be convertible into the kind
and number of shares of stock or other securities or property of the Corporation
or of the entity resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold or otherwise disposed
to which such holder would have been entitled if immediately prior to such
reorganization, reclassification, consolidation, merger, sale or other
disposition he had converted his shares of Preferred Stock into such Common
Stock. The provisions of this subsection (h) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales or other
dispositions.
(i) All calculations under this Section D shall be made to the nearest cent or to the nearest one hundredth (l/100) of a share, as the case may be.
The name and address of the registered agent and registered office of the Corporation are MIBEF Corporate Services, Inc., 100 East Wisconsin Avenue, Suite 3300, Milwaukee, Wisconsin 53202-4108.
Any action required or permitted to be taken at a meeting of the shareholders of the Corporation may be taken without a meeting by shareholders who would be entitled to vote at a meeting those shares with voting power to cast no less than the minimum number or, in the case of voting groups, numbers of votes that would be necessary to authorize or take the action at a meeting at
which all shares entitled to vote were present and voted. Any action so take must be evidenced by one or more written consents describing the action taken, signed by the number of shareholders necessary to take the action and delivered to the Corporation for inclusion in the corporate records.
The foregoing Restated Articles of Incorporation of Centene Corporation contain amendments to the Articles of Incorporation requiring shareholder approval; do not provide for an exchange, reclassification or cancellation of issued shares; and were duly adopted on _______________, 1998 in accordance with Section 180.1003 and 180.1007 of the Wisconsin Business Corporation Law.
Dated this 23rd day of September, 1998.
/s/ Michael Neidorff ---------------------------------- Michael Neidorff, President |
This instrument was drafted by and is returnable to:
Robert J. Johannes, Esq.
Michael Best & Friedrich
100 East Wisconsin Avenue, Suite 3300
Milwaukee, Wisconsin 53202
414-271-6560
Exhibit 3.2
CENTENE CORPORATION
CERTIFICATE OF INCORPORATION
The undersigned, being a natural person of the age of twenty-one (21) or more, for the purpose of forming a corporation under the General Corporation Law of the State of Delaware, adopts the following Certificate of Incorporation:
FIRST: The name of the Corporation is Centene Corporation (the "Corporation").
SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, New Castle County, Delaware 19801. The name of its registered agent at that address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the "GCL").
FOURTH: (a) Authorized Capital Stock. The total number of shares of stock which the Corporation shall have authority to issue is 50,000,000 shares of capital stock, consisting of (i) 40,000,000 shares of common stock, par value of one cent ($0.01) per share (the "Common Stock") and (ii) 10,000,000 shares of preferred stock, par value of one cent ($0.01) per share (the "Preferred Stock").
(b) Common Stock. The powers, preferences and rights, and the qualifications, limitations and restrictions, of each class of the Common Stock are as follows:
(1) No Cumulative Voting. The holders of shares of Common Stock shall not have cumulative voting rights.
(2) Dividends; Stock Splits. Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Certificate of Incorporation, as it may be amended from time to time, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.
(3) Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Corporation, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution after payments to creditors and to the holders of any Preferred Stock of the Corporation that may at the time be outstanding, in proportion to the number of shares held by them, respectively.
(4) Merger, etc. In the event of a merger or consolidation of the Corporation with or into another entity (whether or not the Corporation is the surviving entity), the holders of each share of Common Stock shall be entitled to receive the same per share consideration on a per share basis.
(5) No Preemptive or Subscription Rights. No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.
(c) Preferred Stock. The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.
(d) Power to Sell and Purchase Shares. Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law.
FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(b) The number of directors of the Corporation shall be as from time to time fixed by the Board of Directors, within any limitations as may be fixed by the By-Laws. Election of directors need not be by written ballot unless the By-Laws so provide.
(c) The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 2002 annual meeting; the term of the initial Class II directors shall terminate on the date of the
2003 annual meeting; and the term of the initial Class III directors shall terminate on the date of the 2004 annual meeting. At each succeeding annual meeting of stockholders beginning in 2002, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.
(d) A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
(e) Subject to the terms of any one or more classes or series of Preferred Stock, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the Corporation's then outstanding capital stock entitled to vote generally in the election of directors. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article FIFTH unless expressly provided by such terms.
(f) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
SIXTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the GCL, as so amended. Any repeal or
modification of this Article SIXTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
SEVENTH: The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article SEVENTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.
The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article SEVENTH to directors and officers of the Corporation.
The rights to indemnification and to the advance of expenses conferred in this Article SEVENTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the By-Laws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise.
Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
EIGHTH: The name and mailing address of the incorporator is John L. Gillis, Jr., One Metropolitan Square, St. Louis, Missouri 63102-2740.
NINTH: Unless otherwise required by law, special meetings of stockholders, for any purpose or purposes may be called by either (i) the Chairman of the Board of Directors, if there be one, (ii) the Chief Executive Officer, or (iii) the Board of Directors. The ability of the stockholders to call a special meeting is hereby specifically denied.
TENTH: Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation, and the ability of the stockholders to consent in writing to the taking of any action is hereby specifically denied.
ELEVENTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
TWELFTH: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporation's By-Laws. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter or repeal the Corporation's By-Laws. The Corporation's By-Laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the shares entitled to vote at an election of directors.
THIRTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed in this Certificate of Incorporation, the Corporation's By-Laws or the GCL, and all rights herein conferred upon stockholders are granted subject to such reservation; provided, however, that, notwithstanding any other provision of this Certificate of Incorporation (and in addition to any other vote that may be required by law), the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the shares entitled to vote at an election of directors shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Certificate of Incorporation inconsistent with the purpose and intent of Articles FIFTH and TWELFTH of this Certificate of Incorporation or this Article THIRTEENTH.
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming the Corporation pursuant tot he General Corporation Law of the State of Delaware, has hereunto set his hand this 26/th/ day of September, 2001.
John L. Gillis, Jr., Incorporator
EXHIBIT 3.3
BY-LAWS
OF
COORDINATED CARE CORPORATION
(a Wisconsin corporation)
Adopted June 24, 1993
BY-LAWS
OF
COORDINATED CARE CORPORATION
(a Wisconsin corporation)
Introduction - Variable References
0.01. Date of annual shareholders' meeting (See Section 2.01): As determined by the Board of Directors.
0.02. Required notice of shareholders' meeting (See Section 2.04): not less than 10 days.
0.03. Authorized number of Directors (See Section 3.01): 7.
0.04. Required notice of Directors' meeting (See Section 3.05): not less than 48 hours.
TABLE OF CONTENTS
-----------------
ARTICLE I. OFFICES
1.01 Principal and Business Offices ................................... 1
1.02 Registered Office ................................................ 1
ARTICLE II. SHAREHOLDERS
2.01 Annual Meeting ................................................... 1
2.02 Special Meeting .................................................. 1
2.03 Place of Meeting ................................................. 1
2.04 Notice of Meeting ................................................ 1
2.05 Fixing of Record Date ............................................ 2
2.06 Voting Record .................................................... 3
2.07 Quorum and Voting Requirements; Postponements; Adjournments ...... 3
2.08 Conduct of Meetings .............................................. 4
2.09 Proxies .......................................................... 4
2.10 Voting of Shares ................................................. 5
2.11 Voting of Shares by Certain Holders .............................. 5
(a) Other Corporations .......................................... 5
(b) Legal Representatives and Fiduciaries ....................... 5
(c) Pledgees .................................................... 5
(d) Treasury Stock and Subsidiaries ............................. 5
(e) Minors ...................................................... 6
(f) Incompetents and Spendthrifts ............................... 6
(g) Joint Tenants ............................................... 6
2.12 Waiver of Notice By Shareholders ................................. 6
2.13 Majority Consent Without Meeting ................................. 7
ARTICLE III. BOARD OF DIRECTORS
3.01 General Powers and Number ........................................ 7
3.02 Tenure and Qualifications ........................................ 7
3.03 Regular Meetings ................................................. 7
3.04 Special Meetings ................................................. 8
3.05 Notice; Waiver ................................................... 8
3.06 Quorum ........................................................... 9
3.07 Manner of Acting ................................................. 9
3.08 Conduct of Meetings .............................................. 9
3.09 Vacancies ........................................................ 9
3.10 Compensation ..................................................... 9
3.11 Presumption of Assent ............................................ 10
3.12 Committees ....................................................... 10
3.13 Unanimous Consent Without Meeting ................................ 10
3.14 Meetings By Telephone Or By Other Communication Technology ....... 11
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ARTICLE IV. OFFICERS
4.01 Number ........................................................... 11
4.02 Election and Term of Office....................................... 11
4.03 Removal .......................................................... 11
4.04 Vacancies ........................................................ 11
4.05 Chairman of the Board ............................................ 11
4.06 Vice Chairman of the Board ....................................... 11
4.07 President ........................................................ 12
4.08 The Executive Vice President ..................................... 12
4.09 The Vice Presidents .............................................. 12
4.10 The Secretary .................................................... 13
4.11 The Treasurer .................................................... 13
4.12 Assistant Secretaries and Assistant Treasurers ................... 13
4.13 Other Assistants and Acting Officers ............................. 13
4.14 Salaries ......................................................... 14
ARTICLE V. CONFLICT OF INTEREST TRANSACTIONS, CONTRACTS
LOANS, CHECKS AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01 Conflict of Interest Transactions ................................ 14
5.02 Contracts ........................................................ 14
5.03 Loans ............................................................ 14
5.04 Checks, Drafts, etc .............................................. 14
5.05 Deposits ......................................................... 14
5.06 Voting of Securities Owned by this Corporation ................... 14
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01 Certificates for Shares .......................................... 15
6.02 Facsimile Signatures ............................................. 15
6.03 Signature by Former Officers ..................................... 15
6.04 Transfer of Shares ............................................... 16
6.05 Restrictions on Transfer ......................................... 16
6.06 Lost, Destroyed or Stolen Certificates ........................... 16
6.07 Consideration for Shares ......................................... 16
6.08 Stock Regulations ................................................ 17
ARTICLE VII. INDEMNIFICATION
7.01 Indemnification for Successful Defense ........................... 17
7.02 Other Indemnification ............................................ 17
7.03 Allowance of Expenses ............................................ 17
ARTICLE VIII. SEAL
ARTICLE IX. AMENDMENTS
9.01 By Shareholders .................................................. 18
9.02 By Directors ..................................................... 18
9.03 Implied Amendments ............................................... 18
ARTICLE X. SHAREHOLDER AGREEMENT
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ARTICLE I. OFFICERS
ARTICLE II. SHAREHOLDERS
case of a special meeting, a description of each purpose for which the meeting is called, shall be communicated or sent not less than the number of days set forth in Section 0.02 (unless a longer period is required by the Wisconsin Business Corporation Law or the Articles of Incorporation) nor more than 60 days before the date of the meeting, by or at the direction of the Chairman or Vice Chairman of the Board, the President, the Secretary, or other Officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. Written notice is effective at the earliest of the following:
(i) when received;
(ii) on deposit in the U.S. mail, if mailed postpaid and correctly addressed; or
(iii) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested and the receipt is signed by or on behalf of the addressee.
Written notice to a shareholder shall be deemed correctly addressed if it is addressed to the shareholder's address shown in the Corporation's current record of shareholders. Oral notice is effective when communicated and the Corporation shall maintain a record setting forth the date, time, manner and recipient of the notice.
dividend shall be the date on which the Board of Directors authorizes the distribution or share dividend, as the case may be, unless the Board of Directors fixes a different record date.
Once a share is represented for any purpose at a meeting, other than for the purpose of objecting to holding the meeting or transacting business at the meeting, it is considered present for purposes of determining whether a quorum exists, for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.
If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the Articles of Incorporation or the Wisconsin Business Corporation Law requires a greater number of affirmative votes. Unless otherwise provided in the Articles of Incorporation of the Corporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. "Plurality" means that the individuals with the largest number of votes are elected as directors up to the maximum number of directors to be chosen at the election.
"Voting group" means any of the following:
(i) All shares of one or more classes or series that under the Articles of Incorporation or the Wisconsin Business Corporation Law are entitled to vote and be counted together collectively on a matter at a meeting of shareholders.
(ii) All shares that under the Articles of Incorporation or the Wisconsin Business Corporation Law are entitled to vote generally on a matter.
The Board of Directors acting by resolution may postpone and reschedule any previously scheduled meeting; provided, however, that a special meeting called by at least 10% of the shareholders may not be postponed beyond the 30th day following the originally scheduled meeting. Any meeting may be adjourned from time to time, whether or not there is a quorum:
(i) at any time, upon a resolution of shareholders if the votes cast in favor of such resolution by the holders of shares of each voting group, entitled to vote on any matter theretofore properly brought before the meeting exceed the number of votes cast against such resolution by the holders of shares of each such voting group; or
(ii) at any time prior to the transaction of any business at a meeting which was not called by at least 10% of the shareholders, by the Chairman or Vice Chairman of the Board, the President or pursuant to a resolution of the Board of Directors.
No notice of the time and place of adjourned meetings need be given except as required by the Wisconsin Business Corporation Law. At any adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed.
given by the shareholder to the presiding Officer during the meeting. The presence of a shareholder who has filed his or her proxy appointment shall not of itself constitute a revocation. No proxy appointment shall be valid after eleven months from the date of its execution, unless otherwise provided in the appointment form of proxy. In addition to the presumptions set forth in Section 2.11 below, the Board of Directors shall have the power and authority to make rules establishing presumptions as to the validity and sufficiency of proxy appOintmentS.
number of outstanding shares entitled to vote, but shares of its own issue held by this Corporation in a fiduciary capacity, or held by such other corporation in a fiduciary capacity, may be voted and shall be counted in determining the total number of outstanding shares entitled to vote.
(i) lack of notice or defective notice of the meeting unless the shareholder at the beginning of the meeting or promptly upon arrival objects to holding the meeting or transacting business at the meeting; and
(ii) consideration of a particular matter at the meeting that is not within the purpose described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
ARTICLE III. BOARD OF DIRECTORS
such meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Wisconsin, for the holding of additional regular meetings without other notice than such resolution.
(i) when received;
(ii) on deposit in the U.S. Mail, if mailed postpaid and correctly addressed; or
(iii) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested and the receipt is signed by or on behalf of the addressee.
Oral notice is effective when communicated and the Corporation shall maintain a record setting forth the date, time, manner and recipient of the notice.
Whenever any notice whatsoever is required to be given to any Director of the Corporation under the Articles of Incorporation or By-laws or any provision of law, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the Director entitled to such notice, shall be deemed equivalent to the giving of such notice, and the Corporation shall retain copies of such waivers in its corporate records. A Director's attendance at or participation in a meeting waives any required notice to him or her of the meeting unless the Director at the beginning of the meeting or promptly upon his or her arrival objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assert to action taken at the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
-lO-
ARTICLE IV. OFFICERS
ARTICLE V. CONFLICT OF INTEREST TRANSACTIONS,
CONTRACTS, LOANS, CHECKS AND DEPOSITS: SPECIAL CORPORATE ACTS
voted at any meeting of security holders of such other corporation by the President of this Corporation if he or she is present, or in the President's absence by the Executive Vice President (if one is designated), or in the Executive Vice President's absence, by any Vice President of this Corporation who may be present, and (ii) whenever, in the judgment of the President, or in his absence, of the Executive Vice President (if one is designated), or in the Executive Vice President's absence, of any Vice President, it is desirable for this Corporation to execute an appointment of proxy or written consent in respect to any shares or other securities issued by any other corporation and owned by this Corporation, such proxy appointment or consent shall be executed in the name of this Corporation by the President, Executive Vice President or one of the Vice Presidents of this Corporation in the order as provided in clause (i) of this Section, without necessity of any authorization by the Board of Directors or countersignature or attestation by another Officer. Any person or persons designated in the manner above stated as the proxy or proxies of this Corporation shall have full right, power and authority to vote the shares or other securities issued by such other corporation and owned by this Corporation the same as such shares or other securities might be voted by this Corporation.
ARTICLE VI. CERTIFICATES FOR
SHARES AND THEIR TRANSFER
ARTICLE VII. INDEMNIFICATION
(i) A wilful failure to deal fairly with the Corporation or its shareholders in connection with a matter in which the Director or Officer has a material conflict of interest;
(ii) A violation of the criminal law, unless the Director or Officer has reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;
(iii) A transaction from which the Director or Officer derived an improper personal profit; or
(iv) Wilful misconduct.
(i) A written affirmation of his or her good faith belief that he or she has not breached or failed to perform his or her duties to the Corporation; and
(ii) A written undertaking, executed personally or on his or her behalf,
to repay the allowance to the extent that it is ultimately
determined under Sections 7.01 and 7.02 hereof and pursuant to
Section 180.0855 of the Wisconsin Business Corporation Law (or any
successor statutory provision) that indemnification is not
required, will not be provided, or is not so ordered by a court
under Section 180.0854 of the Wisconsin Business Corporation Law
(or any successor statutory provision). The undertaking under this
subsection shall be an unlimited general obligation of the Director
or Officer, and may be accepted without reference to his or her
ability to repay the allowance. The undertaking may be secured or
unsecured as determined by the Board of Directors.
ARTICLE VIII. SEAL
There shall be no corporate seal.
ARTICLE IX. AMENDMENTS
ARTICLE X. SHAREHOLDER AGREEMENT
Notwithstanding any provision contained in the By-laws, the provisions contained in any shareholder agreement entered into by and among the Corporation and the shareholders shall govern and control in the event any conflict exists between the By-laws and such shareholder agreement.
Exhibit 3.4
BY-LAWS
OF
CENTENE CORPORATION
A Delaware Corporation
Effective October ___, 2001
TABLE OF CONTENTS
ARTICLE I OFFICES ....................................................... 1 Section 1. Registered Office ........................................ 1 Section 2. Other Offices ............................................ 1 ARTICLE II MEETINGS OF STOCKHOLDERS ...................................... 1 Section 1. Place of Meetings ........................................ 1 Section 2. Annual Meetings .......................................... 1 Section 3. Special Meetings ......................................... 1 Section 4. Quorum ................................................... 2 Section 5. Proxies .................................................. 2 Section 6. Voting ................................................... 3 Section 7. Nature of Business at Meetings of Stockholders ........... 3 Section 8. List of Stockholders Entitled to Vote .................... 4 Section 9. Stock Ledger ............................................. 4 Section 10. Record Date .............................................. 4 Section 11. Inspectors of Election ................................... 4 ARTICLE III DIRECTORS ..................................................... 5 Section 1. Number and Election of Directors ......................... 5 Section 2. Nomination of Directors .................................. 5 Section 3. Vacancies ................................................ 6 Section 4. Duties and Powers ........................................ 6 Section 5. Organization ............................................. 7 Section 6. Resignations and Removals of Directors ................... 7 Section 7. Meetings ................................................. 7 Section 8. Quorum ................................................... 7 Section 9. Actions of Board ......................................... 7 Section 10. Meetings by Means of Conference Telephone ................ 8 Section 11. Committees ............................................... 8 Section 12. Compensation ............................................. 8 Section 13. Interested Directors ..................................... 8 ARTICLE IV OFFICERS ...................................................... 9 Section 1. General .................................................. 9 Section 2. Election ................................................. 9 Section 3. Voting Securities Owned by the Corporation ............... 9 Section 4. Chairman of the Board of Directors ....................... 9 Section 5. President ................................................ 9 Section 6. Vice Presidents .......................................... 10 Section 7. Secretary ................................................ 10 Section 8. Treasurer ................................................ 10 Section 9. Assistant Secretaries .................................... 11 Section 10. Assistant Treasurers ..................................... 11 |
Section 11. Other Officers ............................................................................................... 11 ARTICLE V STOCK ............................................................................................................ 11 Section 1. Form of Certificates ......................................................................................... 11 Section 2. Signatures ................................................................................................... 11 Section 3. Lost, Destroyed, Stolen or Mutilated Certificates ............................................................ 12 Section 4. Transfers .................................................................................................... 12 Section 5. Transfer and Registry Agents ................................................................................. 12 Section 6. Beneficial Owners ............................................................................................ 12 ARTICLE VI NOTICES .......................................................................................................... 12 Section 1. Notices ...................................................................................................... 12 Section 2. Waivers of Notice ............................................................................................ 13 ARTICLE VII GENERAL PROVISIONS ............................................................................................... 13 Section 1. Dividends .................................................................................................... 13 Section 2. Disbursements ................................................................................................ 13 Section 3. Fiscal Year .................................................................................................. 13 Section 4. Corporate Seal ............................................................................................... 13 ARTICLE VIII INDEMNIFICATION .................................................................................................. 14 Section 1. Power to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation ... 14 Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation .................... 14 Section 3. Authorization of Indemnification ............................................................................. 14 Section 4. Good Faith Defined ........................................................................................... 15 Section 5. Indemnification by a Court ................................................................................... 15 Section 6. Expenses Payable in Advance .................................................................................. 15 Section 7. Nonexclusivity of Indemnification and Advancement of Expenses ................................................ 16 Section 8. Insurance .................................................................................................... 16 Section 9. Certain Definitions .......................................................................................... 16 Section 10. Survival of Indemnification and Advancement of Expenses ...................................................... 16 Section 11. Limitation on Indemnification ................................................................................ 17 Section 12. Indemnification of Employees and Agents ...................................................................... 17 ARTICLE IX AMENDMENTS ....................................................................................................... 17 Section 1. Amendments ................................................................................................... 17 Section 2. Entire Board of Directors .................................................................................... 17 |
BY-LAWS
OF
CENTENE CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
ARTICLE II
MEETINGS OF STOCKHOLDERS
(1) A stockholder may execute a writing authorizing another person or persons to act for him or her as proxy. Execution may be accomplished by the stockholder or his or her authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(2) A stockholder may authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a telegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Company.
To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Company not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 7,
provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 7 shall be deemed to preclude discussion by any stockholder of any such business. If the Chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.
be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law.
ARTICLE III
DIRECTORS
In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Company.
To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Company (a) in the case of an annual meeting, not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on
the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 2. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
Board of Directors shall from time to time determine. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and the Board of Directors. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by these By-Laws or by the Board of Directors.
requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Treasurer and for the restoration to the Corporation, in case of the Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under control of the Treasurer belonging to the Corporation.
ARTICLE V
STOCK
before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
ARTICLE VI
NOTICES
(1) Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting, present by person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.
(2) Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-Laws.
ARTICLE VII
GENERAL PROVISIONS
ARTICLE VIII
INDEMNIFICATION
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders. To
the extent, however, that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith, without
the necessity of authorization in the specific case.
ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII.
VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
ARTICLE IX
AMENDMENTS
Exhibit 4.2
September 23, 1998
1. Restrictions on Transfer ................................................. 2
1.1 General Prohibitions .......................................... 2
1.2 Notice of Transfer ............................................ 3
1.3 Right of First Offer .......................................... 3
1.4 Certain Permitted Transfers ................................... 4
1.5 Exchange of Shares ............................................ 5
2. Tag-Along Rights ......................................................... 5
2.1 Right to Sell Proportionate Number of Shares of Securities .... 5
2.2 Notifications ................................................. 6
2.3 Selling a Proportionate Number of Securities .................. 6
2.4 Purchase Price ................................................ 6
2.5 Closing of Sale ............................................... 6
3. Drag-Along Right ......................................................... 7
3.1 Sale of the Company ........................................... 7
3.2 Sale Notice ................................................... 7
3.3 Purchase of Drag-Along Amount ................................. 7
4. Directors ................................................................ 8
4.1 Initial Board ................................................. 8
4.2 Voting Agreement .............................................. 8
4.3 Compensation .................................................. 8
4.4 Insurance ..................................................... 8
5. Covenants ................................................................ 9
5.1 Affirmative Covenants ......................................... 9
5.2 Negative Covenants ............................................ 11
6. Endorsement on Certificates .............................................. 12
7. Registration Rights ...................................................... 12
7.1 Certain Definitions ........................................... 12
7.2 Demand Registrations .......................................... 13
7.3 Incidental Registrations ...................................... 14
7.4 Expenses of Registration ...................................... 16
7.5 Registration Procedures ....................................... 16
7.6 Indemnification ............................................... 17
7.7 Other Registration Rights ..................................... 19
7.8 Information by Holders ........................................ 19
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7.9 Rule 144 Reporting ............................. 19
7.10 Market Stand-off Agreement ..................... 19
7.11 Transfer Restrictions .......................... 20
8. Future Financings ......................................... 20
8.1 Right of First Refusal ......................... 20
8.2 Notice ......................................... 20
8.3 Exceptions ..................................... 21
9. Standstill Agreement ...................................... 21
10. Specific Performance ...................................... 21
11. Notices ................................................... 21
12. Effect of Invalid Provision: Governing Law ................ 22
13. Benefit, Subsequent Shareholders .......................... 22
14. Spouses ................................................... 22
15. Counterparts .............................................. 22
16. Termination ............................................... 22
17. Amendment ................................................. 23
18. Series D Class Vote ....................................... 23
19. Conflicting Provisions .................................... 23
20. Severability .............................................. 23
21. Amendment to 1993 Securities Purchase Agreement ........... 23
22. Termination of 1993 Shareholder Agreement ................. 23
23. Amendment to Certain Subordinated Note Agreements ......... 23
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WHEREAS, the Company and certain Shareholders are parties to the 1993 Shareholder Agreement;
WHEREAS, whenever the Company issues shares of Capital Stock (as such term is defined below) to a person not previously an owner of the Company's Capital Stock, it requires such person to execute an agreement by which such person assumes and agrees to become bound by the Shareholders' Agreement; and
WHEREAS, the Company and the Shareholders listed on Schedule A to this Agreement desire to become parties to this Agreement and to amend and restate the terms and conditions of the Shareholder Agreement as set forth herein; and
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the receipt and sufficiency of which are acknowledged;
IT IS HEREBY AGREED AS FOLLOWS:
(b) No Securities shall be transferred except on the books of the Company by the respective holders of record thereof or by their legal representatives who shall furnish proper evidence of authority to transfer, or by their attorney thereunto authorized by power of attorney duly executed and filed with the secretary of the Company, subject to the restrictions, if any, set forth in the By-Laws and this Agreement. The holder in whose name Securities stand on the books of the Company shall be deemed by the Company to be owner thereof for all purposes.
(c) No Shareholder shall transfer any Securities until such Shareholder has first given written notice to the Company describing briefly the manner of any such proposed transfer and until (i) the Company has received, if requested, from the Shareholders counsel an opinion (reasonably satisfactory in form and substance to the Company's counsel) that such transfer can be made without compliance with the registration provisions of the Securities Act or any applicable state securities laws or (ii) the Company and the Shareholder shall have complied with Rule 144 promulgated by the Commission and applicable state securities laws requirements, or (iii) a registration statement filed by the Company is declared effective by the Securities and Exchange Commission and governing state securities act authorities or steps necessary to perfect exemptions from such registration are completed with respect to the Securities to be so transferred.
(a) For all Transfers, the Company shall have priority on any exercise of the right of first offer or may assign (by action of the Board of Directors) such rights to any other person. The Company may elect to purchase all or any of the Securities proposed to be Transferred upon the same terms and conditions as those set forth in the Sale Notice by delivering a written notice of such election to the transferring Shareholder within 45 days after the Sale Notice has been given to the Company. Any such election so made within said period shall be binding upon the Company and irrevocable.
i. there shall first be allocated to each electing Shareholder a number of Transfer Securities equal to the lesser of (A) the number of Transfer Securities as to which such Shareholder accepted the Offer or (B) such Shareholder's pro rata fraction thereof, and
ii. the balance, if any, not allocated under clause (i) above shall be allocated to those Shareholders who expressed in their election in response to the Sales Notice a desire to purchase more than their pro rata fraction, in each case on a pro rata basis in proportion to the amount of such excess, or in such other manner as the electing Shareholders may agree among themselves.
(a) a Transfer in accordance with the provisions of Section
1.3 or 3 hereof or through a sale in a registered offering in accordance with
Section 7 hereof;
(b) a Transfer from any Shareholder to any Affiliate, or any of their subsidiaries, partners, limited partners or employees;
(c) a Transfer upon the death of a Shareholder to his executors, administrators and testamentary trustees;
(d) a Transfer to the Shareholder's spouse, parents, siblings or issue (whether natural or adopted) or to a trust, the beneficiaries of which, or to a corporation or partnership the stockholders or partners of which, include only the Shareholders and such Shareholder's spouse, parents, sibling or issue; and
(e) Transfers between Shareholders or to the Company.
As a condition to effectuating any Transfer hereunder, the transferee must agree to be bound by this Agreement and all of the terms and conditions hereunder.
(a) The chief executive officer of the Company;
(d) The party or parties electing a director under (b) or (c) above, shall have the power to remove and replace such director.
Notwithstanding any of the above, this paragraph 4.1 shall terminate and thereafter be of no force and effect upon the effectiveness of a registration statement on Form S-1, Form S-2 or Form S-3 of shares of capital stock of the Company.
Shareholder copies of press releases and other documents that the Company shall have released to the press during the preceding 90 days.
person or entity in question do not involve payment by or to the Company during any fiscal year of more than $5,000.
(a) engage in any business other than the managed health care business and any business incidental thereto;
(b) purchase, redeem or otherwise acquire any shares of capital stock of the Company, other than upon the exercise, approved by the Board (excluding the seller, if a director) or as required by law, of repurchase rights with respect to shares owned by any employee, director, or consultant of the Company;
(c) increase the size of the Board of Directors of the Company;
(d) merge or consolidate with any other entity (except if the sole purpose and effect of such merger is to change the Company's State of incorporation) or sell all or substantially all of its assets;
(e) issue or guarantee senior debt with the exception of debt issued by a commercial lender;
(f) liquidate or dissolve;
(g) enter into any agreement or arrangement of any kind that would restrict the Company's ability to perform its obligations under this Agreement or the Securities Purchase Agreement; or
"This security has not been registered under the Securities Act of 1933, as amended (the "Act") or any state securities laws, and has been acquired for investment and not with a view to, or for sale in connection with, any distribution thereof within the meaning of the Act. This security is subject to transfer restrictions contained in a certain Subordination Agreement [as applicable for Subordinated Debt] and a certain Amended and Restated Shareholders' Agreement, and no transfer of the security shall be made unless the conditions specified in said [Agreements] have been fulfilled. Copies of said [Agreements] are on file and available for inspection at the principal offices of the Company."
respect to, or in exchange or in replacement of, the securities referred to in the above subsection (i).
entitled to one additional demand registration pursuant to this subsection 7.2(a).
Notwithstanding the foregoing, if the Company shall furnish to
the Holders of Registrable Securities requesting registration pursuant to this
Section 7.2(a) a certificate signed by the President of the Company stating that
the Board of Directors of the Company has made the good faith judgment that it
would be seriously detrimental to the Company and its Shareholders for such
registration statement to be filed in the near future, then the Company's
obligation to use its best efforts to file and cause to become effective such
registration statement may be deferred for a period which shall not exceed 180
days. This right may not be exercised by the Company on more than one occasion
for each registration pursuant to this Section 7.2(a).
(a) If at any time or from time to time the Company shall determine to register any of its Capital Stock for its own account (other than a registration relating solely to employee benefit plans, or a registration relating solely to a Commission Rule 145 transaction or any Rule adopted by the Commission in substitution therefor or in amendment thereto, or a registration on any registration form which does not include substantially the same information as would be required to be included in a Registration Statement covering the sale of Registrable Securities), the Company shall:
i. promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to
qualify such Registrable Securities under the applicable Blue Sky or other state securities laws); and
ii. include in such registration (and any related qualification under Blue Sky laws or other compliance), and in any underwriting involved therein, all of the Registrable Securities specified in a written request or requests received by the Company within twenty (20) days after the giving of such written notice by the Company, by any Holder, subject to the limitations set forth in Section 7.3(b).
this Section 7.3 in the same proportion as such Registrable Securities were excluded pursuant to such underwriter limitation (with no more Registrable Securities being so included than were withdrawn). In the event that the contemplated sale does not involve an underwritten public offering, a determination that the inclusion of the Registrable Securities adversely affects the marketing of the shares shall be made by the Board of Directors of the Company in its good faith discretion.
(a) Keep such registration effective for a period of 120 days or until the selling Holders have completed the distribution described in the Registration Statement relating thereto, whichever first occurs; and
(b) Furnish such number of prospectus and other documents incident thereto as a selling Holders may from time to time reasonably request.
(c) Notify the Holders at any time when a Prospectus relating to the Shares is required to be delivered under the Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and prepare and furnish to the Holders one copy of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made.
(a) The Company will indemnify each Holder, each of the officers, directors and partners of such Holder, and each person controlling such Holder, if Registrable Securities held by such Holder are included in the securities with respect to which registration has been effected pursuant to this Agreement, and each underwriter of such Registrable Securities, if any, and each person who controls such underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on (A) any untrue statement (or alleged untrue statement) or a material fact contained in any prospectus, offering circular or other similar document (including any related Registration Statement, notification or the like) incident to any such registration, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, or (B) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action or inaction required of the Company in connection with any such registration and will reimburse such Holder, each of the officers, directors and partners of such Holder, and each person controlling such Holder, such under-writer and each person who controls such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action; provided that the Company will not be liable to a Holder or underwriter in any such case to the extent that such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance upon and in conformance with written information furnished to the Company by or on behalf of such Holder or underwriter and which was furnished specifically for the purpose of being used therein.
(b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such registration, qualification or compliance, each person who controls the Company or such
judgment, the Indemnifying Party shall not have employed satisfactory counsel to represent the Indemnified Party within a reasonable time after notice of the institution of such claim or litigation; or (D) the Indemnifying Party shall authorize the Indemnified Party to employ separate counsel at the expense of the Indemnifying Party. The Indemnified Party shall not settle any such claim or litigation without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld.
(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
(c) Furnish to each Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing that Holder to sell any such securities without registration.
be in writing in form satisfactory to the Company and such underwriter. The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of this 120-day period.
of such 15 day period, the Company may sell, free of any right of first refusal
on the Shareholders' part, the portion of the Shareholders' pro-rata shares not
purchased pursuant to such right of first refusal, upon the same terms specified
in the option Notice. Any Proposed Securities purchased by an affiliate of such
Shareholder to whom such Shareholder has assigned rights pursuant to this
Section 9 shall be deemed to have been purchased by, and to be held by, such
Shareholder.
addressed, in the care of the Company, to its office at 7711 Carondelet Avenue,
St. Louis, MO 63105; and, in the case of any Shareholder, to such Shareholder's
address set forth in the stock records of the Company, or to such other address
as may be designated in writing by such Shareholder. Any such notice shall be
deemed effective when personally delivered, if delivered personally, or three
(3) business days after mailing, if mailed, or one business day after delivery
to the courier, if delivered by overnight courier service.
D Preferred Stock. Section 7 shall terminate upon the registration of all Registrable Securities.
[Signature pages follow]
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date hereinabove set forth.
THE COMPANY:
CENTENE CORPORATION
By: /s/ Michael F. Neidorff
--------------------------
Name: Michael F. Neidorff
Title: Chief Executive Officer and President
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[Shareholder signatures appear on subsequent pages]
SHAREHOLDERS:
CAHILL, WARNOCK STRATEGIC PARTNERS FUND, L.P.
By: CAHILL WARNOCK STRATEGIC PARTNERS, L.P.,
its General Partner
By: /s/ Edward Cahill
-----------------------------------
Name: Edward Cahill
Title: a General Partner
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STRATEGIC ASSOCIATES, L.P.
By: CAHILL, WARNOCK & COMPANY, LLC, its
General Partner
By: /s/ Edward Cahill
-----------------------------------
Name: Edward Cahill
Title: Managing Member
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STRATEGIC INVESTMENT PARTNERS LTD.
By: /s/ Michael Neus
------------------------------------
Name: Michael Neus
Title: Attorney-in-Fact
|
GREYLOCK LIMITED PARTNERSHIP
By: ____________________________________
Name: Howard E. Cox, Jr.
Title: a General Partner
SHAREHOLDERS:
CAHILL, WARNOCK STRATEGIC PARTNERS FUND, L.P.
By: CAHILL WARNOCK STRATEGIC PARTNERS, L.P.,
its General Partner
By: ___________________________________
Name: Edward Cahill
Title: a General Partner
STRATEGIC ASSOCIATES, L.P.
By: CAHILL, WARNOCK & COMPANY, LLC, its
General Partner
By: ___________________________________
Name: Edward Cahill
Title: Managing Member
STRATEGIC INVESTMENT PARTNERS LTD.
By: ___________________________________
Name: Michael Neus
Title: Attorney-in-Fact
GREYLOCK LIMITED PARTNERSHIP
By: /s/ Howard E. Cox, Jr.
-----------------------------------
Name: Howard E. Cox, Jr.
Title: a General Partner
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/s/ Samuel E. Bradt /s/ Nancy B. Bradt
---------------------------------- ------------------------------------
Samuel E. Bradt Nancy B. Bradt,
his spouse
/s/ Raymond C. Brinn /s/ Charlotte Brinn
---------------------------------- ------------------------------------
Raymond C. Brinn Charlotte Brinn,
his spouse
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D.L. ASSOCIATES
By: /s/ Illegible
------------------------------
authorized officer
/s/ Patrick T. Flanagan /s/ Karen Flanagan
---------------------------------- ------------------------------------
Patrick T. Flanagan Karen Flanagan,
his spouse
/s/ Jerome M. Fritsch /s/ Jane Ann Fritsch
---------------------------------- ------------------------------------
Jerome M. Fritsch Jane Ann Fritsch,
his spouse
/s/ Thomas M. Gazzana /s/ Nancy A. Gazzana
---------------------------------- ------------------------------------
Thomas M. Gazzana Nancy A. Gazzana,
his spouse
/s/ Michael H. Guns
----------------------------------
Michael H. Guns
/s/ Dr. Edward Hutt /s/ Diane Hutt
---------------------------------- ------------------------------------
Dr. Edward Hutt Diane Hutt,
his spouse
/s/ Robert J. Johannes /s/ Christine J. Johannes
---------------------------------- ------------------------------------
Robert J. Johannes Christine J. Johannes
his spouse
/s/ Claire W. Johnson /s/ Majorie Johnson
---------------------------------- ------------------------------------
Claire W. Johnson Majorie Johnson,
his spouse
|
/s/ William P. Jollie /s/ Joanie Ouellette,
------------------------------------ ------------------------------------
William P. Jollie Joanie Ouellette,
his spouse
|
Marshall & Ilsley Trust Company for
Michael, Best & Friedrich Retirement
Plan, F/B/O
Tracey L. Klein
By: /s/ Illegible
--------------------------------
authorized officer
/s/ Elaine E. Laverenz /s/ Mark Laverenz
------------------------------------ ------------------------------------
Elaine E. Laverenz Mark Laverenz,
her spouse
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MANAGED HEALTH SERVICES, INC.
By: /s/ Richard Weiderhold, President
--------------------------------
authorized officer
/s/ Michael F. Neidorff /s/ Noemi K. Neidorff
------------------------------------ ------------------------------------
Michael F. Neidorff Noemi K. Neidorff,
his spouse
/s/ Thomas 0. Pyle
------------------------------------
Thomas 0. Pyle
/s/ Suzanne Ring-Wagner /s/ Leo Wagner
------------------------------------ ------------------------------------
Suzanne Ring-Wagner Leo Wagner,
her spouse
/s/ Leon K. Rusch /s/ Constance Bliss-Rusch
------------------------------------ ------------------------------------
Leon K. Rusch Constance Bliss-Rusch,
his spouse
/s/ Kathleen A. Tordik /s/ Christopher J. Tordik
------------------------------------ ------------------------------------
Kathleen A. Tordik Christopher J. Tordik,
her spouse
|
/s/Sandra S. Tunis /s/Ronald E. Tunis,
---------------------------------- ---------------------------------------
Sandra S. Tunis Ronald E. Tunis,
her spouse
/s/ Richard P. Weiderhold /s/ Barbra A. Weiderhold
---------------------------------- ---------------------------------------
Richard P. Weiderhold Barbra A. Weiderhold,
his spouse
|
Exhibit 10.1
This STOCK PURCHASE AND RECAPITALIZATION AGREEMENT (this "Agreement") is made and entered into as of this l0/th/ day of September, 2001, by and among COMMUNITY HEALTH CENTERS NETWORK, L.P., a Texas limited partnership ("CHCN"), SUPERIOR HEALTHPLAN, INC., a Texas corporation ("Superior"), CENTENE CORPORATION, a Wisconsin corporation ("Centene") and TACHC GP, Inc., a Texas corporation ("TACHC").
WHEREAS, pursuant to Sections 11.802 and 11.809 of the Texas Administrative Code (the "Code"), Superior must maintain a certain statutorily required level of net worth (the "Net Worth Requirement"); and
WHEREAS, without the investment of additional capital Superior shall be unable to meet the Net Worth Requirement and lawfully operate while paying its debts as they become due; and
WHEREAS, Superior desires to obtain from Centene and Centene desires to contribute to Superior additional capital in an aggregate amount necessary for Superior to meet the Net Worth Requirement not to exceed One Million Three Hundred Thousand Dollars ($1,300,000) (such amount being referred to as the "Required Capital") subject to the terms and conditions set forth herein and all in such form and manner as to satisfy the Net Worth Requirement; and
WHEREAS, CHCN desires to sell to Centene and Centene desires to purchase from CHCN such number of shares of the Class A Voting Common Stock of Superior as will result in Centene's ownership of ninety percent (90%) of the total issued and outstanding capital stock of Superior (the "Shares") on the terms and subject to the conditions set forth herein; and
WHEREAS, TACHC desires to sell to Centene and Centene desires to purchase from TACHC that certain Amended Term Note (the "Term Note") in the original principal amount of Two Hundred Sixty Thousand Dollars ($260,000) (which such principal amount is currently One Hundred Sixty Thousand Dollars ($160,000)) made by Superior to TACHC, dated February 17, 1997 on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
(b) CHCN owns free and clear of all encumbrances, except the lien arising from the Pledge Agreement, six hundred ten (610) shares of Superior's Class A Voting Common Stock and such shares constitute all of the capital stock of Superior owned by CHCN.
(a) Centene shall have no obligation to close either the Stock Purchase or the Note Purchase unless:
(b) reconstituting the Board of Directors of Superior so that
(i) Ernesto Gomez and Jose Comacho shall be elected as Class A Directors and
(ii) Elena Marin, Salvador Balcorta, Michael Niedorff, Robert Packman, Joseph
Drozda, Karey Witty, Irene Armendariz shall be elected as Class B Directors;
(c) converting the Shares into a like number of shares of the Class B Voting Common Stock of Superior;
(ii) increase the number of Class B Directors (as defined therein) to seven (7) and decrease the number of Class A Directors (as defined therein) to two (2);
(iii) provide that the President of Superior shall be a Class B Director; and
(iv) make certain amendments to the structure of committees of the Board of Directors.
(e) accepting the resignation of Mr. Jose Camacho as President of Superior and electing Michael Neidorff as President of Superior.
(a) The number of Centene Shares issued to CHCN pursuant to the Exchange shall equal One Hundred Thousand Dollars ($100,000) divided by the IPO Price. For purposes of the preceding sentence, the IPO Price
(iii) in the event of an Initial Public Offering as contemplated by Section 5.2(c), shall equal (x) the closing price of the publicly traded securities received by the
holders of the Centene common stock on the date of issuance of such securities to the holders of Centene common stock or (y) the average of the bid and ask prices for the publicly traded securities issued to the holders of the Centene common stock on the date of issuance of such securities if such securities are traded other than on a national securities exchange or in the "national market" segment of NASDAQ.
(b) Within ten (10) days after the closing of the Initial Public Offering, Centene shall inform CHCN in writing of the IPO Price (the "Price Notification"). In the event of a dispute between Centene and CHCN regarding the IPO Price, the written statement of the IPO Price provided by the underwriter of the Initial Public Offering (the "Final Determination") shall constitute the final and conclusive determination of the IPO Price.
(d) Pursuant to the terms of the Stock Exchange Agreement, Centene shall issue and deliver to CHCN a stock certificate evidencing the Centene Shares.
(e) Upon the Exchange, Centene shall grant to CHCN the one time option (the "Put Option"), to be exercised prior to the expiration of the Rule 144 Holding Period, as defined below, to sell all of the Centene Shares to Centene as follows:
(i) If CHCN desires to exercise the Put Option, CHCN shall deliver written notice thereof (the "Put Notice") to Centene. The price at which the Centene Shares shall be sold pursuant to the Put Option shall be the closing price on a national securities exchange or in the "national market" segment of NASDAQ of the publicly traded shares of Centene on the last full trading day prior to the receipt by Centene of such notice. The sale and purchase of the Centene Shares pursuant to the Put shall be consummated as provided in clause (ii) immediately following.
(ii) The consummation of the sale and purchase pursuant to the Put shall occur within thirty (30) days after the delivery of the Put Notice, but not prior to one hundred eighty (180) days after the closing of the Initial Public Offering, and simultaneously with the execution by and between Centene and CHCN of an agreement containing, among other terms and conditions, terms and conditions substantially similar to those of Articles 2 and 4 hereof, as well as such other terms and conditions as Centene may reasonably require for purposes of complying with all federal and state securities laws, any requirements imposed by TDI and/or any other legal or business requirements.
(f) CHCN acknowledges that Centene shall be under no obligation to register shares of its common capital stock for resale and that as a result neither the Exchange Shares nor the Centene Shares may be sold, assigned or transferred unless an exemption is available under the Securities Act of 1933. CHCN understands that in order for the Centene Shares to be sold in reliance upon the exemption provided by Rule 144 under the Securities Act of 1933 the Centene Shares must be held for a period of one year prior to any sale (the "Rule 144
Holding Period") and that in the succeeding twelve month period the terms of such rule may limit the volume and manner in which the Centene Shares are sold and require notice of sale to the Securities and Exchange Commission.
(4) The closing of an underwritten public offering of the common capital stock of Centene pursuant to an effective registration statement under the Securities Act of 1933 having an aggregate price to the public of not less than $lO,OOO,OOO; or
(b) The date upon which the common capital stock of Centene is registered as a security under Section 12 of the Securities Exchange Act of 1934 and such security is either traded on a national securities exchange or in the "national market" segment of NASDAQ or otherwise publicly traded; or
(c) The date upon which the common capital stock of Centene is exchanged for or converted into a security registered under Section 12 of the Securities Exchange Act of 1934 and such security is either traded on a national securities exchange or in the "national market" segment of NASDAQ or otherwise publicly traded.
(a) So long as at all times from the date hereof (i) Centene complies with the provisions of this Agreement in all material respects and (ii) Superior complies with the provisions of the Provider Agreements in all material respects, then from and after the date
hereof until the consummation of the Exchange or the Contingent Purchase, as the
case may be, CHCN shall not directly or indirectly undertake any activities in
the State of Texas, or enter into any arrangement or agreement with any other
person, entity or organization that, at the time undertaken or entered into,
would compete (or was undertaken or entered into for the purpose of competing)
with Superior or any business in which Superior is engaged. Without limiting the
generality of the foregoing, this provision expressly prohibits CHCN from:
investing in a Texas licensed health maintenance organization ("HMO") that
competes with Superior in the Medicaid managed care market or any management
company providing management services to such an HMO; by itself or in
conjunction with any third party forming, owning, operating, administering,
managing and/or controlling any such Texas licensed HMO; and (subject to the
terms of the Model Provider Agreements and Centene's waiver of this requirement
from time to time as to specific clinic members of CHCN) entering into a
provider contract, directly or indirectly, with another Medicaid managed care
HMO in the State of Texas.
(b) CHCN acknowledges and agrees that the restrictive covenants contained in this Section 6.4, are given in consideration of the Centene's execution of this Agreement and in consideration of, and as a condition to, consummation by Centene of the transactions contemplated hereby. If a court construes any one or more of such provisions to state unreasonable restrictions, then Centene and CHCN request the court to revise such restrictions to make them reasonable and enforceable to the maximum extent permissible. Moreover, if a court construes any one or more of such provisions to state unreasonable restrictions, the validity and enforceability of the remaining provisions shall remain unaffected.
Each party hereto represents and warrants that:
(a) Such party hereto has full right, power and authority to execute and deliver this Agreement and the documents contemplated hereby, and to perform and comply with all of the terms, covenants and conditions to be performed and complied with by it hereunder.
(b) There is no provision in such party's articles of incorporation, bylaws, limited partnership agreement or other governing or organizational document which prohibits or limits such Party's ability to consummate the transactions contemplated hereunder. Such party has the full right, power and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions and to fulfill all of the obligations contemplated to be consummated or fulfilled by such party hereunder. The execution and delivery of this Agreement by such party and the due consummation by such party of the transactions contemplated to be consummated by such party hereby have been duly authorized by all necessary action of the board of directors, general partner or other governing body or entity of such party. This Agreement constitutes a legal, valid and binding agreement of such party, enforceable against such party in accordance with its terms.
(c) There is no litigation or any other legal proceeding pending or, to the knowledge of such party, threatened which challenges the validity of this Agreement or the transactions contemplated hereunder or otherwise seeks to prevent, directly or indirectly, the consummation of such transactions, nor, to the knowledge of such party, is there a valid basis for any such litigation or proceeding.
(d) Such party is duly organized, validly existing and in good standing under the laws of its state of organization, with full power and authority to conduct its business as it is now being conducted and to own, lease and operate its properties and assets.
10 South Broadway
Suite 2000
St. Louis, Missouri 63102
Attn: Mr. David M. Harris
Fax No.: (314) 241-8624
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attn: Terry M. Schpok, P.C.
Fax No.: (214) 969-4343
or to such other address or fax number as any party hereto may designate by notice to the other parties in accordance with the terms of this Section.
specific finding as to which party is the prevailing party on the basis of the evidence presented and the relief granted.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Recapitalization Agreement as of the date first above written.
SUPERIOR HEALTHPLAN, INC. CENTENE CORPORATION
By: /s/ Jose Camacho By: /s/ Michael Neidorff
--------------------------------------- ------------------------------
Mr. Jose Camacho, President Mr. Michael Neidorff,
President & CEO
COMMUNITY HEALTH CENTERS TACHC GP, INC.,
NETWORK, L.P.
By: TACHC GP, Inc., its General Partner By: /s/ Jose Camacho
------------------------------
Mr. Jose Camacho, President
By: /s/ Jose Camacho
---------------------------------------
Mr. Jose Camacho, President
Signature Page
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EXHIBIT 10.2
JANUARY 2000 - DECEMBER 2001
Contract for Medicaid/BadgerCare HMO Services
Between
HMO
And
Wisconsin Department of
Health and Family Services
Page No.
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ARTICLE I............................................................................................... 1
I DEFINITIONS................................................................................... 1
ARTICLE II.............................................................................................. 7
II. DELEGATIONS OF AUTHORITY...................................................................... 7
ARTICLE III............................................................................................. 7
III. FUNCTIONS AND DUTIES OF THE HMO............................................................... 7
A. Statutory Requirement........................................................ 7
B. Provision of Contract Services............................................... 8
C. Time Limit for Decision on Certain Referrals................................. 18
D. Emergency Care............................................................... 18
E. 24-Hour Coverage............................................................. 19
F. Thirty Day Payment Requirement............................................... 20
G. HMO Claim Retrieval System................................................... 20
H. Appeals to the Department for HMO Payment/Denial of Providers................ 20
I. Payments for Diagnosis of Whether an Emergency Condition Exists.............. 22
J. Memoranda of Understanding for Emergency Services............................ 22
K. Provision of Services........................................................ 22
L. Open Enrollment.............................................................. 23
M. Pre-Existing Conditions...................................................... 23
N. Hospitalization at the Time of Enrollment or Disenroliment................... 23
0. Non-Discrimination........................................................... 24
P. Affirmative Action Plan...................................................... 24
Q. Cultural Competency.......................................................... 25
R. Health Education and Prevention.............................................. 26
S. Enrollee Handbook and Education and Outreach for Newly Enrolled
Recipients................................................................... 27
T. Approval of Marketing Plans and Informing Materials.......................... 29
U. Conversion Privileges........................................................ 31
V. Choice of Health Professional................................................ 31
W. Quality Assessment/Performance Improvement (QAPI)............................ 31
X. Access to Premises........................................................... 52
Y. Subcontracts................................................................. 52
Z.. Compliance with Applicable Laws, Rules or Regulations........................ 52
AA. Use of Providers Certified By Medicaid Program............................... 52
DD. Coordination and Continuation of Care........................................ 54
FE. HMO ID Cards................................................................. 54
FF. Federally Qualified Health Centers and Rural Health Centers
(FQHCS and RHCS)............................................................. 54
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
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GG. Coordination with Prenatal Care Services, School-Based Services,
Targeted Case Management Services, a Child Welfare Agencies, and
Dental Managed Care Organizations............................................ 55
HH. Physician Incentive Plans.................................................... 57
II. Advance Directives........................................................... 57
JJ. Ineligible Organizations..................................................... 58
KK. Clinical Laboratory Improvement Amendments................................... 60
LL. Limitation on Fertility Enhancing Drugs...................................... 60
MM. Reporting of Communicable Diseases........................................... 60
NN. MedicaBadgerCareare HMO Advocate Requirements................................ 61
00. HMO Designation of Staff Person as Contract Representative................... 64
PP. Subcontracts with Local Health Departments................................... 64
QQ. Subcontracts with Community-Based Health Organizations....................... 65
RR. Prescription Drugs........................................................... 65
ARTICLE IV.............................................................................................. 65
IV. FUNCTIONS AND DUTIES OF THE DEPARTMENT................................................. 65
A. Eligibility Determination.................................................... 65
B. Enrollment................................................................... 67
C. Disenroliment................................................................ 67
D. HMO Enrollment Reports....................................................... 67
E. Utilization Review and Control............................................... 68
F. HMO Review................................................................... 68
G. HMO Review of Study or Audit Results......................................... 68
H. Vaccines..................................................................... 68
I. Coordination of Benefits..................................................... 68
J. Wisconsin Medicaid Provider Reports.......................................... 69
ARTICLE V............................................................................................... 69
V. PAYMENT TO THE HMO..................................................................... 69
A. Capitation Rates............................................................. 69
B. Actuarial Basis.............................................................. 69
C. Renegotiation................................................................ 69
D. Reinsurance.................................................................. 69
E. Neonatal Intensive Care Unit Risk-Sharing.................................... 70
F. Payment Schedule............................................................. 71
G. Capitation Payments For Newborns............................................. 71
H. Cordination of Benefits (COB)................................................ 72
I. Recoupments.................................................................. 74
J. HealthCheck Recoupment....................................................... 75
K. Payment for Aids, HIV-Positive, and Ventilator Dependent..................... 76
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
--------
ARTICLE VI...................................................................................... 78
VI. REPORTS, DATA, AND COMPUTER/DATA REPORTING SYSTEM..................................... 78
A. Disclosure...................................................................... 78
B. Periodic Reports................................................................ 79
C. Access to and Audit of Contract Records......................................... 80
D. Records Retention............................................................... 80
E. Special Reporting and Compliance Requirements................................... 80
F. Reporting of Corporate and Other Changes........................................ 81
G. Computer/Data Reporting System.................................................. 81
ARTICLE VII...................................................................................... 83
VII. ENROLLMENT AND DISENROLLMENTS......................................................... 83
A. Enrollment...................................................................... 83
B. Third Trimester Pregnancy Disenrollment......................................... 83
C. Ninth Month Pregnancy Disenrollment............................................. 84
D. Exemptions from Enrollment in any HMO and Disenrollment for
Patients of Certified Nurse Midwives or Nurse Practitioners..................... 84
F. Exemption from Enrollment in any HMO and Disenrollment For
AIDS or HIV-Positive with Anti Retroviral Drug Treatment........................ 84
F. Exemptions from Enrollment in any HMO and Disenrollment for
Patients of Federally Qualified Health Centers.................................. 85
G. Native American Disenrollment................................................... 85
H. Special Disenrollments.......................................................... 85
I. Exemptions from Enrollment in any HMO and Disenrollment for
Recipients With Commercial HMO Insurance or Commercial
Insurance With a Restricted Provider Network.................................... 85
J. Exemption from Enrollment in any HMO and Disenrollment for
Families Where One or More Members are receiving SSI benefits................... 86
K. Voluntary Disenrollment......................................................... 86
L. Section 1115(A) Waiver and State Plan Amendment................................. 87
M. Additional Services............................................................. 87
N. Enrollment/Disenrollment Practices.............................................. 87
0. Enrollee Lock-In Period......................................................... 87
ARTICLE VIII. ................................................................................... 88
VIII. GRIEVANCE PROCEDURES.................................................................. 88
A. Procedures...................................................................... 88
B. Recipient Appeals of HMO Formal Grievance Decisions............................. 90
C. Notifications of Denial, Termination, Suspension, or Reduction of
Benefits to Enrollees........................................................... 90
D. Notifications of Denial of New Benefits to Enrollees............................ 92
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
-------
ARTICLE IX............................................................................................. 93
IX. REMEDIES FOR VIOLATION, BREACH, OR NON-PERFORMANCE OF CONTRACT............................... 93
A. Suspension of New Enrollment......................................................... 93
B. Department-Initiated Enrollment Reductions........................................... 93
C. Other Enrollment Reductions.......................................................... 93
D. Withholding of Capitation Payments and Orders to Provide Services.................... 94
E. Inappropriate Payment Denials........................................................ 97
F. Sanctions............................................................................ 97
G. Sanctions and Remedial Actions....................................................... 98
ARTICLE X............................................................................................. 98
X. TERMINATION AND MODIFICATION OF CONTRACT..................................................... 98
A. Mutual Consent....................................................................... 98
B. Unilateral Termination............................................................... 98
C. Obligations of Contracting Parties................................................... 99
D. Modification......................................................................... 100
ARTICLE XI............................................................................................. 101
XI. INTERPRETATION OF CONTRACT LANGUAGE.......................................................... 101
A. Interpretations...................................................................... 101
ARTICLE XII............................................................................................ 101
XIII. CONFIDENTIALITY OF RECORDS................................................................... 101
ARTICLE XIII........................................................................................... 102
XIII. DOCUMENTS CONSTITUTING CONTRACT.............................................................. 102
A. Current Documents.................................................................... 102
B. Future Documents..................................................................... 103
ARTICLE XIV............................................................................................ 103
XIV. MISCELLANEOUS................................................................................ 103
A. Indemnification...................................................................... 103
B. Independent Capacity of Contractor................................................... 104
C. Omissions............................................................................ 104
D. Choice of Law........................................................................ 104
E. Waiver............................................................................... 104
F. Severability......................................................................... 104
G. Force Majeure........................................................................ 105
H. Headings............................................................................. 105
I. Assignability........................................................................ 105
J. Right to Publish..................................................................... 105
K. Year 2000 Compliance................................................................. 105
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
-------
ARTICLE XV................................................................................................... 107
XV. HMO SPECIFIC CONTRACT TERMS......................................................................... 107
A. Initial Contract Period....................................................................... 107
B. Renewals...................................................................................... 107
C. Specific Terms of the Contract................................................................ 107
ADDENDUM I................................................................................................... 109
SUBCONTRACTS AND MEMORANDA OF UNDERSTANDING............................................................. 109
ADDENDUM II.................................................................................................. 118
POLICY GUIDELINES FOR MENTAL HEALTH/SUBSTANCE ABUSE AND
COMMUNITY HUMAN SERVICE PROGRAMS........................................................................ 118
ADDENDUM III................................................................................................. 125
RISK-SHARING FOR INPATIENT HOSPITAL SERVICES............................................................ 125
ADDENDUM IV.................................................................................................. 128
CONTRACT SPECIFIED REPORTING REQUIREMENTS............................................................... 128
PART A. REPORTS AND DUE DATES......................................................................... 128
PART B. WISCONSIN MEDICAID/BADGERCARE HMO SUMMARY AND
ENCOUNTER DATA SET............................................................................ 133
PART C. PROVIDER LIST ON TAPE......................................................................... 135
PART D. REPORTS FOR AIDS AND VENTILATOR DEPENDENT..................................................... 137
ADDENDUM V................................................................................................... 139
STANDARD ENROLLEE HANDBOOK LANGUAGE..................................................................... 139
ADDENDUM VI.................................................................................................. 150
ADDENDUM VII................................................................................................. 151
ACTUARIAL BASIS COB REPORT.............................................................................. 152
ADDENDUM VIII................................................................................................ 153
COMPLIANCE AGREEMENT AFFIRMATIVE ACTION/CIVIL RIGHTS.................................................... 153
ADDENDUM IX.................................................................................................. 156
MODEL MEMORANDUM OF UNDERSTANDING HEALTH
MAINTENANCE ORGANIZATION AND PRENATAL CARE
COORDINATION AGENCY..................................................................................... 156
ADDENDUM X................................................................................................... 157
MEMORANDUM OF UNDERSTANDING BETWEEN MILWAUKEE
COUNTY HMOS AND BUREAU OF MILWAUKEE CHILD WELFARE....................................................... 157
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
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ADDENDUM XI............................................................................................. 160
HEALTHCHECK WORKSHEET.............................................................................. 160
ADDENDUM XII............................................................................................ 161
COMMON CARRIER TRANSPORTATION MEMORANDUM OF
UNDERSTANDING MILWAUKEE COUNTY MEDICAID/BADGERCARE
HMOS AND MILWAUKEE COUNTY DEPARTMENT OF HUMAN
SERVICES........................................................................................... 161
ADDENDUM XIII........................................................................................... 163
MODEL MEMORANDUM OF UNDERSTANDING BETWEEN.......................................................... 163
HEALTH MAINTENANCE ORGANIZATION AND SCHOOL DISTRICT OR.
CESA MEDICAID-CERTIFIED FOR THE SCHOOL BASED SERVICES
BENEFIT............................................................................................ 163
ADDENDUM XIV............................................................................................ 164
GUIDELINES FOR THE COORDINATION OF SERVICES BETWEEN
HMOS, TARGETED CASE MANAGEMENT (TCMs) AGENCIES, AND
CHILD WELFARE AGENCIES............................................................................. 164
ADDENDUM XV............................................................................................. 167
PERFORMANCE IMPROVEMENT PROJECT OUTLINE............................................................ 167
ADDENDUM XVI............................................................................................ 169
TARGETED PERFORMANCE IMPROVEMENT MEASURES DATA SET................................................. 169
ADDENDUM XVII........................................................................................... 183
MEDICAID/BADGERCARE HMO NEWBORN REPORT............................................................. 183
ADDENDUM XVIII.......................................................................................... 185
RECOMMENDED CHILDHOOD IMMUNIZATION SCHEDULE CDC-ACIP
RECOMMENDATIONS, JANUARY-DECEMBER 2000............................................................. 185
ADDENDUM XIX............................................................................................ 185
REPORTING REQUIREMENTS FOR NEONATAL INTENSIVE CARE
UNIT RISK-SHARING.................................................................................. 186
ADDENDUM XX............................................................................................. 188
SPECIFIC TERMS OF THE MEDICAID/BADGERCARE HMO
CONTRACT........................................................................................... 188
ADDENDUM XXI............................................................................................ 195
FORMAL GRIEVANCE EXPERIENCE SUMMARY REPORT......................................................... 195
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HMO Contract for January 1, 2000 - December 31, 2001
Page No.
-------
ADDENDUM XXII............................................................................................ 196
GUIDELINES FOR THE COORDINATION OF SERVICES BETWEEN
MEDICAID HMOS AND COUNTY BIRTH TO THREE (B-3) AGENCIES.............................................. 196
ADDENDUM XXIII........................................................................................... 202
WISCONSIN MEDICAID HMO REPORT ON AVERAGE BIRTH
COSTS BY COUNTY..................................................................................... 202
ADDENDUM XXIV............................................................................................ 205
LOCAL HEALTH DEPARTMENTS AND COMMUNITY-BASED
HEALTH ORGANIZATIONS A RESOURCE FOR HMOs............................................................ 205
ADDENDUM XXV............................................................................................. 208
GENERAL INFORMATION ABOUT THE WIC PROGRAM, SAMPLE
HMO-TO-WIC REFERRAL FORM, AND STATEWIDE LIST OF WIC
AGENCIES............................................................................................ 208
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HMO Contract for January 1, 2000- December 31, 2001
CONTRACT FOR SERVICES
Between
Department of Health and Family Services
and
HMO
The Wisconsin Department of Health and Family Services and HMO, an insurer with a certificate of authority to do business in Wisconsin, and an organization which makes available to enrolled participants, in consideration of periodic fixed payments, comprehensive health care services provided by providers selected by the organization and who are employees or partners of the organization or who have entered into a referral or contractual arrangement with the organization, for the purpose of providing and paying for Medicaid/Badger Care contract services to recipients enrolled in the HMO under the State of Wisconsin Medicaid Plan approved by the Secretary of the United States Department of Health and Human Services pursuant to the provisions of the Social Security Act and for the further specific purpose of promoting coordination and continuity of preventive health services and other medical care including prenatal care, emergency care, and HealthCheck services, do herewith agree:
ARTICLE I
I. DEFINITIONS
The term "CESA" means Cooperative Educational Service Agencies, which are cooperatives that include multiple school districts that work together for purchasing and other coordinated functions. There are 12 CESAs in Wisconsin.
The term "children with special health care needs" means children who have or are at increased risk for chronic physical, developmental, behavioral, or emotional conditions and who also require health and related services of a type or amount beyond that required by children generally and who are enrolled in a Children with Special Health Care Needs program operated by a Local Health Department or a local Title V funded Maternal and Child Health Program.
The term "Community Based Health Organizations" means non-profit agencies providing community based health services. These organizations provide important health care services such as HealthCheck screenings, nutritional support, and family planning, targeting such services to high risk populations.
HMO Contract for January 1, 2000 - December 31, 2001
The term "continuing care provider" means (as stated in 42 CFR 441.60(a)) a provider who has an agreement with the Medicaid agency to provide:
A. any reports that the Department may reasonably require, and
B. at least the following services to eligible HealthCheck recipients
formally enrolled with the provider as enumerated in 42 CFR
441.60(a) (1)-(5):
1. screening, diagnosis, treatment, and referrals for follow-up services,
2. maintenance of the recipient's consolidated health history, including information received from other providers,
3. physician's services as needed by the recipient for acute, episodic or chronic illnesses or conditions,
4. provide or refer for dental services, and
5. transportation and scheduling assistance.
The term "contract" means the agreements executed between HMOs and the Department to accomplish the duties and functions, in accordance with the rules and arrangements specified in this document.
The term "contract services" means those services which the HMO is required to provide under this Contract.
The term "contractor" means the HMOs awarded the contracts resulting from the HMO Certification process to provide capitated Managed care in accordance with the Contract.
The term "cultural competency" means a set of congruent behaviors, attitudes, practices and policies that are formed within an agency, and among professionals that enable the system, agency, and professionals to work respectfully, effectively and responsibly in diverse situations. Essential elements of cultural competence include understanding diversity issues at work, understanding the dynamic of difference, institutionalizing cultural knowledge, and adapting to and encouraging organizational diversity.
The term "Department" means the Wisconsin Department of Health and Family Services.
HMO Contract for January 1, 2000 - December 31, 2001
The term "emergency medical condition" means---
A. A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:
1. placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
2. serious impairment of bodily functions, or
3. serious dysfunction of any bodily organ or part; or
B. With respect to a pregnant woman who is in active labor---
1. that there is inadequate time to effect a safe transfer to another hospital before delivery; or
2. that transfer may pose a threat to the health or safety of the woman or the unborn child.
C. A psychiatric emergency involving a significant risk of serious harm to oneself or others.
D. A substance abuse emergency exists if there is significant risk of serious harm to an enrollee or others, or there is likelihood of return to substance abuse without immediate treatment.
E. Emergency dental care is defined as an immediate service needed to relieve the patient from pain, an acute infection, swelling, trismus, fever, or trauma. In all emergency situations, the HMO must document in the recipient's dental records the nature of the emergency.
The term "encounter" shall include the following:
1. A service or item provided to a patient through the health care system. Examples include but are not limited to:
a. Office visits
b. Surgical procedures
c. Radiology, including professional and/or technical components
d. Prescribed drugs
e. Durable medical equipment
f. Emergency transportation to a hospital
HMO Contract for January 1, 2000 - December 31, 2001
g. Institutional stays (inpatient hospital, rehabilitation stays)
h. HealthCheck screens
2. A service or item not directly provided by the HMO, but for which the HMO is financially responsible. An example would include an emergency service provided by an out-of-network provider or facility.
3. A service or item not directly provided by the HMO, and one for which no claim is submitted but for which the HMO may supplement its encounter data set. Such services might include HealthCheck screens for which no claims have been received and if no claim is received, the HMO's medical chart. Examples of services or items the HMO may include are:
. HealthCheck services
. Lead Screening and Testing
. Immunizations
4. The terms "services" or "items" as used above include those services and items not covered by the Wisconsin Medicaid Program, but which the HMO chooses to provide as part of its Medicaid managed care product. Examples include educational services, certain over-the-counter drugs, and delivered meals.
The terms "enrollee" and "participant" mean a Medicaid/BadgerCare recipient who has been certified by the State as eligible to enroll under this Contract, and whose name appears on the HMO Enrollment Reports which the Department will transmit to the HMO every month in accordance with an established notification schedule. Children who are reported to the certifying agency within 100 days of birth shall be enrolled in the HMO their mother is enrolled in from their date of birth if the mother was an enrollee on the date of birth. Children who are reported to the certifying agency after the 100th day but before their first birthday may be eligible for Medicaid/BadgerCare on a fee-for-service basis.
The term "enrollment area" means the geographic area within which recipients must reside in order to enroll, on a mandatory basis, in the HMO under this Contract.
The term "experimental surgery and procedures" means experimental services that meet the definition of HFS 107.035(1) and (2) Wis. Adm. Code. as determined by the Department.
The term "formally enrolled with a continuing care provider" (as cited in 42 CFR 441.60(d)) means that a recipient (or recipient's guardian) agrees to use one continuing care provider as the regular source of a described set of services for a stated period of time.
HMO Contract for January 1, 2000 - December 31, 2001
The term "HMO" means the health maintenance organization or its parent corporation with a certificate of authority to do business in Wisconsin, that is obligated under this Contract.
The term "HMO Encounter Technical Workgroup" means a workgroup composed of HMO technical staff, contract administrators, claims processing, eligibility, and/or other HMO staff, as necessary; Department staff from the Division of Health Care Financing; and staff from the Department's fiscal agent contractor.
The term "encounter record" means an electronically formatted list of encounter data elements per encounter as specified in the Wisconsin Medicaid 2000-2001 HMO Encounter Data User Manual. An encounter record may be prepared from a single detail line from a claim such as the HCFA 1500 or UB-92.
The term "Local Health Department" (LHD) means an agency of local
government established according to Chapter 251, Wis. Stats. Local health
departments have statutory obligation to perform certain core functions:
which include assessment, assurance, and policy development for the purpose
of protecting and promoting the health of their communities.
The term "Medicaid" means the Wisconsin Medical Assistance Program operated by the Wisconsin Department of Health and Family Services under Title XIX of the Federal Social Security Act, Ch. 49, Wis. Stats., and related State and Federal rules and regulations. This will be the term used consistently in this Contract. However, other expressions or words equivalent to Medicaid are "MA," "Medical Assistance," and "WMAP."
The term "BadgerCare" means part of the Wisconsin Medical Assistance Program operated by the Wisconsin Department of Health and Family Services under Title XIX and Title XXI of the Federal Social Security Act, s. 49.655, Wis. Stats., and related State and Federal rules and regulations. This term will be used throughout this contract.
The term "medical status code" means the two digit (alphanumeric) code that the Department uses in its computer system to define the type of Medicaid eligibility a recipient has: the code identifies the basis of eligibility, whether cash assistance is being provided, and other aspects of Medicaid. The medical status code is listed on the HMO enrollment reports. Please refer to Article IV. A. for a list of HMO eligible medical status codes.
The term "medically necessary" means a medical service that meets the definition of HFS 101 .03(96m) Wis. Adm. Code.
The term "newborn" means an enrollee who is less than 100 days old.
HMO Contract for January 1, 2000 - December 31, 2001
The term "Post Stabilization Services" means medically necessary non- emergency services furnished to an enrollee after he or she is stabilized following an emergency medical condition.
The term "provider" means a person who has been certified by the Department to provide health care services to recipients and to be reimbursed by Medicaid for those services.
The term "Public Institution" means an institution that is the responsibility of a governmental unit or over which a governmental unit exercises administrative control as defined by federal regulations.
The term "recipient" means any individual entitled to benefits under Title XIX and XXI of the Social Security Act, and under the Medicaid State Plan as defined in Chapter 49, Wis. Stats.
The term "risk" means the possibility of monetary loss or gain by the HMO resulting from service costs exceeding or being less than payments made to it by the Department.
The term "service area" means an area of the State in which the HMO has agreed to provide Medicaid services to Medicaid enrollees. The Department will monitor enrollment levels of HMOs by the service areas of the HMO, and HMO will indicate whether they will provide dental or chiropractic services by service area. A service area may be as small as a zip code, may be a county, a number of counties, or the entire State.
The term "State" means the State of Wisconsin.
The term "subcontract" means any written agreement between the HMO and another party to fulfill the requirements of this Contract. However, such term does not include insurance purchased by the HMO to limit its loss with respect to an individual enrollee, provided the HMO assumes some portion of the underwriting risk for providing health care services to that enrollee.
The term "Wisconsin Tribal Health Directors Association (WTHDA)" means the coalition of all Wisconsin American Indian Tribal Health Departments.
Terms that are not defined above shall have their primary meaning identified in the Wisconsin Administrative Code, Chs. HFS 101-108.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE II
II. DELEGATIONS OF AUTHORITY
The HMO shall oversee and remain accountable for any functions and responsibilities that it delegates to any subcontractor. For all subcontracting or delegation of function or authority:
A. There shall be a written agreement that specifies the delegated activities and reporting responsibilities of the subcontractor and provides for revocation of the delegation or imposition of other sanctions if the subcontractor's performance is inadequate.
B. Before any delegation, the HMO shall evaluate the prospective subcontractor's ability to perform the activities to be delegated.
C. The HMO shall monitor the subcontractor's performance on an ongoing basis and subject the subcontractor to formal review at least once a year.
D. If the HMO identifies deficiencies or areas for improvement, the HMO and the subcontractor shall take corrective action.
E. If the HMO delegates selection of providers to another entity, the HMO retains the right to approve, suspend, or terminate any provider selected by that entity.
ARTICLE III
III. FUNCTIONS AND DUTIES OF THE HMO
In consideration of the functions and duties of the Department contained in this Contract the HMO shall:
A. Statutory Requirement
Retain at all times during the period of this Contract a valid Certificate of Authority issued by the State of Wisconsin Office of the Commissioner of Insurance.
HMO Contract for January 1, 2000 - December 31, 2001
B. Provision of Contract Services
1. Promptly provide or arrange for the provision of all services required under s. 49.46(2), Wis. Stats., and HFS 107 Wis. Adm. Code; as further clarified in all Wisconsin Medicaid Program Provider Handbooks and Bulletins, and HMO Contract Interpretation Bulletins (CIBs) and as otherwise specified in this Contract except:
a. County Transportation by common carrier or private motor vehicle (except as required in Article III. B (10). HealthCheck). HMOs are required to arrange for transportation for HealthCheck visits. When authorized by the Department, the HMO may provide non-emergency transportation by common carrier or private motor vehicle for HealthCheck visits and be reimbursed by the County.
HMOs may negotiate arrangements with local county Departments of Health and Social Services for common carrier or private vehicle transportation for HMO services in general and not just for HealthCheck visits.
The Department will facilitate the development of such arrangements between the HMO and the county. HMOs interested in developing a transportation arrangement with one or more counties and interested in Department assistance should contact the following office either by mail or phone:
Bureau of Managed Health Care Programs P.O. Box 309 Madison, WI 53701- 0309 Phone Number: (608) 266-7894 or 267-2170 Fax Number: (608) 261-7792
b. Milwaukee County HMOs will provide common carrier transportation to enrollees. Transportation services will be limited to:
. Transporting Medicaid/BadgerCare HMO members only.
. Transportation of Medicaid/BadgerCare HMO members to and from Medicaid covered services.
HMO Contract for January 1, 2000 - December 31, 2001
The HMO is responsible for arranging for the common carrier transportation and providing monthly costs incurred to Milwaukee County Department of Human Services (DHS), of common carrier transportation arranged. HMO agrees to submit costs to the DHS within 15 days following the end of each month to:
Milwaukee County DHS Financial Assistant, Division Administrator 1220 W. Vliet Street Milwaukee, WI 53206
The DHS is responsible for reimbursing the HMO for mileage and an administration fee.
The State Department of Health and Family
Services reserves the right to adjust these
rates.
The HMO shall maintain adequate records for
each enrollee which include all pertinent
and sufficient information relating to
common carrier transportation, and make this
information readily available to the
Department of Health and Family Services
(DHFS). HMO agrees to report suspected
abuse by enrollees or providers to the DHFS.
c. Dental, if Article XV and Addendum XX indicates dental is not covered.
d. Prenatal Care Coordination.
e. Targeted Case Management.
f. School-Based Services.
g. Milwaukee Childcare Coordination.
h. Tuberculosis-related Services.
2. Cover chiropractic services, or in the alternative, enter into a subcontract for chiropractic services with the State as provided in Article XV. State law mandates coverage.
3. Remain liable for provision of care for that period for which capitation payment has been made in cases where medical status code changes occur subsequent to capitation payment.
HMO Contract for January 1, 2000 - December 31, 2001
4. Be liable, where emergencies and HMO referrals to out-of-area or non-affiliated providers occur, for payment only to the extent that Medicaid pays, including Medicare deductibles, or would pay, its fee-for-service providers for services to the AFDC population. For inpatient hospital services, the Department will provide each HMO per diem rates based on the Medicaid fee-for-service equivalent. This condition does not apply to: (1) cases where prior payment arrangements were established; and (2) specific subcontract agreements.
5. Changes to Medicaid covered services mandated by Federal or State law subsequent to the signing of this Contract will not affect the contract services for the term of this Contract, unless (1) agreed to by mutual consent, or (2) unless the change is necessary to continue to receive federal funds or due to action of a court of law.
The Department may incorporate any change in covered services mandated by Federal or State law into the Contract effective the date the law goes into effect, if it adjusts the capitation rate accordingly. The Department will give the HMO 30 days notice of any such change that reflects service increases, and the HMO may elect to accept or reject the service increases for the remainder of that contract year; the Department will give the HMO 60 days notice of any such change that reflects service decreases, with a right of the HMO to dispute the amount of the decrease within that 60 days. The HMO has the right to accept or reject service decreases for the remainder of the Contract year. The date of implementation of the change in coverage will coincide with the effective date of the increased or decreased funding. This section does not limit the Department's ability to modify the Medicaid/HMO Contract for changes in the State Budget.
6. Be responsible for payment of all contract services provided to all Medicaid/BadgerCare recipients listed as ADDs or CONTINUEs on either the Initial or Final Enrollment Reports (see Article IV. B and D) generated for the month of coverage. The HMO is also responsible for payment of services to all newborns meeting the criteria described in Article V. G. "Capitation Payments for Newborns." Additionally, the HMO agrees to provide, or authorize provision of, services to all Medicaid enrollees with valid Forward cards indicating HMO enrollment without regard to disputes about enrollment status and without regard to any other identification requirements. Any discrepancies between the cards and the reports will be reported to the Department for resolution. The HMO shall continue to provide and authorize provision of all contract services until the discrepancy is resolved. This includes recipients who were PENDING on the Initial Report and held a valid Forward card indicating HMO enrollment, but did not appear as an ADD on the Final Report.
HMO Contract for January 1, 2000 - December 31, 2001
7. Transplants: As a general principle, Wisconsin Medicaid does not pay for items that it determines to be experimental in nature.
a. Procedures that are covered by Medicaid that are no longer considered experimental are cornea transplants and kidney transplants. HMOs shall cover these services.
b. There are other procedures that are approved only at particular institutions, including bone marrow transplants, liver, heart, heart-lung, lung, pancreas-kidney, and pancreas transplants. HMOs need not cover the transplantation because there are no funds in the fee-for-service experience data (and thus in the HMO capitation rates) for these services. This relieves the HMO from paying for expensive follow-up care, as when there are permanent, expensive requirements for drugs or equipment.
1) The person to get the transplant will be permanently exempted from HMO enrollment the date of the transplant surgery.
2) In the case of autologous bone marrow transplants, the person will be permanently exempted from HMO enrollment the date the bone marrow was extracted.
8. Dental Care: HMOs that agree to accept the dental capitation rate for the purpose of covering all Medicaid dental services must:
a. Cover all dental services as required under HFS 107.07, provider handbooks, bulletins, and periodic updates.
b. Provide diagnostic, preventive, and medically necessary follow-up care to treat the dental disease, illness, injury or disability of enrollees while they are enrolled in an HMO, except as required in sub. (c).
HMO Contract for January 1, 2000 - December 31, 2001
c. Complete orthodontic or prosthodontic treatment begun while an enrollee is enrolled in an HMO if the enrollee becomes ineligible or disenrolls from the HMO, no matter how long the treatment takes. Medicaid/BadgerCare covers such continuing services for fee-for-service recipients and the costs of continuing treatment are included in the fee-for-service payment data on which the HMO capitation rates are based. An HMO will not be required to complete orthodontic or prosthodontic treatment on an enrollee who has begun treatment as a fee-for-service recipient and who subsequently has been enrolled in an HMO.
[Refer to the chart following this page of the Contract for the specific details of completion of orthodontic or prosthodontic treatment in these situations.]
HMO Contract for January 1, 2000 - December 31, 2001
RESPONSIBILITY FOR PAYMENT OF ORTHODONTIC & PROSTHODONTIC TREATMENT WHEN THERE IS AN ENROLLMENT STATUS CHANGE DURING THE COURSE OF TREATMENT
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Who pays for completion of orthodontic and
prosthodontic treatment* where there is an enrollment
status change
---------------------------------------------------------
First HMO Second HMO Fee-for-Service
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Person converts from one status to another:
1. Fee-for-service to an HMO covering dental. N/A X
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2a. HMO covering dental to an HMO not covering dental,
and person's residence remains within 50 miles of the X
person's residence when in the first HMO.
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2b. HMO covering dental to an HMO not covering dental,
and person's residence changes to greater than X
50 miles of the person's residence when in the first HMO.
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3a. HMO covering dental to the same or another HMO
covering dental and the person's residence remains X
within 50 miles of the residence when in the first HMO.
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3b. HMO covering dental to the same or another HMO covering X
dental and the person's residence changes to greater
than 50 miles of the residence when in the first HMO.
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4. HMO with dental coverage to fee-for-service because:
a. Person moves out of the HMO service area but the
person's residence remains within 50 miles of the
residence when in the HMO. X
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b. Person moves out of the HMO service area, but the
person's residence changes to greater than 50 miles N/A X
of the residence when in the HMO.
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c. Person exempted from HMO enrollment. N/A X
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d. Person's medical status changes loan ineligible HMO X N/A
code and the person's residence remains within 50
miles of the residence when in that
HMO.
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e. Person's medical status changes to an ineligible HMO N/A X
code and the person's residence changes to greater
than 50 miles of the residence when in that
HMO.
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5a. HMO with dental to ineligible for Medicaid/BC and the X N/A
person's residence remains within 50 miles of the
residence when in that HMO.
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Sb. HMO with dental to ineligible for Medicaid/BC and the N/A X
person's residence changes to greater than 50 miles
of the residence when in that HMO.
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6. HMO without dental to ineligible for Medicaid/BC. N/A X
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HMO Contract for January 1, 2000 - December 31, 2001
* Orthodontic and prosthodontic treatment are only covered by Medicaid/BadgerCare for children under 21 as a result of a HealthCheck referral (HFS 107,07(3)).
9. The following provision refers to payments made by the HMO. HMO covered primary care and emergency care services provided to a recipient living in a Health Professional Shortage Area (HPSA) or by a provider practicing in a HPSA must be paid at an enhanced rate of 20 percent above the rate the HMO would otherwise pay for those services. Primary care providers are defined as nurse practitioners, nurse midwives, physician assistants, and physicians who are Medicaid-certified with specialties of general practice, OB-GYN, family practice, internal medicine, or pediatrics. Specified HMO-covered obstetric or gynecological services (see the Wisconsin Medicaid and BadgerCare Physicians Services Handbook) provided to a recipient living in a HPSA or by a provider practicing in a HPSA must be paid at an enhanced rate of 25 percent above the rate the HMO would otherwise pay providers in HPSAs for those services.
However, this does not require the HMO to pay more than the enhanced Medicaid fee-for-service rate or the actual amount billed for these services. The HMO shall ensure that the moneys for HPSA payments are paid to the physicians and are not used to supplant funds that previously were used for payment to the physicians. The Department will supply a list of the services affected by this provision, their maximum fee-for-service rates, and HPSAs. The HMO must develop written policies and procedures to ensure compliance with this provision. These policies must be available for review by the Department, upon request.
10. HEALTHCHECK----Provide services as a continuing care provider as defined in Article I, and according to policies and procedures in Part D of the Wisconsin Medicaid Provider Handbook related to covered services.
Provide HealthCheck screens at a rate equal to or greater than 80 percent of the expected number of screens. The rate of HealthCheck screens will be determined by the calculation in the HealthCheck Worksheet in Addendum XI. The Department will complete the worksheet from data provided by the HMO- from the HMO Utilization Report for calendar year 2000 and, for calendar year 2001, from HealthCheck screens the Department retrieves and identifies from the 2001 encounter data set. The HMO may complete the worksheet on its own, periodically, as a means to monitor its HealthCheck screening performance.
HMO Contract for January 1, 2000 - December 31, 2001
For the 2000 HealthCheck worksheet data calculation, the number of HealthCheck screens reported on the 2000 HMO utilization Report must be substantiated by the number reported on the 2000 encounter data set. If for the year 2000, the encounter data set does not substantiate the HealthCheck screens reported on the HMO Utilization Report within 5 percent, the Department will require HMOs to submit a 2001 HMO Utilization Report.
When the Department completes the HealthCheck worksheet using encounter data for calendar year 2001, the Department will identify and retrieve HealthCheck screening data from the encounter data set as of July 1, 2002. For those HMOs required to submit a 2001 HMO Utilization Report, the Department will compare the HealthCheck data submitted on the 2001 HMO Utilization Report with HealthCheck data reported on the encounter data set, and utilize the smaller number when completing the worksheet.
If the HMO provides fewer screens in the contract year than 80 percent, the Department will recoup the funds provided to the HMO for the provision of the remaining screens. This formula will be used:
(0.80 x A - B) x (C - D), where
A = Expected number of screens (Line 6 of Addendum XI: HealthCheck Worksheet)
B = Number of screens paid in the contract year as reported in the Encounter Data Set or on the final Utilization Report for the year
C = Fee-for-service maximum allowable fee*
D = HMO discount
* The fee-for-service maximum allowable fee is the average maximum fee for the year. For example, if the maximum allowable fee for HealthCheck is $50 from January through June, and $52 from July through December, then the average maximum allowable fee for the year is $51.
For recipients over 1 year of age, if a recipient requests a HealthCheck screen, HMO shall provide such screen within 60 days, if a screen is due according to the periodicity schedule. If the screen is not due within 60 days, then the HMO shall schedule the appointment in accordance with the periodicity schedule. For recipients up to 1 year of age, if a recipient requests a HealthCheck screen, HMO shall provide such screen
HMO Contract for January 1, 2000 - December 31, 2001
within 30 days, if a screen is due according to the periodicity schedule. If the screen is not due within 30 days, then the HMO shall schedule the appointment in accordance with the periodicity schedule.
11. The HMO must adequately fund physician services provided to pregnant women and children under 19, so that they are paid at rates sufficient to ensure that provider participation and services are as available to the Medicaid/BadgerCare population as to the general population in the HMO service area(s).
12. The actual provision of any service is subject to the
professional judgment of the HMO providers as to the
medical necessity of the service, except that the HMO must
provide assessment and evaluation services ordered by a
court. Decisions to provide or not to provide or authorize
medical services shall be based solely on medical
necessity and appropriateness as defined in HFS
101.03(96m). Disputes between HMOs and recipients about
medical necessity can be appealed through an HMO grievance
system, and ultimately to the Department for a binding
determination;the Department's determinations will be
based on whether Medicaid would have covered that service
on a fee-for-service basis (except for certain
experimental procedures discussed in Article III, B. 7).
Alternatively, disputes between HMOs and enrollees about
medical necessity can be appealed directly to the
Department.
HMOs are not restricted to providing Wisconsin Medicaid covered services. Sometimes, HMOs find that other treatment methods may be more appropriate than Medicaid covered services, or result in better outcomes.
None of the provisions of this contract that are applicable to Wisconsin Medicaid covered services apply to other services that an HMO may choose to provide, except that abortions, hysterectomies and sterilizations must comply with 42 CFR 441 Subpart E and 42 CFR 441 Subpart F.
If a service provided is an alternative or replacement to a Wisconsin Medicaid covered service, then the HMO or HMO provider is not allowed to bill the enrollee for the service.
13. HMO and its providers and subcontractors shall not bill a Medicaid BadgerCare enrollee for medically necessary services covered under this Contract and provided during the enrollee's period of HMO enrollment. HMO and its providers and subcontractors shall not bill a Medicaid/BadgerCare enrollee for copayments and/or premiums for medically necessary services covered under this Contract and provided
HMO Contract for January 1, 2000 - December 31, 2001
during the enrollee's period of HMO enrollment. This provision shall continue to be in effect even if the HMO becomes insolvent.
However, if an enrollee agrees in advance in writing to pay for a nonMedicaid/BadgerCare covered service, then the HMO, HMO provider, or HMO subcontractor may bill the enrollee. The standard release form signed by the enrollee at the time of services does not relieve the HMO and its providers and subcontractors from the prohibition against billing an enrollee in the absence of a knowing assumption of liability for a nonMedicaid/BadgerCare covered service. The form or other type of acknowledgment relevant to an enrollee's liability must specifically state the admissions, services, or procedures that are not covered by Medicaid/BadgerCare.
14. The HMO must operate a program to promote full immunization of enrollees. The HMO shall be responsible for administration of immunizations including payment of an administration fee for vaccines provided by the Department. For vaccines that are newly approved during the term of the Contract and not yet part of the Vaccine for Children program, the HMO will report usage for reimbursement from the Department. The Department will identify vaccines which meet these criteria to the HMO.
The HMO, as a condition of their certification as a Medicaid BadgerCare provider, shall share enrollee immunization status with Local Health Departments and other non-profit HealthCheck providers upon request of those providers without the necessity of enrollee authorization. The Department is also requiring that Local Health Departments and other non-profit HealthCheck providers share that equivalent information with HMOs upon request. This provision is made to ensure proper coordination of immunization services and to prevent duplication of services.
15. Services required under s. 49.46(2). Wis. Stats., and HFS
107 Wis. Adm. Code, include (without limitation due to
enumeration) private duty nursing services, nurse-midwife
services, and independent nurse practitioner services:
physician services, including primary care services, are
not only services performed by physicians, but services
under the direct, on-premises supervision of a physician
performed by other providers such as physician assistants
and nurses of various levels of certification.
HMO Contract for January 1, 2000 - December 31, 2001
16. Provision of Family Planning Services and Confidentiality of Family Planning Information: Give enrollees the opportunity to have their own primary physician for the provision of family planning services whether that provider is in-plan or out-of-plan. If the enrollee chooses an out-of-plan provider, those family planning services will be paid fee-for-service. The physician does not replace the primary care provider chosen by or assigned to the enrollee. All such information and medical records relating to family planning shall be kept confidential including those of a minor.
C. Time Limit for Decision on Certain Referrals
Pay for covered services provided by a non-HMO provider to a disabled participant less than 3 years of age, or to any participant pursuant to a court order (for treatment), effective with the receipt of a written request for referral from the non-HMO provider, and extending until the HMO issues a written denial of referral. This requirement does not apply if the HMO issues a written denial of referral within 7 days of receiving the request for referral.
D. Emergency Care
Promptly provide or pay for needed contract services for emergency medical conditions and post-stabilization services as defined in Article I. Nothing in this requirement mandates HMOs to reimburse for post-stabilization services that were not authorized by the HMO.
1. Payments for qualifying emergencies (including services at hospitals or urgent care centers within the HMO service area(s)) are to be based on the medical signs and symptoms of the condition upon initial presentation. The retrospective findings of a medical work-up may legitimately be the basis for determining how much additional care may be authorized, but not for payment for dealing with the initial emergency.
2. All HMOs, regardless of whether dental care is included in their contract, are responsible for paying all ancillary charges relating to dental emergencies with the only exception being the dentist's or oral surgeon's direct and office charges. These charges would include, but are not limited to, physician, anesthesia, pharmacy and emergency room in a hospital or freestanding ambulatory care setting.
HMO Contract for January 1, 2000 - December 31, 2001
Ambulance Services
1. HMOs may require submission of a trip ticket with ambulance claims before paying the claim. Claims submitted without a trip ticket need only be paid at the service charge rate.
2. HMOs will pay a service fee for ambulance response to a call in order to determine whether an emergency exists, regardless of the HMO's determination to pay for the call.
3. HMOs will pay for emergency ambulance services based on established Medicaid criteria for claims payment of these services.
4. HMO will either pay or deny payment of a complete claim for ambulance services within 45 days of receipt of the claim.
5. HMOs will respond to appeals from ambulance companies within the time frame described in Article III. H. Failure will constitute HMO agreement to pay the appealed claim in full.
E. 24-Hour Coverage
Provide all emergency contract services and post-stabilization services
as defined in this Contract 24 hours each day, 7 days a week, either by
the HMO's own facilities or through arrangements approved by the
Department with other providers. The HMO shall have one (1) toll-free
phone number that enrollees or individuals acting on behalf of an
enrollee can call at any time to obtain authorization for emergency
transport, emergency, or urgent care. (Authorization here refers to the
requirements defined in Addendum V, in the Standard Enrollee Handbook
Language, regarding the conditions under which an enrollee must receive
permission from the HMO prior to receiving services from a non-HMO
affiliated provider in order for the HMO to reimburse the provider:
e.g., for urgent care, for ambulance services for non-emergency care,
for extended emergency services, and other situations.) This number
must have access to individuals with authority to authorize treatment
as appropriate. A response to such call must be provided within 30
minutes (except that response to ambulance calls shall be within 15
minutes) or the HMO will be liable for the cost of subsequent care
related to that illness or injury incident whether treatment is in- or
out-of-plan and whether the condition is emergency, urgent, or routine.
The HMO must be able to communicate with a caller in the language spoken by the caller or the HMO will be liable for the cost of subsequent care related to that illness or injury incident whether treatment is in- or out-of-plan and whether the condition is emergency, urgent, or routine.
HMO Contract for January 1, 2000 - December 31, 2001
These calls must be logged with time, date and any pertinent information related to persons involved, resolution and follow-up instructions.
The HMO shall notify the Department of any changes of this one toll- free phone number for emergency calls within 7 working days of change.
F. Thirty Day Payment Requirement
Pay at least 90 percent of adjudicated (clean) claims from subcontractors for covered medically necessary services within 30 days of receipt of bill, and 99 percent within 90 days and 100% of the claims within 180 days of receipt, except to the extent subcontractors have agreed to later payment. HMO agrees not to delay payment to subcontractors pending subcontractor collection of third party liability unless the HMO has an agreement with their subcontractor to collect third party liability.
G. HMO Claim Retrieval System
Maintain a claim retrieval system that can on request identify date of receipt, action taken on all provider claims (i.e., paid, denied, other), and when action was taken. HMO shall date stamp all provider claims upon receipt. In addition, maintain a claim retrieval system that can identify, within the individual claim, services provided and diagnoses of enrollees with nationally accepted coding systems: HCPCS including level I CPT codes and level II and level III HCPCS codes with modifiers, ICD-9-CM diagnosis and procedure codes, and other national code sets such as place of service, type of service, and EOB codes. Finally, the claim retrieval system must be capable of identifying the provider of services by the appropriate Wisconsin Medicaid provider ID number assigned to all in-plan providers. Refer to Article III, section AA for use of providers certified by the Medicaid program.
H. Appeals to the Department for HMO Payment/Denial of Providers
Provide the name of the person and/or function at the HMO to whom provider appeals should be submitted.
Provide written notification to providers of HMO payment/denial determinations which includes:
1. A specific explanation of the payment amount or a specific reason for the payment denial.
2. A statement regarding the provider's rights and responsibilities in appealing to the HMO about the HMO's initial determination by submitting a separate letter or form:
a. clearly marked "appeal"
HMO Contract for January 1, 2000 - December 31, 2001
b. which contains the provider's name, date of service, date of billing, date of rejection, and reason(s) claim merits reconsideration
c. for each appeal
d. to the person and/or function at the HMO that handles Provider Appeals within 60 days of the initial denial or partial payment.
3. A statement advising the provider of the provider's right to appeal to the Department if the HMO fails to respond to the appeal within 45 days or if the provider is not satisfied with the HMO response to the request for reconsideration, and that all appeals to the Department must be submitted in writing within 60 days of the HMO's final decision.
4. Accept written appeals from providers who disagree with the HMO's payment/denial determination, if the provider submits the dispute in writing and within 60 days of the initial payment/denial notice. The HMO has 45 days from the date of receipt of the request for reconsideration to respond in writing to the provider. If the HMO fails to respond within that time frame, or if the provider is not satisfied with the HMO's response, the provider may seek a final determination from the Department.
5. Accept the Department's determinations regarding appeals of disputed claims. In cases where there is a dispute about an HMO's payment/denial determination and the provider has requested a reconsideration by the HMO according to the terms described above, the Department will hear appeals and make final determinations. These determinations may include the override of the HMO's time limit for submission of claims in exceptional cases. The Department will not exercise its authority in this regard unreasonably. The Department will accept written comments from all parties to the dispute prior to making the decision. Appeals must be submitted to the Department within 60 days of the date of written notification of the HMO's final decision resulting from a request for reconsideration. The Department has 45 days from the date of receipt of all written comments to respond to these appeals. HMOs will pay provider(s) within 45 days of receipt of the Department's final determination.
HMO Contract for January 1, 2000 - December 31, 2001
I. Payments for Diagnosis of Whether an Emergency Condition Exists
Pay for appropriate, medically necessary, and reasonable diagnostic tests utilized to determine if an emergency exists. Payment for emergency services continue until the patient is stabilized and can be safely discharged or transferred.
J. Memoranda of Understanding for Emergency Services
HMOs may have a contract or an MOU with hospitals or urgent care centers within the HMO's service area(s) to ensure prompt and appropriate payment for emergency services. For situations where a contract or MOU is not possible, HMOs must identify for hospitals and urgent care centers procedures that ensure prompt and appropriate payment for emergency services.
1. Such MOUs shall provide for:
a. The process for determining whether an emergency exists.
b. The requirements and procedures for contacting the HMO before the provision of urgent or routine care.
c. Agreements, if any, between the HMO and the provider regarding indemnification, hold harmless, or any other deviation from malpractice or other legal liability which would attach to the HMO or provider in the absence of such an agreement.
d. Payments for appropriate, medically necessary, and reasonable diagnostic tests to determine if an emergency exists.
e. Assurance of timely and appropriate provision of and payment for emergency services.
2. Unless a contract or MOU specifies otherwise, HMOs are liable to the extent that fee-for-service would have been liable for the emergency situation. The Department reserves the right to resolve disputes between HMOs, hospitals and urgent care centers regarding emergency situations based on fee-for-service criteria.
K. Provision of Services
Provide contract services to Medicaid/BadgerCare enrollees under this Contract in the same manner as those services are provided to other members of the HMO.
HMO Contract for January 1, 2000 - December 31, 2001
L. Open Enrollment
Conduct a continuous open enrollment period during which the HMO shall accept recipients eligible for coverage under this Contract in the order in which they are enrolled without regard to health status of the recipient or any other factor(s).
M. Pre-Existing Conditions
Assume responsibility for all covered medical conditions of each enrollee as of the effective date of coverage under the Contract. The aforementioned responsibility shall not apply in the case of persons hospitalized at the time of initial enrollment, as provided for in this article.
N. Hospitalization at the Time of Enrollment or Disenrollment
1. The HMO will not assume financial responsibility for enrollees who are hospitalized at the time of enrollment (effective date of coverage) until an appropriate hospital discharge.
2. The Department will be responsible for paying on a fee- for-service basis all Medicaid covered services for such hospitalized enrollees during hospitalization.
3. Enrollees, including newborn enrollees, who are hospitalized at the time of disenroliment from the HMO shall remain the financial responsibility of the HMO. The financial liability of the HMO shall encompass all contract services. The HMO's financial liability shall continue for the duration of the hospitalization, except where (1) loss of Medicaid/BadgerCare eligibility occurs; (2) disenrollment occurs because there is a voluntary disenrollment from the HMO as a result of one of the conditions in Addendum II, in which case HMO liability shall terminate upon disenrollment being effective; and (3) except where disenrollment is due to medical status change to a code indicating SSI, 503 case, or institutionalized eligibility. 503 cases are SSI cases that continue Medicaid eligibility in spite of social security cost of living increases that cause an SSI recipient to lose SSI eligibility. In these three exceptions, the HMO's liability shall not exceed the period for which it is capitated.
4. Discharge from one hospital and admission to another within 24 hours for continued treatment shall not be considered discharge under this section. Discharge is defined here as it is in the UB-92 Manual.
HMO Contract for January 1, 2000 - December 31, 2001
O. Non-Discrimination
Comply with all applicable Federal and State laws relating to
non-discrimination and equal employment opportunity including
s. 16.765, Wis. Stats., Federal Civil Rights Act of 1964,
regulations issued pursuant to that Act and the provisions of
Federal Executive Order 11246 dated September 26, 1985, and
assure physical and program accessibility of all services to
persons with physical and sensory disabilities pursuant to
Section 504 of the Federal Rehabilitation Act of 1973, as
amended (29 U.S.C. 794), all requirements imposed by the
applicable Department regulations (45 CFR part 84) and all
guidelines and interpretations issued pursuant thereto, and
the provisions of the Age Discrimination and Employment Act of
1967 and Age Discrimination Act of 1975.
Chapter 16.765, Wis. Stats. requires that in connection with the performance of work under this Contract, the Contractor agrees not to discriminate against any employee or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01(5), sexual orientation or national origin. This provision shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Except with respect to sexual orientation, the Contractor further agrees to take affirmative action to ensure equal employment opportunities. The Contractor agrees to post in conspicuous places, available for employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of the non-discrimination clause. Addendum VIII contains further details on the requirements of nondiscrimination.
With respect to provider participation, reimbursement, or indemnification -- HMO will not discriminate against any provider who is acting within the scope of the provider's license or certification under applicable State law, solely on the basis of such license or certification. This shall not be construed to prohibit an HMO from including providers to the extent necessary to meet the needs of the Medicaid population or from establishing any measure designed to maintain quality and control cost consistent with these responsibilities.
P. Affirmative Action Plan
Comply with State Affirmative Action policies. Contracts estimated to be twenty-five thousand dollars ($25,000) or more require the submission of a written affirmation action plan or have a current plan on file with the State of Wisconsin. Contractors with an annual work force of less than twenty-five employees are exempted from this requirement; however, such contractors shall submit a statement to the Division of Health Affirmative Action/Civil Rights
HMO Contract for January 1, 2000 - December 31, 2001
Compliance Office certifying that its work force is less than twenty-five employees.
1. "Affirmative Action Plan" is a written document that details an affirmative action program. Key parts of an affirmative action plan are:
a. a policy statement pledging nondiscrimination and affirmative action in employment;
b. internal and external dissemination of the policy;
c. assignment of a key employee as the equal opportunity officer;
d. a work force analysis that identifies job classification where representation of women, minorities and the disabled is deficient;
e. goals and timetables that are specific and measurable, and that are set to correct deficiencies and to reach a balance of work force;
f. revision of all employment practices to ensure that they do not have discriminatory effects; and
g. establishment of internal monitoring and reporting systems to measure progress regularly.
2. Within fifteen (15) days after the award of a contract,
the affirmative action plan shall be submitted to the
Department of Health and Family Services Box 7850,
Madison, WI 53707-7850. Contractors are encouraged to
contact the Department of Health and Family Services,
Affirmative Action/Civil Rights Compliance Office at
(608) 266-9372 for technical assistance.
3. Addendum VIII contains further details on the requirements of Affirmative Action Plans.
Q. Cultural Competency
1. HMO shall address the special health needs of enrollees such as those who are low income or members of specific population groups needing specific culturally competent services. HMO shall incorporate in its policies, administration, and service practice such as (1) recognizing member's beliefs, (2) addressing cultural differences in a competent manner, (3) fostering in staff/providers behaviors and effectively address interpersonal communication styles which respect enrollees' cultural
HMO Contract for January 1, 2000 - December 31, 2001
backgrounds. HMO shall have specific policy statements on these topics and communicate them to subcontractors.
2. HMO shall encourage and foster cultural competency among providers. HMO shall, when appropriate, permit enrollees to choose providers from among the HMO's network based on linguistic/cultural needs. HMO shall permit enrollees to change primary providers based on the provider's ability to provide services in a culturally competent manner. Enrollees may submit grievances to the HMO and/or the Department related to inability to obtain culturally appropriate care, and the Department may, pursuant to such grievance, permit an enrollee to disenroll and enroll into another HMO, or into fee-for-service in a county where HMOs do not enroll all eligibles.
R. Health Education and Prevention
1. Inform all enrollees of contributions which they can make to the maintenance of their own health and the proper use of health care services.
2. Have a program of health education and prevention available and within reasonable geographic proximity to its enrollees. The program shall include health education and anticipatory guidance provided as a part of the normal course of office visits, and in discrete programming.
3. The program shall provide:
a. An individual responsible for the coordination and delivery of services in the program.
b. Information on how to obtain these services (locations, hours, phones, etc.).
c. Health-related educational materials in the form of printed, audiovisual, and/or personal communication.
d. Information on recommended check-ups and screenings, and prevention and management of disease states which affect the general population. This includes specific information for persons who have or who are at risk of developing such health problems (e.g., hypertension, diabetes, STD, asthma, breast and cervical cancer, osteoporosis and postpartum depression).
HMO Contract for January 1, 2000 - December 31, 2001
e. Health education and prevention programs. Recommended programs include: injury control, family planning, teen pregnancy, sexually transmitted disease prevention, prenatal care, nutrition, childhood immunization, substance abuse prevention, child abuse prevention, parenting skills, stress control, postpartum depression, exercise, smoking cessation, weight gain and healthy birth, postpartum weight loss, and breast-feeding promotion and support. Note that any education and prevention programs for family planning and substance abuse would supplement the required family planning and substance abuse health care services covered in the Medicaid/BadgerCare program.
f. Promotion of the health education and prevention program, including use of languages understood by the population served, and use of facilities accessible to the population served.
g. Information on and promotion of other available prevention services offered outside of the HMO including child nutrition programs, parenting classes, programs offered by local health departments and other programs.
h. Systematic referrals of potentially eligible women, infants, and children to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and relevant medical information to the WIC program. General information about recipient eligibility requirements for the WIC program, a statewide list of WIC agencies, as well as a sample WIC Referral Form that can be used by HMOs, can be found in Addendum XXV.
4. Health related educational materials produced by the HMO must be at a sixth grade reading comprehension level and reflect sensitivity to the diverse cultures served. Also, if the HMO uses material produced by other entities, the HMO must review these materials for grade level comprehension level and for sensitivity to the diverse cultures served. Finally, the HMO must make all reasonable efforts to locate and use culturally appropriate health related material.
S. Enrollee Handbook and Education and Outreach for Newly Enrolled Recipients
1. Within one week of initial enrollment notification to the HMO, mail to caseheads an enrollee handbook which is at the "sixth grade reading comprehension level" and which at a minimum will include information about:
HMO Contract for January 1, 2000 - December 31, 2001
a. the phone number that can be used for assistance in obtaining emergency care or for prior authorization for urgent care;
b. information on contract services offered by the HMO;
c. location of facilities;
d. hours of service;
e. informal and formal grievance procedures, including notification of the enrollee's right to a fair hearing;
f. grievance appeal procedures;
g. HealthCheck;
h. family planning policies;
i. policies on the use of emergency and urgent care facilities;
j. when you may have to pay for care; and
k. changing HMOs.
2. The HMO must provide periodic updates to the handbook as needed explaining changes in the above policies. Such changes must be approved by the Department prior to printing.
3. New standard language for the enrollee handbooks required by this Contract may be included in the handbooks when they are reprinted.
4. Enrollee handbooks (or substitute enrollee
information approved by the Department which explains
HMO services and how to use the HMO) shall be made
available in at least the following languages:
Spanish, Lao, and Hmong if the HMO has enrollees who
are conversant only in those languages. The handbook
should direct enrollees who are not conversant in
English to the appropriate resources within the HMO
for obtaining a copy of the handbook with the
appropriate language.
5. HMOs may create enrollee handbook language that they believe is simpler than the standard language of Addendum V, but this substitute language must be approved by the Department.
HMO Contract for January 1, 2000 - December 31, 2001
6. Enrollee handbooks shall be submitted by contractors during the Certification Application for review and approval during the pre-contract review stage of the HMO Certification process. The specific dates for submittal of enrollee handbooks are prescribed in the HMO Certification Application.
7. Standard language on several subjects, including HealthCheck, family planning, grievance and appeal rights, conversion rights, and emergency and urgent care shall appear in all handbooks and is included in Addendum V. Any exceptions to the standard must be approved in advance by the Department, and will be approved only for exceptional reasons. Standard language may change during the course of the contract period, if there are changes in federal or state laws, rules or regulations, in which case the new language will have to be inserted into the enrollee handbooks as of the effective date of any such change.
8. In addition to the above requirements sections 1 through 7 for the enrollee handbook, HMOs are required to perform other education and outreach activities for newly enrolled recipients. HMOs are to submit to the Department for prior written approval an education and outreach plan targeted towards newly enrolled recipients. This outreach plan will be examined by the Department during pre-contract review. Newly enrolled recipients are those recipients appearing on the enrollment reports described in Article IV. D. and listed as "ADD-NEW." The plan must identify at least 2 educational/outreach activities in addition to the enrollee handbook to be undertaken by the HMO for the purpose of informing new enrollees of pertinent information necessary to access services within the HMO network. The plan must include the frequency (i.e., weekly, monthly, etc.) of the activity, the person within the HMO responsible for the activities, and how activities will be documented and evaluated for effectiveness.
T. Approval of Marketing Plans and Informing Materials
1. Submit to Department for prior written approval a marketing plan and all marketing materials and other marketing activities that refer to Medicaid Title XIX, BadgerCare, or Title XXI or are intended for Medicaid/BadgerCare recipients. This requirement includes marketing or informing materials that are produced by providers under subcontract to the HMO or owned by the HMO in whole or in part. The Department will not approve any materials which are deemed to be confusing, fraudulent, misleading, or do not accurately reflect the scope and philosophy of the Medicaid program and/or its covered benefits.
HMO Contract for January 1, 2000 - December 31, 2001
2. The Department will review and either approve, approve with modifications, or deny all informing material within ten working days of receipt of the informing materials. Time-sensitive material must be clearly marked by the HMO and will be approved, approved with modifications or denied by the Department within ten business days. The Department reserves the right to determine whether the material is, indeed, time-sensitive. HMO agrees to engage only in marketing activities and distribute only those marketing materials that are preapproved in writing, except that marketing materials and other marketing activities are deemed approved if there is no response from the Department within 10 working days. However, problems and errors subsequently identified by the Department must be corrected by the HMO when they are identified. HMO agrees to comply with in. 6.07 and 3.27, Wis. Admin. Code, and practices consistent with the Balanced Budget Amendment of 1997 P.L. 105-33 Sec. 4707(a) [42 U.S.C. 1396v(d)(2)].
3. As used in this section, "marketing materials and other marketing activities" include the production and dissemination of any promotional material by any medium, including but not limited to community events, print media, radio, television, billboards, Yellow Pages, and advertisements that refer to Medicaid, BadgerCare, Title XIX, or Title XXI are intended for Medicaid/BadgerCare recipients. The Department in its sole discretion will determine whether the marketing materials and/or other marketing activities refer to Medicaid, BadgerCare, Title XIX, or Title XXI are intended for Medicaid/BadgerCare recipients.
4. Approval of marketing plans and materials will be reviewed by the Department in a manner that does not unduly restrict or inhibit the HMO's marketing plans. When applying this provision to specific marketing plans, material and/or activity, the entire content and use of the marketing material or activity shall be taken into consideration.
5. HMOs that fail to abide by these marketing requirements may be subject to any and all sanctions available under Article IX. In determining any sanctions, the Department will take into consideration any past unfair marketing practices, the nature of the current problem and the specific implications on the health and well-being of the Medicaid enrollees. In the event that an HMO's affiliated provider fails to abide by these requirements, the Department will evaluate whether the HMO should have had knowledge of the marketing issue and the HMO's ability to adequately monitor ongoing future marketing activities of the subcontractor(s).
HMO Contract for January 1, 2000 - December 31, 2001
Note: This section has been incorporated in Addendum I.
U. Conversion Privileges
Offer any enrollee covered under this Contract, whose enrollment is subsequently terminated due to loss of Medicaid/BadgerCare eligibility, the opportunity to convert to a private enrollment contract without underwriting. This time period for conversion following Medicaid/BadgerCare termination notice will comply with Wisconsin Stats. 632.897 regarding conversion rights.
V. Choice of Health Professional
Offer each enrollee covered under this Contract the opportunity to choose a primary health care professional affiliated with the HMO, to the extent possible and appropriate. If the HMO assigns recipients to primary physicians, then the HMO shall notify recipients of the assignment. HMOs must permit Medicaid BadgerCare enrollees to change primary providers at least twice in any calendar year, and to change primary providers more often than that for just cause, just cause being defined as lack of access to quality, culturally appropriate, health care. Such just cause will be handled as a formal grievance. If the HMO has reason to lock-in an enrollee to one primary provider and/or pharmacy in cases of difficult case management. the HMO must submit a written request in advance of such lock-in to the Department. Requests should be submitted to the Contract Monitor. Culturally appropriate care in this section means care by a provider who can relate to the enrollee and who can provide care with sensitivity, understanding, and respect for the enrollee's culture.
W. Quality Assessment/Performance Improvement (QAPI)
1. The HMO QAPI program must conform to requirements of 42 CFR, Part 400, Medicaid Managed Care Requirements, Subpart E, Quality Assessment and Performance Improvement. The program must also comply with 42 Code of Federal Regulations (CFR) 434.34 which states that the HMO must have a Quality Assessment/Performance Improvement system that:
a. Is consistent with the utilization control requirement of 42 CFR 456;
b. Provides for review by appropriate health professionals of the process followed in providing health services;
c. Provides for systematic data collection of performance and patient results:
HMO Contract for January 1, 2000 - December 31, 2001
d. Provides for interpretation of this data to the practitioners; and
e. Provides for making needed changes.
2. Quality Assessment/Performance Improvement Program
a. The HMO must have a comprehensive Quality Assessment/Improvement Program (QAPI) program that protects, maintains, and improves the quality of care provided to Wisconsin Medicaid program recipients. The HMO must evaluate the overall effectiveness of its QAPI program annually to determine whether the program has demonstrated improvement, where needed, in the quality of care and service provided to its Medicaid BadgerCare population.
The HMO must have documentation of all aspects of the QAPI program available for Department review upon request. The Department may perform off-site and on-site Quality Assessment/Performance Improvement audits to ensure that the HMO is in compliance with contract requirements. The review and audit may include: on-site visits; staff and enrollee interviews; medical record reviews; review of all QAPI procedures, reports, committee activities, including credentialing activities, corrective actions and follow-up plans; peer review process; review of the results of the member satisfaction surveys, and review of staff and provider qualifications.
b. The HMO must have a written QAPI work plan that is ratified by the board of directors and outlines the scope of activity and the goals, objectives, and time lines for the QAPI program. New goals and objectives must be set annually based on findings from quality improvement activities and studies.
c. The HMO governing body is ultimately accountable to the Department for the quality of care provided to HMO enrollees. Oversight responsibilities of the governing body are: approval of the overall QAPI program and an annual QAPI plan: designating an accountable entity or entities within the organization to provide oversight of QAPI:
review of written reports from the
designated entity on a periodic basis which
include a description of QAPI activities,
progress on objectives, and improvements
made: formal review on an annual basis of a
written report on the QAPI program; and
directing modifications to the QAPI program
on an ongoing basis to accommodate review
findings and issues of concern within the
HMO.
HMO Contract for January 1, 2000 - December 31, 2001
d. The QAPI committee shall be in an organizational location within the HMO such that it can be responsible for all aspects of the QAPI program. The committee membership must be interdisciplinary and be made up of both providers and administrative staff of the HMO, including:
1) a variety of health professions (e.g., pharmacy, physical therapy, nursing, etc.);
2) qualified professionals specializing in mental health or substance abuse and dental care on a consulting basis when an issue related to these areas arises:
3) a variety of medical disciplines (e.g.. medicine, surgery, radiology, etc.);
4) OB/GYN and pediatric representation; and
5) HMO management or governing body.
6) Enrollees of the HMO must be able to contribute input to the QAPI Committee. The HMO must have a system to receive enrollee input on quality improvement, document the input received, document the HMO's response to the input, including a description of any changes or studies it implemented as the result of the input and document feedback to enrollees in response to input received. The HMO response must be timely.
e. The committee must meet on a regular basis, but not less frequently than quarterly. The activities of the QAPI Committee must be documented in the form of minutes and reports. The QAPI Committee must be accountable to the governing body.
Documentation of Committee minutes and activities must be available to the Department upon request.
f. QAPI activities of HMO providers and subcontractors, if separate from HMO QAPI activities, shall be integrated into the overall HMO/QAPI program. Requirements to participate in QAPI activities are incorporated into all provider and subcontractor contracts and employment agreements. The HMO QAPI program shall provide feedback to the providers/subcontractors regarding the integration of, operation of, and corrective actions necessary in provider/subcontractor QAPI efforts.
HMO Contract for January 1, 2000 - December 31, 2001
Other management activities (Utilization Management, Risk Management, Complaints and Grievances, etc.) must be integrated with the QAPI program. Physicians and other health care practitioners and institutional providers must actively cooperate and participate in the HMO's quality activities.
The HMO remains accountable for all QAPI functions, even if certain functions are delegated to other entities. If the HMO delegates any activities to contractors the conditions listed in Article 11 of this agreement must be met.
g. There is evidence that HMO management representatives and providers participate in the development and implementation of the QAPI plan of the HMO. This provision shall not be construed to require that HMO management representatives and providers participate in every committee or subcommittee of the QAPI program.
h. The HMO must designate a senior executive to be responsible for the operation and success of the QAPI program. If this individual is not the HMO Medical Director, the Medical Director must have substantial involvement in the QAPI program. The designated individual shall be accountable for the QAPI activities of the HMO"s own providers, as well as the HMO's subcontracted providers.
i The qualifications, staffing level and available resources must be sufficient to meet the goals and objectives of the QAPI program and related QAPI activities. Such activities include, but are not limited to, monitoring and evaluation of important aspects of care and services, facilitating appropriate use of preventive services, monitoring provider performance, provider credentialing, involving members in QAPI initiatives and conducting performance improvement projects in identified priority areas.
Written documentation listing the staffing resources that are directly under the organizational control of the person who is responsible for QAPI (including total FTEs, percent of time dedicated to QAPI, background and experience, and role) must be available to the Department upon request.
HMO Contract for January 1, 2000 - December 31, 2001
3. Monitoring and Evaluation
a. The QAPI program must monitor and evaluate the quality of clinical care on an ongoing basis. Important aspects of care (i.e., acute, chronic conditions, high volume, high risk preventive care and services) are studied and prioritized for performance improvement and/or development of practice guidelines. Standardized quality indicators must be used to asses improvement, assure achievement of minimum performance levels, monitor adherence to guidelines, and identify patterns of over utilization and under utilization. The measurement of quality indicators must be supported by appropriate data collection methodologies and must be used to analyze and improve clinical care and services.
b. Provider performance must be measured against practice guidelines and standards adopted by the QAPI Committee. Areas identified for improvement must be tracked and corrective actions taken when warranted. The effectiveness of corrective actions must be monitored until problem resolution occurs. Reevaluation must occur to assure that the improvement is sustained.
c. The HMO must use appropriate clinicians to evaluate the data on clinical performance, and multi disciplinary teams to analyze and address data on systems issues.
d. The HMO must also monitor and evaluate care and services in certain priority clinical and non-clinical areas of interest specified by the Department.
e. The HMO must make documentation available to the Department upon request regarding quality improvement and assessment studies on plan performance, which relate to the enrolled population. See reporting requirements in Article III. W. Section 13, Priority Areas.
f. Practice guidelines: The HMO must develop or adopt practice guidelines that are disseminated to providers and to enrollees as appropriate or upon request. The guidelines should be based on reasonable medical evidence or consensus of health professionals; consider the needs of the enrollees; developed or adopted in consultation with the contracting health professionals, and reviewed and updated periodically.
HMO Contract for January 1, 2000 - December 31, 2001
4. Access
a. The HMO must provide medical care to its Medicaid/BadgerCare enrollees that is as accessible to them, in terms of timeliness, amount, duration, and scope, as those services are to nonenrolled Medicaid/BadgerCare recipients within the area served by the HMO.
The HMO must have a Medicaid certified primary care provider within a 20 mile distance from any enrollee residing in the HMO service area. A service area for an HMO will be specified down to the zip code. Therefore, all portions of each zip code in the HMO service area must be within 20 miles from a Medicaid certified primary care provider.
b. Network Adequacy:
The HMO must assure that its delivery network is sufficient to provide adequate access to all services covered under this agreement. In establishing the network, the HMO must consider:
1) The anticipated enrollment with particular attention to pregnant women and children:
2) The expected utilization of services, considering enrollee characteristics and health care needs.
3) The number and types of providers required to furnish the contracted services.
4) The number of network providers not accepting new patients.
5) The geographic location of providers and enrollees, distance, travel time, normal means of transportation used by enrollees and whether provider locations are accessible to enrollees with disabilities.
This access standard does not prevent a recipient from choosing and HMO when the recipient resides in zip code that does not meet the 20 mile distance standard. However, the recipient will not be automatically assigned to that HMO. If by some circumstance the recipient has been assigned to the HMO or has chosen the HMO and becomes dissatisfied with access to medical care, the recipient will be allowed to disenroll from the HMO for reason of distance.
HMO Contract for January 1, 2000 - December 31, 2001
Primary care providers are defined to include, but are not limited to, Physicians and Physician Clinics with specialties in general practice, family practice, internal medicine, obstetrics and gynecology, adolescent medicine and pediatrics, FQHCs, RHCs, Nurse Practitioners, Nurse Midwives, Physician Assistants, and Tribal Health Centers. HMOs may define other types of providers as primary care providers. If they do so, the HMOs must define these other types of primary care providers and justify their inclusion as primary care providers during the precontract review phase of the HMO Certification process.
c. The HMO must have written protocols to ensure that enrollees have access to screening, diagnosis and referral, and appropriate treatment for those conditions and services covered under the Wisconsin Medicaid program.
d. The HMO must also provide medically necessary high risk prenatal care within two weeks of the enrollee's request for an appointment, or within three weeks if the request is for a specific HMO provider.
e. The HMO must have written standards for the accessibility of care and services which are communicated to providers and monitored. The standards must include the following: waiting times for care at facilities; waiting times for appointments; specify that providers' hours of operation do not discriminate against Medicaid/ BadgerCare enrollees; and whether or not provider(s) speak member's language. The HMO must take corrective action if its standards are not met.
f. The HMO must have a mental health or substance abuse provider within a 35 mile distance from any enrollee residing in the HMO service area or no further than the distance for non-enrolled recipients residing in the service area.
g. The HMO must have a dental provider, when appropriate, within a 35 mile distance from any enrollee residing in the HMO service area or no further than the distance for non-enrolled recipients residing in the service area. The HMO must also give consideration to whether the dentist is accepting new patients, and where full or part-time coverage is available.
HMO Contract for January 1, 2000 - December 31, 2001
5. Health Promotion and Prevention Services
a. The HMO must identify at-risk populations for preventive services and develop strategies for reaching Medicaid/ BadgerCare members included in this population. Local health departments and community- based health organizations can provide the HMO with special access to vulnerable and low-income population groups, as well as settings that reach at-risk individuals in their communities, schools and homes. Public health resources can be used to enhance the HMO's health promotion and preventive care programs.
b. The HMO must have mechanisms for facilitating appropriate use of preventive services and educating enrollees on health promotion. At a minimum, an effective health promotion and prevention program includes: tracking of preventive services, practice guidelines for preventive services, yearly measurement of performance in the delivery of such services, and communication of this information to providers and enrollees.
6. Provider Selection (credentialing) and Periodic Evaluation
(recredentialing)
a. The HMO must have written policies and procedures for provider selection and qualifications. For each practitioner, including each member of a contracting group that provides services to the HMO's enrollees, initial credentialing must be based on a written application, primary source verification of licensure, disciplinary status, eligibility for payment under Medicaid and certified for Medicaid. The HMO must periodically monitor (no less than every two years) the provider's documented qualifications to assure that the provider still meets the HMO's specific professional requirements.
b. The HMO must periodically monitor (no less than every two years) the provider's documented qualifications to assure that the provider still meets the HMO's specific professional requirements.
c. The HMO must also have a mechanism for considering the
provider's performance. The method must include
updating all the information (except medical education)
utilized in the initial credentialing process.
Performance evaluation must include information from:
the QAPI system, reviewing enrollee complaints and
enrollee satisfaction surveys, and the utilization
management system.
HMO Contract for January 1, 2000 - December 31, 2001
d. The selection process must not discriminate against providers such as those serving high-risk populations, or specialize in conditions that require costly treatment. The HMO must have a process for receiving advice on the selection criteria for credentialing and recredentialing practitioners in the HMO's network.
e. If the HMO delegates selection of providers to another entity, the organization retains the right to approve, suspend or terminate any provider selected by that entity.
f. The HMO must have a formal process of peer review of care delivered by providers and active participation of the HMO's contracted providers in the peer review process. This process may include internal medical audits, medical evaluation studies, peer review committees, evaluation of outcomes of care, and systems for correcting deficiencies. The HMO must supply documentation of its peer review process upon request.
g. The HMO must have written policies that allow it to suspend or terminate any provider for quality deficiencies. There must also be an appeals process available to the provider that conforms to the requirements of the HealthCare Quality Improvement Act of 1986 (42 USC (S)11101 etc. Seq.).
h. In addition to the requirements in this section, the names of individual practitioners and institutional providers who have been terminated from the HMO provider network as a result of quality issues must be immediately forwarded to the Department and reported to other entities as required by law (42 USC (S)11101 et. Seq.).
i. Institutional Provider Selection--For each provider, other than an individual practitioner, the HMO determines, and verifies at specified intervals, that the provider is:
1) licensed to operate in the State, if licensure is required, and in compliance with any other applicable State or Federal requirements; and
HMO Contract for January 1, 2000 - December 31, 2001
2) the HMO verifies that the provider is reviewed and approved by an approved accrediting body (if the provider claims accreditation), or is determined by the HMO to meet standards established by the HMO itself.
7. Enrollee Feedback on Quality Improvement
a. The HMO must have a process to maintain a relationship with its enrollees that promotes two way communication and contributes to quality of care and service. The HMO must show a commitment to treating members with respect and dignity.
b. Annually, the HMO must conduct an internal satisfaction of care survey of a representative sample of enrolled Medicaid! BadgerCare recipients. The survey must be designed to identify potential problems and barriers to care, and should cover, at a minimum, the following three areas:
1) care process - attention received as a patient (i.e.. provider sensitivity);
2) structure or delivery of care - assess impediments to care such as waiting times, choice of provider, physical accessibility; and
3) perceived quality of care - thoroughness of exams and results or health status outcomes.
The Department must approve the survey instrument and plan. The HMO shall have systems in place for acting on survey results and shall report to the Department the survey results and any quality management projects planned in response to survey results.
c. The HMO is encouraged to find additional ways to involve Medicaid/BadgerCare enrollees in quality improvement initiatives and in soliciting enrollee feedback on the quality of care and services the HMO provides. Other ways to bring enrollees into the HMO's efforts to improve the health care delivery system include but are not limited to: focus groups, consumer advisory councils, enrollee participation on the governing board, the QAPI committees or other committees, or task forces related to evaluating services. All efforts to solicit feedback from enrollees must be approved by the Department.
HMO Contract for January 1, 2000 - December 31, 2001
8. Medical Records
a. The HMO must have policies and procedures for participating provider medical records content and documentation that have been communicated to providers and a process for evaluating its providers' medical records based on the HMO's policies. These policies must address patient confidentiality, organization and completeness, tracking, and important aspects of documentation such as accuracy, legibility, and safeguards against loss, destruction, or unauthorized use. The HMO must also have confidentiality policies and procedures that are applicable to administrative functions that are concerned with confidential patient information.
b. Patient medical records must be maintained in an organized manner (by the HMO, and/or by the HMO's subcontractors) that permits effective patient care, they must reflect all aspects of patient care and be readily available for patient encounters, for administrative purposes, and for Department review.
c. Because HMOs are considered contractors of the State and are therefore (only for the limited purpose of obtaining medical records of its enrollees) entitled to obtain medical records according to Wisconsin Administrative Code, HFS 104.01(3), the Department will require Medicaid-certified providers to release relevant record to the HMO to assist in compliance with this section. Where HMOs have not specifically addressed photocopying expenses in their provider contracts or other arrangements, the HMOs are liable for charges for copying records only to the extent that the Department would reimburse on a fee-for-service basis.
d. The HMO must have written confidentiality policies and procedures in regard to confidential patient information. Policies and procedures must be communicated to HMO staff, members, and providers. The transfer of medical records to out-of-plan providers or other agencies not affiliated with HMO (except for the Department) are contingent upon the receipt by the HMO of written authorization to release such records signed by the enrollee or, in the case of a minor, by the enrollee's parent, guardian. or authorized representative.
HMO Contract for January 1, 2000 - December 31, 2001
e. The HMO must have written quality standards and performance goals for participating provider medical record documentation and be able to demonstrate, upon request of the DHFS, that the standards and goals have been communicated to providers. The HMO must actively monitor established standards and provide documentation of standards and goals upon request of the Department.
f. Medical records must be readily available for HMO-wide Quality Assessment/Performance Improvement (QAPI) and Utilization Management (UM) activities and provide adequate medical and other clinical data required for (QAPI)/UM, and Department use.
g. The HMO must have adequate policies in regard to transfer of medical records to ensure continuity of care when enrollees are treated by more than one provider. This may include transfer to local health departments subject to the receipt of a signed authorization form as specified in Article III. W. 8 (d) above (with the exception of immunization status information described in Article III. B. 14., which doesn't require enrollee authorization).
h. Requests for completion of residual functional capacity evaluation forms and other impairment assessments, such as queries as to the presence of a listed impairment, shall be provided within 10 working days of request (at the discretion of the individual provider and subject to the provider's medical opinion of its appropriateness) and according to the other requirements listed above; the HMO and its providers and subcontractor may charge the enrollee, authorized representative, or other third party a reasonable rate for the completion of such forms and other impairment assessments. Such rates may be reviev~ed by the Department for reasonableness and may be modified based on this review.
i. Minimum medical record documentation per chart
entry or encounter must conform to the
Wisconsin Administrative Code, Chapter HFS
106.02. (9)(b) Medical record content.
HMO Contract for January 1, 2000 - December 31, 2001
9. Utilization Management (UM)
a. The HMO must have documented policies and procedures for all UM activities that involve determining medical necessity, and the approval or denial of medical services. Qualified medical professionals must be involved in any decision-making that requires clinical judgment. Criteria used to determine medical necessity and appropriateness must be communicated to providers.
b. If the HMO delegates any part of the TIM program to a third party, the delegation must meet the requirements in Article II Delegations of Authority.
c. If the HMO utilizes phone triage, nurse lines or other demand management systems, the HMO must document review and approval of qualification criteria of staff and of clinical protocols or guidelines used in the system. The system's performance will be evaluated annually in terms of clinical appropriateness.
d. The policies specify time frames for responding to requests for initial and continued service determinations, specify information required for authorization decisions, provide for consultation with the requesting provider when appropriate, and provide for expedited responses to requests for authorization of urgently needed services, In addition, the HMO must have in effect mechanisms to ensure consistent application of review criteria for authorization decisions (interrater reliability).
Within the timeframes specified above, the HMO must give the enrollee and the requesting provider written notice of:
1) the decision to deny, limit, reduce, delay or terminate a service along with the reasons for the decision.
2) the enrollee's right to file a grievance or request a state fair hearing.
Authorization decisions must be made within the following time frames and in all cases as expeditiously as the enrollee's condition requires:
1) within 14 days of the receipt of the request, or
HMO Contract for January 1, 2000 - December 31, 2001
2) within 72 hours if the physician indicates or the HMO determines that following the ordinary time frame could jeopardize the enrollee's health or ability to regain maximum function.
One extension of up to 14 days may be allowed if the enrollee requests it or if the HMO justifies the need for more information.
e. Criteria for decisions on coverage and medical necessity are clearly documented, are based on reasonable medical evidence, current standards of medical practice, or a consensus of relevant health care professionals, and are regularly updated.
f. The HMO oversees and is accountable for any functions and responsibilities that it delegates to any subcontractor. (See Article II Delegations of Authority).
g. Postpartum discharge policy for mothers and infants must be based on medical necessity determinations. This policy must include all follow-up tests and treatments consistent with currently accepted medical practice and applicable federal law. The policy must allow at least a 48- hour hospital stay for normal spontaneous vaginal delivery, and 96 hours for a cesarean section delivery, unless a shorter stay is agreed to by both the physician and the enrollee. HMOs may not deny coverage, penalize providers, or give incentives or payments to providers or enrollees. Post hospitalization follow-up care must be based on the medical needs and circumstances of the mother and infant. The Department may request documentation demonstrating compliance with this requirement.
10. External Quality Review Contractor
a. The HMO must assist the Department and the external quality review organization under contract with the Department in identification of provider and enrollee information required to carry out on-site or off-site medical chart reviews. This includes arranging orientation meetings for physician office staff concerning medical chart review, and encouraging attendance at these meetings by HMO and physician office staff as necessary. The provider of service may elect to have charts reviewed on-site or off-site.
HMO Contract for January 1, 2000 - December 31, 2001
b. When the professional review organization under contract with the Department identifies an adverse health situation in which follow-up is needed to determine whether appropriate care was provided, the HMO will be responsible for the following tasks:
1) Assign a staff person(s) to conduct follow-up with the provider(s) concerning each adverse health situation identified by the Department's professional review organization, including informing the provider(s) of the QAPI finding and monitoring the provider's resolution of the QI finding;
2) Inform the HMO's QAPI Committee of the final QAPI finding and involve the QAPI Committee in the development, monitoring and resolution of the corrective action plan; and
3) Submit a corrective action plan or an opinion in writing to the Department within 60 days that addresses the measures that the HMO and the provider intend to take to resolve the QAPI finding. The HMO's final resolution of all cases must be completed within six (6) months of HMO notification. A case is not considered resolved by the Department until the Department approves the response provided by the HMO and provider.
c. The HMO will facilitate training provided by the Department to its providers.
11. Dental Services Quality Improvement
a. The HMO QAPI Committee and QAPI coordinator will review subcontracted dental programs quarterly to assure that quality dental care is provided and that the HMO and the contractor comply with the following:
1) The HMO or HMO affiliated dental provider must advise the enrollee within 30 days of effective enrollment of the name of the dental provider and the address of the dental provider's site. The HMO or HMO affiliated dental provider must also inform the enrollee in writing how to contact his/her dentist (or dental office), what dental services are covered, when the coverage is effective, and how to appeal denied services.
HMO Contract for January 1, 2000 - December 31, 2001
2) An HMO or HMO affiliated dental provider who
assigns all or some Medicaid/BadgerCare HMO
enrollees to specific participating dentists
must give enrollees at least 30 days after
assignment to choose another dentist.
Thereafter, in accordance with Article III.
V., the HMO and/or affiliated provider must
permit enrollees to change dentists at least
twice in any calendar year and more often
than that for just cause.
3) HMO-affiliated dentists must provide a routine dental appointment to an assigned enrollee within 90 days after the request. Enrollee requests for emergency treatment must be addressed within 24 hours after the request is received.
4) Dental providers must maintain adequate records of services provided. Records must fully disclose the nature and extent of each procedure performed and should be maintained in a manner consistent with standard dental practice.
5) The HMO affirms by execution of this Contract that the HMO's peer review systems are consistently applied to all dental subcontractors and providers.
6) The HMO must document, evaluate, resolve, and follow up on all verbal and written complaints they receive from Medicaid/BadgerCare enrollees related to dental services.
12. Accreditation
a. The Department encourages the HMO to actively pursue accreditation by the National Committee for Quality Assurance (NCQA), the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or other recognized accrediting body approved by the Department.
b. The achievement of full accreditation by one of
the above organizations by the HMO may result in:
reduction of on-site internal Quality Improvement
program audits; fewer requests for periodic
documentation to determine compliance with
contract requirements: and fewer medical record
reviews.
Where accreditation standards conflict with the standard set forth in this agreement, the agreement prevails unless the accreditation standard is more stringent.
HMO Contract for January 1, 2000 - December 31, 2001
13. Performance Improvement Priority Areas
a. The HMO must develop and ensure implementation of program initiatives to address the specific clinical needs that have a higher prevalence in the HMO's enrolled population served under this agreement. These priority areas must include clinical and non-clinical Performance Improvement projects. The Department strongly advocates the development of collaborative relationships among HMOs, Local Health Departments, community based behavioral health treatment agencies (both public and private), and other community health organizations to achieve improved services in priority areas. Linkages between managed care organizations and public health agencies is an essential element for the achievement of the public health objectives, potentially reducing the quantity and intensity of services the HMO needs to provide. The Department and the HMO are jointly committed to on-going collaboration in the area of service and clinical care improvements by the development and sharing of "best practices."
Annually, for the priority areas specified by the Department and listed below, the HMO must monitor and evaluate the quality of care and services through performance improvement projects for at least two of the listed areas in Article III, W. 13 (c) or (d) below, or an HMO may propose alternative performance improvement topics to be addressed by making a request in writing to the Department. The final or on-going status report for each project must be submitted by October 1, 2000, and October 1, 2001. The performance improvement topic must take into account: the prevalence of a condition among. or need for a specific service by, the HMO enrollees served under this agreement, enrollee demographic characteristics and health risks; and the interest of consumers or purchasers in the aspect of care or services to be addressed. The final annual report must include an overview of the performance improvement project that addresses all of the information in the Performance Improvement Project Outline in Addendum XV.
b. Performance reporting will utilize standardized indicators appropriate to the performance improvement area. Minimum performance levels must be specified for each performance improvement area, using normative standards derived from regional, national norms, or from norms established by an appropriate practice organization. Goals for improvement for the "Priority Areas" listed in c. of this section, may be set by the organization itself.
HMO Contract for January 1, 2000 - December 31, 2001
The organization must assure that improvements are sustained through periodic audits of relevant data and maintenance of the interventions that resulted in the improvement. The HMO agrees to open at least one new performance improvement project in 2001 with the report on that project to be submitted to the Department by October 1, 2002. In all cases, not less than two performance improvement projects must be reported to the Department in any year and not less than three different projects must be reported to the Department between 2000 and 2002.
The organization must implement a performance improvement project in the area if a quality improvement opportunity is identified. The HMO must report to the Department on each study, including those areas where the HMO will not pursue a performance improvement project.
c. Clinical Priority Areas: 1) prenatal services; 2)
identification of adequate treatment for high-risk
pregnancies, including those involving substance abuse; 3)
evaluating the need for specialty services; 4) availability
of comprehensive, ongoing nutrition education, counseling,
and assessments; 5) Family Health Improvement Initiative:
Smoking Cessation; 6) children with special health care
needs; 7) outpatient management of asthma; 8) the provision
of family planning services, 9) early postpartum discharge
of mothers and infants; 10) STD screening and treatment; and
11) high volume/high risk services selected by the HMO.
Non-Clinical Priority Areas: 1) grievances, appeals and complaints; 2) access to and availability of services.
In addition, the HMO may be required to conduct performance improvement projects specific to the HMO and to participate in one annual statewide project that may be specified by the Department.
d. Targeted Performance Improvement Measures
The HMO must develop and implement programs that address the specific performance improvement initiatives described below. In addition, the HMO must measure and report activity in the six areas using the standardized indicators described. (The data reporting guidelines and specifications for reporting activity are found in Addendum XVI.)
HMO Contract for January 1, 2000 - December 31, 2001
The HMO's activity in these areas must be reported (along with all other required data) to the Department by October 1, 2001, for calendar year 2000. Unless otherwise noted within a specific targeted performance improvement measure. the Department may specify minimum performance levels and require that the HMOs develop action plans to respond to performance levels below the minimum performance levels. In subsequent years that this Contract is in force, the Department may require the same or different Targeted Performance Improvement Measures.
1) Immunization Performance Improvement
The objective for the year 2000 is to increase to 90 percent the proportion of children who are two years of age who are fully immunized (Healthy People 2000 goal). Immunization series complete is defined by the most recent Advisory Committee on Immunization Practices (ACIP) schedule found in Addendum XVIII.
If the organization's rate on this measure is below the 90 percent objective and the organization did not achieve an improvement in adverse outcomes of at least 10 percent in the current reporting year over the previous reporting year, the organization must report a plan of action to the Department. Such plans may include, but are not limited to, initiation of a performance improvement project, increased outreach to members and providers, provider and member education or any other actions designed to increase delivery of childhood immunization services. The Department may directly monitor the delivery of immunization services to children from birth to age one using encounter data and other resources at its disposal to assess the sufficiency of immunizations in the first year of life.
2) Dental Preventive Care Performance Improvement
The objective for calendar year 2000 is that HMO enrollees under this agreement will receive preventive dental services at a rate greater than or equal to 110 percent of the preventive dental services rate for Medicaid fee-for-service (FFS) recipients. The baseline year for determining the FFS rate that will be used for comparison is described in Addendum XVI. This measure applies only in situations where the HMO receives the capitation
HMO Contract for January 1, 2000 - December 31, 2001
payment for total dental care in accordance with the HMO's Medicaid/BadgerCare Contract.
3) Lead Toxicity Screening Performance Improvement
The minimum performance level for calendar year 2000 is 65 percent of all enrollees served under this agreement with their first or second birthday during the reporting period. Two rates must be reported, one for one year olds and one for two year olds. The minimum performance level for calendar year 2001 is 85 percent of all Medicaid/BadgerCare enrollees with their first or second birthday during the reporting period (calendar year). Detailed instructions for calculation of these measures are included in Addendum XVI.
4) Mental Health Follow Up Care Performance Improvement
The minimum performance level for calendar years 2000 and 2001 is a rate of ambulatory follow-up treatment within 7 and 30 days of discharge after inpatient care for treatment of selected mental health disorders, that represents a reduction of 10 percentage points in adverse outcomes each year from the HMO prior baseline. For example:
The 1999 HMO rate for follow-up at 30 days is 80
percent. The adverse outcome is represented by the
20 percent that did not have a follow-up visit
within 30 days. The minimum performance level for
2000 would be calculated as a 10 percent
improvement on the adverse outcomes as follows:
.10 x 20 = 2.0. Thus, the minimum performance
level for 2000 would be eighty two percent: 80 +
2.0= 82 percent.
5) Substance Abuse Follow-up Care Performance Improvement.
The minimum performance level for calendar year 2000 and 2001 is a rate of ambulatory follow-up treatment within 7 and 30 days of discharge after inpatient care for substance abuse for individuals with specific substance abuse disorders, that represents a reduction of 10 percentage points in adverse outcomes each year from the HMO prior year baseline. See example 4) above in
HMO Contract for January 1, 2000 - December 31, 2001
Mental Health Follow Up Care Performance Improvement for information on calculation of this measure.
6) Outpatient Management of Diabetes
This targeted performance improvement project is designed to measure and improve performance of outpatient management services for people with Type 1 or Type 2 diabetes. The goal for 2000 is establishment of baseline data for the provision of the following services to enrollees with diabetes:
. Hemoglobin A1c (HbA1c) testing, CPT-4 code 83036;
. Lipid profile testing, CPT-4 procedure codes 80061, 83720 or 83721.
The goal for 2001 will be for the HMO to improve the above rates of service provision by a 10 percent reduction in adverse outcomes from the baselines established in 2000.
7) Satisfaction with referral for MH/SA services performance improvement: This performance improvement area establishes a baseline measure of enrollee satisfaction with referral for mental health and substance abuse services based on enrollee responses to the following specific questions. These questions will be included in the standardized Consumer Assessment of Health Plan (CAHPS) survey administered by the Department.
This measure assesses the number of enrollees indicating they "need help with an alcohol, drug or mental health problem" as the denominator and the number of enrollees that indicate they did or did not actually get counseling or help as the numerator. The results will be aggregated by the Department or its contractor and reported to the respective HMO. The Department will share analysis of the baseline data for the survey questions conducted in 1999 with HMOs. The Department will work closely with HMOs to review or revise if necessary survey questions for 2000 and 2001. Survey questions will be reviewed for reasonableness, validity and reliability. The
HMO Contract for January 1, 2000 - December 31, 2001
Department will work closely with HMOs to set reasonable minimum performance levels once it is determined that the survey questions are reasonable, reliable and valid.
X. Access to Premises
Allow duly authorized agents or representatives of the State or Federal government, during normal business hours, access to HMO's premises or HMO subcontractor's premises to inspect, audit, monitor or otherwise evaluate the performance of the HMO's or subcontractor's contractual activities and shall within a reasonable time, but not more than 10 working days, produce all records requested as part of such review or audit. In the event right of access is requested under this Section, the HMO or subcontractor shall, upon request, provide and make available staff to assist in the audit or inspection effort, and provide adequate space on the premises to reasonably accommodate the State or Federal personnel conducting the audit or inspection effort. All inspections or audits shall be conducted in a manner as will not unduly interfere with the performance of HMO's or subcontractor's activities. The HMO will be given 15 business days to respond to any findings of an audit before the Department shall finalize its findings. All information so obtained will be accorded confidential treatment as provided under applicable laws, rules or regulations.
Y. Subcontracts
Assure that all subcontracts shall be in writing, shall comply with the provisions of Addendum I, shall include any general requirements of this Contract that are appropriate to the service or activity identified in Addendum I, and assure that all subcontracts shall not terminate legal liability of the HMO under this Contract. The HMO may subcontract for any function covered by this Contract, subject to the requirements of this Contract.
Z. Compliance with Applicable Laws, Rules or Regulations
Observe and comply with all Federal and State laws, rules or regulations in effect when the Contract is signed or which may come into effect during the term of the Contract, which in any manner affects HMO's performance under this Contract, except as specified in Article III, Section B.
AA. Use of Providers Certified By Medicaid Program
Except in emergency situations, use only providers who have been certified by the Medicaid program for those services required under this Contract. The Department reserves the right to withhold retrospectively from the capitation payments the monies related to services provided by non-Medicaid- certified providers, at the Medicaid fee-for-service rate for those services. (See
HMO Contract for January 1, 2000 - December 31, 2001
Wisconsin Administrative Code. Chapter HFS 105, for provider certification requirements.) Every Medicaid HMO will require each physician providing services to enrollees to have a unique physician identifier, as specified in Section 1173(b) of the Social Security Act.
BB. Reproduction and Distribution of Materials
Reproduce and distribute at HMO expense, according to a reasonable Department timetable, information or documents sent to HMO from Department that contain information the HMO-affiliated providers must have in order to fully implement this Contract.
CC. Provision of Interpreters
Provide interpreter services for enrollees as necessary to ensure availability of effective communication regarding treatment, medical history or health education and/or any other component of this contract. Furthermore, the HMO must provide for 24 hour a day, 7 day a week access to interpreter services in languages spoken by those individuals otherwise eligible to receive the services provided by the HMO or its provider. Also, upon a recipient or provider request for interpreter services in a specific situation where care is needed, the HMO shall provide an interpreter in time to assist adequately with all necessary care, including urgent and emergency care. The HMO must clearly document all such actions and results. This documentation must be available to the Department at the Department's request.
1. Professional interpreters shall be used, when needed, where technical, medical, or treatment information or other matters, where impartiality is critical, are to be discussed or where use of a family member or friend as interpreter is otherwise inappropriate. Family members, especially children, should not be used as interpreters in assessments, therapy and other situations where impartiality is critical.
2. The HMO will maintain a current list of interpreters who are on "on call" status to provide interpreter services. Provision of interpreter services must be in compliance with Title VI of the Civil Rights Act.
3. The HMO must designate a person responsible for the administration of interpreter/translation services.
4. The HMO must receive Department approval of written policies and procedures for the provision of interpreter services.
HMO Contract for January 1, 2000 - December 31, 2001
DD. Coordination and Continuation of Care
Have systems in place to ensure well managed patient care, including at a minimum:
1. Management and integration of health care through primary provider/gatekeeper/other means.
2. Systems to assure referrals for medically necessary, specialty, secondary and tertiary care.
3. Systems to assure provision of care in emergency situations, including an education process to help assure that enrollees know where and how to obtain medically necessary care in emergency situations.
4. Specific referral requirements. HMO shall clearly specify referral requirements to providers and subcontractors and keep copies of referrals (approved and denied) in a central file or the patient's medical records.
5. Systems to assure provision of a clinical determination, within 10 working days, at the request of the enrollee, of the medical necessity and appropriateness of an enrollee to continue with MH or Substance Abuse providers who are not subcontracted by the HMO. If the HMO determines that the enrollee does not need to continue with the non-contracted provider, it must ensure an orderly transition of care.
EE. HMO ID Cards
The HMO may issue their own HMO ID cards. The HMO may not deny services to an enrollee solely for failure to present an HMO issued ID card. The Forward ID card will always determine HMO enrollment, even where an HMO issues HMO ID cards.
FF. Federally Qualified Health Centers and Rural Health Centers
(FQHCS and RHCS)
If an HMO contracts with a facility or program, which has been certified as an FQHC or RHC by the Medicaid program, for the provision of services to its enrollees, the HMO must negotiate payment rates for that FQHC or RHC on the same basis as it negotiates with other clinics and primary providers and the HMO must increase the FQHC's or RHC's payment in direct proportion to the annual increase for physicians' services in the capitation rate paid to the HMO. In other words, if an HMO receives a 10 percent increase from the Department for physicians' services, the contracted rates paid to the FQHC or RHC either through capitation or fee-for-service, must be increased by at least 10 percent
HMO Contract for January 1, 2000 - December 31, 2001
over those that were in effect on the date this Contract is signed. The Department will notify the HMOs of the percentage increase for physician services made in the capitation rates by the Department when such changes occur. An HMO which contracts with an FQHC or RHC must report to the Department within 45 days of the end of each quarter (for example, January 1 - March 31 is due May 15) the total amount paid to each FQHC or RHC, per month and as reported on the 1099 forms prepared by the HMO for each FQHC or RHC. FQHC or RHC payments include direct payments to a medical provider who is employed by the FQHC or RHC. The report should be for the entire HMO, aggregating all service areas if the HMO has more than one service area.
GG. Coordination with Prenatal Care Services, School-Based Services, Targeted Case Management Services, a Child Welfare Agencies, and Dental Managed Care Organizations
1. Prenatal Care Services-- The HMO must sign an MOU (Addendum IX) with all agencies in the HMO service area that are Medicaid-certified prenatal care coordination agencies. The MOU will be effective on the effective date of the agency's PNCC certification or when both HMO and PNCC agency have signed it, whichever is later. In addition, if the PNCC wants to negotiate additional provisions into the MOU, the HMO must negotiate in good faith and document those negotiations. Such documentation must be available to the Department for review on request. In addition, the HMO must assign an HMO medical representative to interface with the care coordinator from the prenatal care coordination agency. This HMO representative shall work with the care coordinator to identify what Medicaid covered services, in conjunction with other identified social services, are to be provided to the enrollee. The HMO is not liable for medical services directed outside of their provider network by the care coordinator unless prior authorized by the HMO. In addition, the HMO is not required to pay for services provided directly by the Prenatal Care Coordinating provider: such services are paid on a fee-for-service basis by the Department. The main purpose of the MOU is to assure coordination of care between the HMO, that provides medical services, and the Prenatal Care Coordinating Agency, that provides outreach, risk assessment, care planning, care coordination, and follow-up.
2. School-Based Services-- The HMO must sign an MOU
(Addendum XIII) with all School-Based Services (SBS)
providers in the HMO service area who are
Medicaid-certified (a School-Based Services provider
is a school district or Cooperative Educational
Service Agency (CESA) and not the individual schools
within the school district). The MOU will be
effective on the date when both the HMO and the SBS
provider have signed it or the date the SBS provider
is Medicaid-certified, whichever is
HMO Contract for January 1, 2000 - December 31, 2001
later. As described in Addendum XIII, the purpose of the MOU is to develop policies and procedures to avoid duplication of services and to promote continuity of care between the HMO and SBS provider. There are many situations where schools cannot provide services: after school hours, during school vacations, and during the summer, and these situations may interrupt the course of treatment or otherwise affect the continuity of care. In addition, the fact that HMOs and SBS providers may provide the same services could lead to the duplication of services. Therefore, an MOU is essential for the avoidance of duplication of services and the assurance of continuity of care. School-based services are paid fee-for-service by Medicaid. SBS providers, as a requirement of Medicaid/BadgerCare certification, will be directed to negotiate MOUs with HMOs.
3. Targeted Case Management-- The HMO must assign an HMO medical representative to interface with the case manager from the Targeted Case Management (TCM) agency. This HMO representative shall work with the case manager to identify what Medicaid covered services, in conjunction with other identified social services, are to be provided to the enrollee. The HMO is not required to pay for medical services directed outside of their provider network by the case manager unless prior authorized by the HMO. The Department will distribute a statewide list of Medicaid-certified TCM agencies to the HMOs and periodically update the list. Addendum XIV contains guidelines for how HMOs and TCM agencies should coordinate care.
4. Child Welfare Agencies-- Milwaukee County HMOs must designate at least one individual to serve as a contact person for the Bureau of Milwaukee Child Welfare (BMCW) agency. If the HMO chooses to designate more than one contact person, the HMO should identify the service area for which each contact person is responsible. The HMO must provide all Medicaid covered mental health and substance abuse services to individuals identified as clients of the BMCW agency. Disputes regarding the medical necessity of services identified in the Family Treatment Plan will be adjudicated using the dispute process outlined in Addendum X, except that HMOs will provide court ordered services in accordance with Addendum II. Addendum X contains guidelines for how Milwaukee County HMOs and the Bureau of Milwaukee Child Welfare agency will work together to provide mental health and substance abuse services.
HMO Contract for January 1, 2000 - December 31, 2001
5. Dental Managed Care Pilot Programs-- Once the Department's contract with dental managed care organizations (MCOs) has been finalized, HMOs providing contract services to enrollees residing in Ashland, Bayfield, Douglas and Iron Counties shall sign MOUs with the contracted MCOs to provide Medicaid dental services. The purpose of the MOUs shall be to:
. Coordinate dental services provided by MCO dental providers in HMO affiliated hospitals and emergency rooms: and
. Ensure necessary and appropriate information is shared between an enrollee's primary dental provider and an enrollee's primary care physician.
The MOU shall be signed by both parties. It will be the responsibility of the Department's MCO(s) to initiate contracts with the HMO for implementation.
HH. Physician Incentive Plans
A physician incentive plan is any compensation arrangement between the HMO and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the HMO.
1. The HMO shall fully comply with the physician incentive plan requirements specified in 42 CFR s. 417.479(d) through (g) and the requirements relating to subcontracts set forth in 42 CFR s. 417.479(i), as those provisions may be amended from time to time, and shall submit to the Department its physician incentive plans as required under 42 CFR s. 434.470 and as requested by the Department.
II. Advance Directives
Maintain written policies and procedures related to advance directives. An advance directive is a written instruction, such as a living will or durable power of attorney for health care, recognized under Wisconsin law (whether statutory or recognized by the courts of Wisconsin) and relating to the provision of such care when the individual is incapacitated. HMO shall:
1. Provide written information at time of HMO enrollment to all adults receiving medical care through the HMO regarding: (a) the individual's rights under Wisconsin law (whether statutory or recognized by the courts of Wisconsin) to make decisions concerning such medical care, including the right to accept or refuse medical or surgical treatment and
HMO Contract for January 1, 2000 - December 31, 2001
the right to formulate advance directives; and (b) the HMO's written policies respecting the implementation of such rights.
2. Document in the individual's medical record whether or not the individual has executed an advance directive.
3. Shall not discriminate in the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive. This provision shall not be construed as requiring the provision of care which conflicts with an advance directive.
4. Ensure compliance with requirements of Wisconsin law (whether statutory or recognized by the courts of Wisconsin) respecting advance directives.
5. Provide education for staff and the community on issues concerning advance directives.
The above provisions shall not be construed to prohibit the application of any Wisconsin law which allows for an objection on the basis of conscience for any health care provider or any agent of such provider which as a matter of conscience cannot implement an advance directive.
JJ. Ineligible Organizations
Upon obtaining information or receiving information from the Department or from another verifiable source, exclude from participation in the HMO all organizations which could be included in any of the following categories (references to the Act in this section refer to the Social Security Act):
1. Entities Which Could Be Excluded Under Section 1128(b)(8) of the Social Security Act.--These are entities in which a person who is an officer, director, agent or managing employee of the entity, or a person who has direct or indirect ownership or control interest of 5 percent or more in the entity has:
a. Been convicted of the following crimes:
1) Program related crimes, i.e., any criminal offense related to the delivery of an item or service under Medicare or Medicaid (see Section 1128(a)(1) of the Act);
2) Patient abuse, i.e., criminal offense relating to abuse or neglect of patients in connection with the delivery of health care (see Section 1128(a)(2) of the Act);
HMO Contract for January 1, 2000 - December 31, 2001
3) Fraud, i.e., a State or Federal crime involving fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of health care or involving an act or omission in a program operated by or financed in whole or part by Federal, State or local government (see Section 1128(b)(1) of the Act);
4) Obstruction of an investigation,
i.e., conviction under State or
Federal law of interference or
obstruction of any investigation
into any criminal offense described
in subsections a, b, or c (see
Section 1128(b)(2) of the Act): or
5) Offenses relating to controlled substances, i.e., conviction of a State or Federal crime relating to the manufacture, distribution, prescription or dispensing of a controlled substance (see Section 1128(b)(3) of the Act).
b. Been Excluded, Debarred, Suspended or Otherwise Excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in non procurement activities under regulations issued pursuant to Executive Order No. 12549 or under guideline implementing such order.
c. Been Assessed a Civil Monetary Penalty under
Section 1128A of the Act. --Civil monetary
penalties can be imposed on individual
providers, as well as on provider
organizations, agencies, or other entities
by the DHHS Office of Inspector General.
Section 1128A authorizes their use in case
of false or fraudulent submittal of claims
for payment, and certain other violations of
payment practice standards. (See Section
1128(b)(8)(B)(ii) of the Act.)
2. Entities Which Have a Direct or Indirect Substantial Contractual Relationship with an Individual or Entity Listed in subsection A.--A substantial contractual relationship is defined as any contractual relationship which provides for one or more of the following services:
a. The administration, management, or provision of medical services;
b. The establishment of policies pertaining to the administration, management, or provision of medical services; or
c. The provision of operational support for the administration, management, or provision of medical services.
HMO Contract for January 1, 2000 - December 31, 2001
3. Entities Which Employ, Contract With, or Contract Through Any Individual or Entity That is Excluded From Participation in Medicaid under Section 1128 or 1128A, for the Provision (Directly or Indirectly) of Health Care, Utilization Review, Medical Social Work or Administrative Services.--For the services listed, HMO must exclude from contracting any entity which employs, contracts with, or contracts through an entity which has been excluded from participation in Medicaid by the Secretary under the authority of Section 1128 or 1128A of the Act.
HMO attests by signing this Contract that it excludes from participation in the HMO all organizations which could be included in any of the above categories.
KK. Clinical Laboratory Improvement Amendments
Use only certain laboratories. All laboratory testing sites providing services under this Contract must have a valid Clinical Laboratory Improvement Amendments (CLIA) certificate along with a CLIA identification number, and comply with CLIA regulations as specified by 42 CFR Part 493, "Laboratory Requirements." Those laboratories with certificates will provide only the types of tests permitted under the terms of their certification.
LL. Limitation on Fertility Enhancing Drugs
The HMO must get prior authorization from the Chief Medical Officer in the Division of Health Care Financing before an HMO provider treats an enrollee with any of the following drug products: Chorionic Gonadotropin, Clomiphene, Gonadorelin, Menotropins, Urofollitropin and any other new fertility enhancing drugs.
MM. Reporting of Communicable Diseases
As required by Wis. Stats. 252.05, 252.15(5)(a)6 and 252.17(7)(9b), Physicians, Physician Assistants, Podiatrists, Nurses, Nurse Midwives, Physical Therapists, and Dietitians affiliated with a Medicaid HMO shall report the appearance, suspicion or diagnosis of a communicable disease or death resulting from a communicable disease to the Local Health Department for any enrollee treated or visited by the provider. Reports of human immunodeficiency virus (HIV) infection shall be made directly to the State Epidemiologist. Such reports shall include the name, sex, age, residence, communicable disease, and any other facts required by the Local Health Department and Wisconsin Division of Public Health. Such reporting shall be made within 24 hours of learning about the communicable disease or death or as specified in Wis. Admin. Code HFS 145.04, Appendix A. Charts and reporting forms on communicable diseases are available from the Local Health Department. Each laboratory subcontracted or otherwise affiliated with the HMO shall report the identification or suspected
HMO Contract for January 1, 2000 - December 31, 2001
identification of any communicable disease listed in Wis. Admin. Rules 145,. Appendix A to the local health department; reports of HIV infections shall be made directly to the State Epidemiologist.
NN. MedicaBadgerCareare HMO Advocate Requirements
Each HMO must employ a Medicaid/BadgerCare HMO Advocate during the entire contract term. The HMO Advocate is to work with both enrollees and providers to facilitate the provision of Medicaid benefits to enrollees; is responsible for making recommendations to management on any changes needed to improve either the care provided or the way care is delivered; and must be in an organizational location within the HMO which provides the authority needed to carry out these tasks. The detailed requirements of the HMO Advocate are listed below:
1. Functions of the Medicaid/BadgerCare HMO Advocate(s)
a. Investigation and resolution of access and cultural sensitivity issues identified by HMO staff, State staff, providers, advocate organizations, and enrollees.
b. Monitoring formal and informal grievances with the grievance personnel for purposes of identification of trends or specific problem areas of access and care delivery. An aspect of the monitoring function is the ongoing participation in the HMO grievance committee.
c. Recommendation of policy and procedural changes to HMO management including those needed to ensure and/or improve enrollee access to care and enrollee quality of care. Changes can be recommended for both internal administrative policies and for subcontracted providers.
d. Act as the primary contact for enrollee advocacy groups. Work with enrollee advocacy groups on an ongoing basis to identify and correct enrollee access barriers.
e. Act as the primary contact for local community based organizations (local governmental units, non-profit agencies, etc.). Work with the local community based organizations on an ongoing basis to acquire knowledge and insight regarding the special health care needs of enrollees.
f. Participate in the Advocacy Program for Managed Care that is organized by the Department. Such participation includes the following: attendance, on an as needed basis, at the Regional
HMO Contract for January 1, 2000 - December 31, 2001
Forums chaired by a Department staff person, at the semiannual Statewide Forum; work with Division of Health Care Financing Managed Care staff person assigned to the HMO on issues of access to medical care and quality of medical care; work with the Enrollment Contractor staff persons on issues of access to medical care, quality of medical care, and enrollment/disenrollment; attendance, on an as needed basis, at bi-monthly Advocacy Team meetings, which will be attended by the Division of Health Care Financing Managed Care Staff, enrollment contractor staff, community based organizations, recipient service representatives from the Fiscal Agent, and EDS ombuds.
g. Ongoing analysis of internal HMO system functions, with HMO staff, as these functions affect enrollee access to medical care and enrollee quality of medical care.
h. Organization and provision of ongoing training and educational materials for HMO staff and providers to enhance their understanding of the values and practices of all cultures with which the HMO interacts.
i. Provision of ongoing input to HMO management on how changes in the HMO provider network will affect enrollee access to medical care and enrollee quality and continuity of care. Participation in the development and coordination of plans to minimize any potential problems that could be caused by provider network changes.
j. Review and approve all HMO informing material to be distributed to enrollees for the purpose of assessing clarity and accuracy.
k. Provision of assistance to enrollees and their authorized representatives for the purpose of obtaining medical records.
l. The lead advocate position will be responsible for overall evaluation of the HMO's internal advocacy plan and will be required to monitor any contracts the HMO may enter into for external advocacy with culturally diverse associations or agencies. The lead advocate will be responsible for training the associations or agencies and assuring their input into the HMO's advocacy plan.
HMO Contract for January 1, 2000 - December 31, 2001
2. Staff Requirements and Authority of the Medicaid/BadgerCare HMO Advocate
a. At a minimum one HMO Advocate must be
located in the organizational structure so
that the Advocate has the authority to
perform the functions and duties listed in
(1)(a-l).
The HMO Certification Application requires HMOs to state the staffing levels to perform the functions and duties listed in (1)(a-1) in terms of number of full and part time staff and total Full Time Equivalents (FTEs) assigned to these tasks. The Department assumes that an HMO acting as an Administrative Service Organization (ASO) for another HMO will have one Advocate or FTE position for each ASO contract as well as maintaining their own internal advocate.
An HMO may employ less than a Full Time
Equivalent (FTE) advocate position, but must
justify to the satisfaction of the
Department why less than one FTE position
will suffice the HMO's enrollee population.
The HMO must also regularly evaluate the
advocate position, workplan, and job duties
and allocate an FTE advocate position to
meet the duties listed in (1)(a-l) if there
is significant increase in the HMO's
enrollee population or in the HMO service
area. The Department reserves the right to
require an HMO to employ an FTE advocate
position if the HMO does not demonstrate
adequacy of a part-time advocate position.
In order to meet the requirement for the
Advocate position statewide, the DHFS
encourages HMOs to contract or have a formal
memorandum of understanding for advocacy
and/or translation services with
associations or organizations who have
culturally diverse populations within the
HMO service area. However, the overall or
lead responsibility for the advocate
position will be within each HMO. HMOs must
monitor the effectiveness of the
associations and agencies under contract and
may alter the contract(s) with written
notification to the Department.
b. The HMO Advocate shall have authority for facilitating and assuring access to all medically necessary services as stipulated in this Contract for each enrollee.
HMO Contract for January 1, 2000 - December 31, 2001
c. The HMO Advocate staffing levels submitted in the HMO Certification Application shall be maintained, and solely devoted to the functions and duties listed in (1)(a-l) throughout the contract term. Changes in the HMO Advocate staffing levels must be approved by the Department thirty days prior to the effective date of the change.
d. The HMO Advocate shall develop prior to contract signing, and shall maintain and modify as necessary, throughout the Contract term, a Medicaid/BadgerCare HMO Advocacy workplan, with time lines and activities specified.
OO. HMO Designation of Staff Person as Contract Representative
The HMO is required to designate a staff person to act as liaison to the Department on all issues that relate to the contract between the Department and the HMO. The contract representative will be authorized to represent the HMO regarding inquiries pertaining to the Contract, will be available during normal business hours, and will have decision making authority in regard to urgent situations that arise. The Contract representative will be responsible for follow-up on contract inquiries initiated by the Department.
PP. Subcontracts with Local Health Departments
The Department encourages the HMO to contract with local health departments for the provision of care to Medicaid/BadgerCare enrollees in order to assure continuity and culturally appropriate care and services. Local health departments can provide HealthCheck outreach and screening, immunizations, blood lead screening services, and services to targeted populations within the community for the prevention, investigation, and control of communicable diseases (e.g., tuberculosis, HIV/AIDS, sexually transmitted diseases, hepatitis and others). WIC projects provide nutrition services and supplemental foods, breastfeeding promotion and support; and immunization screening. Many projects screen for blood lead poisoning during the WIC appointment.
The Department encourages HMOs to work closely with local health departments as noted in Addendum XXIV - Recommendations for Coordination between HMOs and Local Health Departments and Community-Based Health Organizations.
Local health departments have a wide variety of resources that could be coordinated with HMOs to produce more efficient and cost effective care for HMO enrollees. Examples of such resources are ongoing programs of medical services, materials on health education, prevention, and disease states, expertise on outreaching specific subpopulations, communication networks with varieties of medical providers, advocates, community-based health organizations, and
HMO Contract for January 1, 2000 - December 31, 2001
social service agencies, and access to ongoing studies of and information about health status and disease trends and patterns.
QQ. Subcontracts with Community-Based Health Organizations
The Department encourages the HMO to contract with community-based health organizations for the provision of care to Medicaid/BadgerCare enrollees in order to assure continuity and culturally appropriate care and services. Community-based organizations can provide HealthCheck outreach and screening, immunizations, family-planning services, and other types of services.
The Department encourages HMOs to work closely with community-based health organizations as noted in Addendum XXIV - Recommendations for Coordination between HMOs and Local Health Departments and Community-Based Health Organizations.
Community-based health organizations may also provide services, such as WIC services, that HMOs are required by Federal law to coordinate with and refer to, as appropriate.
RR. Prescription Drugs
I. If an HMO elects not to cover dental services, the HMO is liable for the cost of all medically necessary prescription drugs when ordered by a certified Medicaid dental provider.
2. When an enrollee elects to use a family planning provider that is non-HMO affiliated, the HMO is liable for the cost of all medically necessary drugs when ordered by a certified Medicaid family planning provider.
ARTICLE IV
IV. FUNCTIONS AND DUTIES OF THE DEPARTMENT
In consideration of the functions and duties of the HMO contained in this Contract, the Department shall:
A. Eligibility Determination
Identify Medicaid/BadgerCare recipients who are eligible for enrollment in HMOs as a result of eligibility under the following eligibility status:
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===============================================================================================================
Med Stat Cap Rate* Description
===============================================================================================================
31, WN A AFDC-Regular
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32 A AFDC-Unemployed
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38,39 A AFDC-Related, No Cash Payment
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CC, CM, GC, PC A Healthy Start Children
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E2 A AFDC-Related, No Cash Payment
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GE A Healthy Start Children Ages 15-18
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N1, N2 A Medicaid Newborn
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UA, WU A AFDC-Related, Unemployed
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WH A AFDC Employed over 100 Hours a Month
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X1, X2, X3, X4 A AFDC-Related, No Cash Payment
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B1 A BadgerCare -- Income equal or greater than 100% of FPL,
and less than or equal to 150% of FPL, Kids. No premium.
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B4 A BadgerCare -- Income equal or greater than 100% of FPL,
and less than or equal to 150% of FPL, Adults. No premium.
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B2 A BadgerCare -- Income greater than 150% of FPL, and less than
185% of FPL, Kids, Premium.
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B5 A Income greater than 150% of FPL, and less than 185% of FPL,
Adults, Premium.
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B3 A Income equal or greater than 185% of the FPL, and less than
200% of the FPL, Kids, Premium.
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B6 A Income equal or greater than 185% of the FPL, and less than
200% of the FPL, Adults, Premium.
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GP A Income less than 100% of FPL, Adults Parents of OBRA kids
(AFDC), No premium.
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95 B Pregnant Women in Intact Families
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A6, A7, A8, A9 B Pregnant Woman, IRCA Alien
---------------------------------------------------------------------------------------------------------------
E3, E4 B Extension for Pregnant Woman
---------------------------------------------------------------------------------------------------------------
PW, P1 B Healthy Start Pregnant Women
===============================================================================================================
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*A = AFDC/Healthy Start Children/BadgerCare capitation rate. *B = Pregnant Women Healthy Start capitation rate.
HMO Contract for January 1, 2000 - December 31, 2001
B. Enrollment
Promptly notify the HMO of all Medicaid/BadgerCare recipients enrolled in the HMO under this Contract. Notification shall be effected through the HMO Enrollment Reports. All recipients listed as an ADD or CONTINUE on either the Initial or Final HMO Enrollment Report are members of the HMO during the enrollment month. The reports shall be generated in the sequence specified under HMO ENROLLMENT REPORTS. These reports shall be in both tape and hard copy formats or available through electronic file transfer capability and shall include Medical Status Codes. The Department will make all reasonable efforts to enroll pregnancy cases as soon as possible.
C. Disenrollment
Promptly notify the HMO of all Medicaid/BadgerCare recipients no longer eligible to receive services through the HMO under this Contract. Notification shall be effected through the HMO Enrollment Reports which the Department will transmit to the HMO for each month of coverage throughout the term of the Contract. The reports shall be generated in the sequence under HMO ENROLLMENT REPORTS. Any recipient who was enrolled in the HMO in the previous enrollment month, but does not appear as an ADD or CONTINUE on either the Initial or Final HMO Enrollment Report for the current enrollment month, is disenrolled from the HMO effective the last day of the previous enrollment month.
D. HMO Enrollment Reports
For each month of coverage throughout the term of the Contract, the Department shall transmit "HMO Enrollment Reports" to the HMO. These reports will provide the HMO with ongoing information about its Medicaid/ BadgerCare enrollees and disenrollees and will be used as the basis for the monthly capitation claims described in Article V--PAYMENT TO THE HMO. The HMO Enrollment Reports will be generated in the following sequence:
1. The Initial HMO Enrollment Report will list all of the HMO's enrollees and disenrollees for the enrollment month who are known on the date of report generation. The Initial HMO Enrollment Report will be received by the HMO on or before the fifth day of each month covered by the Contract. A capitation claim shall be generated for each enrollee listed as an ADD or CONTINUE on this report. Enrollees who appear as PENDING on the Initial Report and are reinstated into the HMO during the month will appear as a CONTINUE on the Final Report and a capitation claim shall be generated at that time.
HMO Contract for January 1, 2000 - December 31, 2001
2. The final HMO Enrollment Report will list all of the HMO's enrollees for the enrollment month, who were not included in the Initial HMO Enrollment Report. The Final HMO Enrollment Report will be received by the HMO on or before the tenth day of each month subsequent to the coverage month. A capitation claim shall be generated for each enrollee listed as an ADD or CONTINUE on this report. Enrollees in PENDING status will not be included on the final report.
E. Utilization Review and Control
Waive, to the extent allowed by law, any present Department requirements for prior authorization, second opinions, co-payment, or other Medicaid restrictions for the provision of contract services provided by the HMO to enrollees, except as may be provided in Addendum II.
F. HMO Review
Submit to HMOs for prior approval materials that describe specific HMOs and that will be distributed by the Department or County to recipients.
G. HMO Review of Study or Audit Results
Submit to HMOs for a 15 business day review/comment period, any HMO Medicaid/BadgerCare audits, the annual HMO Comparison Report, HMO Consumer Satisfaction Reports, or any other HMO Medicaid studies the Department releases to the public.
H. Vaccines
Provide certain vaccines to HMO providers for administration to Medicaid/ BadgerCare HMO enrollees according to the policies and procedures in the Wisconsin Medicaid and BadgerCare Physicians Services Handbook. The Department will reimburse the HMO for the cost of vaccines that are newly approved during the contract year and not yet part of the Vaccine for Children program. The cost of the vaccine shall be the same as the cost to the Department of buying the new vaccine through the Vaccine for Children program. The HMO retains liability for the cost of administering the vaccines.
I. Coordination of Benefits
Maintain a report of recovered money reported by the HMO and its subcontractor.
HMO Contract for January 1, 2000 - December 31, 2001
J. Wisconsin Medicaid Provider Reports
Provide a monthly electronic listing of all Wisconsin Medicaid certified providers to include, at a minimum, the name, address, Wisconsin Medicaid provider ID number, and dates of certification in Wisconsin Medicaid.
ARTICLE V
V. PAYMENT TO THE HMO
A. Capitation Rates
In full consideration of contract services rendered by the HMO, the Department agrees to pay the HMO monthly payments based on the capitation rate specified in Addendum VII. The capitation rate shall be prospectively designed to be less than the cost of providing the same services covered under this Contract to a comparable Medicaid population on a fee-for-service basis. The capitation rate shall not include any amount for recoupment of losses incurred by the HMO under previous contracts. The Department shall have the right to make separate payments to subcontractors directly on a monthly basis when the Department determines it is necessary to assure continued access to quality care. Such separate payment will be made only to subcontractors that receive more than 90 percent of the contracted monthly capitation rate from the Department to the HMO.
B. Actuarial Basis
The capitation rate is calculated on an actuarial basis (specified in Addendum VII) recognizing the payment limits set forth in 42 CFR 447.361.
C. Renegotiation
The monthly capitation rates set forth in this article shall not be subject to renegotiation during the contract term or retroactively after the contract term, unless such renegotiation is required by changes in Federal or State laws, rules or regulations.
D. Reinsurance
The HMO may obtain a risk-sharing arrangement from an insurer other than the Department for coverage of enrollees under this Contract, provided that the HMO remains substantially at risk for providing services under this Contract.
HMO Contract for January 1, 2000 - December 31, 2001
E. Neonatal Intensive Care Unit Risk-Sharing
The Department agrees to reimburse each HMO for a portion of the neonatal intensive care unit (NICU) costs incurred by the HMO if the HMO's average number of NICU days per thousand member year exceeds 75 days per thousand member year during the contract period. This reimbursement shall be provided in the following manner:
1. The Department shall reimburse the HMO for the average number of NICU days per thousand member years that the HMO exceeds 75 NICU days per thousand member years during the contract period. For each day that the HMO's average number of NICU days per thousand member years exceeds 75 NICU days per thousand member years, the Department will reimburse the HMO for ninety percent (90%) of the HMO's NICU cost per day, not to exceed $1,443 per day.
2. The HMO's NICU cost per day shall include the HMO's NICU inpatient payment per day and the HMO's associated physician payments. Associated physician payments refers to total HMO payments made by the HMO to the physician(s) for services provided to the infant during the NICU stay. Associated physician payments will be divided by the number of days reported for the NICU stay to determine the HMO's payment per day of associated physician payments.
3. Neonatal intensive care unit days cover any newborn transferred or directly admitted after birth, to a Level II, Level III or Level IV SCN/NICD for treatment and/or observation under the care of a neonatologist or pediatrician. NICU coverage will continue until the infant is deemed medically stable to be discharged to a newborn nursery, medical floor or home.
NICU days will also cover any newborn infant transferred or directly admitted after birth to a Level II, Level III or Level IV SCN/NICD who requires transfer to another institution for a severe, compromised physical status, diagnostic testing or surgical intervention which cannot be provided for at the hospital of initial admission. NICU coverage will continue until the infant is transferred back to the initial hospital and deemed medically stable to be discharged to a newborn nursery, medical floor or home.
Level I facilities are those which are designed primarily for the care of neonatal patients who have no complications but which are able to provide competent emergency services when the need arises. Level II facilities provide a full range of services for low birthweight neonates who are not sick, but require frequent feeding, and neonates who require more hours of nursing than do normal neonates. Level III facilities
HMO Contract for January 1, 2000 - December 31, 2001
provide a full range of newborn intensive care services for neonatal patients who do not require intensive care but require 6-12 hours of nursing each day. Level IV facilities provide a full range of services for severely ill neonates who require constant nursing and continuous cardiopulmonary and other support.
Note: HMOs cannot claim additional reimbursement under both the NICU risk-sharing policy and the ventilator dependent policy for the same enrollee on the same date of service.
4. HMOs must submit all data requested by the Department for calculating the NICU reimbursement in the format specified by the Department before May 1 of the following calendar year. The data and data format required is defined in Addendum IX. The Department will calculate the NICU reimbursement amount by county.
5. NICU reimbursement shall be made by the Department to the HMO after the end of the contract year, following submittal of all needed NICU data from the HMO. The Department will reimburse the HMO within sixty days of receipt of all necessary data from the HMO. A final adjustment to the NICU reimbursement amount may be made by the Department one year after the initial payment. This adjustment will be based on updated NICU days and eligible months.
F. Payment Schedule
Payment to the HMO shall be based on the HMO Enrollment Reports which the
Department will transmit to the HMO according to the schedule in Article
IV. D. Payment for each person listed as an ADD or CONTINUE on the HMO
Enrollment Reports shall be made by the Department within 60 days of the
date the report is generated. Also, all retroactive capitation payments for
newborns shall be paid within 60 days of the child's first appearance on an
enrollment report. (See Article V. G.) Any claim that is not paid within
these time limits shall be denied by the Department and the recipient shall
be disenrolled from the HMO for the capitation month specified on the
claim. Notification of all paid and denied claims shall be given through
the weekly Remittance Status Report, which is available on both tape and
hard copy.
G. Capitation Payments For Newborns
The HMO shall authorize provision of contract services to the newborn child of an enrolled mother for the first ten days of life. The child's date of birth should be counted as day one. In addition, if the child is reported within 100 days of its date of birth, the HMO shall provide contract services to the child from its date of birth until the child is disenrolled from the HMO. The HMO will receive a separate capitation payment for the month of birth and for all other
HMO Contract for January 1, 2000 - December 31, 2001
months the HMO is responsible for providing contract services to the child. If the child is not reported within 100 days of its date of birth the child will not be retroactively enrolled into the HMO. In this case the HMO is not responsible for payment of services provided prior to the child's enrollment and will receive no capitation payments for that time period and may recoup from providers for any services that were authorized in that 100 day time period. The providers who gave services in this 100 day time period may then bill the Department on a fee-for-service basis. More detailed information for providers on billing the Department on a fee-for- service basis in these situations can be found in Part A, Section IX, of the Wisconsin Medicaid Provider Handbook
HMOs, or their providers, must complete an HMO Newborn Report (example and instructions in Addendum XVII) for newborns. The HMO shall report all births to the Department's fiscal agent as soon as possible after the date of birth, but at least monthly. Prompt HMO reporting of newborns will facilitate retroactive enrollment and capitation payments for newborns, since this newborn reporting will ensure the newborn's Medicaid/BadgerCare eligibility for the first 12 months of life contingent upon the newborn continuously residing with the mother.
H. Coordination of Benefits (COB)
The HMO must actively pursue, collect and retain all monies from all available resources for services to enrollees covered under this Contract except where the amount of reimbursement the HMO can reasonably expect to receive is less than the estimated cost of recovery (this exception does not apply to collections for AIDS and ventilator dependent patients), or except as provided in Addendum II. COB recoveries will be done by post- payment billing (pay and chase) for certain prenatal care and preventive pediatric services. Post-payment billing will also be done in situations where the third party liability is derived from a parent whose obligation to pay is being enforced by the State Child Support Enforcement Agency and the provider has not received payment within 30 days after the date of service.
1. Cost effectiveness of recovery is determined by, but not limited to time, effort, and capital outlay required to perform the activity. The HMO must be able to specify the threshold amount or other guidelines used in determining whether to seek reimbursement from a liable third party, or describe the process by which the HMO determines seeking reimbursement would not be cost effective, upon request of the Department.
HMO Contract for January 1, 2000 - December 31, 2001
2. To assure compliance, records shall be maintained by the HMO of all COB collections and reports shall be made quarterly on the form designated by the Department in Addendum VI. HMOs must be able to demonstrate that appropriate collection efforts and appropriate recovery actions were pursued. The Department has the right to review all billing histories and other data related to COB activities for enrollees. HMOs must seek from all enrollees information on other available resources. HMOs must also seek to coordinate benefits before claiming reimbursement from the Department for the AIDS and ventilator dependent enrollees:
a. Other available resources may include, but are not limited to, all other State or Federal medical care programs which are primary to Medicaid, group or individual health insurance, ERISAs, service benefit plans, the insurance of absent parents who may have insurance to pay medical care for spouses or minor enrollees, and subrogation/workers compensation collections.
b. Subrogation collections are any recoverable amounts arising out of settlement of personal injury, medical malpractice, product liability, or Worker's Compensation. State subrogation rights have been extended to HMOs under s. 49.89(9), Act 31, Laws of 1989. After attorneys' fees and expenses have been paid, the HMO shall collect the full amount paid on behalf of the enrollee.
3. Section 1912(b) of the Social Security Act must be construed in a beneficiary-specific manner. The purpose of the distribution provision is to permit the beneficiary to retain TPL benefits to which he or she is entitled to except to the extent that Medicaid (or the HMO on behalf of Medicaid) is reimbursed for its costs. The HMO is free, within the constraints of State law and this contract, to make whatever case it can to recover the costs it incurred on behalf of its enrollee. It can use the Medicaid fee schedule, an estimate of what a capitated physician would charge on a fee-for-service basis, the value of the care provided in the market place or some other acceptable proxy as the basis of recovery. However, any excess recovery, over and above the cost of care (however the HMO chooses to define that cost), must be returned to the beneficiary. HMOs may not collect from amounts allotted to the beneficiary in a judgement or court-approved settlement. The HMO is to follow the practices outlined in the DHFS Casualty Recovery Manual.
4. Where the HMO has entered a risk-sharing arrangement with the Department, the COB collection and distribution shall follow the procedures described in Addendum III of this Contract. Act 27, Laws of 1995 extended assignment rights to HMOs under s. 632.72.
HMO Contract for January 1, 2000 - December 31, 2001
5. COB collections are the responsibility of the HMO or its subcontractors. Subcontractors must report COB information to the HMO. HMOs and subcontractors shall not pursue collection from the enrollee, but directly from the third party payer. Access to medical services will not be restricted due to COB collection.
6. The following requirement shall apply if the Contractor (or the Contractor's parent firm and/or any subdivision or subsidiary of either the Contractor's parent firm or of the Contractor) is a health care insurer (including, but not limited to, a group health insurer and/or health maintenance organization) licensed by the Wisconsin Office of the Commissioner of Insurance and/or a third-party administrator for a group or individual health insurer(s), health maintenance organization(s), and/or employer self-insurer health plan(s):
a. Throughout the Contract term, these insurers and third-party administrators shall comply in full with the provision of subsection 49.475 of the Wisconsin Statutes. Such compliance shall include the routine provision of information to the Department in a manner and electronic format prescribed by the Department and based on a monthly schedule established by the Department. The type of information provided shall be consistent with the Department's written specifications.
b. Throughout the Contract term, these insurers and third-party administrators shall also accept and properly process postpayment billings from the Department's fiscal agent for health care services and items received by Wisconsin Medicaid enrollees.
7. If, at any time during the contract term, any of the insurers or third party administrators fail, in whole or in part, to adhere to the requirements of (Article V. H. subsection 6. (a.) or (6.(b.)) above, the Department may take the remedial measures specified in Article IX. D. 1. and Article X. B. (2).
I. Recoupments
The Department will not normally recoup HMO per capita payments when the HMO actually provided service. However, in situations where the Medicaid enrollee cannot use HMO facilities, the Department will recoup HMO capitation payments. Such situations are described more fully below:
1. The Department will recoup HMO capitation payments for the following situations where an enrollee's HMO status has changed before the 1st day of a month for which a capitation payment has been made:
HMO Contract for January 1, 2000 - December 31, 2001
a. enrollee moves out of the HMO's service area
b. enrollee enters a public institution
c. enrollee dies
2. The Department will recoup HMO capitation payments for the following situations where the Department initiates a change in an enrollee's HMO status on a retroactive basis, reflecting the fact that the HMO was not able to provide services. In these situations, recoupments for multiple month's capitation payments are more likely.
a. correction of a computer or human error, where the person was never really enrolled in the HMO.
b. disenrollments of enrollees for reasons of pregnancy and continuity of care, or for reasons specified in Addendum II.
3. In instances where membership is disputed between two HMOs, the Department shall be the final arbitrator of HMO membership and reserves the right to recoup an inappropriate capitation payment.
4. If an HMO enrollee moves out of the HMO service area, the enrollee will be disenrolled from the HMO on the date the enrollee moved as verified by the eligibility worker. Any capitation payment made for periods of time after disenrollment will be recouped.
5. If a contract is terminated, recoupments will be handled through a payment by the HMO within 30 days of contract termination.
J. HealthCheck Recoupment
The Department will determine the amount of the HMO's HealthCheck
recoupment, by service area, by following the algorithm defined in Article
III. B. (10) and by using the number of screens and eligibles reported in
the second semi-annual Utilization Report. Data provided by the HMO must
agree with medical record documentation. Before completing the recoupment,
the Department will inform the HMO of the intended action and allow the
HMO thirty days to review and respond to the calculation. The second semi-
annual Utilization Report will be considered complete and final.
HMO Contract for January 1, 2000 - December 31, 2001
K. Payment for Aids, HIV-Positive, and Ventilator Dependent
The Department will pay the HMO's costs of providing Medicaid-covered services to HMO enrollees who meet the criteria in this section, by HMO service area. These payments will be made based on the data submitted by the HMO to the Department on a quarterly basis. The data submission and payment schedule is included as Addendum IV to this Contract. Reimbursement already provided to the HMO in the form of capitation payments for qualified enrollees will be deducted from 100 percent reimbursement payments. 100 percent reimbursement refers to full reimbursement of HMO costs for providing Medicaid services to the above enrollees. The criteria for enrollees are:
1. Ventilator Assisted Patients----Costs incurred for enrollees who need ventilator treatment services qualify for reimbursement if the enrollee meets the following criteria:
a. For the purposes of this reimbursement, a ventilator-assisted patient must have died while on total respiratory support or must meet all of the criteria below:
1) The patient must require equipment that provides total respiratory support. This equipment may be a volume ventilator, a negative pressure ventilator, a continuous positive airway pressure (CPAP) system, or a Bi (inspiratory and expiratory) PAP. The patient may need a combination of these systems. Any equipment used only for the treatment of sleep apnea does not qualify as total respiratory support.
2) The total respiratory support must be required for a total of six or more hours per 24 hours.
3) The patient must have total respiratory support for at least 30 days which need not be continuous.
4) The patient must have absolute need for the respiratory support, as documented by appropriate blood gases.
b. The HMO will submit the following written documentation to qualify enrollees for reimbursement at the same time as the quarterly reports identified in Addendum IV:
1) The Department's designated form.
HMO Contract for January 1, 2000 - December 31, 2001
2) A signed statement from the doctor attesting to the need of the patient.
3) Copies of progress notes which show the need for continuation of total ventilatory support, any change in the type of ventilatory support and the removal of the ventilatory support.
Copies of lab reports must be submitted if the progress notes do not include blood gas levels.
c. Dates of enhanced funding are based on the following methodology:
1) Day one is the day that the patient is placed on the ventilator. If the patient is on the ventilator for less than six hours on the first day, the use must continue into the next day and be more than six total hours.
2) Each day that the patient is on the ventilator for a part of any day, as long as it is part of the six total hours per 24 hours, counts as a day for enhanced funding.
3) The period of enhanced funding starts on the first day of the month that the patient was placed on ventilator support. It ends on the last day of the month after which the patient is removed from the ventilatory support, or at the end of the hospital stay, whichever is later.
2. HMOs cannot claim additional reimbursement under both the NICU risk- sharing policy and the ventilator dependent policy for the same enrollee on the same date of service.
3. AIDS or HIV-Positive with Anti Retroviral Drug Treatment----Costs for services provided to enrollees with a confirmed diagnosis of AIDS, as indicated by an ICD-9-CM diagnosis code or HIV-Positive who are on anti retroviral drug treatment approved by the Food and Drug Administration, qualify for reimbursement. Written requests to qualify enrollees for reimbursement must be submitted by the HMO to the Contract Monitor. These requests should be batched and submitted with the reports identified in Addendum IV. A signed statement from a physician that indicates a diagnosis of AIDS or HIV-Positive and that the patient is on an Anti Retroviral Drug treatment must accompany each request. One hundred percent reimbursement will be effective for services provided on or after the first day of the month in which treatment begins.
HMO Contract for January 1, 2000 - December 31, 2001
a. For AIDS and HIV -- Positive enrollees retroactively disenrolled under Article VII of this Contract, the HMO will have to back out the cost of the care provided during the backdated period from the reports in Addendum IV. Part D.
b. Submission of Data -- As required by the Wisconsin Administrative Code HFS 106.03, payment data or adjustment data for AIDS and/or vent enrollees must be received by the Department's fiscal agent within 365 days after the date of the service. If the HMO cannot meet this requirement, the HMO must provide documentation that substantiates the delay. The Department will make the final determination to pay or deny the services. The Department will exercise its discretion reasonably in making the determination to waive the 365-day billing requirement.
4. NICU days for which the HMO will collect 100 percent reimbursement cannot be counted under the NICU risk-sharing policy in this Contract. (HMOs cannot choose between the 100 percent policy and the NICU policy; if a cost qualifies under the 100 percent policy, it must be reported under that policy.)
The HMO will manage the care of these enrollees, produce quarterly cost and utilization reports and meet with the Department on a quarterly basis to discuss cost and other issues related to care management for these.
5. The HMO must submit reports (eligibility summary, cost summary, inpatient hospital utilization summary, and detail) to the Department according to the schedule and in the format specified in Addendum IV.
ARTICLE VI
VI. REPORTS, DATA, AND COMPUTER/DATA REPORTING SYSTEM
A. Disclosure
The HMO and any subcontractors shall make available to the Department, the Department's authorized agents, and appropriate representatives of the U.S. Department of Health and Family Services any financial records of the HMO or subcontractors which relate to the HMO's capacity to bear the risk of potential financial losses, or to the services performed and amounts paid or payable under this Contract. The HMO shall comply with applicable record keeping requirements specified in HFS 105.02(1)-(7) Wis. Adm. Code, as amended.
HMO Contract for January 1, 2000 - December 31, 2001
B. Periodic Reports
The HMO agrees to furnish within the Department's time frame and within the Department's stated form and format, information and/or data from its records to the Department, and to the Department's authorized agents, which the Department may require to administer this Contract, including but not limited to the following:
1. Summaries of amounts recovered from third parties for services rendered to enrollees under this Contract in the format specified in Addendum VI.
2. Enrollee summary utilization data to be submitted semiannually via electronic media and to include the data elements in the format specified in the Wisconsin Medicaid HMO Utilization Reporting User Manual for Reporting Period 2000.
The Department will compare the summary data reported in this manner to data extracted from the encounter data set for the same time period using logic from the definitions obtained in the Wisconsin Medicaid HMO Utilization Reporting User Manual to ensure the completeness of the encounter data set. Based on the magnitude of any differences between the two data sets (summary vs. encounter), the Department retains the right to require the HMO to continue submitting summary utilization data during 2001.
An encounter record for each service provided to enrollees. The Encounter data set will include at least those data elements specified in Addendum IV. The encounter data set must be submitted monthly via electronic media. Refer to Article I, Definitions, for the definition of an encounter.
3. Information and/or data to support the Department's monitoring and evaluation of the Medicaid/BadgerCare HMO Program to include, at a minimum, a Verification Data File supporting the utilization data from subpart 2, above.
4. Copies of all formal grievances and documentation of actions taken on each grievance, as specified in Article VIII. A. (11).
5. Birth Cost as specified in Addendum XXIII.
HMO Contract for January 1, 2000 - December 31, 2001
C. Access to and Audit of Contract Records
Throughout the duration of the Contract, and for a period of five (5) years after termination of the Contract, the HMO shall provide duly authorized representatives of the State or Federal government access to all records and material relating to the Contractor's provision of and reimbursement for activities contemplated under the Contract. Such access shall include the right to inspect, audit and reproduce all such records and material and to verify reports furnished in compliance with the provisions of the Contract. All information so obtained will be accorded confidential treatment as provided under applicable laws, rules or regulations.
D. Records Retention
The HMO shall retain, preserve and make available upon request all records relating to the performance of its obligations under the Contract, including claim forms, paper and electronic, for a period of not less than five (5) years from the date of termination of the Contract. Records involving matters which are the subject of litigation shall be retained for a period of not less than five (5) years following the termination of litigation. Microfilm copies of the documents contemplated herein may be substituted for the originals with the prior written consent of the Department, provided that the microfilming procedures are approved by the Department as reliable and are supported by an effective retrieval system.
Upon expiration of the five (5) year retention period, the subject records shall, upon request, be transferred to the Department's possession. No records shall be destroyed or otherwise disposed of without the prior written consent of the Department.
E. Special Reporting and Compliance Requirements
The HMO shall comply with the following State and Federal reporting and compliance requirements for the services listed below, for the entire HMO, aggregating all service areas if the HMO has more than one service area:
1. Abortions shall comply with the requirements of Chapter 20.927, Wis. Stats., and with 42 CFR 441 Subpart E--Abortions.
2. Hysterectomies and sterilizations shall comply with 42 CFR 441 Subpart F--Sterilizations.
Sanctions in the amount of $10,000.00 may be imposed for non- compliance with the above special reporting and compliance requirements.
HMO Contract for January 1, 2000 - December 31, 2001
F. Reporting of Corporate and Other Changes
If corporate restructuring or any other change affects the continuing accuracy of certain information previously reported by the HMO to the Department, the HMO shall report the change in information to the Department. The HMO shall report each such change in information as soon as possible, but not later than 30 days after the effective date of the change. Changes in information covered under this section include all of the following:
1. Any change in information previously provided by the HMO in response to questions posed by the Department in the current HMO Certification Application or any previous RFB for Medicaid/BadgerCare HMO Contracts. This includes any change in information originally provided by the HMO as a "new HMO," within the meaning of the HMO Certification Application or RFB.
2. Any change in information relevant to Article III, Section JJ of this Contract, relating to ineligible organizations.
3. Any change in information relevant to Section 4 of Addendum I of this Contract, relating to ownership and business transactions of the HMO.
G. Computer/Data Reporting System
The HMO must maintain a computer/data reporting system that meets the Department's following requirements. The HMO is responsible for complying with all of the reporting requirements established by the Department and with assuring the accuracy and completeness of the data as well as the timely submission of data. The data submitted must be supported by records available to the Department or its designee. The Department reserves the right to conduct on-site inspections and/or audits prior to awarding the Contract. The HMO must have a contact person responsible for the computer/data reporting system and in a position to answer questions from the Department and resolve problems identified by the Department in regard to the requirements listed below:
1. The HMO must have a claims processing system that is adequate to meet all claims processing and retrieval requirements specified in this Contract, specifically Article III. G.
2. The HMO must have a computer/data collection, processing, and reporting system sufficient to monitor HMO enrollment/ disenrollment (in order to determine on any specific day which recipients are enrolled or disenrolled from the HMO) and to monitor service utilization for the Utilization Management requirements of Quality Improvement that are specified in Article III. W. (9) of the Contract.
HMO Contract for January 1, 2000 - December 31, 2001
3. The HMO must have a computer/data collection, processing, and
reporting system sufficient to support the Quality Improvement (QI)
requirements described in Article III. W. The system must be able to
support the variety of QI monitoring and evaluation activities,
including the monitoring/evaluation of quality of clinical care and
service (III. W. (3)); periodic evaluation of HMO providers (III.
W.(6)(b)); member feedback on QI (III. W. (7)(b) and (c)); maintenance
of and use of medical records in QI (III. W. (8)(f) and (i)); and
monitoring and evaluation of priority areas (III. W. (13)(a) - (f)).
4. The HMO must have a computer and data processing system sufficient to accurately produce the data, reports, and encounter data set, in the formats and time lines prescribed by the Department in this contract, that are included in Addendum IV of the Contract. HMOs are required to submit electronic test encounter data files as required by the Department in the format specified in the 2000-2001 HMO encounter data user manual and timelines specified in Addendum IV of the Contract and as may be further specified by the Department. The electronic test encounter data files are subject to Department review and approval before production data is accepted by the Department. Production claims or other documented encounter data must be used for the test data files.
5. The HMO must capture and maintain a claim record of each service or item provided to enrollees, using HCFA 1500, UB-92, NCPDP, or other claim, or claim formats that are adequate to meet all reporting requirements of this contact. The computerized database must be a complete and accurate representation of all services covered by the HMO for the contract period. The HMO is responsible for monitoring the integrity of the data base, and facilitating its appropriate use for such required reports as encounter data, summary utilization data, and targeted performance improvement studies.
6. The HMO must have a computer processing and reporting system that is capable of following or tracing an encounter within its system using a unique encounter record identification number for each encounter.
7. The HMO reporting system must have the ability to identify all denied claims/encounters using national ANSI EOB codes.
8. The HMO system must be capable of reporting original and reversed claim detail records and encounter records.
9. The HMO system must be capable of correcting an error to the encounter record within 90 days of notification by the Department.
HMO Contract for January 1, 2000 - December 31, 2001
10. The HMO must notify the Department of all significant changes to the system that may impact the integrity of the data, including such changes as new claims processing software, new claims processing vendors and significant changes in personnel.
ARTICLE VII
VII. ENROLLMENT AND DISENROLLMENTS
A. Enrollment
The HMO shall accept as enrolled all persons who appear as enrollees
on the HMO Enrollment Reports and newborns as defined in Article I.
Enrollment in the HMO shall be voluntary by the recipient except where
limited by Departmental implementation of a State Plan Amendment or a
Section 1115(a) waiver. The current State Plan Amendment and 1115(a)
waiver requires mandatory enrollment into an HMO for those service
areas in which there are two or more HMOs with sufficient slots for
the HMO eligible population. The Department reserves the right to
assign a Medicaid/BadgerCare recipient to a specific HMO when the
recipient fails to choose an HMO during a required enrollment period.
The HMO shall designate, in Article XV, and Addendum XX, of this Contract, their maximum enrollment level for the different service areas of the HMO throughout the State. The Department may take up to 60 days, from the date of written notification, to implement maximum enrollment level changes. The HMO shall accept as enrolled all persons who appear as enrollees on the HMO Enrollment Reports and newborns up to the HMO specified enrollment level for a particular service area. The number of enrollees may exceed the maximum enrollment level by 5 percent on a temporary basis. The Department does not guarantee any minimum enrollment level. The maximum enrollment level for a service area may be increased or decreased during the course of the contract period based on mutual acceptance of a different maximum enrollment level.
B. Third Trimester Pregnancy Disenrollment
Enrollees who are in their third trimester of pregnancy when they are expected to enter an HMO may be eligible for disenrollment. In order for disenrollment to occur, the enrollee must have been automatically assigned or reassigned. In addition, they must be seeking care from a provider (physician and/or hospital) who is either not affiliated with the HMO to which they were assigned or is affiliated but the HMO is closed to new enrollment. Disenrollment requests can only be made by the enrollee and/or casehead. Disenrollment requests must be made before the end of the second month in the HMO or before the birth,
HMO Contract for January 1, 2000 - December 31, 2001
whichever occurs first. Disenrollment requests should be directed to the Enrollment Contractor or the Department's assigned HMO Contract Monitor.
C. Ninth Month Pregnancy Disenrollment
Enrollees who deliver or are expected to deliver the first month they are assigned to a HMO may be eligible for disenrollment. In order for disenrollment to occur, the enrollee must have been automatically assigned or reassigned and must not have been in the HMO to which they were assigned or reassigned within the last seven months. In addition, they must be seeking care from a provider (physician and/or hospital) not affiliated with the HMO to which they were assigned. Disenrollment requests can be made by the HMO, a provider, or the recipient. Requests for ninth month pregnancy disenrollments should be directed to the Department's assigned HMO Contract Monitor.
D. Exemptions from Enrollment in any HMO and Disenrollment for Patients of Certified Nurse Midwives or Nurse Practitioners
1. Enrollees may be eligible for an exemption from enrollment if:
a. they reside in a service area of a certified nurse midwife or nurse practitioner; and
b. they choose to receive their care from a certified nurse midwife or nurse practitioner; and
c. the certified nurse midwife or nurse practitioner is not affiliated with any HMO in the service area; or
d. the certified nurse midwife or nurse practitioner is not independently certified as a provider of any HMO within the service area.
2. Exemptions and disenrollment requests may be made by the enrollee and should be directed to the Department's Enrollment Contractor. Exemptions will be processed as soon as possible and will be effective as of the first of the month of request.
E. Exemption from Enrollment in any HMO and Disenrollment For AIDS or HIV-Positive with Anti Retroviral Drug Treatment
Enrollees with a confirmed diagnosis of AIDS, as indicated by an ICD -9-CM diagnosis code, or HIV-Positive who are on anti retroviral drug treatment approved by the Federal Food and Drug Administration, are eligible for an exemption. The casehead may apply for the exemption. The HMO shall not counsel or otherwise influence an enrollee or potential enrollee in such a way as
HMO Contract for January 1, 2000 - December 31, 2001
to encourage exemption from enrollment or continued enrollment. Exemptions will be processed as soon as possible. Disenrollment will be effective with the first day of the month in which anti retroviral treatment begins or in which the enrollee was diagnosed with AIDS except that disenrollment will not be backdated more than nine (9) months from the date the request is received.
F. Exemptions from Enrollment in any HMO and Disenrollment for Patients of Federally Qualified Health Centers
1. Enrollees may be eligible for an exemption from enrollment if:
a. they reside in the service area of an FQHC;
b. they choose to receive their primary care from the FQHC; and
c. the FQHC is not affiliated with any HMO within the service area.
2. Exemption and Disenrollment requests may be made by the casehead and should be directed to the Department's assigned HMO Contract Monitor. Exemptions will be processed as soon as possible and will be effective as of the first of the month of the request.
G. Native American Disenrollment
Enrollees who are Native American and members of a federally recognized tribe are eligible for disenrollment. Only the enrollee can make disenrollment requests.
H. Special Disenrollments
The HMO may request and the Department may approve disenrollment for specific cases or persons where there is just cause. Just cause is defined as a situation where enrollment would be harmful to the interests of the recipient or in which the HMO cannot provide the recipient with appropriate medically necessary contract services for reasons beyond its control.
I. Exemptions from Enrollment in any HMO and Disenrollment for Recipients With Commercial HMO Insurance or Commercial Insurance With a Restricted Provider Network
Enrollees who have commercial HMO insurance may be eligible for exemption from enrollment in any HMO or disenrollment, if the commercial HMO does not participate in Medicaid. In addition, enrollees who have commercial insurance which limits enrollees to a restricted provider network (e.g., PPOs, PHOs, etc.) may be eligible for an exemption from enrollment in any HMO or
HMO Contract for January 1, 2000 - December 31, 2001
disenrollment. Requests for exemption and disenrollment should be directed to the Department's Enrollment Contractor. Exemptions will be processed as soon as possible and will be effective as of the first of the month of the request.
J. Exemption from Enrollment in any HMO and Disenrollment for Families Where One or More Members are receiving SSI benefits
1. Families may be eligible for exemption from enrollment if:
a. there are one or more members in the family who are receiving SSI benefits, and
b. the SSI member receives primary care from a provider who does not accept any Medicaid HMO, and
c. other family members receive their primary care from the same provider as the SSI member.
2. Exemption and Disenrollment requests may be made by the SSI member, parent or guardian and should be directed to the Department's Enrollment Contractor. Exemptions will be processed as soon as possible and will be effective as of the first of the month of request.
K. Voluntary Disenrollment
All enrollees shall have the right to disenroll from the HMO pursuant to 42 CFR 434.27(b)(1) unless otherwise limited by a State Plan Amendment or a Section 1115(a) waiver of federal laws, or pursuant to Addendum II. A voluntary disenrollment shall be effective no later than the first day of the second month after the month in which the enrollee requests termination. The HMO will promptly forward to the Department or its designee all requests from enrollees for disenrollment. Wisconsin currently has a State Plan Amendment and an 1115(a) waiver which allows the Department to "lock-in" enrollees to an HMO for a period of 12 months in mandatory HMO service areas, except that disenrollment is allowed for good cause as described in Sections B. through J. above. The lock-in policy is described more completely in Section O below. Addendum II allows voluntary exemptions and disenrollment from HMOs for a variety of reasons. Because of these two Department policies, voluntary disenrollment is limited to the situations described in Sections B. through K. of Article VII. and Addendum II.
HMO Contract for January 1, 2000 - December 31, 2001
L. Section 1115(A) Waiver and State Plan Amendment
Should the Department, at any time during the Contract, obtain a State Plan Amendment, a waiver or revised waiver authority under the Social Security Act (as amended), the conditions of enrollment described in the Contract, including but not limited to voluntary enrollment and the right to voluntary disenrollment, shall be amended by the terms of said waiver and State Plan Amendment.
M. Additional Services
The HMO shall not obtain enrollment through the offer of any compensation, reward, or benefit to the enrollee except for additional health-related services which have been approved by the Department.
N. Enrollment/Disenrollment Practices
The HMO shall permit the Department to monitor enrollment and disenrollment practices of the HMO under this Contract. The HMO will not discriminate in enrollment/disenrollment activities between individuals on the basis of health status or requirement for health care services, including those individuals who have AIDS or are HIV- Positive. This section shall not prevent the HMO from assisting in the disenrollment process for individuals who can be in a different medical status code.
O. Enrollee Lock-In Period
Under the Department's State Plan Amendment and waiver authority of
Section 1115(a) of the Social Security Act (as amended), in mandatory
HMO service areas, enrollees will be locked in to an HMO for twelve
months. The first 90 days of the 12-month lock-in period will be an
open enrollment period in which the enrollee may change their HMO. The
conditions of disenrollment as specified in VII. B - K still apply
during this lock-in period.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE VIII
VIII. GRIEVANCE PROCEDURES
Medicaid/BadgerCare enrollees may grieve regarding any aspect of service delivery provided or arranged by the HMO.
A. Procedures
The HMO shall:
1. Have written policies and procedures that detail what the grievance system is and how it operates.
2. Identify a contact person in the HMO to receive grievances and be responsible for routing/processing.
3. Operate an informal grievance/complaint process which enrollees can use to get problems resolved without going through the formal, written grievance process.
4. Operate a formal grievance process which enrollees can use to grieve in writing.
5. Inform enrollees about the existence of the formal and informal grievance/complaint processes and how to use the formal and informal grievance process.
6. Attempt to resolve complaints informally.
7. Respond to written complaints (i.e., formal grievances) in writing within 10 business days of receipt of grievance, except that in cases of emergency or urgent (expedited grievances) situations, HMOs must resolve the grievance within 2 business days of receiving the complaint or sooner if possible. This represents the first response. More complete procedures are described in Section B. of this Article.
8. Operate a grievance appeals process within the HMO which enrollees can use to appeal any negative response to their grievance to the Board of Directors of the HMO. The HMO Board of Directors may delegate this authority to review appeals to an HMO grievance appeal committee, but the delegation must be in writing. If a grievance appeal committee is established, the Medicaid HMO Advocate must be a member of the committee.
HMO Contract for January 1, 2000 - December 31, 2001
9. Grant the enrollee the right to appear in person before the grievance committee, to present written and oral information. The enrollee may bring a representative to this meeting. The HMO must inform the enrollee in writing of the time and place of the meeting at least 7 calendar days before the meeting.
10. Maintain a record keeping system for informal grievances in the form of a "log" that includes a short, dated summary of each of the problems, the response, and the resolution. This log shall distinguish Medicaid/BadgerCare from commercial enrollees, if the HMO does not have a separate log for Medicaid. The HMO must submit quarterly reports to the Department of all informal grievances/complaints. The analysis of the log will include the number of informal grievances/complaints divided into two categories, program administration and benefits denials. The first report is due April 10, 2000.
11. Maintain a record keeping system for formal grievances that includes a copy of the original grievance, the response, and the resolution. This system shall distinguish Medicaid/BadgerCare from commercial enrollees. Beginning April 10 of each year and quarterly thereafter, the HMO shall forward copies of all formal grievances and documentation of actions taken on each grievance, for the previous quarter, to the Department, in the format specified under Addendum XXI.
12. Notify the enrollee who grieves, at the time of the initial HMO grievance decision denying the grievance, that the enrollee may appeal to the Division of Hearings and Appeals (DHA) or the Department.
13. Assure that individuals with the authority to require corrective action are involved in the grievance process.
14. Distribute to their gatekeepers* and IPAs the informational flyer on enrollee's grievance rights `(the ombudsman brochure). When a new brochure is available, the HMO shall distribute copies to their gatekeepers and IPAs within three weeks of receipt of the new brochure.
15. Assure that their gatekeepers* and IPAs have written procedures for describing how enrollees are informed of denied services. The HMO will make copies of the gatekeeper's and IPA's grievance procedures available for review upon request by the Department.
HMO Contract for January 1, 2000 - December 31, 2001
*The word "gatekeeper" in this context refers to any entity that performs a management services contract, a behavioral health science IPA, or a dental IPA, and not to individual physicians acting as a gatekeeper to primary care services.
B. Recipient Appeals of HMO Formal Grievance Decisions
The enrollee may choose to use the HMO's formal grievance process or may appeal to the State instead of using the HMO's formal grievance process. If the enrollee chooses to use the HMO's process, the HMO must provide a first response within 10 business days and a final response within 30 calendar days of receiving the grievance. If the HMO is unable to resolve the grievance within 30 calendar days, the time period may be extended another 30 calendar days from receipt of the grievance if the HMO notifies the enrollee in writing that the HMO has not resolved the grievance, when the resolution may be expected and why the additional time is needed. The total timeline for HMOs to finalize a formal grievance may not exceed 60 calendar days from the date of the receipt of the grievance. Any formal grievance decision by the HMO may be appealed by the enrollee to the Department. The Department shall review such appeals and may affirm, modify, or reject any formal grievance decision of the HMO at any time after the formal appeal is filed by the enrollee. The Department will give final response within 30 days from the date the Department has all information needed for a decision. Also, an enrollee can submit a formal, written grievance directly to the Department. Any formal decision made by the Department under this section is subject to enrollee appeal rights to the extent provided by State and Federal Laws and rules. The Department will receive input from the recipient and the HMO in considering appeals.
C. Notifications of Denial, Termination, Suspension, or Reduction of Benefits to Enrollees
1. When an HMO, its gatekeepers,* or its IPAs discontinues, terminates, suspends, limits, or reduces a service (including services authorized by an HMO the enrollee was previously enrolled in or services received by the enrollee on a Medicaid fee-for-service basis), the HMO shall notify the affected enrollee(s) in writing of:
a. The nature of the intended action.
b. The reasons for the intended action.
c. The fact that the enrollee if appealing the action must do so within forty-five (45) days.
HMO Contract for January 1, 2000 - December 31, 2001
d. An explanation of the enrollee's right to appeal the HMO's decision to the Department.
e. The fact that the enrollee, if appealing the HMO action, may file a request for a hearing with the Division of Hearings and Appeals (DHA) and the address of the DHA.
f. The fact that the enrollee can receive help in filing a grievance by calling either the Enrollment contractor or the Ombudsman.
g. The telephone number of both the Enrollment contractor and the Ombudsman.
*The word "gatekeeper" in this context refers to any entity that performs a management services contract, a behavioral health science IPA, or a dental IPA, and not to individual physicians acting as a gatekeeper to primary care services.
This notice requirement does not apply when an HMO, its gatekeeper or its IPA triages an enrollee to proper health care provider or when an individual health care provider determines that a service is medically unnecessary.
The Department must review and approve all notice language prior to its use by the HMO. Department review and approval will occur during the Medicaid certification process of the HMO and prior to any change of the notice language by the HMO.
2. If the recipient files a request for a hearing with the Division of Hearings and Appeals within 10 days of the effective date of the decision to reduce, limit, terminate or suspend benefits, upon notification by the Division of Hearings and Appeals:
a. The Department will notify the enrollee they are eligible to continue receiving care but may be liable for care if DHA overturns the decision; and
b. The Department will put the enrollee on fee-for-service status effective the first of the month in which the enrollee received the termination, reduction, or suspension notice from the HMO; and:
1) If the Division of Hearings and Appeals reverses the HMO's decision, the Department will recoup from the HMO the amount paid for any benefits provided to the enrollee during the period of the enrollee's fee-for- service status while the decision was pending. The enrollee will
HMO Contract for January 1, 2000 - December 31, 2001
be reenrolled into the HMO following the resolution of the medical condition, the completion of medical, psychological or dental services or the end of medical necessity of the service(s) unless the HMO has reversed its original decisions and agrees to reimburse the provider(s) for services provided to the enrollee during the administrative hearing process.
2) If the Division of Hearings and Appeals upholds the HMO's decision, the Department may pursue reimbursement from the enrollee for all services provided to the enrollee during their fee-for-service period. The enrollee will be reenrolled into the HMO no later than the end of the second month following notification from the DHA.
D. Notifications of Denial of New Benefits to Enrollees
When an HMO, its gatekeeper, or IPA denies a new service, the HMO shall notify the affected enrollee (s) in writing of:
1. The nature of the intended action.
2. The reasons for the intended action.
3. The fact that the enrollee if appealing the action must do so within forty-five (45) days.
5. An explanation of the enrollee's right to appeal the HMO's decision to the Department.
6. The fact that the enrollee can receive help in filing a grievance by calling either the Enrollment contractor or the Ombudsman.
7. The telephone number of both the Enrollment contractor and the Ombudsman.
If the enrollee was not receiving the service prior to the denial, the HMO is not required to provide the benefit while the decision is being appealed.
HMO grievance procedures must be reviewed and approved by the Department prior to signing the HMO Contract. All changes to HMO grievance procedures require prior review and approval by the Department.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE IX
IX. REMEDIES FOR VIOLATION, BREACH, OR NON-PERFORMANCE OF CONTRACT
A. Suspension of New Enrollment
Whenever the Department determines that the HMO is out of compliance with this Contract, the Department may suspend the HMO's right to receive new enrollment under this Contract. The Department, when exercising this option, must notify the HMO in writing of its intent to suspend new enrollment at least 30 days prior to the beginning of the suspension period. The suspension will take effect if the non-compliance remains uncorrected at the end of this period. The Department may suspend new enrollment sooner than the time period specified in this paragraph if the Department finds that enrollee health or welfare is jeopardized. The suspension period may be for any length of time specified by the Department, or may be indefinite. The suspension period may extend up to the expiration of the Contract as provided under Article XV.
The Department may also notify enrollees of HMO non-compliance and provide an opportunity to enroll in another HMO.
B. Department-Initiated Enrollment Reductions
The Department may reduce the maximum enrollment level and/or number of current enrollees whenever it determines that the HMO has failed to provide one or more of the contract services required under Article III or that the HMO has failed to maintain or make available any records or reports required under this Contract which the Department needs to determine whether the HMO is providing contract services as required under Article III. The HMO shall be given at least 30 days to correct the non-compliance prior to the Department taking any action set forth in this paragraph. The Department may reduce enrollment sooner than the time period specified in this paragraph if the Department finds that enrollee health or welfare is jeopardized.
C. Other Enrollment Reductions
The Department may also suspend new enrollment or disenroll enrollees in anticipation of the HMO not being able to comply with federal or state law at its current enrollment level. Such suspension shall not be subject to the 30 day notification requirement.
HMO Contract for January 1, 2000 - December 31, 2001
D. Withholding of Capitation Payments and Orders to Provide Services
Notwithstanding the provisions of Article V, the Department may withhold portions of capitation payments as liquidated damages or otherwise recover damages from the HMO on the following grounds:
1. Whenever the Department determines that the HMO has failed to provide one or more of the medically necessary Medicaid covered contract services required under Article III, the Department may either order the HMO to provide such service, or withhold a portion of the HMO's capitation payments for the following month or subsequent months, such portion withheld to be equal to the amount of money the Department must pay to provide such services.
If the Department orders the HMO to provide services under this section and the HMO fails to provide the services within the timeline specified by the Department, the Department may withhold an amount up to 150 percent of the fee-for-service amount for such services from the HMO's capitation payments.
When it withholds payments under this section, the Department must submit to the HMO a list of the participants for whom payments are being withheld, the nature of the service(s) denied, and payments the Department must make to provide medically necessary services.
If the Department acts under this section and subsequently determines that the services in question were not covered services:
a. In the event the Department withheld payments it shall restore to the HMO the full capitation payment, or
b. In the event the Department ordered the HMO to provide services under this section, it shall pay the HMO the actual documented cost of providing the services.
2. If the HMO fails to submit required data and/or information to the Department or the Department's authorized agents, or fails to submit such data or information in the required form or format, by the deadline specified by the Department, the Department may immediately impose liquidated damages in the amount of $1,500 per day for each day beyond the deadline that the HMO fails to submit the data or fails to submit the data in the required form or format, such liquidated damages to be deducted from the HMO's capitation payments.
HMO Contract for January 1, 2000 - December 31, 2001
3. If the HMO fails to submit State and Federal reporting and compliance requirements for abortions, hysterectomies and sterilizations, the Department may impose liquidated damages in the amount of $10,000 per reporting period.
4. If the HMO fails to correct an error to the encounter record within the timeframe specified, the Department may assess liquidated damages of $5 per erred encounter record per month until the error has been corrected. The liquidated damage amount will be deducted from the HMO's capitation payment. When applied, these liquidated damages will be calculated and assessed on a monthly basis.
If upon audit or review, the Department finds that the HMO has, without Department approval, removed an erred encounter record, the Department may assess liquidated damages for each day from the date of original error notification until the date of correction.
The term "erred encounter record" means an encounter record that has failed an edit when a correction is expected by the Department.
The following criteria will be used prior to assessing liquidated damages:
. The Department will calculate a percentage rate by dividing the number of erred records not corrected within 90 days (numerator), by the total number of records in error (denominator) and multiply the result by 100.
. Records failing non-critical edits, as defined in the Wisconsin Medicaid/BadgerCare HMO 2000-2001 Encounter Data User Manual, will not be included in the numerator.
. If this rate is 2 percent or less, liquidated damages will not be assessed.
. The Department will calculate this rate each month.
5. Whenever the Department determines that the HMO has failed to perform an administrative function required under this Contract, the Department may withhold a portion of future capitation payments. For the purposes of this section, "administrative function" is defined as any contract obligation other than the actual provision of contract services. The amount withheld by the Department under this section will be an amount that the Department determines in the reasonable exercise of its discretion to approximate the cost to the Department to perform the
HMO Contract for January 1, 2000 - December 31, 2001
function. The Department may increase these amounts by 50 percent for each subsequent non-compliance.
Whenever the Department determines that the HMO has failed to perform the administrative functions defined in Article V. H. (1) and (2), the Department may withhold a portion of future capitation payments sufficient to directly compensate the Department for the Medicaid/BadgerCare program's costs of providing health care services and items to individuals insured by said insurers and/or the insurers/employers represented by said third party administrators.
6. In any case under this Contract where the Department has the authority to withhold capitation payments, the Department also has the authority to use all other legal processes for the recovery of damages.
7. Notwithstanding the provisions of this subsection, in any case where the Department deducts a portion of capitation payments under subsection (2) above, the following procedures shall be used:
a. The Department will notify the HMO's contract administrator no later than the second business day after Department's deadline that the HMO has failed to submit the required data or the required data cannot be processed.
b. The HMO will be subject to liquidated damages without further notification per submission, per data file or report, beginning on the second business day after the Department's deadline.
c. If the late submission of data is for encounter data, and the HMO responds with a submission of the data within five (5) business days from the deadline, the Department will rescind liquidated damages if the data can be processed according to the criteria published in the Wisconsin Medicaid/BadgerCare HMO 2000-2001 Encounter Data User Manual. The Department will not edit the data until the process period in the subsequent month.
d. If the late submission is for any other required data or report, and the HMO responds with a submission of the data in the required format within five (5) business days from the deadline, the Department will rescind liquidated damages and immediately process the data or report.
HMO Contract for January 1, 2000 - December 31, 2001
e. If the HMO repeatedly fails to submit required data or reports, or data that cannot be processed, the Department will require the HMO to develop an action plan to comply with the contract requirements that must meet Department approval.
f. If the HMO, after a corrective action plan has been implemented, continues to submit data beyond the deadline, or continues to submit data that cannot be processed, the Department will invoke the remedies under Article IX, section A (SUSPENSION OF NEW ENROLLMENT), from section B (DEPARTMENT-INITIATED ENROLLMENT REDUCTIONS), or both, in addition to liquidated damages that may have been imposed for a current violation.
g. If an HMO notifies the Department it is discontinuing contracting with the Department at the end of a contract period, but reports or data are due for a contract period, the Department retains the right to withhold up to two months of capitation payments otherwise due the HMO which will not be released to the HMO until all required reports or data are submitted and accepted after expiration of the contract. Upon determination by the Department that the reports and data are accepted, the Department will release the monies withheld.
E. Inappropriate Payment Denials
HMOs that inappropriately fail to provide or deny payments for services may be subject to suspension of new enrollments, withholding, in full or in part, of capitation payments, contract termination, or refusal to contract in a future time period, as determined by the Department. The Department will select among these sanctions based upon the nature of the services in question, whether the failure or denial was an isolated instance or a repeated pattern or practice, and whether the health of an enrollee was injured, threatened or jeopardized by the failure or denial. This applies not only to cases where the Department has ordered payment after appeal, but also to cases where no appeal has been made (i.e., the Department is knowledgeable about the documented abuse from other sources).
F. Sanctions
Section 1903(m)(5)(B)(ii) of the Social Security Act vests the Secretary of the Department of Health and Human Services with the authority to deny Medicaid payments to an HMO for enrollees who enroll after the date on which the HMO has been found to have committed one of the violations identified in the federal law. State payments for enrollees of the contracting organization are
HMO Contract for January 1, 2000 - December 31, 20014
automatically denied whenever, and for so long as, Federal payment for such enrollees has been denied as a result of the commission of such violations.
G. Sanctions and Remedial Actions
The Department may pursue all sanctions and remedial actions with HMOs that are taken with Medicaid fee-for-service providers, including any civil penalties not to exceed the amounts specified in the Balanced Budget Amendment of 1997 P.L. 105-33 Sec. 4707(a) [42 U.S.C. 1396v(d)(2)].
ARTICLE X
X. TERMINATION AND MODIFICATION OF CONTRACT
A. Mutual Consent
This Contract may be terminated at any time by mutual written agreement of both the HMO and the Department.
B. Unilateral Termination
This Contract between the parties may be terminated only as follows:
1. This Contract may be terminated at any time, by either party, due to modifications mandated by changes in Federal or State laws, rules or regulations, that materially affect either party's rights or responsibilities under this Contract. In such case, the party initiating such termination procedures must notify the other party, at least 90 days prior to the proposed date of termination, of its intent to terminate this Contract. Termination by the Department under these circumstances shall impose an obligation upon the Department to pay the Contractor's reasonable and necessarily incurred termination expenses.
2. This Contract may be terminated by either party at any time if it determines that the other party has substantially failed to perform any of its functions or duties under this Contract. In such event, the party exercising this option must notify the other party, in writing, of this intent to terminate this Contract and give the other party 30 days to correct the identified violation, breach or non-performance of Contract. If such violation, breach or non-performance of Contract is not satisfactorily addressed within this time period, the exercising party may terminate this Contract. The termination date shall always be the last day of a month. The Contract may be terminated by the Department sooner than the time period specified in this paragraph if the Department
HMO Contract for January 1, 2000 - December 31, 2001
finds that enrollee health or welfare is jeopardized by continued enrollment in the HMO. A "substantial failure to perform" for purposes of this paragraph includes any violation of any requirement of this Contract that is repeated or ongoing, that goes to the essentials or purpose of the Contract, or that injures, jeopardizes or threatens the health, safety, welfare, rights or other interests of enrollees.
3. By either party, in the event Federal or State funding of contractual services rendered by the Contractor become or will become permanently unavailable. In the event it becomes evident State or Federal funding of claims payments or contractual services rendered by the Contractor will be temporarily suspended or unavailable, the Department shall immediately notify the Contractor, in writing, identifying the basis for the anticipated unavailability or suspension of funding. Upon such notice, the Department or the Contractor may suspend performance of any or all of the Contractor's obligations under this Contract if the suspension or unavailability of funding will preclude reimbursement for performance of those obligations. The Department or Contractor shall attempt to give notice of suspension of performance of any or all of the Contractor's obligations by 60 calendar days prior to said suspension, if this is possible; otherwise, such notice of suspension should be made as soon as possible. In the event funding temporarily suspended or unavailable is reinstated, the Contractor may remove suspension hereunder by written notice to the Department, to be made within 30 calendar days from the date the funds are reinstated. In the event the Contractor elects not to reinstate services, the Contractor shall give the Department written notice of its reasons for such decision, to be made within 30 calendar days from the date the funds are reinstated. The Contractor shall make such decision in good faith and will provide to the Department documentation supporting its decision. In the event of termination under this Section, this Contract shall terminate without termination costs to either party.
C. Obligations of Contracting Parties
When termination of the Contract occurs, the following obligations shall be met by the parties:
1. Where this Contract is terminated unilaterally by the Department, due to non-performance by the HMO or by mutual consent with termination initiated by the HMO:
a. The Department shall be responsible for notifying all enrollees of the date of termination and process by which the enrollees will continue to receive contract services; and
HMO Contract for January 1, 2000 - December 31, 2001
b. The HMO shall be responsible for all expenses related to said notification.
2. Where this Contract is terminated on any basis not given in (1) above:
a. The Department shall be responsible for notifying all enrollees of the date of termination and process by which the enrollees will continue to receive contract services; and
b. The Department shall be responsible for all expenses relating to said notification.
3. Where this Contract is terminated for any reason:
a. Any payments advanced to the HMO for coverage of enrollees for periods after the date of termination shall be returned to the Department within the period of time specified by the Department; and
b. The HMO shall supply all information necessary for the reimbursement of any outstanding Medicaid/BadgerCare claims within the period of time specified by the Department.
4. If a contract is terminated, recoupments will be handled through a payment by the HMO within 90 days of contract termination.
D. Modification
This Contract may be modified at any time by written mutual consent of the HMO and the Department or when modifications are mandated by changes in Federal or State laws, rules or regulations. In the event that changes in State or Federal law, rule or regulation require the Department to modify its contract with the HMO, notice shall be made to the HMO in writing. However, the capitation rate to the HMO can be modified only as provided in Article V relating to RENEGOTIATION.
If the Department exercises its right to renew this Contract, as allowed by Article XV, the Department will recalculate the capitation rate for succeeding calendar years. The HMO will have 30 days to accept the new capitation rate in writing or to initiate termination of the Contract. If the Department changes the reporting requirements during the contract period, the HMO shall have 180 days to comply with such changes or to initiate termination of the Contract.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE XI
XI. INTERPRETATION OF CONTRACT LANGUAGE
A. Interpretations
The Department has the right to final interpretation of the contract language when disputes arise. The HMO has the right to appeal to the Department or invoke the procedures outlined in Chapter 788, Wis. Stats. if it disagrees with the Department's decision. Until a decision is reached, the HMO shall abide by the interpretation of the Department.
ARTICLE XII
XIII. CONFIDENTIALITY OF RECORDS
A. The parties agree that all information, records, and data collected in connection with this Contract shall be protected from unauthorized disclosure as provided in Chapter 19, Subchapter II, Wis. Stats., HFS 108.01, Wis. Admin. Code, and 42 CFR 431 Subpart F. Except as otherwise required by law, rule or regulation, access to such information shall be limited by the HMO and the Department to persons who, or agencies which, require the information in order to perform their duties related to this Contract, including the U.S. Department of Health and Human Services and such others as may be required by the Department.
B. The HMO agrees to forward to the Department all media contacts regarding Medicaid/BadgerCare enrollees or the Medicaid/BadgerCare program.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE XIII
XIII. DOCUMENTS CONSTITUTING CONTRACT
A. Current Documents
The contract between the parties to this Contract shall include, in addition to this document, existing Medicaid Provider Publications addressed to HMOs, the terms of the most recent HMO Certification Application issued by this Department for Medicaid/BadgerCare HMO Contracts, any Questions and Answers released pursuant to said HMO Certification Application by this Department, and an HMO's signed application. The terms of the HMO Certification Application are also part of this Contract even if the HMO had a Medicaid/BadgerCare HMO Contract in the prior contract period and consequently did not have to answer all the questions in the HMO Certification Application. In the event of any conflict in provisions among these documents, the terms of this Contract shall prevail. The provisions in any Question and Answer Document shall prevail over the HMO Certification Application. And the HMO Certification Application terms shall prevail over any conflict with an HMO's actual signed application. In addition, the Contract shall incorporate the following Addenda:
I. Subcontracts and Memoranda of Understanding
II. Policy Guidelines for Mental Health/Substance Abuse and Community Human Service Programs
III. Risk-Sharing for Inpatient Hospital Services (if the HMO has elected to risk-share with the Department)
IV. Contract Specified Reporting Requirements
V. Standard Enrollee Handbook Language
VI. COB Report Format
VII. Actuarial Basis
VIII. Compliance Agreement: Affirmative Action/Civil Rights
IX. Model MOU for Prenatal Care Coordination
X. Bureau of Milwaukee Child Welfare MOU
XI. HealthCheck Worksheet
XII. Common Carrier Transportation MOU for Milwaukee County
XIII. Model MOU for School Districts or CESAs
XIV. Guidelines for Coordination of Services between HMOs, Targeted Case Management Agencies, and Child Welfare Agencies
HMO Contract for January 1, 2000 - December 31, 2001
XV. Performance Improvement Project Outline
XVI. Targeted Performance Improvement Measures Data Set
XVII. Medicaid/BC HMO Newborn Report
XVIII. Recommended Childhood Immunization Schedule
XIX. Reporting Requirements for NICU Risk-Sharing
XX. Specific Terms of the Medicaid/BC HMO Contract
XXI. Formal Grievance Experience Summary Report
XXII. Guidelines for the Coordination of Services Between Medicaid HMOs and County Birth to Three (B-3) Agencies
XXIII. Wisconsin Medicaid HMO Report on Average Birth Cost by County
XXIV. Local Health Departments and Community-Based Health Organizations - A Resource for HMOs
XXV. General Information About the WIC Program, Sample HMO-to-WIC Referral Form, and Statewide List of WIC Agencies
B. Future Documents
The HMO is required, by this Contract, to comply with all future Medicaid Provider Publications addressed to the HMOs and Contract Interpretation Bulletins issued pursuant to this Contract.
C. The documents listed above constitute the entire Contract between the parties and no other expression, whether oral or written, constitutes any part of this Contract.
ARTICLE XIV
XIV. MISCELLANEOUS
A. Indemnification
The HMO agrees to defend, indemnify and hold the Department harmless, with respect to any and all claims, costs, damages and expenses, including reasonable attorney's fees, which are related to or arise out of:
1. Any failure, inability, or refusal of the HMO or any of its subcontractors to provide contract services;
HMO Contract for January 1, 2000 - December 31, 2001
2. The negligent provision of contract services by the HMO or any of its subcontractors; or
3. Any failure, inability or refusal of the HMO to pay any of its subcontractors for contract services.
B. Independent Capacity of Contractor
Department and HMO agree that HMO and any agents or employees of HMO, in the performance of this Contract, shall act in an independent capacity, and not as officers or employees of Department.
C. Omissions
In the event that either party hereto discovers any material omission in the provisions of this Contract which such party believes is essential to the successful performance of this Contract, said party may so inform the other party in writing, and the parties hereto shall thereafter promptly negotiate in good faith with respect to such matters for the purpose of making such reasonable adjustments as may be necessary to perform the objectives of this Contract.
D. Choice of Law
This Contract shall be governed by and construed in accordance with the laws of the State of Wisconsin. HMO shall be required to bring all legal proceedings against Department in Wisconsin State courts.
E. Waiver
No delay or failure by either party hereto to exercise any right or power accruing upon noncompliance or default by the other party with respect to any of the terms of this Contract shall impair such right or power or be construed to be a waiver thereof. A waiver by either of the parties hereto of a breach of any of the covenants, conditions, or agreements to be performed by the other shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition, or agreement herein contained.
F. Severability
If any provision of this Contract is declared or found to be illegal, unenforceable, invalid or void, then both parties shall be relieved of all obligations arising under such provision; but if such provision does not relate to payments or services to Medicaid/BadgerCare enrollees and if the remainder of this Contract shall not be affected by such declaration or finding, then each
HMO Contract for January 1, 2000 - December 31, 2001
provision not so affected shall be enforced to the fullest extent permitted by law.
G. Force Majeure
Both parties shall be excused from performance hereunder for any period that they are prevented from meeting the terms of this Contract as a result of a catastrophic occurrence or natural disaster including but not limited to an act of war, and excluding labor disputes.
H. Headings
The article and section headings used herein are for reference and convenience only and shall not enter into the interpretation hereof.
I. Assignability
Except as allowed under subcontracting, the Contract is not assignable by the HMO either in whole or in part, without the prior written consent of the Department.
J. Right to Publish
The Department agrees to allow the HMO to write and have such writing published provided the HMO receives prior written approval from the Department before publishing writings on subjects associated with the work under this Contract.
K. Year 2000 Compliance
Contractor warrants that:
1. All computer hardware, software or processes that we use in administering this contract have been tested for and will be fully Year 2000 compliant, which means they are capable of correctly and consistently handling all date-based functions before, during and after the Year 2000;
2. The date change from 1999 to 2000, or any other date changes, will not prevent goods, services or licenses from operating in a merchantable manner, for the purposes intended and is accordance with all applicable plans and specifications and without interruption before, during and after the Year 2000;
3. Contractor's internal systems will be Year 2000 compliant, such that Contractor will be able to deliver goods, services and licenses as required by this contract.
HMO Contract for January 1, 2000 - December 31, 2001
Contractor will not be held responsible for its failure to comply with this Year 2000 standard if such noncompliance results directly or indirectly from invalid or noncompliant information and/or data furnished to it by the Department or its representatives, agents, affiliates or subcontractors.
In addition, the Contractor shall develop a written contingency plan which will ensure the protection of the health and safety of its clients and the ability to meet its contract obligations in the event that the Contractor experiences failures attributable to the date change from 1999 to 2000, or any other date change.
HMO Contract for January 1, 2000 - December 31, 2001
ARTICLE XV
XV. HMO SPECIFIC CONTRACT TERMS
A. Initial Contract Period
The respective rights and obligations of the parties as set forth in this Contract shall commence on January 1, 2000, and, unless earlier terminated under Article X, shall remain in full force and effect through December 31, 2001. The specific terms for enrollment, rates, risk-sharing, dental coverage, and chiropractic coverage are as specified in C.
B. Renewals
By mutual written agreement of the parties, there may be one (1) one-year renewal of the term of the Contract. An agreement to renew must be effected at least forty-five (45) calendar days prior to the expiration date of any contract term. The terms and conditions of the Contract shall remain in full force and effect throughout any renewal period, unless modified under the provision of Article X., Section D.
C. Specific Terms of the Contract
The specific terms of the Medicaid/BadgerCare HMO Contract that
the HMO is agreeing to are indicated by the Department in a
completed Addendum XX - Specific Terms of the Medicaid/BadgerCare
HMO Contract. These specific terms include the following items:
the service area to be covered; and, whether dental services and
chiropractic services will be provided by the HMO and the HMO's
maximum enrollment level for each area; finally, whether the HMO,
on a State-wide basis, will participate or not participate in
risk-sharing under Addendum III. The Department has completed
Addendum XX based on the information supplied the Department by
the HMO in the HMO Certification Application.
In WITNESS WHEREOF, the State of Wisconsin has executed this agreement:
Managed Health Services
--------------------------------------------------------------------------------
(Name of HMO) State of Wisconsin
================================================================================
Official Signature Official Signature
/s/ ILLEGIBLE /s/ ILLEGIBLE
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Title Title
President and CEO Deputy Administrator
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Date 3/29/00 9/19/00
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HMO Contract for January 1, 2000 - December 31, 2001
Note: The following subcontract with the Department for Chiropractic Services is not effective unless signed below.
SUBCONTRACT FOR CHIROPRACTIC SERVICES
A. THIS AGREEMENT is made and entered into by and between the HMO and the Department of Health and Family Services.
The parties agree as follows:
1. The Department agrees to be at risk for and pay claims for chiropractic services covered under this Contract.
2. The HMO agrees to a deduction from the capitation rate of an amount of money based on the cost of chiropractic services. This deduction is reflected in the Contract that is being signed on the same date.
B. This is the only subcontract for services that the Department is entering into with the HMO.
C. The provisions of the Contract regarding subcontracts, in Addendum I, do not apply to this subcontract.
D. The term of this subcontract is for the same period as the Contract between HMO and Department for medical services.
Signed: /s/ ILLEGIBLE /s/ ILLEGIBLE
FOR FOR
HMO: Managed Health Services STATE: State of Wisconsin
------------------------------- -----------------------------
TITLE: President and CEO TITLE: Deputy Administrator
----------------------------- -----------------------------
DATE: 3/29/00 DATE: 9/19/00
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HMO Contract for January 1, 2000 - December 31, 2001
Exhibit 10.3
Confidential Materials omitted and filed separately with The Securities and Exchange Commission. Asterisks denote omissions.
AGREEMENT
This Agreement is entered into effective the 1/st/ day of January, 2001, by and between Network Health Plan of Wisconsin, Inc. (hereinafter referred to as "NHP"), a Wisconsin insurance corporation, and Managed Health Services Insurance Corp. (hereinafter referred to as "MHSIC"), a Wisconsin insurance corporation.
WHEREAS, NHP is a domestic insurance corporation organized under the laws of the State of Wisconsin and maintaining a health maintenance organization for its eligible members through contractual arrangements with various participating providers and other entities;
WHEREAS, NHP has contracted with the Wisconsin Department of Health and Family Services (hereinafter referred to as "DHFS") to provide and pay for Medical Assistance/BadgerCare contract services to recipients enrolled in NHP under the State Medical Assistance Plan (hereinafter referred to as "ENROLLEES");
WHEREAS, the DHFS contract for services permits NHP to subcontract its duties and functions subject to the right of DHFS to approve such subcontracts;
WHEREAS, MHSIC desires to enter into a subcontract with NHP under the terms and conditions set forth herein;
WHEREAS, the parties desire to enter into this Agreement in order to facilitate the provision of cost effective, covered health care services to NHP ENROLLEES in Wisconsin;
NOW, THEREFORE, in consideration of the premises set forth above and the terms, covenants and conditions set forth below, the parties mutually agree as follows:
1. MHSIC agrees to be obligated to NHP for all functions and duties assumed by NHP in the Contract for Services between NHP and DHFS, as renewed. amended, or replaced (hereinafter referred to as the "CONTRACT FOR SERVICES"), with respect to all NHP ENROLLEES in Wisconsin, with the exception of those functions specified herein as the obligations of NHP. MHSIC shall be responsible to comply with the requirements of the CONTRACT FOR SERVICES to the same extent as NHP is responsible for such requirements to DHFS. Unless the contract clearly requires otherwise, words used in this Agreement shall have the meanings assigned to them by the CONTRACT FOR SERVICES. A copy of the CONTRACT FOR SERVICES is attached hereto as Exhibit 1.
2. The parties agree that MHSIC may enter into written agreements or subcontracts in order to fulfill MHSIC's duties under this Agreement. Such subcontracts shall be in accord with the requirements set forth in the CONTRACT FOR SERVICES, Addendum I-Subcontracts. MHSIC affirms that it may terminate a subcontract agreement immediately whenever the MHSIC Quality Assurance Committee and MHSIC Board of Directors determine the health or safety of ENROLLEES utilizing such subcontractor is endangered by actions of the subcontractor.
3. In consideration for the services to be provided hereunder. NHP agrees to pay MHSIC an amount equal to all premium payments, supplemental payments and any other form
of compensation received by NHP under the CONTRACT FOR SERVICES from the State of Wisconsin or its agent or representative allocable to periods during which this Agreement is in effect, less an amount equal to [****] per month per member, plus an amount equal to the actual per member assessment for the Health Insurance Risk Sharing Pool (HIRSP) that is allocable to all NHP ENROLLEES in Wisconsin for the period during which this Agreement is in effect. NHP shall give DHFS written authorization to issue directly to MHSIC monthly checks and any and all other payments for the full amount of the compensation paid to NHP by the State of Wisconsin. Within five (5) business days from the receipt of such monthly compensation from the State of Wisconsin, MHSIC shall remit directly to NHP on a monthly basis the amount specified above per NHP Enrollee in Wisconsin.
4. ENROLLEES shall be held harmless by MHSIC and/or its subcontracted providers for payment of monies owed by MHSIC. Neither MHSIC nor its subcontracted providers shall bill, collect from, or charge ENROLLEES for Covered Services or impose any surcharges for the provision of Covered Services. If MHSIC learns of any such unauthorized charge or surcharge, MHSIC shall take appropriate action to ensure a prompt refund. MHSIC and/or its subcontracted providers may bill ENROLLEES for noncovered services, or for services rendered after the ENROLLEES discontinue, or cease to be eligible for NHP membership. This section supersedes any present or future agreement to the contrary between an ENROLLEE or an ENROLLEE'S representative and MHSIC regarding payment for Covered Services.
5. NHP, or its designee, has the right, at reasonable times, on a concurrent and/or retrospective basis, to review and/or obtain copies at NHP's sole expense, of medical records of NHP ENROLLEES in order to determine compliance with quality assurance standards and utilization review standards, NHP's medical director, or his or her designee, shall have the right to attend, as an observer, any utilization review or quality assurance meeting at MHSIC at which care rendered to NHP ENROLLEES is discussed, if such attendance will not violate any Wisconsin law regarding confidentiality of peer review discussions and peer review documents. NHP agrees that the person designated to attend such meetings shall be a licensed, medical professional and shall agree in advance to abide by all requirements of confidentiality of peer review documents and peer review discussions in accordance with Wisconsin law.
6. The parties agree that all information, records and data collected in connection with this Agreement shall be protected from unauthorized disclosure as provided in Chapter 19, Subchapter II of this Wisconsin Statutes, and 42 C.F.R. ch. 431 Subpart F. Except as otherwise required by law, access to such information shall be limited by MHSIC to persons who, or agencies that require the information in order to perform their duties related to the Agreement. These persons or agencies include, but are not limited to, NHP, the US Department of Health and Human Services, the Wisconsin Department of Health and Family Services, and the Wisconsin Office of the Commissioner of Insurance, as may be necessary for compliance by NHP with the provisions of certain federal and state regulations. MHSIC shall maintain such records in accordance with the CONTRACT FOR SERVICES.
7. MHSIC shall maintain a process for Credentialing all physicians listed as providers in the provider directory provided to NHP ENROLLEES by MHSIC and shall verify
the Medicaid certification of all subcontracted providers pursuant to the requirements of the CONTRACT FOR SERVICES.
8. MHSIC shall be responsible for prompt review and reconciliation of ENROLLEE eligibility.
9. NHP, with reasonable cause, shall have the right to review and provide oversight for all activities that have been questioned by Federal or State agencies as non-compliant with the Federal HMO Act or the CONTRACT FOR SERVICES and are performed by MHSIC. The method by which review and oversight shall occur shall be subject to mutual written agreement of both parties.
10. The effective date of this Agreement shall be January 1, 2001, and shall have an initial term of six (6) years thereafter. This Agreement shall thereafter be automatically renewed for successive five (5) year terms unless terminated by mutual consent or pursuant to this Section. Either party may terminate this Agreement upon notification to the other party two years prior to the end of the original or any renewal term. In no case shall such termination end the obligations of MHSIC and NHP to perform any remaining obligations either party has pursuant to the CONTRACT FOR SERVICES or any remaining obligations of either party as set forth in this Agreement. In addition, this Agreement may be terminated during any initial or renewal term by MHSIC due to modifications mandated by changes in the CONTRACT FOR SERVICES or in federal or state law, regulations, or policies that materially affect MHSIC's rights or responsibilities under this Agreement. In such case, MHSIC shall notify NHP. in writing, at least ninety (90) days prior to the proposed date of termination of its intent to terminate this Agreement pursuant to this Section.
11. This Agreement shall terminate if the CONTRACT FOR SERVICES is terminated. In the event of such termination, MHSIC shall be obligated to perform the obligations set forth in Article X of the CONTRACT FOR SERVICES in the paragraph entitled "Obligations of Contracting Parties" to the same extent that NHP is obligated to DHFS and NHP agrees to fulfill any remaining obligations it has to MHSIC pursuant to the terms of this Agreement.
12. In the event that either party defaults in the performance of any duties or obligations hereunder, including either party's inability or refusal to provide services hereunder or either party's frustration of the purpose of this Agreement so that the nondefaulting party is unable to perform its duties hereunder, and the default or breach has not been cured within sixty (60) days of the nondefaulting party's giving of written notice of the default, specifying the nature of the alleged default or breach, the nondefaulting party may give notice of intent to terminate this Agreement, and this Agreement will terminate on the last day of the month in which the notice of intent to terminate is received.
13. NHP and MHSIC are separate and independent entities and neither NHP nor MHSIC, nor the employees, servants, agents or representatives of either shall be considered to be the employees, servants, agents or representatives of the other party. The parties further agree that this Agreement shall also not be construed to create a partnership or joint venture between the parties.
14. MHSIC agrees that ENROLLEES shall not be discriminated against on the basis of age, race, color, creed, religion, sex, sexual preference, national origin, health status, or income level.
15. This Agreement may not be assigned by either party without the prior written consent of the other party, except that NHP agrees that MHSIC may assign this agreement to any one or more of its affiliates without the prior written consent of NHP. MHSIC will notify NHP of any assignments in a timely manner.
16. Any controversy between the parties hereto not informally resolved by appropriate representatives of the parties shall, upon the request of one (1) party served on the other, be submitted to arbitration in accordance with the following provision:
If any claim, dispute or controversy shall arise among the parties
hereto with respect to the making or termination of, construction of,
the terms of, or the interpretation of this Agreement or the rights of
any party hereto or with respect to any transaction involved, the
claim, dispute or controversy shall be settled by arbitration by three
(3) arbitrators in accordance with the then current Center for Public
Resources Rules for Non-Administered Arbitration of Business Disputes.
The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. (S)(S) 1-16, and judgment based on the arbitration award
may be entered in any court having jurisdiction thereof. The place of
the arbitration shall be Milwaukee, Wisconsin. The arbitrators are not
empowered to award damages in excess of compensatory damages. Not
withstanding the foregoing requirements, any party shall have the
right to seek equitable relief, in a court of competent jurisdiction,
to the extent that equitable relief is available to a person hereto.
If a person chooses to pursue equitable relief, such conduct shall not
constitute a waiver of or be deemed inconsistent with the arbitration
provision set forth above.
17. MHSIC shall not use the name of Network Health Plan, or any derivative thereof in any advertising or materials distributed to ENROLLEES, except for normal operational correspondence with ENROLLEES.
18. Any notice, request, demand or other communication required or permitted hereunder will be given in writing, by certified mail, to the party to be notified. All communications will be deemed given upon delivery or attempted delivery to the address specified herein. The addresses for the parties are as follows:
To NHP: Donald T. Schumann
Director of Business Development
Affinity Health System
1570 Midway Place
Menasha, WI 54952
To MHS: Kathleen Crampton
President & CEO
Managed Health Services
1205 South 70/th/ Street
West Allis, WI 53214
19. MHSIC shall maintain general liability insurance and professional liability insurance in accord with industry standards at all times during the term of this Agreement. Upon request of NHP, MHSIC shall provide a certificate of insurance evidencing such coverage. MHSIC further agrees to require that physician members and subcontracted providers of MHSIC maintain such professional liability insurance as required by Wisconsin law to participate in the Wisconsin Patients Compensation Fund.
20. MHSIC shall indemnify and hold NHP, its shareholders, officers, directors, employees, and agents harmless from and against any and all liabilities, losses, settlements, claims, demands and expenses of any kind (including, without limitation, reasonable attorneys fees), that may result from any business dispute between MHSIC and any ENROLLEE in Wisconsin, or that may arise as a result of any negligent act or intentional misconduct on the part of MHSIC, its agents, employees or representatives, with respect to the performance or failure to perform any duties assumed by MHSIC pursuant to this Agreement. NHP shall, as a condition to such indemnification, notify MHSIC within ten (10) business days after receipt of notice of any claim against NHP for which NHP seeks indemnification hereunder, and MHSIC shall be entitled to make such investigation, settlement, or defense of the claim as it deems prudent. This provision shall survive the termination of this Agreement.
21. NHP shall indemnify and hold MHSIC, its officers, directors, employees and representatives harmless from and against any and all liabilities, losses, settlements, claims, demands, and expenses of any kind (including, without limitation, reasonable attorneys fees) that may result from the contractual relationship between NHP and the State of Wisconsin or NHP and any ENROLLEE in Wisconsin or that may arise as a result of any negligent act or intentional misconduct caused or alleged to have been caused by NHP or its agents, employees or representatives in the performance or failure to perform any of the duties assumed by NHP pursuant to this Agreement. MHSIC shall, as a condition to such indemnification, notify NHP within ten (10) business days after receipt of notice of any claim against MHSIC for which MHSIC seeks indemnification hereunder, and NHP shall be entitled to make such investigation, settlement, or defense of the claim as it deems prudent. This section shall survive the termination of this Agreement.
22. Unless notice to terminate this Agreement for the next contract year is given pursuant to Sections 10-12 above by either party, MHSIC shall be responsible for preparation of any certification application renewals for succeeding contract years for submission to DHFS with respect to the CONTRACT OF SERVICES, unless otherwise agreed to by the parties in writing.
23. In the event that NHP should become insolvent, MHSIC agrees to provide covered services as set forth in the CONTRACT FOR SERVICES for NHP ENROLLEES in Wisconsin, provided that NHP continues to authorize DHFS to pay MHSIC directly, until the sooner of
(a) the duration of the period for which MHSIC has received payments from DHFS and until the time of discharge for ENROLLEES confined in an inpatient facility according to the terms set forth in the CONTRACT FOR SERVICES; or
(b) the ENROLLEES become covered under another plan of health insurance and/or medical assistance plan with similar benefits.
24. No delay or failure by either party hereto in exercising any rights or powers accruing upon noncompliance or default by the other party with respect to any terms of this Agreement shall impair such right or power or be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition or agreement herein contained.
25. If any part of this Agreement is found to be void or unenforceable, such part shall be treated as severable, leaving valid the remainder of the Agreement notwithstanding the part or parts found void or unenforceable.
26. The Agreement shall be exclusive on the part of NHP as regards Wisconsin Medicaid recipients.
27. This Agreement shall be governed by the laws of the State of Wisconsin notwithstanding any state's choice of law rules to the contrary.
28. This Agreement constitutes the entire understanding of the parties hereto, and supersedes all previous agreements, whether oral or written, among the parties or their affiliates on the subject matter hereof. No changes, amendments or alterations shall be effective unless in writing signed by both parties. This agreement supercedes all prior or contemporaneous agreements or understandings between the parties, written or oral, all of which are merged herein.
29. A waiver by either party of a breach or failure to perform shall not constitute a waiver of any subsequent breach or failure. No term or condition of this Agreement may be waived except in a writing by the party charged with the waiver.
30. During the term of this Agreement, NHP shall use its best efforts to obtain subsequent renewals and extensions of the existing CONTRACT FOR SERVICES and/or new contracts with DHFS, subject in all cases however to the written approval of the terms and conditions of such renewals, extensions or contracts by MHSIC.
31. Each party hereto shall maintain any and all licenses, permits, authorizations and contracts with DHFS, the State of Wisconsin and the Wisconsin Office of the Commissioner of Insurance necessary to maintain the business described herein and shall maintain compliance with all laws, regulations and requirements necessary for such licenses, permits, authorizations, and/or contracts.
32. As between NHP and MHSIC, MHSIC shall have the right to determine any appropriate changes to the applicable county service area under the CONTRACT FOR SERVICES, including, without limitation, the counties to be served.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates specified below.
NETWORK HEALTH PLAN
By: /s/ [ILLEGIBLE] Date: 3/9/01
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Attest: [ILLEGIBLE] Date: 3/9/01
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MANAGED HEALTH SERVICES INSURANCE CORP.
By: /s/ Kathleen R. Crampton Date: 03/9/01
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Attest: [ILLEGIBLE] Date: 3/9/01
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ADDENDUM I
SUBCONTRACTS AND MEMORANDA OF UNDERSTANDING
NOTE: This Addendum does not apply to subcontracts between the Department and the HMO. The Department shall have sole authority to determine the conditions and terms of such subcontracts.
1. Original Review and Approval for HMOs that did not have a Medicaid/BadgerCare HMO Contract in the Prior Contract Period, or that are going to accept enrollment of recipients in a new county.
a. The Department may approve, approve with modification, or deny subcontracts under this Contract at its sole discretion. The Department may, at its sole discretion and without the need to demonstrate cause, impose such conditions or limitations on its approval of a subcontract as it deems appropriate. The Department may consider such factors as it deems appropriate to protect the interests of the State and recipients, including but not limited to the proposed subcontractor's past performance. DHFS will give the HMO (1) 120 days to implement a change that requires the HMO to find a new subcontractor, and (2) 60 days to implement any other change required by DHFS. DHFS will acknowledge the approval or disapproval of a subcontract within 14 days after its receipt from the HMO.
b. The Department will review and approve or disapprove each subcontract before contract signing. Any disapproval of subcontracts may result in the application by the Department of remedies pursuant to Article IX of this Contract. The Department's subcontract review will assure that the HMO has inserted the following standard language in subcontracts (except for specific provisions that are inapplicable in a specific HMO management subcontract);
c. Subcontractor (hereafter identified as subcontractor) agrees to abide by all applicable provisions of the (HMO's NAME)'s contract with the Department of Health and Family Services, hereafter referred to as the Medicaid/BadgerCare HMO Contract. Subcontractor compliance with the Medicaid/HMO Contract specifically includes but is not limited to the following requirements:
1. Subcontractor uses only Medicaid-certified providers in accordance with Article III. AA. of the Medicaid/BadgerCare HMO Contract.
2. No terms of this subcontract are valid which terminate legal liability of HMO in accordance with Article III. Z. of the Medicaid/BadgerCare HMO Contract.
HMO Contract for January 1, 2000 - December 31, 2001
3. Subcontractor agrees to participate in and contribute required data to HMO Quality Assessment/Performance Improvement programs as required in Article III. W. of the Medicaid/BadgerCare HMO Contract.
4. Subcontractor agrees to abide by the terms of the Medicaid/BadgerCare HMO Contract (Article III. D.) for the timely provision of emergency and urgent care. Where applicable, subcontractors agrees to follow those procedures for handling urgent and emergency care cases stipulated in any required hospital/emergency room MOUs signed by HMO in accordance with Article III. J. of the Medicaid/BadgerCare HMO Contract.
5. Subcontractor agrees to submit HMO encounter data in the format specified by the HMO, so the HMO can meet the Department specifications required by Article VI and Addendum IV of the Medicaid/BadgerCare HMO Contract. HMOs will evaluate the credibility of data obtained from subcontracted vendors' external databases to ensure that any patient-reported information has been adequately verified.
6. Subcontractor agrees to comply with all non-discrimination requirements in Article III. O. of the Medicaid/BadgerCare HMO Contract.
7. Subcontractor agrees to comply with all record retention requirements and, where applicable, the special reporting requirements on abortions, sterilizations, hysterectomies, and HealthCheck requirements.
8. Subcontractor agrees to provide representatives of the HMO, as well as duly authorized agents or representatives of DHFS and the Federal Department of Health and Human Services, access to its premises and its contract and/or medical records in accordance with Article III and Article IX of the Medicaid/BadgerCare HMO Contract. Subcontractor agrees otherwise to preserve the full confidentiality of medical records in accordance with Article XII of the Medicaid/BadgerCare HMO Contract.
9. Subcontractor agrees to the requirements for maintenance and transfer of medical records stipulated in Article III. W. of the Medicaid/BadgerCare HMO Contract.
10. Subcontractor agrees to ensure confidentiality of family planning services in accordance with Article III. B. of the Medicaid/BadgerCare HMO Contract.
HMO Contract for January 1, 2000 - December 31, 2001
11. Subcontractor agrees not to create barriers to access to care by imposing requirements on recipients that are inconsistent with the provision of medically necessary and covered Medicaid benefits (e.g., COB recovery procedures that delay or prevent care).
12. Subcontractor agrees to clearly specify referral approval requirements to its providers and in any sub-subcontracts.
13. Subcontractor agrees not to bill a Medicaid/BadgerCare enrollee for medically necessary services covered under the Medicaid/BadgerCare HMO Contract and provided during the enrollee's period of HMO enrollment pursuant to Section 1128 B(d)(l) of the Social Security Act. This provision shall continue to be in effect even if the HMO becomes insolvent. However, if an enrollee agrees in writing to pay for a non- Medicaid covered service, then the HMO, HMO provider, or HMO subcontractor can bill.
The standard release form signed by the enrollee at the time of services does not relieve the HMO and its providers and subcontractors from the prohibition against billing a Medicaid enrollee in the absence of a knowing assumption of liability for a non-Medicaid covered service. The form or other type of acknowledgment relevant to Medicaid/ BadgerCare enrollee liability must specifically state the admissions, services, or procedures that are not covered by Medicaid.
14. Subcontractors must forward to the HMO medical records pursuant to grievances, within 15 working days of the HMO's request. If the subcontractor does not meet the 15 day requirement, the subcontractor must explain why and indicate when the medical records will be provided.
15. Subcontractor agrees to abide by the terms of Article III. H. regarding appeals to the HMO and to the Department for HMO non-payment of service providers.
16. Subcontractor agrees to abide by the HMO marketing/informing requirements. Subcontractor will forward to the HMO for prior approval a11 flyers, brochures, letters, and pamphlets the subcontractor intends to distribute to its Medicaid/BadgerCare enrollees concerning its HMO affiliation(s), changes in affiliation, or relates directly to the Medicaid/BadgerCare population. Subcontractor will not distribute any "marketing" or recipient informing materials without the consent of the HMO and the Department.
HMO Contract for January 1, 2000 - December 31, 2001
2. The Department will also review HMO management subcontracts to assure that rates are reasonable.
a. Subcontracts for HMO management must clearly describe the services to be provided and the compensation to be paid.
b. Any potential bonus, profit-sharing, or other compensation not directly related to costs of providing goods and services to the HMO, shall be identified and clearly defined in terms of potential magnitude and expected magnitude during the Medicaid/BadgerCare HMO Contract period.
c. Any such bonus or profit-sharing shall be reasonable compared to services performed. The HMO shall document reasonableness.
d. A maximum dollar amount for such bonus or profit-sharing shall be specified for the contract period.
e. Requirements A through D do not have to relate to non- Medicaid/BadgerCare enrollees if the HMO wishes to have separate arrangements for these Medicaid enrollees.
3. Subcontract Review for HMOs that have had a Medicaid/BadgerCare HMO Contract in the Previous Contract Period and are Not Expanding into New Service Areas during the Current Contract Period.
a. The HMO, shall1 submit, and the Department shall review, before signing this Contract, an affidavit that the contract language required above in all Medicaid/BadgerCare HMO subcontracts is included in all the HMO's subcontracts for medical services (and dental care, if covered). The affidavit shall specify the expiration date of all subcontracts.
b. These HMOs shall submit the HMO management subcontract for review as specified for new contractors above.
4. Review and Approval of New Subcontracts and Changes in Approved Subcontracts During the Contract Period.
a. New subcontracts and changes in approved subcontracts shall be reviewed and approved by the Department before taking effect. This requirement will be considered met if the Department has not responded within 15 consecutive days of the date of Departmental receipt of request.
b. This review requirement applies to changes which affect the amount, duration, scope. location, or quality of services. In other words, technical changes do not have to be approved.
HMO Contract for January 1, 2000 - December 31, 2001
c. Changes in rates paid do not have to be approved, with the exception of changes in the amounts paid to HMO management services subcontractors.
d. The HMO shall submit notice within 10 days to the Department of addition or deletion of subcontracts involving: (i) a clinic or group of physicians, (ii) an individual physician.
e. The HMO shall notify the Department's enrollment broker within 10 days of additions to, and deletions from the provider network.
f. The HMO shall submit to the enrollment broker an electronic listing of all network Medicaid providers, facilities and pharmacies within the first 10 days of each calendar quarter in a mutually agreed upon format approved by the Department. This listing will include, but is not limited to, provider name, provider number, address, phone number, and specialty as well as indicators designating whether a provider can be selected as a PCP, and whether the PCP is accepting new patients. The listing shall include only Medicaid certified providers who are contracted with the HMO to provide contract services to Medicaid/BadgerCare enrollees.
g. The HMO must send timely written notification to enrollees whose PCP, mental health provider, gatekeeper or dental clinic terminates a contract with the HMO. The Department must approve notifications before they are sent to enrollees.
h. The HMO shall be required to submit transition plans when a primary care provider(s), mental health provider(s), gatekeeper or dental clinic terminates their contractual relationship with the HMO. The transition plan will address continuity of care issues, enrollee notification and any other information required by the Department to assure adequate enrollee access. The Department will either approve, deny, or modify the transition plan prior to the effective date of the subcontract change.
5. Disclosure Statements
Ownership
The HMO agrees to submit to the Department within 30 days of contract signing full and complete information as to the identity of each person or corporation with an ownership or controlling interest in the HMO, or any subcontractor in which the HMO has a 5 percent or more ownership interest.
a. Definition of "Person with an Ownership or Controlling Interest." --A "person with an ownership or controlling interest" means a person or corporation that:
1. Owns directly or indirectly, 5 percent or more of the HMO's capital or stock or receives 5 percent or more of its profits (see subsection B);
HMO Contract for January 1. 2O00 - December 31, 2001
2 . Has an interest in any mortgage, deed of trust, note, or other obligation secured in whole or in part by the HMO or by its property or assets, and that interest is equal to or exceeds 5 percent of the total property and assets of the HMO; or
3. Is an officer or director of the HMO (if it is organized as a corporation) or is a partner in the HMO (if it is organized as a partnership).
b. Calculation of 5 percent Ownership or Receipt of Profits.-The percentage of direct ownership or control is calculated by multiplying the percent of interest which a person owns by the percent of the HMO's assets used to secure the obligation. Thus, if a person owns 10 percent of a note secured by 60 percent of the HMO's assets, the person owns 6 percent of the HMO.
The percentage of indirect ownership or control is calculated by multiplying the percentages of ownership in each organization. Thus, if a person owns 10 percent of the stock in a corporation which owns 80 percent of the stock of the HMO, the person owns 8 percent of the HMO.
c. Information to be Disclosed - The following information must be disclosed:
1. The name and address of each person with an ownership or controlling interest of 5 percent or more in the HMO or in any subcontractor in which the HMO has direct or indirect ownership of 5 percent or more;
2. A statement as to whether any of the persons with ownership or controlling interest is related to any other of the persons with ownership or controlling interest as spouse, parent, child, or sibling; and
3. The name of any other organization in which the person also has ownership or controlling interest. This is required to the extent that the HMO can obtain this information by requesting it in writing. The HMO must keep copies of all of these requests and responses to them, make them available upon request, and advise the Department when there is no response to a request.
d. Potential Sources of Disclosure Information - This information may already have been reported on Form HCFA-1513. "Disclosure of Ownership and Controlling Interest Statement." Form HCFA- 1513 is likely to have been completed in two different cases. First, if an HMO is Federally qualified and has a Medicare contract, it is required to file Form HCFA-1513 with HCFA within 120 days of the HMO's fiscal year end. Secondly. if the HMO is owned by or has subcontracts with Medicaid providers which are reviewed by the State survey agency these providers may have completed Form HCFA-1513 as part of the survey process. If Form HCFA-15 13 has not been completed, the HMO
HMO Contract for January 1, 2000 - December 31. 2001
may supply the ownership and,controlling information on a separate report or submit reports filed with the State's insurance or health regulators as long as these reports provide the necessary information for the prior 12 month period.
e. As directed by the HCFA Regional Office (RO), this Department must provide documentation of this disclosure information as part of the prior approval process for contracts. This documentation must be submitted to the Department and the RO prior to each contract period. If an HMO has not supplied the information that must be disclosed, a contract with the HMO is not considered approvable for this period of time and no FFP is available for the period of time preceding the disclosure.
f. A managed care entity may not knowingly have a person who is debarred, suspended, or otherwise excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in non-procurement activities as a director, officer, partner, or person with beneficial ownership of more than 5 percent of the entity's equity, or have an employment, consulting, or other agreement for the provision of items and services that are significant and material to the entity's obligations under irs contract with the State.
g. Business Transactions
All HMOs which are not Federally qualified must disclose to the Department information on certain types of transactions they have with a "party in interest" as defined in the Public Health Service Act. (See Sections 1903(m)(2)(A)(viii) and 1903(m)(4) of the Act.):
1. Definition of a Party in Interest - As defined in Section 1318(b) of the Public Health Service Act, a party in interest is:
a) Any director, officer, partner, or employee responsible
for Management or administration of an HMO and HIO; any
person who is directly or indirectly the beneficial
owner of more than 5 percent of the equity of the HMO:
any person who is the beneficial owner of more than 5
percent of the HMO; or, in the case of an HMO organized
as a nonprofit corporation, an incorporator or member
of such corporation under applicable State corporation
law;
HMO Contract for January 1, 2000 - December 31, 2001
b) Any organization in which a person described in subsection 1 is director, officer or partner; has, directly or indirectly a beneficial interest of more than 5 percent of the equity of the HMO; or has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of the HMO,
c) Any person directly or indirectly controlling, controlled by, or under common control with an HMO; or
d) Any spouse, child, or parent of an individual described in subsections 1, 2, or 3.
2. Types of Transactions Which Must Be Disclosed--Business transactions which must be disclosed include:
a) Any sale, exchange or lease of any property between the HMO and a party in interest;
b) Any lending of money or other extension of credit between the HMO and a party in interest; and
c) Any furnishing for consideration of goods, services (including management services) or facilities between the HMO and the party in interest. This does not include salaries paid to employees for services provided in the normal course of their employment.
3. The information which must be disclosed in the transactions listed in subsection b, between an HMO and a party in interest includes:
a) The name of the party in interest for each transaction;
b) A description of each transaction and the quantity or units involved;
c) The accrued dollar value of each transaction during the fiscal year; and
d) Justification of the reasonableness of each transaction.
4. If this Medicaid/BadgerCare HMO Contract is being renewed or extended, the HMO must disclose information on these business transactions which occurred during the prior contract period. If the Contract is an initial contract with Medicaid, but the HMO has operated previously in the commercial or Medicare markets, information on business transactions for the entire year preceding the initial contract
HMO Contract for January 1, 2000 - December 31, 2001
period must be disclosed. The business transactions which must be reported are not limited to transactions related to serving the Medicaid enrollment. All of these HMO business transactions must be reported.
6. The HMO shall notify Department within seven days of any notice by the HMO to a subcontractor, or any notice to the HMO from a subcontractor, of a subcontract termination, a pending subcontract termination, or a pending modification in subcontract terms, that could reduce Medicaid/BadgerCare enrollee access to care.
a. If the Department determines that a pending subcontract termination or pending modification in subcontract terms will jeopardize enrollee access to care, then the Department may invoke the remedies provided for in Article IX and Article X of this Contract. These remedies include contract termination (notice to HMO and opportunity to correct are provided for), suspension of new enrollment, and giving enrollees an opportunity to enroll in a different HMO.
7. The HMO shall submit MOUs referred to in this Contract to the Department upon the Department's request.
8. The HMO shall submit to the Department copies of new MOUs, or changes in existing MOUs within 15 days of signing.
HMO Contract for January 1, 2000 - December 31, 2001
Exhibit 10.4
TDH Document No.___________________
1999
CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
El Paso Service Area HMO Contract
5-14-99
TABLE OF CONTENTS
APPENDICES................................................................. v
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT........................ 1
ARTICLE II DEFINITIONS.............................................. 3
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS...... 13
3.1 ORGANIZATION AND ADMINISTRATION................................... 13
3.2 NON-PROVIDER SUBCONTRACTS......................................... 14
3.3 MEDICAL DIRECTOR.................................................. 16
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS................. 17
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION........................ 18
3.6 HMO REVIEW OF TDH MATERIALS....................................... 19
ARTICLE IV FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS..... 19
4.1 FISCAL SOLVENCY................................................... 19
4.2 MINIMUM EQUITY.................................................... 20
4.3 PERFORMANCE BOND.................................................. 20
4.4 INSURANCE......................................................... 21
4.5 FRANCHISE TAX..................................................... 21
4.6 AUDIT............................................................. 21
4.7 PENDING OR THREATENED LITIGATION.................................. 22
4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN HMO
OPERATIONS........................................................ 22
4.9 THIRD PARTY RECOVERY.............................................. 22
4.10 CLAIMS PROCESSING REQUIREMENTS.................................... 24
4.11 INDEMNIFICATION................................................... 25
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS......... 26
5.1 COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS..................... 26
5.2 PROGRAM INTEGRITY................................................. 26
5.3 FRAUD AND ABUSE COMPLIANCE PLAN................................... 26
5.4 SAFEGUARDING INFORMATION.......................................... 28
5.5 NON-DISCRIMINATION................................................ 28
5.6 HISTORICALLY UNDERUTILIZED BUSINESS (HUBs)........................ 29
5.7 BUY TEXAS......................................................... 29
5.8 CHILD SUPPORT..................................................... 30
5.9 REQUESTS FOR PUBLIC INFORMATION................................... 30
5.10 NOTICE AND APPEAL................................................. 31
ARTICLE VI SCOPE OF SERVICES........................................ 31
6.1 SCOPE OF SERVICES - GENERAL....................................... 31
6.2 PRE-EXISTING CONDITIONS........................................... 31
6.3 SPAN OF ELIGIBILITY............................................... 31
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS................... 32
6.5 EMERGENCY SERVICES................................................ 33
6.6 BEHAVIORAL HEALTH SERVICES - SPECIFIC REQUIREMENTS................ 34
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS........................... 36
6.8 TEXAS HEALTH STEPS (EPSDT)........................................ 38
6.9 PERINATAL SERVICES................................................ 40
6.10 EARLY CHILDHOOD INTERVENTION (ECI)................................ 41
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS
AND CHILDREN (WIC) - SPECIFIC REQUIREMENTS........................ 42
6.12 TUBERCULOSIS (TB)................................................. 43
6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS......... 44
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS................ 46
6.15 SEXUALLY TRANSMITTED DISEASES (STDs) AND HUMAN IMMUNODEFICIENCY
VIRUS (HIV)....................................................... 48
6.16 BLIND AND DISABLED MEMBERS........................................ 50
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ARTICLE VII PROVIDER NETWORK REQUIREMENTS............................ 51
7.1 PROVIDER ACCESSIBILITY............................................ 51
7.2 PROVIDER CONTRACTS................................................ 52
7.3 PHYSICIAN INCENTIVE PLANS......................................... 55
7.4 PROVIDER MANUAL AND PROVIDER TRAINING............................. 56
7.5 MEMBER PANEL REPORTS.............................................. 57
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES.......................... 57
7.7 PROVIDER QUALIFICATIONS - GENERAL................................. 58
7.8 PRIMARY CARE PROVIDERS............................................ 59
7.9 OB/GYN PROVIDERS.................................................. 63
7.10 SPECIALTY CARE PROVIDERS.......................................... 63
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES................... 64
7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA).......... 64
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPs).......................... 66
7.14 RURAL HEALTH PROVIDERS............................................ 67
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FQHCs) AND RURAL
HEALTH CLINICS (RHCs)............................................. 67
7.16 COORDINATION WITH PUBLIC HEALTH................................... 68
7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND
REGULATORY SERVICES............................................... 72
7.18 PROVIDER NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)..... 72
ARTICLE VIII MEMBER SERVICES REQUIREMENTS............................. 75
8.1 MEMBER EDUCATION.................................................. 75
8.2 MEMBER HANDBOOK................................................... 75
8.3 ADVANCE DIRECTIVES................................................ 75
8.4 MEMBER ID CARDS................................................... 77
8.5 MEMBER HOTLINE.................................................... 77
8.6 MEMBER COMPLAINT PROCESS.......................................... 77
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS.......................... 80
8.8 MEMBER ADVOCATES.................................................. 81
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES........................... 81
ARTICLE IX MARKETING AND PROHIBITED PRACTICES....................... 84
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION......................... 84
9.2 MARKETING ORIENTATION AND TRAINING................................ 84
9.3 PROHIBITED MARKETING PRACTICES.................................... 84
9.4 NETWORK PROVIDER DIRECTORY........................................ 85
ARTICLE X MIS SYSTEM REQUIREMENTS.................................. 86
10.1 MODEL MIS REQUIREMENTS............................................ 86
10.2 SYSTEM-WIDE FUNCTIONS............................................. 87
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM.................................. 88
10.4 PROVIDER SUBSYSTEM................................................ 89
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM............................. 90
10.6 FINANCIAL SUBSYSTEM............................................... 92
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM......................... 92
10.8 REPORT SUBSYSTEM.................................................. 94
10.9 DATA INTERFACE SUBSYSTEM.......................................... 95
10.10 TPR SUBSYSTEM..................................................... 96
10.11 YEAR 2000 (Y2K) COMPLIANCE........................................ 96
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM........ 97
11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM.......................... 97
11.2 WRITTEN QIP PLAN.................................................. 97
11.3 QIP SUBCONTRACTING................................................ 97
11.4 ACCREDITATION..................................................... 98
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP............................ 98
11.6 QIP REPORTING REQUIREMENTS........................................ 98
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ARTICLE XII REPORTING REQUIREMENTS................................... 98
12.1 FINANCIAL REPORTS................................................. 98
12.2 STATISTICAL REPORTS............................................... 100
12.3 ARBITRATION/LITIGATION CLAIMS REPORT.............................. 101
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS............................. 102
12.5 PROVIDER NETWORK REPORTS.......................................... 102
12.6 MEMBER COMPLAINTS................................................. 103
12.7 FRAUDULENT PRACTICES.............................................. 103
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH................ 103
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH.................. 103
12.10 QUALITY IMPROVEMENT REPORTS....................................... 104
12.11 HUB REPORTS....................................................... 105
12.12 THSTEPS REPORTS................................................... 105
12.13 REPORTING REQUIREMENTS DUE DATES.................................. 105
ARTICLE XIII PAYMENT PROVISIONS....................................... 105
13.1 CAPITATION AMOUNTS................................................ 106
13.2 EXPERIENCE REBATE TO STATE........................................ 107
13.3 PERFORMANCE OBJECTIVES............................................ 108
13.4 PAYMENT OF PERFORMANCE OBJECTIVE BONUSES.......................... 109
13.5 ADJUSTMENTS TO PREMIUM............................................ 110
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT............... 111
14.1 ELIGIBILITY DETERMINATION......................................... 111
14.2 ENROLLMENT........................................................ 113
14.3 DISENROLLMENT..................................................... 113
14.4 AUTOMATIC RE-ENROLLMENT........................................... 114
14.5 ENROLLMENT REPORTS................................................ 115
ARTICLE XV GENERAL PROVISIONS....................................... 115
15.1 INDEPENDENT CONTRACTOR............................................ 115
15.2 AMENDMENT......................................................... 115
15.3 LAW, JURISDICTION AND VENUE....................................... 116
15.4 NON-WAIVER........................................................ 116
15.5 SEVERABILITY...................................................... 116
15.6 ASSIGNMENT........................................................ 116
15.7 NON-EXCLUSIVE..................................................... 116
15.8 DISPUTE RESOLUTION................................................ 116
15.9 DOCUMENTS CONSTITUTING CONTRACT................................... 116
15.10 FORCE MAJEURE..................................................... 117
15.11 NOTICES........................................................... 117
15.12 SURVIVAL.......................................................... 117
ARTICLE XVI DEFAULT.................................................. 117
16.1 FAILURE TO PROVIDE COVERED SERVICES............................... 117
16.2 FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION..................... 118
16.3 HMO CERTIFICATE OF AUTHORITY...................................... 118
16.4 INSOLVENCY........................................................ 118
16.5 FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS............... 118
16.6 EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID.............. 118
16.7 MISREPRESENTATION, FRAUD OR ABUSE................................. 119
16.8 FAILURE TO MAKE CAPITATION PAYMENTS............................... 119
16.9 FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS
AND SUBCONTRACTORS................................................ 119
16.10 FAILURE TO DEMONSTRATE THE ABILITY TO PERFORM CONTRACT
FUNCTIONS......................................................... 119
16.11 FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF
CONTRACTORS OR NETWORK PROVIDERS.................................. 119
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT.................... 120
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ARTICLE XVIII REMEDIES AND SANCTIONS................................... 120
18.1 TERMINATION BY TDH................................................ 120
18.2 TERMINATION BY HMO................................................ 121
18.3 TERMINATION BY MUTUAL CONSENT..................................... 122
18.4 DUTIES UPON TERMINATION OF CONTRACTING PARTIES.................... 122
18.5 STATE AND FEDERAL DAMAGES, PENALTIES AND SANCTIONS................ 122
18.6 SUSPENSION OF NEW ENROLLMENT...................................... 123
18.7 TDH INITIATED DISENROLLMENT....................................... 123
18.8 LIQUIDATED MONEY DAMAGES - WITHHOLDING PAYMENTS................... 124
18.9 FORFEITURE OF TDI PERFORMANCE BOND................................ 126
ARTICLE XIX TERM..................................................... 127
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APPENDICES
APPENDIX A
Standards for Quality Improvement Programs
APPENDIX B
HUB Progress Assessment Reports
APPENDIX C
Scope of Services
APPENDIX D
Family Planning Providers
APPENDIX E
Transplant Facilities
APPENDIX F
Trauma Facilities
APPENDIX G
Hemophilia Treatment Centers And Programs
APPENDIX H
Utilization Management Report - Behavioral Health
APPENDIX I
Managed Care Financial - Statistical Report
APPENDIX J
Utilization Management Report - Physical Health
APPENDIX K
Preventive Health Performance Objectives
APPENDIX L
Cost Principals for Administrative Expenses
APPENDIX M
Required Critical Elements
El Paso Service Area HMO Contract
5-14-99
1999
CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
This contract is entered into between the Texas Department of Health (TDH) and _________________ (HMO). The purpose of this contract is to set forth the terms and conditions for HMO's participation as a managed care organization in the TDH STAR Program (STAR or STAR Program). Under the terms of this contract HMO will provide comprehensive health care services to qualified and eligible Medicaid recipients through a managed care delivery system. This is a risk-based contract. HMO was selected to provide services under this contract under Health and Safety Code, Title 2, ss. 12.011 and ss. 12.021, and Texas Government Code ss. 533.001 et. seq. HMO's selection for this contract was based upon HMO's Application submitted in response to TDH's 1998 Request for Application (RFA). Representations and responses contained in HMO's Application are incorporated into and are enforceable provisions of this contract.
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT
1.1 The Texas Legislature has designated the Texas Health and Human
Services Commission (THHSC) as the single State agency to administer
the Medicaid program in the State of Texas. THHSC has delegated the
authority to operate the Medicaid managed care delivery system for
acute care services to TDH. TDH has authority to contract with HMO
to carry out the duties and functions of the Medicaid managed care
program under Health and Safety Code, Title 2, ss. 12.011 and ss.
12.021 and Texas Government Code ss. 533.001 et seq.
1.2 HMO is a corporation with authority to conduct business in the State
of Texas and has a certificate of authority from the Texas
Department of Insurance (TDI) to operate as a Health Maintenance
Organization (HMO) under Chapter 20A of the Insurance Code. HMO is
in compliance with all TDI rules and laws that apply to HMOs. HMO
has been authorized to enter into this contract by its Board of
Directors or other governing body. HMO is an authorized vendor with
TDH.
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1.3 This contract is subject to the approval and on-going monitoring of
the federal Health Care Financing Administration (HCFA).
1.4 Readiness Review. This contract is subject to TDH's Readiness Review
of HMO. Under the provisions of Human Resources Code ss. 32.043(a),
TDH is required to review all HMOs with whom it contracts to
determine whether HMO has complied with the TDH/HMO contract and/or
can continue to meet all contract obligations.
1.4.1 Readiness Review will be conducted through: on-site inspection of
service authorization, claims payment systems, complaint-processing
systems, and other processes or systems required by the contract, as
determined by TDH.
1.4.2 TDH will provide HMO with written notice of the elements and
scheduling of the reviews, any deficiencies which must be corrected,
and the timeline by which deficiencies must be corrected.
1.4.3 TDH may discontinue enrollment of Members into HMO if the Readiness
Review reveals that HMO is not currently prepared to meet its
contractual obligations or has failed to correct or cure defaults
under the provisions of Article XVII.
1.5 Implementation Plan. Texas Government Code ss. 533.007(b) requires
that each HMO that contracts with TDH to provide health care
services to Members in a service area must submit an implementation
plan not later than the 90th day before the Implementation Date in
the service area.
1.5.1 The implementation plan must include, but not limited to: (1)
staffing patterns by function for all operations, including
enrollment, information systems, Member services, quality
improvement, claims management, case management, and provider and
recipient training, and (2) specific time frames for demonstrating
preparedness for implementation before the Implementation Date in
the service area.
1.5.2 TDH will respond to an implementation plan not later than the 10th
day after the date HMO submits the plan if the plan does not
adequately meet preparedness guidelines.
1.5.3 HMO must submit status reports on the implementation plan not later
than the 60th day and the 30th day before the Implementation Date
and every 30th day after the Implementation Date, until the 180th
day after the Implementation Date.
1.6 AUTHORITY OF HMO TO ACT ON BEHALF OF TDH. HMO is given express,
limited authority to exercise the State's right of recovery as
provided in Article 4.9, and to enforce provisions of this contract
which require providers or Subcontractors to produce records,
reports, encounter data, public health data, and other documents to
comply with this contract and which TDH has authority to require
under State or federal laws.
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ARTICLE II DEFINITIONS |
Terms used throughout this Contract have the following meaning, unless the context clearly indicates otherwise:
Abuse means provider practices that are inconsistent with sound fiscal, business, or medical practices and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes recipient practices that result in unnecessary cost to the Medicaid program.
Action means a denial, termination, suspension, or reduction of covered services or the failure of HMO to act upon request for covered services within a reasonable time or a denial of a request for prior authorization for covered services affecting a Member. This term does not include reaching the end of prior authorized services.
Adjudicate means to deny or pay a clean claim.
AFDC and AFDC-related means the federally funded program that provides financial assistance to single-parent families with children who meet the categorical requirements for aid. This program is now called Temporary Assistance to Needy Families (TANF).
Affiliate means any individual or entity owning or holding more than a five percent (5%) interest in HMO; in which HMO owns or holds more than a five percent (5%) interest; any parent entity; or subsidiary entity of HMO, regardless of the organizational structure of the entity.
Allowable expenses means all expenses related to the Contract for Services between TDH and HMO that are incurred during the term of the contract that are not reimbursable or recovered from another source.
Allowable revenue means all Medicaid managed care revenue received by HMO for the contract period, including retroactive adjustments made by TDH.
Behavioral health services means covered services for the treatment of mental or emotional disorders and treatment of chemical dependency disorders.
Capitation means a method of payment in which HMO or a health care provider receives a fixed amount of money each month for each enrolled Member, regardless of the services used by the enrolled Member.
El Paso Service Area HMO Contract
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CHIP means Children's Health Insurance Program established by Title XXI of the Social Security Act to assist state efforts to initiate and expand child health insurance to uninsured, low-income children.
Chronic or complex condition means a physical, behavioral, or developmental condition which may have no known cure and/or is progressive and/or can be debilitating or fatal if left untreated or undertreated.
Clean claim means a TDH approved or identified claim format that contains all data fields required by HMO and TDH for final adjudication of the claim. The required data fields must be complete and accurate. Clean claim also includes HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Unclean Claim). The TDH required data fields are identified in TDH's "HMO Encounter Data Claims Submission Manual".
CLIA means the federal legislation commonly known as the Clinical Laboratories Improvement Act of 1988 as found at Section 353 of the federal Public Health Services Act, and regulations adopted to implement the Act.
Community Management Team (CMT) means interagency groups responsible for developing and implementing the Texas Children's Mental Plan (TCMHP) at the local level. A CMT consists of local representatives from TXMHMR, the Mental Health Association of Texas, Texas Commission of Alcohol and Drug Abuse, Texas Department of Protective and Regulatory Services, Texas Department of Human Services, Texas Department of Health, Juvenile Probation Commission, Texas Youth Commission, Texas Rehabilitation Commission, Texas Education Agency, Council on Early Childhood Intervention and a parent representative. This organizational structure is also replicated in the State Management Team that sets overall policy direction for the TCMHP.
Community Resource Coordination Groups (CRCGs) means a statewide system of local interagency groups, including both public and private providers, which coordinate services for "multi-problem" children and youth. CRCGs develop individual service plans for children and adolescents whose needs can only be met through interagency cooperation. CRCGs address complex needs in a model that promotes local decision-making and ensures that children receive the integrated combination of social, medical and other services needed to address their individual problems.
Complainant means a Member or a treating provider or other individual designated to act on behalf of the Member who files the complaint.
Complaint means any dissatisfaction, expressed by a complainant orally or in writing to HMO, with any respect of HMO's operation, including but not limited to dissatisfaction with plan administration; an appeal of an adverse determination to HMO; the way a service is provided; or disenrollment decisions expressed by a complainant. A complaint is not a misunderstanding or misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the Member, or a request for a Fair Hearing to TDH.
El Paso Service Area HMO Contract
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Continuity of care means care provided to a Member by the same primary care provider or specialty provider to the greatest degree possible, so that the delivery of care to the Member remains stable, and services are consistent and unduplicated.
Contract means this contract between TDH and HMO and documents included by reference and any of its written amendments, corrections or modifications.
Contract administrator means an entity contracting with TDH to carry out specific administrative functions under that State's Medicaid managed care program.
Contract anniversary date means September 1 of each year after the first year of this contract, regardless of the date of execution of effective date of the contract.
Contract period means the period of time starting with effective date of the contract and ending on the termination date of the contract.
Court-ordered commitment means a commitment of a STAR Member to a psychiatric facility for treatment that is ordered by a court of law pursuant to the Texas Health and Safety Code, Title VII Subtitle C.
Covered services means health care services and health-related services HMO must provide to Members, including all services required by this contract and state and federal law, and all value-added services described by HMO in its response to the Request For Application (RFA) for this contract.
Day means a calendar day unless specified otherwise.
Denied claim means a clean claim or a portion of a clean claim for which a determination is made that the claim cannot be paid.
Disability means a physical or mental impairment that substantially limited one or more of the major life activities of an individual.
DSM-IV means the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, which is the American Psychiatry Association's official classification of behavioral health disorders.
ECI means Early Childhood Intervention which is a federally funded mandated program for infants and children under the age of three with or at risk for development delays and/or disabilities. The federal ECI regulations are found at 34 C.F.R. 303.1 et seq. The State ECI rules are found at 25 TAC ss.621.21 et. seq.
Effective date of the contract means the day on which this contract is signed and the parties are bound by the terms and conditions of this contract.
El Paso Service Area HMO Contract
5-14-99
Emergency behavioral health condition means any condition, without regard to the nature or cause of the condition, which in the opinion of a prudent layperson possessing an average knowledge of health and medicine requires immediate intervention and/or medical attention without which Members would present an immediate danger to themselves or others or which renders Members incapable of controlling, knowing or understanding the consequences of their actions.
Emergency services means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish such services under this contract and are needed to evaluate or stabilize an emergency medical condition.
Emergency Medical Condition means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical care could result in:
(a) placing the patient's health in serious jeopardy;
(b) serious impairment to bodily functions;
(c) serious dysfunction of any bodily organ or part;
(d) serious disfigurement; or
(e) in the case of a pregnant woman, serious jeopardy to the health
of the fetus.
Encounter means a covered service or group of services delivered by a provider to a Member during a visit between the Member and provider. This also includes value-added services.
Encounter data means data elements from fee-for-service claims or capitated services proxy claims that are submitted to TDH by HMO in accordance with TDH's "HMO Encounter Data Claims Submission Manual".
Enrollment Broker means an entity contracting with TDH to carry out specific functions related to Member services (i.e., enrollment/disenrollment, complaints, etc.) under TDH's Medicaid managed care program.
Enrollment report means the list of Medicaid recipients who are enrolled with an HMO as Members for the month the report was issued.
EPSDT means the federally mandated Early and Periodic Screening, Diagnosis and Treatment program contained at 42 USC 1396 d (r ) (see definition for Texas Health Steps). The name has been changed to Texas Health Steps (THSteps) in the State of Texas.
Execution date means the date this contract is signed by persons with the authority to contract for TDH and HMO.
Fair Hearing means a due process hearing conducted by the Texas Department of Health that complies with 25 TAC ss. 1.51 et seq. and federal rules found at 42 CFR Subpart E, relating to Fair Hearings for Applicants and Recipients.
El Paso Service Area HMO Contract
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FQHC means a Federally Qualified Health Center that has been certified by HCFA to meet the requirements of ss. 1861 (aa)(3) of the Social Security Act as a federally qualified health center and is enrolled as a provider in the Texas Medicaid Program.
Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state law.
HCFA means the federal Health Care Financing Administration.
Health care services or health services means physical medicine, behavioral health care and health-related services which an enrolled population might reasonably required in order to be maintained in good health, including, as a minimum, emergency services and inpatient and outpatient services.
Implementation Date means the first date that Medicaid managed care services are delivered to Members in a service area.
Inpatient stay means at least a 24-hour stay in a facility licensed to provide hospital care.
JCAHO means Joint Accreditation of Health Care Organizations.
Local Health Department means a local health department established pursuant to Health and Safety Code, Title 2, Local Public Health Reorganization Act ss. 121.031.
Local Mental Health Authority (LMHA) means an entity to which the TXMHMR board delegates its authority and responsibility within a specified region for planning, policy development, coordination, and resource development and allocation and for supervising and ensuring the provision of mental health services to persons with mental illness in one or more local service areas.
Local tuberculosis control program means a tuberculosis program that is managed by a local or regional health department.
Major life activities means functions such as caring for oneself, performing manual task, walking, seeing, hearing, speaking, breathing, learning and working.
Major population group means any population which represents at least 10% of the Medicaid population in any of the counties in the service areas served by the Contractor.
Medical education refers to the State-supported allopathic medical schools and schools of osteopathic medicine, their teaching institutions and faculties, those entities that have Primary Care Residency Programs approved by the Accreditation Council for Graduate Medical Education.
El Paso Service Area HMO Contract
5-14-99
Medical home means a primary or specialty care provider who has accepted the responsibility for providing accessible, continuous, comprehensive and coordinated care to Members participating in TDH's Medicaid managed care program.
Medically necessary behavioral health services means those behavioral health services which:
(a) are reasonable and necessary for the diagnosis or treatment of a mental health or chemical dependency disorder or to improve or to maintain or to prevent deterioration of functioning resulting from such a disorder;
(b) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care;
(c) are furnished in the most appropriate and least restrictive setting in which services can be safely provided;
(d) are the most appropriate level or supply of services which can be safely provided; and
(e) could not be omitted without adversely affecting the Member's mental and/or physical health or the quality of care rendered.
Medically necessary health care services means health care services, other than behavioral health services which are:
(a) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, and/or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a Member, or endanger life;
(b) provided at appropriate facilities and at the appropriate levels of care for the treatment of a Member's medical conditions;
(c) consistent with health care practice guidelines and standards that are issued by professionally recognized health care organizations or governmental agencies;
(d) consistent with the diagnoses of the conditions; and
(e) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency.
Member means a person who: is entitled to benefits under Title XIX of the Social Security Act and Texas Medical Assistance Program (Medicaid), is in a Medicaid eligibility category included in the STAR Program, and is enrolled in the STAR Program.
El Paso Service Area HMO Contract
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Member month means one Member enrolled with an HMO during any given month. The total Member months for each month of a year comprise the annual Member months.
Mental health priority population means those individuals served by TXMHMR who meet the definition of the priority population. The priority population for mental health services is defined as:
Children and adolescents under the age of 18 who have a diagnosis of mental illness who exhibit sever emotional or social disabilities which are life-threatening or require prolonged intervention.
Adults who have severe and persistent mental illnesses such as schizophrenia, major depression, manic depressive disorder, or other severely disabling mental disorders which require crisis resolution or on-going and long-term support and treatment.
MIS means management information system.
Pended claim means a claim for payment which requires additional information before the claim can be adjudicated as a clean claim.
Performance premium means an amount which may be paid to a managed care organization as a bonus for accomplishing a portion or all of the performance objectives contained in this contract.
Premium means the amount paid by TDH to a managed care organization on a monthly basis and is determined by multiplying the Member months times the capitation amount for each enrolled Member.
Primary care physician or primary care provider (PCP) means a physician or provider who has agreed with HMO to provide a medical home to Members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care (also see Medical home).
Provider means an individual or entity and its employees and Subcontractors that directly provide health care services to HMO's Members under TDH's Medicaid managed care program.
Provider contract means an agreement entered into by a direct provider of health services and HMO or an intermediary entity.
Public Information means information that is collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business by a governmental body or for a governmental body and the governmental body owns the information or has a right of access.
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Readiness Review means a review process conducted by TDH or its agent(s) to assess HMO's capacity and capability to perform the duties and responsibilities required under the Contract. This process is required by Texas Government Code ss. 533.007.
Rehabilitation services for mental illness means specialized services provided to people age 18 or over with severe and persistent mental illness and people under age 18 with severe emotional disturbance. The individual must have severe mental disorders and institutionalization. Mental Health Rehabilitation includes the following:
plan of care oversight; community support services; day programs services (adult); and day programs services (children).
RFA means Request For Application issued by TDH on June 17,1998, and all RFA addenda, corrections or modifications.
Risk means the potential for loss as a result of expenses and costs of HMO exceeding payments made by TDH under this contract.
Rural Health Clinic (RHC) means an entity that meets all of the requirements for designation as a rural health clinic under ss. 1861 (aa) (1) of the Social Security Act and approved for participation in the Texas Medicaid Program.
SED means severe emotional disturbance as determined by the Local Mental Health Authority.
Service area means the counties included in a site selected for the STAR Program, within which a participating HMO must provide services.
SPMI means severe and persistent mental illness as determined by the Local Mental Health Authority.
Significant traditional provider (STP) means all hospitals receiving disproportionate share hospital funds (DSH) in FY '97 and all other providers in a county that, when listed by provider type in descending order by the number of recipient encounters, provided the top 80 percent of recipient encounters for each provider type in FY'97.
Special hospital means an establishment that:
(a) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated, and discharged and who require services more intensive than room, board, personal services, and general nursing care;
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(b) has clinical laboratory facilities, diagnostic x-ray facilities, treatment facilities, or other definitive medical treatment;
(c) has a medical staff in regular attendance; and
(d) maintains records of the clinical work performed for each patient.
STAR Program is the name of the State of Texas Medicaid managed care program. "STAR" stands for the State of Texas Access Reform.
State fiscal year means the 12-month period beginning on September 1 and ending on August 31 of the next year.
Subcontract means any written agreement between HMO and other party to fulfill the requirements of this contract. All subcontracts are required to be in writing.
Subcontractor means any individual or entity which has entered into a subcontract with HMO.
TAC means Texas Administrative Code.
TANF means Temporary Assistance to Needy Families.
TCADA means Texas Commission on Alcohol and Drug Abuse, the State agency responsible for licensing chemical dependency treatment facilities. TCADA also contracts with providers to deliver chemical dependency treatment services.
Texas Children's Mental Health Plan (TCMHP) means the interagency, State-funded initiative that plans, coordinates, provides and evaluates service systems for children and adolescents with behavioral health needs. The Plan is operated at a state and local level by Community Management Teams representing the major child-serving state agencies.
TDD means telecommunication device for the deaf. It is interchangeable with the term Teletype machine or TTY.
TDH means the Texas Department of Health or its designees.
TDHS means the Texas Department of Human Services.
TDI means the Texas Department of Insurance.
TDMHMR means the Texas Department of Mental Health and Mental Retardation, which is the State agency responsible for developing mental health policy for public and private sector providers.
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Temporary Assistance to Needy Families (TANF) means the federally funded program that provides assistance to single-parent families with children who meet the categorical requirements for aid. This program was formerly known as Aid to Families with Dependent Children (AFDC).
Texas Health Steps (THSteps) is the name adopted by the State of Texas for the federally mandated Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. It includes the State's Comprehensive Care Program extension to EPSDT, which adds benefits to the federal EPSDT requirements contained in 42 United States Code ss. 1396d(r), and defined and codified at 42 C.F.R. ss. 440.40 and ss.ss.441.56-62. TDH's rules are contained in 25 TAC, Chapter 33 (relating to Early and Periodic Screening, Diagnosis and Treatment).
Texas Medicaid Provider Procedures Manual means the policy and procedures manual published by or on behalf of TDH which contains policies and procedures required of all health care providers who participate in the Texas Medicaid program. The manual is updated by the Medicaid Bulletin which is published bi-monthly.
Texas Medicaid Service Delivery Guide means an attachment to the Texas Medicaid Provider Procedures Manual.
THHSC means the Texas Health and Human Services Commission.
Third Party Liability (TPL) means the legal responsibility of another individual or entity to pay for all or part of the services provided to Members under this contract (see 25 TAC, Subchapter 28, relating to Third Party Resources).
Third Party Recovery (TPR) means the recovery of payments made on behalf of a Member by TDH or HMO from an individual or entity with the legal responsibility to pay for the services.
THSteps means Texas Health Steps.
TXMHMR means Texas Mental Health and Mental Retardation system which includes the state agency TDMHMR and the Local Mental Health and Mental Retardation Authorities.
Unclean claim means a claim that does not contain accurate and complete data in all claim fields that are required by HMO and TDH and other HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Clean Claim).
Urgent behavioral health situations means conditions which require attention and assessment within 24 hours but which do not place the Member in immediate danger to themselves or others, and the Member is able to cooperate with treatment.
Urgent condition means a health condition, including an urgent behavioral health situation, which is not an emergency but is severe or painful enough to cause a prudent layperson possessing an average knowledge of medicine to believe that his or her condition required medical treatment-
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evaluation or treatment within 24 hours by the Member's PCP or PCP designee to prevent serious deterioration of the Member's condition or health.
Value-added services means services which were not included in the RFA as mandatory covered services but which were submitted by HMO with or subsequent to its response to the RFA and which have been approved by TDH to be included in this contract as value-added services in Appendix C - Scope of Services. These services must be provided to all mandatory Members as part of the covered services under this contract. No additional capitation will be paid for these services, under the current capitation rate.
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS
3.1 ORGANIZATION AND ADMINISTRATION
-------------------------------
3.1.1 HMO must maintain the organizational and administrative capacity and
capabilities to carry out all duties and responsibilities under this
contract.
3.1.2 HMO must maintain assigned staff with the capacity and capability to
provide all services to all Members under this contract.
3.1.3 HMO must maintain an administrative office in the service area
(local office). The local office must comply with the American with
Disabilities Act (ADA) requirements for public buildings. Member
Advocates for the service area must be located in this office (see
Article 8.8).
3.1.4 HMO must provide training and development programs to all assigned
staff to ensure they know and understand the service requirements
under this contract including the reporting requirements, the
policies and procedures, cultural and linguistic requirements and
the scope of services to be provided.
3.1.5 By Phase I of Readiness Review, HMO must submit a current
organizational chart showing basic functions, the number of
employees for those functions, and a list of key managers in HMO who
are responsible for the basic functions of the organization. HMO
must submit a description and organizational chart which illustrates
how behavioral health service administration is integrated into the
overall administrative structure of HMO, including individuals
assigned to be behavioral health liaisons with TDH. If HMO uses
Subcontractors or other entities to administer or manage behavioral
health, a second chart must be attached describing these entities
and identifying key positions, departments and management functions.
HMO must notify TDH within fifteen (15) working days of any change
in key managers or behavioral health Subcontractors. This
information must be updated
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annually or when there is a significant change in organizational
structure or personnel.
3.1.6 Participation in Regional Advisory Committee. HMO must participate
in a Regional Advisory Committee established in the service area in
compliance with the Texas Government Code, ss.ss. 533.021-533.029.
The Regional Advisory Committee in each managed care service area
must include representatives from at least the following entities:
hospitals; managed care organizations; primary care providers; state
agencies; consumer advocates; Medicaid recipients; rural providers;
long-term care providers; specialty care providers, including
pediatric providers; and political subdivisions with a
constitutional or statutory obligation to provide health care to
indigent patients. HHSC and TDH will determine the composition of
each Regional Advisory Committee.
3.1.6.1 The Regional Advisory Committee is required to meet at least
quarterly for the first year after appointment of the committee and
at least annually in subsequent years. The actual frequency may vary
depending on the needs and requirements of the committee.
3.2 NON-PROVIDER SUBCONTRACTORS
---------------------------
3.2.1 HMO must enter into written contracts with all Subcontractors and
maintain copies of the subcontract in HMO's administrative office.
HMO non-provider subcontracts relating to the delivery or payment of
covered health services must be submitted to TDH no later than 120
days prior to Implementation Date. On an on-going basis, HMO must
make non-provider subcontracts available to TDH upon request, at the
time and location requested by TDH.
3.2.1.1 HMO must notify TDH not less than 90 day prior to terminating any
subcontract affecting a major performance function of this contract.
All major Subcontractor terminations or substitutions require TDH
approval. TDH may require HMO to provide a transition plan
describing how care will continue to be provided to Members. All
subcontracts are subject to the terms and conditions of this
contract and must contain the provisions of Article V, Statutory and
Regulatory Compliance, and the provisions contained in Article
3.2.4.
3.2.2 Subcontracts which are requested by any agency with authority to
investigate and prosecute fraud and abuse must be produced at the
time and in the manner requested by the requesting Agency.
Subcontracts requested in response to a Public Information request
must be produced within 48 hours of the request. All requested
records must be provided free-of-charge.
3.2.3 The form and substance of all Subcontracts including subsequent
amendments are subject to approval by TDH. TDH retains the authority
to reject or require changes
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to any provisions of the subcontract that do not comply with the
requirements or duties and responsibilities of this contract or
create significant barriers for TDH in carrying out its duty to
monitor compliance with the contract. HMO REMAINS RESPONSIBLE FOR
PERFORMING ALL DUTIES, RESPONSIBILITIES AND SERVICES UNDER THIS
CONTRACT REGARDLESS OF WHETHER THE DUTY, RESPONSIBILITY OR SERVICE
IS SUBCONTRACTED TO ANOTHER.
3.2.4 HMO and all intermediary entities must include the following
standard language in each subcontract and ensure that this language
is included in all subcontracts down to the actual provider of the
services. The following standard language is not the only language
that will be considered acceptable by TDH.
3.2.4.1 [Contractor] understands that services provided under this contract
are funded by state and federal funds under the Texas Medical
Assistance Program (Medicaid). [Contractor] is subject to all state
and federal laws, rule and regulations that apply to persons or
entities receiving state and federal funds. [Contractor] understands
that any violation by [Contractor] of a state or federal law
relating to the delivery of services under this contract, or any
violation of the TDH/HMO contract could result in liability for
contract money damages, and/or civil and criminal penalties and
sanctions under state and federal law.
3.2.4.2 [Contractor] understands and agrees that HMO has the sole
responsibility for payment of services rendered by the [Contractor]
under this contract. In the event of HMO insolvency or cessation of
operations, [Contractor's] sole recourse is against HMO through the
bankruptcy or receivership estate of HMO.
3.2.4.3 [Contractor] understands and agrees that TDH is not liable or
responsible for payment for any services provided under this
contract.
3.2.4.4 [Contractor] agrees that any modification, addition, or deletion of
the provisions of this agreement will become effective no earlier
than 30 days after HMO notifies TDH of the change. If TDH does not
provide written approval within 30 days from receipt of notification
from HMO, changes may be considered provisionally approved.
3.2.4.5 This contract is subject to state and federal fraud and abuse
statutes. [Contractor] will be required to cooperate in the
investigation and prosecution of any suspected fraud or abuse, and
must provide any and all requested originals and copies of records
and information, free-of-charge on request, to any state or federal
agency with authority to investigate fraud and abuse in the Medicaid
program.
3.2.5 The Texas Medicaid Fraud Control Unit must be allowed to conduct
private interviews of HMO personnel, Subcontractors and their
personnel, witnesses, and patients. Requests for information are to
be complied with, in the form and the language requested. HMO
employees and Contractors and Subcontractors and their
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employees and Contractors must cooperate fully in making themselves
available in person for interviews, consultation, grand jury
proceedings, pretrial conference, hearings, trial and in any other
process, including investigations. Compliance with this Article is
at HMO's and Subcontractors' own expense.
3.2.6 HMO must include a complaint and appeals process which complies with
the requirements of Article 20A.12 of the Texas Insurance Code
relating to Complaint System in all non-provider subcontracts. HMO's
complaint and appeals process must be the same for all
[Contractors].
3.3 MEDICAL DIRECTOR
----------------
3.3.1 HMO must have a full-time physician (M.D. or D.O.) licensed in
Texas, to serve as Medical Director. HMO must enter into a written
contract or written employment agreement with the Medical Director
describing the following authority, duties and responsibilities:
3.3.1.1 Ensure that medical necessity decisions, including prior
authorization protocols, are rendered by qualified medical personnel
and are based on TDH's definition of medical necessity.
3.3.1.2 Oversight responsibility of network providers to ensure that all
care provided complies with generally accepted health standards of
the community.
3.3.1.3 Oversight of HMO's quality improvement process, including
establishing and actively participating in HMO's quality improvement
committee, monitoring Member health status, HMO utilization review
policies and standards and patient outcome measures.
3.3.1.4 Identify problems and develop and implement corrective actions to
quality improvement process.
3.3.1.5 Develop, implement and maintain responsibility for HMO's medical
policy.
3.3.1.6 Oversight responsibility for medically related complaints.
3.3.1.7 Participate and provide witnesses and testimony on behalf of HMO in
the TDH Fair Hearing process.
3.3.2 The Medical Director must exercise independent medical judgement in
all medical necessity decisions. HMO must ensure that medical
necessity decisions are not adversely influenced by fiscal
management decisions. TDH may conduct reviews of medical necessity
decisions by HMO Medical Director at any time.
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS
-------------------------------------------------
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3.4.1 HMO and its Subcontractors must receive written approval from TDH
for all written materials containing information about the STAR
Program prior to distribution to Members, prospective Members,
providers within HMO's network, or potential providers who HMO
intends to recruit as network providers.
3.4.2 Member materials must meet cultural and linguistic requirements as
stated in Article VIII. Unless otherwise required, Member materials
must be:
3.4.2.1 written at a 4th- 6th grade reading comprehension level; and
3.4.2.2 translated into the language of any major population group.
3.4.3 All materials regarding the STAR Program must be submitted to TDH
for approval prior to distribution. TDH has 15 working days to
review the materials and recommend any suggestions or required
changes, If TDH has not responded to HMO by the fifteenth day, HMO
may submit a written request for deemed approval. Requests for
deemed approval must clearly identify the materials for which deemed
approval is requested by title of document, date of submission, and
the timelines for publication and distribution. TDH must respond in
writing within two working days from the date a deemed approval
request is received. TDH reserves the right to request HMO to modify
plan materials.
3.4.4 HMO must reproduce all written instructional, educational, and
procedural documents required under this contract and distribute
them to its providers and Members. HMO must reproduce and distribute
instructions and forms to all network providers who have reporting
and audit requirements under this contract.
3.4.5 HMO must provide TDH with at least five copies of all written
materials that HMO is required to submit under this contract, unless
otherwise specified by TDH.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.1 HMO must keep all records required to be created and retained under
this contract. Records related to Members served in this service
area must be made available in HMO's local office when requested by
TDH. All records must be retained for a period of five (5) years
unless otherwise specified in this contract. Original records must
be kept in the form they were created in the regular course of
business for a minimum of two (2) years following the end of the
contract period. Microfilm, digital or electronic records may be
substituted for the original records after the first two (2) years,
if the retention system is reliable and supported by a retrieval
system which allows reasonable access to the records. All copies of
original records must be made using guidelines and procedures
approved by TDH, if the original documents will no longer be
available or accessible.
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3.5.2 Availability and Accessibility. All records, documents and data
required to be created under this contract are subject to audit,
inspection and production. If an audit, inspection or production is
requested by TDH, TDH's designee or TDH acting on behalf of any
agency with regulatory or statutory authority over Medicaid Managed
Care, the requested records must be made available at the time and
at the place the records are requested. Copies of requested records
must be produced or provided free-of-charge to the requesting
agency. Records requested after the second year following the end of
contract term, which have been stored or archived must be accessible
and made available within 10 calendar days from the date of a
request by TDH or the requesting agency or at a time and place
specified by the requesting entity.
3.5.3 Accounting Records. HMO must create and keep accurate and complete
accounting records in compliance with Generally Accepted Accounting
Principles (GAAP). Records must be created and kept for all claims
payments, refunds and adjustment payments to providers, premium or
capitation payments, interest income and payments for administrative
services or functions. Separate records must be maintained for
medical and administrative fees, charges, and payments. HMO must
submit periodic reports and data to TDH as required by TDH.
3.5.4 General Business Records. HMO must create and keep complete and
accurate general business records to reflect the performance of
duties and responsibilities, and compliance with the provisions of
this contract.
3.5.5 Medical records. HMO must require, through contractual provisions or
provider manual, providers to create and keep medical records in
compliance with the medical records standards contained in the
Standards for Quality Improvement Programs in Appendix A. All
medical records must be kept for at least five (5) years, except for
records of rural health clinics, which must be kept for a period of
six (6) years from the date of service.
3.5.6 Matters in Litigation. HMO must keep records related to matters in
litigation for five (5) years following the termination or
resolution of the litigation.
3.5.7 On-line Retention of Claims History. HMO must keep automated claims
payment histories for a minimum of 18 months, from date of
adjudication, in an on-line inquiry system. HMO must also keep
sufficient history on-line to ensure all claim/encounter service
information is submitted to and accepted by TDH for processing.
3.6 HMO REVIEW OF TDH MATERIALS
---------------------------
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TDH will submit all studies or audits that relate or refer to HMO
for review and comment to HMO 15 days prior to releasing the report
to the public or to Members.
ARTICLE IV FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS
4.1 FISCAL SOLVENCY
---------------
4.1.1 HMO must be and remain in full compliance with all state and federal
solvency requirements for HMOs, including but not limited to all
reserve requirements, net worth standards, debt-to-equity ratios, or
other debt limitations.
4.1.2 If HMO becomes aware of any impending changes to its financial or
business structure which could adversely impact its compliance with
these requirements or its ability to pay its debts as they come due,
HMO must notify TDH immediately in writing. In addition, if HMO
becomes aware of a take-over or assignment which would require the
approval of TDI or TDH, HMO must notify TDH immediately in writing.
4.1.3 HMO must not have been placed under state conservatorship or
receivership or filed for protection under federal bankruptcy laws.
None of HMO's property, plant or equipment must have been subject to
foreclosure or repossession within the preceding 10-year period. HMO
must not have any debt declared in default and accelerated to
maturity within the preceding 10-year period. HMO represents that
these statements are true as of the contract execution date. HMO
must inform TDH within 24 hours of a change in any of the preceding
representations.
4.2 MINIMUM EQUITY
--------------
4.2.1 HMO has minimum equity equal to the greater of (a) $1,500,000; (b)
an amount equal to the sum of twenty-five dollars ($25) times the
number of all enrollees including Medicaid Members; or (c) an amount
that complies with standards adopted by TDI. Equity is calculated by
subtracting accrued liabilities from admitted assets, as those terms
are defined in 28 TAC ss. 11.806 and ss. 11.2(b) respectively.
4.2.2 The minimum equity must be maintained during the entire contract
period.
4.3 PERFORMANCE BOND
----------------
HMO has furnished TDH with a performance bond in the form prescribed
by TDH and approved by TDI, naming TDH as Obligee, securing HMO's
faithful performance of the terms and conditions of this contract.
The performance bond has been issued in the amount of $100,000. If
the contract is renewed or extended under Article XVIII, a separate
bond will be required for each additional term of the
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contract. The bond has been issued by a surety licensed by TDI, and
specifies cash payment as the sole remedy. Performance Bond
requirements under this Article must comply with Texas Insurance
Code ss. 11. 1805, relating to Performance and Fidelity Bonds. The
bond must be delivered to TDH at the same time the signed HMO
contract is delivered to TDH.
4.4 INSURANCE
---------
4.4.1 HMO must maintain, or cause to be maintained, general liability
insurance in the amounts of at least $1,000,000 per occurrence and
$5,000,000 in the aggregate.
4.4.2 HMO must maintain or require professional liability insurance on
each of the providers in its network in the amount of $100,000 per
occurrence and $300,000 in the aggregate, or the limits required by
the hospital at which the network provider has admitting privileges.
4.4.3 HMO must maintain an umbrella professional liability insurance
policy for the greater of $3,000,000 or an amount (rounded to the
next $100,000) which represents the number of STAR Members enrolled
in HMO in the first month after the Implementation Date multiplied
by $150, not to exceed $10,000,000.
4.4.4 Any exceptions to the requirements of this Article must be approved
in writing by TDH prior to the contract Implementation Date. HMOs
and providers who qualify as either state or federal units of
government are exempt from the insurance requirements of this
Article and are not required to obtain exemptions from these
provisions prior to the contract Implementation Date. State and
federal units of goverment are required to comply with and are
subject to the provisions of the Texas or Federal Tort Claims Act.
4.5 FRANCHISE TAX
-------------
HMO certifies that its payment of franchise taxes is current or that
it is not subject to the State of Texas franchise tax.
4.6 AUDIT
-----
4.6.1 TDH, TDI, or their designee have the right from time to time to
examine and audit books and records of HMO, or its Subcontractors,
relating to: (1) HMO's capacity to bear the risk of potential
financial losses; (2) services performed or determination of amounts
payable under this contract; (3) detection of fraud and abuse; and
(4) other purposes TDH deems to be necessary to perform its
regulatory function and/or to enforce the provisions of this
contract.
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4.6.2 TDH is required to conduct an audit of HMO at least once every three
years. HMO is responsible for paying the costs of an audit conducted
under this Article. The costs of the audit may be allowed as a
credit against premium taxes paid by HMO under the provisions of the
Texas Insurance Code.
4.7 PENDING OR THREATENED LITIGATION
--------------------------------
HMO must require disclosure from Subcontractors and network
providers of all pending or potential litigation or administrative
actions against the Subcontractor or network provider and must
disclose this information to TDH, in writing, prior to the execution
of this contract. HMO must make reasonable investigation and inquiry
that there is not pending or potential litigation or administrative
action against the providers or Subcontractors in HMO's provider
network. HMO must notify TDH of any litigation which is initiated or
threatened after the Implementation Date within seven days of
receiving service or becoming aware of the threatened litigation.
4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN HMO OPERATIONS
--------------------------------------------------------------------
4.8.1 HMO was awarded this contract based upon the responses and
representations contained in HMO's application submitted in response
to TDH's RFA. All responses and representations upon which scoring
was based were considered material to the decision of whether to
award the contract to HMO. RFA responses are incorporated into this
contract by reference. The provisions of this contract control over
any RFA response if there is a conflict between the RFA and this
contract, or if changes in law or policy have changed the
requirements of HMO contracting with TDH to provide Medicaid Managed
Care.
4.8.2 This contract was awarded in part based upon HMO's representation of
its current equity and financial ability to bear the risks under
this contract. TDH will consider any misrepresentations of HMO's
equity, HMO's ability to bear financial risks of this contract or
inflating the equity of HMO, solely for the purpose of being awarded
this contract, a material misrepresentation and fraud under this
contract.
4.8.3 Discovery of any material misrepresentation or fraud on the part of
HMO in HMO's application or in HMO's day-to-day activities and
operations may cause this contract to terminate and may result in
legal action being taken against HMO under this contract, and state
and federal civil and criminal laws.
4.9 THIRD PARTY RECOVERY
--------------------
4.9.1 Third Party Recovery. All Members are required to assign their
rights to any benefits to the State and agree to cooperate with the
State in identifying third parties who may be liable for all or part
of the costs for providing services to the Member, as a
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condition for participation in the Medicaid program. HMO is
authorized to act as the State's agent in enforcing the State's
rights to third party recovery under this contract.
4.9.2 Identification. HMO must develop and implement systems and
procedures to identify potential third parties who may be liable for
payment of all or part of the costs for providing medical services
to Members under this contract. Potential third parties must include
any of the sources identified in 42 C.F.R. 433.138, relating to
identifying third parties, except workers' compensation, uninsured
and underinsured motorist insurance, first and third party liability
insurance and tortfeasors. HMO must coordinate with TDH to obtain
information from other state and federal agencies and HMO must
cooperate with TDH in obtaining information from commercial third
party resources. HMO must require all providers to comply with the
provisions of 25 TACss.28, relating to Third Party Recovery in the
Medicaid program.
4.9.3 Exchange of identified resources. HMO must forward identified
resources of uninsured and underinsured motorist insurance, first
and third party liability insurance and tortfeasors ("excepted
resources") to TDH for TDH to pursue collection and recovery from
these resources. TDH will forward information on all third party
resources identified by TDH to HMO. HMO must coordinate with TDH to
obtain information from other state and federal agencies, including
HCFA for Medicare and the Child Support Enforcement Division of the
Office of the Attorney General for medical support. HMO must
cooperate with TDH in obtaining and exchanging information from
commercial third party resources.
4.9.4 Recovery. HMO must actively pursue and collect from third party
resources which have been identified, except when the cost of
pursuing recovery reasonably exceeds the amount which may be
recovered by HMO. HMO is not required to, but may pursue recovery
and collection from the excepted resources listed in Article 4.9.3.
HMO must report the identity of these resources to TDH, even if HMO
will pursue collection and recovery from the excepted resources.
4.9.4.1 HMO must provide third party resource information to network
providers to whom individual Members have been assigned or who
provide services to Members. HMO must require providers to seek
recovery from potential third party resources prior to seeking
payment from HMO. If network providers are paid capitation, HMO must
either seek recovery from third party resources or account to TDH
for all amounts received by network providers from third party
resources.
4.9.4.2 HMO must prohibit network providers from interfering with or placing
liens upon the State's right or HMO's right, acting as the State's
agent, to recovery from third party resources. HMO must prohibit
network providers from seeking recovery in excess of the Medicaid
payable amount or otherwise violating state and federal laws.
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4.9.5 Retention. HMO may retain as income all amounts recovered from third
party sources as long as recoveries are obtained in compliance with
the contract and state and federal laws.
4.9.6 Accountability. HMO must report all third party recovery efforts and
amounts recovered as required in Article 12.1.12. If HMO fails to
pursue and recover from third parties no later than 180 days after
the date of service, TDH may pursue third party recoveries and
retain all amounts recovered without accounting to HMO for the
amounts recovered. Amounts recovered by TDH will be added to
expected third party recoveries to reduce future capitation rates,
except recoveries from those excepted third party resources listed
in Article 4.9.3.
4.10 CLAIMS PROCESSING REQUIREMENTS
------------------------------
4.10.1 HMO and claims processing Subcontractors must comply with TDH's
Texas Managed Care Claims Manual (Claims Manual), which contains
TDH's claims processing requirements.
4.10.2 HMO must forward claims submitted to HMO in error to either: 1) the
correct HMO if the correct HMO can be determined from the claim or
is otherwise known to HMO; 2) the State's claims administrator; or
3) the provider who submitted the claim in error, along with an
explanation of why the claim is being returned.
4.10.3 HMO must not pay any claim submitted by a provider who is under
investigation for or has been excluded or suspended from the
Medicare or Medicaid programs for fraud and abuse when HMO is on
actual or constructive notice of the investigation, exclusion or
suspension.
4.10.4 All provider clean claims must be adjudicated (finalized as paid or
denied adjudicated) within 30 days from the date the claim is
received by HMO. HMO must pay providers interest on a clean claim
which is not adjudicated within 30 days from the date the claim is
received by HMO or becomes clean at a rate of 1.5% per month (18%
annual) for each month the clean claim remains unadjudicated.
4.10.4.1 All claims and appeals submitted to HMO and claims processing
Subcontractors must be paid-adjudicated (clean claims),
denied-adjudicated (clean claims), or denied for additional
information (unclean claims) to providers within 30 days from the
date the claim is received by HMO. Providers must be sent a written
notice for each claim that is denied for additional information
(unclean claims) identifying the claim, all reasons why the claim is
being denied, the date the claim was received by HMO, all
information required from the provider in order for HMO to
adjudicate the claim, and the date by which the requested
information must be received from the provider.
4.10.4.2 Claims that are suspended (pended internally) must be subsequently
paid-adjudicated, denied-adjudicated, or denied for additional
information (pended externally) within
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30 days from date of receipt. No claim can be suspended for a period
exceeding 30 days from date of receipt of the claim.
4.10.4.3 HMO must identify each data field of each claim form that is
required from the provider in order for HMO to adjudicate the claim.
HMO must inform all network providers about the required fields at
least 30 days prior to the service area Implementation Date or as a
provision within HMO/provider contract. Out of network providers
must be informed of all required fields if the claim is denied for
additional information. The required fields must include those
required by HMO and TDH.
4.10.5 HMO is subject to the Remedies and Sanctions Article of this
contract for claims that are not processed on a timely basis as
required by this contract and the Claims Manual.
4.10.6 HMO must offer to its Subcontractors the option of submitting and
receiving claims information through electronic data interchange
(EDI) that allows for automated processing and adjudication of
claims. EDI processing must be offered as an alternative to the
filing of paper claims.
4.11 INDEMNIFICATION
---------------
4.11.1 HMO/TDH: HMO must agree to indemnify TDH and its agents for any and
all claims, costs, damages and expenses, including court costs and
reasonable attorney's fees, which are related to or arise out of:
4.11.1.1 Any failure, inability, or refusal of HMO or any of its network
providers or other Subcontractors to provide covered services;
4.11.1.2 Claims arising from HMO's, HMO's network provider's or other
Subcontractor's negligent or intentional conduct in not providing
covered services; and
4.11.1.3 Failure, inability, or refusal of HMO to pay any of its network
providers or Subcontractors for covered services.
4.11.2 HMO/Provider: HMO is prohibited from requiring any providers to
indemnify HMO for HMO's own acts or omissions which result in
damages or sanctions being assessed against HMO either under this
contract or under state or federal law.
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS
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5.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS
----------------------------------------------
5.1.1 HMO must know, understand and comply with all state and federal laws
and regulations relating to the Texas Medicaid Program which have
not been waived by HCFA. HMO must comply with all rules relating to
the Medicaid managed care program adopted by TDH, TDI, THHSC, TDMHMR
and any other state agency delegated authority to operate or
administer Medicaid or Medicaid managed care programs.
5.1.2 HMO must require, through contract provisions, that all network
providers or Subcontractors comply with all state and federal laws
and regulations relating to the Texas Medicaid Program and all rules
relating to the Medicaid managed care program adopted by TDH, TDI,
THHSC, TDMHMR and any other state agency delegated authority to
operate Medicaid or Medicaid Managed Care programs.
5.1.3 HMO must comply with the provisions of the Clean Air Act and the
Federal Water Pollution Control Act, as amended, found at 42 C.F.R.
7401, et seq. and 33 U.S.C. 1251, et seq., respectively.
5.2 PROGRAM INTEGRITY
-----------------
5.2.1 HMO has not been excluded, debarred, or suspended from participation
in any program under Title XVIII or Title XIX under any of the
provisions of Section 1128(a) or (b) of the Social Security Act (42
USCss.1320 a-7), or Executive Order 12549. HMO must notify TDH
within 3 days of the time it receives notice that any action is
being taken against HMO or any person defined under the provisions
of Section 1128(a) or (b) or any Subcontractor, which could result
in exclusion, debarment, or suspension of HMO or a Subcontractor
from the Medicaid program, or any program listed in Executive Order
12549.
5.2.2 HMO must comply with the provisions of, and file the certification
of compliance required by the Byrd Anti-Lobbying Amendment, found at
31 U.S.C. 1352, relating to use of federal funds for lobbying for or
obtaining federal contracts.
5.3 FRAUD AND ABUSE COMPLIANCE PLAN
-------------------------------
5.3.1 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. HMO must cooperate and assist TDH and any state or
federal agency charged with the duty of identifying, investigating,
sanctioning or prosecuting suspected fraud and abuse. HMO must
provide originals and/or copies of all records and information
requested and allow access to premises and provide records to TDH or
its authorized agent(s), THHSC, HCFA, the U.S. Department of Health
and Human Services, FBI, TDI, and the Texas
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Attorney General's Medicaid Fraud Control Unit. All copies of
records must be provided free-of-charge.
5.3.2 HMO must submit a written compliance plan to TDH for approval at
least 120 days prior to the Implementation Date. HMO must submit any
updates or modifications to TDH for approval at least 30 days prior
to modifications going into effect.
5.3.2.1 The plan must ensure that all officers, directors, managers and
employees know and understand the provisions of HMO's fraud and
abuse compliance plan. The written plan must contain procedures
designed to prevent and detect potential or suspected abuse and
fraud in the administration and delivery of services under this
contract. The plan must contain provisions for the confidential
reporting of plan violations to the designated person. The plan must
contain provisions for the investigation and follow-up of any
compliance plan reports. The fraud and abuse compliance plan must
ensure that the identity of individuals reporting violations of the
plan is protected. The plan must contain specific and detailed
internal procedures for officers, directors, managers and employees
for detecting, reporting, and investigating fraud and abuse
compliance plan violations. The compliance plan must require that
confirmed violations be reported to TDH.
5.3.2.2 The plan must require any confirmed or suspected fraud and abuse
under state or federal law be reported to TDH, the Medicaid Program
Integrity section of the Office of Investigations and Enforcement of
the Texas Health and Human Services Commission, and/or the Medicaid
Fraud Control Unit of the Texas Attorney General. The written plan
must ensure that no individual who reports plan violations or
suspected fraud and abuse is retaliated against.
5.3.3 HMOs must comply with the requirements of the Model Compliance Plan
for HMOs when this model plan is issued by the U.S. Department of
Health and Human Services, the Office of Inspector General (OIG).
HMO must designate executive and essential personnel to attend
mandatory training in fraud and abuse detection, prevention and
reporting. The training will be conducted by the Office of
Investigation and Enforcement, Health and Human Services Commission
and will be provided free-of-charge. Training must be scheduled not
later than 150 days before the Implementation Date and be completed
by all designated personnel not later than 60 days before the
Implementation Date.
5.3.4 HMO must designate an officer or director in its organization who
has the responsibility and authority for carrying out the provisions
of the fraud and abuse compliance plan.
5.3.5 HMO's failure to report potential or suspected fraud or abuse may
result in sanctions, cancellation of contract, or exclusion from
participation in the Medicaid program.
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5.3.6 HMO must allow the Texas Medicaid Fraud Control Unit to conduct
private interviews of HMO's employees, Subcontractors and their
employees, witnesses, and patients. Requests for information must be
complied with in the form and the language requested. HMO's
employees and its Subcontractors and their employees must cooperate
fully and be available in person for interviews, consultation, grand
jury proceedings, pre-trial conference, hearings, trial and in any
other process.
5.4 SAFEGUARDING INFORMATION
------------------------
5.4.1 All Member information, records and data collected or provided to
HMO by TDH or another State agency is protected from disclosure by
state and federal law and regulations. HMO may only receive and
disclose information which is directly related to establishing
eligibility, providing services and conducting or assisting in the
investigation and prosecution of civil and criminal proceedings
under state or federal law. HMO must include a confidentiality
provision in all subcontracts with individuals.
5.4.2 HMO is responsible for inforining Members and providers regarding
the provisions of 42 C.F.R. 431, Subpart F, relating to Safeguarding
Information on Applicants and Recipients, and HMO must ensure that
confidential information is protected from disclosure except for
authorized purposes.
5.4.3 HMO is responsible for educating Members and providers concerning
the Human Immunodeficiency Virus (HIV) and its related conditions
including Acquired Immune Deficiency Syndrome (AIDS). PCP must
develop and implement a policy for protecting the confidentiality of
AIDS and HIV-related medical information and an anti-discrimination
policy for employees and Members with communicable diseases. Also
|
see Health and Safety Code, Chapter 85, Subchapter E, relating to the Duties of State Agencies and State Contractors.
5.4.4 HMO must require that Subcontractors have mechanisms in place to
ensure Member's (including minor's) confidentiality for family
planning services.
5.5 NON-DISCRIMINATION
------------------
HMO agrees to comply with and to include in all Subcontracts a
provision that the Subcontractor will comply with each of the
following requirements:
5.5.1 Title VI of the Civil Rights Act of 1964, Section 504 of the
Rehabilitation Act of 1973, the Americans with Disabilities Act of
1990, and all requirements imposed by the regulations implementing
these acts and all amendments to the laws and regulations. The
regulations provide in part that no person in the United States
shall on the grounds of race, color, national origin, sex, age,
disability, political beliefs or religion be excluded from
participation in, or denied, any aid, care, service or other
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benefits, or be subjected to any discrimination under any program or
activity receiving federal funds
5.5.2 Texas Health and Safety Code Section 85.113 (relating to workplace
and confidentiality guidelines regarding AIDS and HIV).
5.5.3 The provisions of Executive Order 11246, as amended by 11375,
relating to Equal Employment Opportunity.
5.6 HISTORICALLY UNDERUTILIZED BUSINESSES (HUBS)
--------------------------------------------
5.6.1 TDH is committed to providing procurement and contracting
opportunities to historically underutilized businesses (HUBs), under
the provisions of Texas Government Code, Title 10, Subtitle D,
Chapter 2161 and 1 TAC ss. 111.11 (b) and 111. 13(c)(7). TDH
requires its Contractors and Subcontractors to make a good faith
effort to assist HUBs in receiving a portion of the total contract
value of this contract.
5.6.2 The HUB good faith effort goal for this contract is 18. 1 % of total
premiums paid. HMO agrees to make a good faith effort to meet or
exceed this goal. HMO acknowledges it made certain good faith effort
representations and commitments to TDH during the HUB good faith
effort determination process. HMO agrees to use its best efforts to
abide by these representations and commitments during the contract
period.
5.6.3 HMO is required to submit HUB quarterly reports to TDH as required
in Article 12.11.
5.6.4 TDH will assist HMO in meeting the contracting and reporting
requirements of this Article.
5.7 BUY TEXAS
---------
HMO agrees to "Buy Texas" products and materials when they are
available at a comparable price and in a comparable period of time,
as required by Section 48 of Article IX of the General
Appropriations Act of 1995.
5.8 CHILD SUPPORT
-------------
5.8.1 The Texas Family Code ss.231.006 requires TDH to withhold contract
payments from any for-profit entity or individual who is at least 30
days delinquent in child support obligations. It is HMO's
responsibility to determine and verify that no owner, partner, or
shareholder who has at least at 25% ownership interest is delinquent
in child support obligations. HMO must attach a list of the names
and Social Security
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numbers of all shareholders, partners or owners who have at least a
25% ownership interest in HMO.
5.8.2 Under Section 231.006 of the Family Code, the contractor certifies
that the contractor is not ineligible to receive the specified
grant, loan, or payment and acknowledges that this contract may be
terminated and payment may be withheld if this certification is
inaccurate. A child support obligor who is more than 30 days
delinquent in paying child support or a business entity in which the
obligor is a sole proprietor, partner, shareholder, or owner with an
ownership interest of at least 25% is not eligible to receive the
specified grant, loan or payment.
5.8.3 If TDH is informed and verifies that a child support obligor who is
more than 30 days delinquent is a partner, shareholder, or owner
with at least a 25% ownership interest, it will withhold any
payments due under this contract until it has received satisfactory
evidence that the obligation has been satisfied or that the obligor
has entered into a written repayment request.
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.1 This contract and all network provider and Subcontractor contracts
are subject to public disclosure under the Public Information Act
(Texas Government Code, Chapter 552). TDH may receive Public
Information requests related to this contract, information submitted
as part of the compliance of the contract and HMO's application upon
which this contract was awarded. TDH agrees that it will promptly
deliver a copy of any request for Public Information to HMO.
5.9.2 TDH may, in its sole discretion, request a decision from the Office
of the Attorney General (AG opinion) regarding whether the
information requested is excepted from required public disclosure.
TDH may rely on HMO's written representations in preparing any AG
opinion request, in accordance with Texas Government Code
ss.552.305. TDH is not liable for failing to request an AG opinion
or for releasing information which is not deemed confidential by
law, if HMO fails to provide TDH with specific reasons why the
requested information is exempt from the required public disclosure.
TDH or the Office of the Attorney General will notify all interested
parties if an AG opinion is requested.
5.9.3 If HMO believes that the requested information qualifies as a trade
secret or as commercial or financial information, HMO must notify
TDH-within three working days of HMO's receipt of the request -of
the specific text, or portions of text, which HMO claims is excepted
from required public disclosure. HMO is required to identify the
specific provisions of the Public Information Act which HMO believes
are applicable.
5.10 NOTICE AND APPEAL
-----------------
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HMO must comply with the notice requirements contained in 25 TAC
ss.36.21, and the maintaining benefits and services contained in 25
TAC ss.36.22, whenever HMO intends to take an action affecting the
Member benefits and services under this contract. Also see the
Member appeal requirements contained in Article 8.7 of this
contract.
ARTICLE VI SCOPE OF SERVICES
6.1 SCOPE OF SERVICES - GENERAL
---------------------------
HMO must provide or arrange to have provided to Members all health
care services listed in Appendix C -Scope of Services, which is
attached and incorporated into this contract. HMO must also provide
or arrange to have provided to mandatory Members all value-added
services listed in HMO's response to the RFA for this contract. The
RFA and responses are incorporated into this contract by reference.
6.2 PRE-EXISTING CONDITIONS
-----------------------
HMO is responsible for providing all covered services to each
eligible Member beginning on the Implementation Date or the Member's
date of enrollment under the contract regardless of pre-existing
conditions, prior diagnosis and/or receipt of any prior health care
services.
6.3 SPAN OF ELIGIBILITY
-------------------
HMO must provide all covered services to Members assigned to HMO for
all periods for which HMO has received payment, except as follows:
6.3.1 Inpatient admission to hospital or free-standing psychiatric
facility (facility) prior to enrollment in HMO. HMO is responsible
for payment of physician and non-hospital/non-facility services from
the date of enrollment in HMO. HMO is not responsible for
hospital/facility charges for Members admitted prior to enrollment.
6.3.2 Inpatient admission after enrollment in HMO. HMO is responsible for
all hospital/facility charges until the Member is discharged from
the hospital/facility or until the Member loses Medicaid
eligibility.
6.3.3 Discharge after voluntary disenrollment from HMO and re-enrollment
into a new HMO. HMO remains responsible for payment of
hospital/facility charges until the Member is discharged. HMO to
whom Member transfers is responsible for payment
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of all physician and non-hospital/non-facility charges beginning on
the effective date of enrollment into the new HMO.
6.3.4 Hospital Transfer. Discharge from one hospital and readmission or
admission to another hospital within 24 hours for continued
treatment shall not be considered discharge under this Article.
6.3.5 HMO insolvency or receivership. HMO is responsible for payment of
all services provided to a person who was a Member on the date of
insolvency or receivership to the same extent they would otherwise
be responsible under this Article 6.3.
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.1 HMO must ensure that the care of newly enrolled Members is not
disrupted or interrupted. HMO must take special care to provide
continuity in the care of newly enrolled Members whose health or
behavioral health condition has been treated by specialty care
providers or whose health could be placed in jeopardy if care is
disrupted or interrupted.
6.4.2 Pregnant Members with 12 weeks or less remaining before the expected
delivery date must be allowed to remain under the care of the
Member's current OB/GYN through the Member's postpartum checkup,
even if the provider is out-of-network. If Member wants to change
her OB/GYN to one who is in the plan, she must be allowed to do so
if the provider to whom she wishes to transfer agrees to accept her
in the last trimester.
6.4.3 HMO must pay a Member's existing out-of-network providers for
covered services until the Member's records, clinical information
and care can be transferred to a network provider. Payment must be
made within the time period required for network providers. HMO may
elect to pay an amount HMO pays a comparable network provider, an
amount negotiated between the out-of-network provider and HMO, or
the Medicaid fee-for-service amount. This Article does not extend
the obligation of HMO to reimburse the Member's existing
out-of-network providers of on-going care for more than 90 days
after Member enrolls in HMO or for more than nine months in the case
of a Member who at the time of enrollment in HMO has been diagnosed
with and receiving treatment for a terminal illness. The obligation
of HMO to reimburse the Member's existing out-of-network provider
for services provided to a pregnant Member with 12 weeks or less
remaining before the expected delivery date extends through delivery
of the child, immediate postpartum care, and the follow-up checkup
within the first six weeks of delivery.
6.4.4 HMO must provide or pay out-of-network providers who provide covered
services to Members who move out of the service area through the end
of the period for which capitation has been paid for the Member.
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6.5 EMERGENCY SERVICES
------------------
6.5.1 HMO must provide or arrange to have provided, and pay for emergency
services. Emergency services includes all emergency facility charges
related to behavioral health diagnoses except those charges by
specialized behavioral health emergency facilities. HMO cannot
require prior authorization as a condition for payment for emergency
services. HMO must have a system for providers to verify Member
enrollment in HMO 24 hours a day, 7 days a week.
6.5.2 HMO must provide emergency services 24 hours a day, 7 days a week,
at a hospital, by access to physician consultation or emergency
medical care through HMO's own facilities or through arrangements
approved by TDH with other providers. HMO must provide conveniently
located emergency services sites for providing after-hours emergency
services.
6.5.3 HMO must have toll-free emergency and crisis hotline services
available 24 hours a day, 7 days a week, throughout the service
area. Staff must be qualified to assess the immediate health care
needs and determine whether an emergency condition exists and
provide triage, advice, and referral, and-if necessary-arrange for
treatment of the Member. Crisis-hotline staff must include or have
access to qualified behavioral health professionals to assess
behavioral health emergencies. Emergency and crisis behavioral
health services may be arranged through mobile crisis teams. It is
not acceptable for an emergency intake line to be answered by voice
mail or an answering machine.
6.5.4 HMO must develop and maintain an educational program to ensure that
Members understand what is an emergency medical condition and know
where and how to obtain medically necessary services in emergency
situations, 24 hours a day, 7 days a week.
6.5.5 HMO must include in its provider network TDH designated trauma
centers which are within the service area.
6.5.6 HMO must coordinate with emergency response systems in the
community, including the police, fire and EMS departments, child
protective services, and chemical dependency emergency services.
6.5.7 HMO must pay for emergency services provided to Members inside or
outside of HMO's provider network and service area. HMO must pay
reasonable and customary reimbursement amounts for providers and
emergency services required to assess whether an emergency exists,
and deliver emergency services required.
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6.5.8 HMO may establish reasonable deadlines for providers to submit
claims for out-of- network and out-of-service-area emergency
services. HMO must pay out-of-network and service-area provider
clean claims within 30 days from HMO's receipt of a clean claim.
6.5.9 HMO must provide a written copy of its policies and procedures for
emergency admissions to TDH for approval not later than 90 days
prior to the Implementation Date. Modifications or amendments to
policies and procedures must be submitted to TDH for approval at
least 60 days prior to the implementation of the modification or
amendment.
6.6 BEHAVIORAL HEALTH SERVICES - SPECIFIC REQUIREMENTS
--------------------------------------------------
6.6.1 HMO must provide or arrange to have provided to Members all
Behavioral Health Services listed in Appendix C - Scope of Services
which is attached and incorporated into this contract.
6.6.2 HMO must maintain a behavioral health provider network that includes
psychiatrists, psychologists and other behavioral health providers.
HMO must provide the scope of behavioral health benefits described
in Appendix C. The network must include providers with experience in
serving children and adolescents to ensure accessibility and
availability of qualified providers to all eligible children and
adolescents in the service area. The list of providers including
names, addresses and phone numbers must be available to TDH upon
request.
6.6.3 HMO must maintain a Member education process to help Members know
where and how to obtain behavioral health services.
6.6.4 HMO must implement policies and procedures to ensure that Members
who require routine or regular laboratory and ancillary medical
tests or procedures to monitor behavioral health conditions are
provided the services by the provider ordering the procedure or at a
lab located at or near the provider's office.
6.6.5 When assessing Members for behavioral health services, HMO and
network behavioral health providers must use the DSM-IV multi-axial
classification and report axes I, II, III, IV, and V to TDH. TDH may
require use of other assessment instrument/outcome measures in
addition to the DSM-IV. Providers must document DSM-IV and
assessment/outcome information in the Member's medical record.
6.6.6 HMO must permit Members to self refer to any in-network behavioral
health care provider without a referral from the Member's PCP. HMO
must permit Members to participate in the selection or assignment of
the appropriate behavioral health individual practitioner(s) who
will serve them. HMO must provide a written copy of its policies and
procedures for self-referral to TDH for approval 90 days prior to
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the Implementation Date in the service area. Changes or amendments
to those policies and procedures must be submitted to TDH for
approval at least 60 days prior to their effective date.
6.6.7 HMO must require its PCPs to have medical history, screening and
evaluation procedures for behavioral health problems and disorders
and either treat or refer the Member for evaluation and treatment of
known or suspected behavioral health problems and disorders. PCPs
may provide any clinically appropriate behavioral health services
within the scope of their practice. This requirement must be
included in all Provider Manuals.
6.6.8 HMO must require that behavioral health providers refer Members with
known or suspected physical health problems or disorders to their
PCP for examination and treatment. Behavioral health providers may
only provide physical health services if they are licensed to do so.
This requirement must be included in all Provider Manuals.
6.6.9 HMO must require that behavioral health providers send initial and
quarterly (or more frequently if clinically indicated) summary
reports of Members' behavioral health status to PCP. This
requirement must be included in all Provider Manuals.
6.6.10 HMO must establish policies and procedures to ensure that all
Members receiving inpatient psychiatric services are scheduled for
outpatient follow-up and/or continuing treatment prior to discharge.
The outpatient treatment must occur within 7 days from the date of
discharge. HMO must ensure that behavioral health providers contact
Members who have missed appointments within 24 hours to reschedule
appointments.
6.6.11 HMO must provide inpatient psychiatric services to Members under the
age of 21 who have been ordered to receive the services by a court
of competent jurisdiction under the provisions of Chapters 573 and
574 of the Texas Health and Safety Code, relating to court ordered
commitments to psychiatric facilities.
6.6.11.1 HMO cannot deny, reduce or controvert the medical necessity of any
court ordered inpatient psychiatric service for Members under age
21. Any modification or termination of services must be presented to
the court with jurisdiction over the matter for determination.
6.6.11.2 A Member who has been ordered to receive treatment under the
provisions of Chapter 573 or 574 of the Texas Health and Safety Code
cannot appeal the commitment through HMO's complaint or appeals
process.
6.6.12 HMO must comply with 28 TACss.ss.3.8001 et seq., regarding
utilization review of chemical dependency treatment.
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6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS
---------------------------------------
6.7.1 Counseling and Education. HMO must require, through contract
provisions, that Members requesting contraceptive services or family
planning services are provided counseling and education. HMO must
provide education about family planning and family planning services
available to Members. HMO must develop outreach programs to increase
community support for family planning and encourage Members to use
available family planning services. HMO is encouraged to include a
representative cross-section of Members and family planning
providers of the community in developing, planning and implementing
family planning outreach programs.
6.7.2 Freedom of Choice. HMO must ensure that the Member has the right to
choose any Medicaid participating family planning provider in or out
of its network (family planning providers are listed in Appendix D).
HMO must provide Member access to information about the providers of
family planning services available in the network and the Member's
right to choose any Medicaid family planning provider. HMO must
provide access to confidential family planning services.
6.7.3 Provider Standards and Payment. HMO must require all Subcontractors
who are family planning agencies to deliver family planning services
according to the TDH Family Planning Service Delivery Standards. HMO
must provide, at minimum, the full scope of services available under
the Texas Medicaid program for family planning services. HMO will
reimburse out-of-network family planning providers the Medicaid
fee-for-service amounts for family planning services only.
6.7.4 HMO must provide medically approved methods of contraception to
Members. Contraceptive methods must be accompanied by verbal and
written instructions on their correct use. HMO must establish
mechanisms to ensure all medically approved methods of contraception
are made available to the Member, either directly or by referral to
a Subcontractor. The following initial Member education content may
vary according to the educator's assessment of the Member's current
knowledge:
6.7.4.1 general benefits of family planning services and contraception;
6.7.4.2 information on male and female basic reproductive anatomy and
physiology;
6.7.4.3 information regarding particular benefits and potential side effects
and complications of all available contraceptive methods;
6.7.4.4 information concerning all of the health care provider's available
services, the purpose and sequence of health care provider
procedures, and the routine schedule of return visits;
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6.7.4.5 information regarding medical emergencies and where to obtain
emergency care on a 24-hour basis;
6.7.4.6 breast self-examination rationales and instructions unless provided
during physical exam (for females); and
6.7.4.7 information on HIV/STD infection and prevention, and a safe-sex
discussion.
6.7.5 HMO must require, through contractual provisions, that
Subcontractors have mechanisms in place to ensure Member's
(including minor's) confidentiality for family planning services.
6.7.6 HMO must develop, implement, monitor, and maintain standards,
policies and procedures for providing information regarding family
planning to providers and Members, specifically regarding State and
federal laws governing Member confidentiality (including minors).
6.7.7 HMO must report encounter data on family planning services in
accordance with Article 12.2.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.1 THSteps Services. HMO must develop effective methods to ensure that
children under the age of 21 receive THSteps services when due and
according to the recommendations established by the American Academy
of Pediatrics and the THSteps periodicity schedule for children. HMO
must provide THSteps services to all eligible Members except when a
Member knowingly and voluntarily declines or refuses services after
the Member has been provided information upon which to make an
informed decision.
6.8.2 Member Education and Information. HMO must ensure that Members are
provided information and educational materials about the services
available through the THSteps program, and how and when they can
obtain the services. The information should tell the Member how they
can obtain dental benefits, transportation services through the TDH
Medical Transportation program, and advocacy assistance from HMO.
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include THSteps
benefits, the periodicity schedule for THSteps checkups and
immunizations, and services available under the THSteps program
which are not available to all Medicaid recipients and are available
to ensure that Members can comply with the periodicity schedule,
including but not limited to transportation, dental check-ups, and
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CCP. Providers must also be educated and trained regarding the
requirements imposed upon TDH and contracting HMOs under the Consent
Decree entered in Frew v. McKinney, et al., Civil Action No.
3:93CV65, in the United States District Court for the Eastern
District of Texas, Paris Division. Providers should be educated and
trained to treat each THSteps visit as an opportunity for a
comprehensive assessment of the Member.
6.8.4 Member Outreach. HMO must provide an outreach unit that works with
Members to ensure they receive prompt services and are knowledgeable
about available Texas Health Step services. Outreach staff must
coordinate with TDH Texas Health Step outreach staff to ensure that
Members have access to the Medical Transportation Program (MTP), and
that any coordination with other agencies is maintained. MTP will
not transport Members to value-added services offered by HMO.
6.8.5 Initial Checkups Upon Enrollment. HMO must have mechanisms in place
to ensure that all newly enrolled Members receive a THSteps checkup
within 90 days from enrollment, if one is due according to the
American Academy of Pediatrics periodicity schedule, or if there is
uncertainty regarding whether one is due. HMO should make THSteps
checkups a priority to all newly enrolled Members.
6.8.6 Accelerated Services to Migrant Populations. HMO must cooperate and
coordinate with TDH, outreach programs and THSteps regional program
staff and agents to ensure prompt delivery of services to children
of migrant farm workers and other migrant populations who may
transition into and out of HMO's program more rapidly and/or
unpredictably than the general population.
6.8.7 Newborn Checkups. HMO must have mechanisms in place to ensure that
all newborn children of Members have an initial newborn checkup
before discharge from the hospital and again within two weeks from
the time of birth. HMO must require providers to send all THSteps
newborn screens to the TDH Bureau of Laboratories or a TDH certified
laboratory. Providers must include detailed identifying information
for all screened newborns and the Member's mother to allow TDH to
link the screens performed at the hospital with screens performed at
the two week follow-up.
6.8.8 Coordination and Cooperation. HMO must make an effort to coordinate
and cooperate with existing community and school-based health and
education programs that offer services to school-aged children in a
location that is both familiar and convenient to the Members. HMO
must make a good faith effort to comply with Head Start's
requirement that Members participating in Head Start receive their
THSteps checkup no later than 45 days after enrolling into either
program.
6.8.9 Immunizations and Laboratory Tests. HMO must require providers to
comply with the THSteps program requirements for submitting
laboratory tests to the TDH
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Bureau of Laboratories or the Texas Center for Infectious Disease
Cytopathology Laboratory Department.
6.8.9.1 ImmTrac Compliance. HMO must educate providers about and require
providers to comply with the requirements of Chapter 161, Health and
Safety Code, relating to the Texas Immunization Registry (ImmTrac).
6.8.9.2 Vaccines for Children Program. Registered providers can also receive
the vaccines free from TDH through the Vaccines for Children Program
(VFC). These vaccines are supplied to provider offices through local
and state public health departments. (Please refer to Texas Medicaid
Service Delivery Guide, pages 4-9.)
6.8.10 Claim Forms. HMO must require all THSteps providers to submit claims
for services paid (either on a capitated or fee-for-service basis)
on the HCFA 1500 claim form and use the unique procedure coding
required by TDH.
6.8.11 Compliance With THSteps Performance Milestones. TDH will establish
performance milestones against which HMO's full compliance with the
THSteps periodicity schedule will be measured. The performance
milestones will establish minimum compliance measures which will
increase over time. HMO must meet all performance milestones
required for THSteps services. HMO must submit all THSteps reports
and encounters as required under this contract. Failure to meet or
exceed the performance milestones may result in: removal of THSteps
component of the capitation amounts paid to HMO; or any of the
Remedies contained in Article XVIII. Repeated non-compliance with
the THSteps performance milestones is a major breach of the terms of
this contract and could result in termination of the contract, or
non-renewal of the contract, in addition to all money damages and
sanctions assessed against HMO for non-compliance with reporting
administrative requirements.
6.8.12 Validation of Encounter Data. Encounter data will be validated by
chart review of a random sample of THSteps eligible enrollees
against monthly encounter data reported by HMO. Chart reviews will
be conducted by TDH to validate that all screens are performed when
due and as reported, and that reported data is accurate and timely.
Substantial deviation between reported and charted encounter data
could result in HMO and/or network providers being investigated for
potential fraud and abuse without notice to HMO or the provider.
6.9 PERINATAL SERVICES
------------------
6.9.1 HMO's perinatal health care services must ensure appropriate care is
provided to women and infants, from the preconception period through
the infant's first year of life. HMO's perinatal health care system
must comply with the requirements of
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Health & Safety Code, Chapter 32 Maternal and Infant Health
Improvement Act and 25 TAC ss.37.233 et seq.
6.9.2 HMO shall have a perinatal health care system in place that, at a
minimum, provides the following services:
6.9.2.1 pregnancy planning and perinatal health promotion and education for
reproductive age women;
6.9.2.2 perinatal risk assessment of nonpregnant women, pregnant and
postpartum women, and infants up to one year of age;
6.9.2.3 access to appropriate levels of care based on risk assessment,
including emergency care;
6.9.2.4 transfer and care of pregnant women, newborns, and infants to
tertiary care facilities when necessary;
6.9.2.5 availability and accessibility of obstetricians/gynecologists,
anesthesiologists, and neonatologists capable of dealing with
complicated perinatal problems;
6.9.2.6 availability and accessibility of appropriate outpatient and
inpatient facilities capable of dealing with complicated perinatal
problems; and
6.9.2.7 compiles, analyzes and reports process and outcome data of Members
to TDH.
6.9.3 HMO must have procedures in place to assign a PCP to an unborn child
prior to birth of the child.
6.9.4 HMO must provide inpatient care for a Member and a newborn child in
a health care facility, if requested by the mother or is determined
to be medically necessary by the Member's PCP, for a minimum of:
6.9.4.1 48 hours following an uncomplicated vaginal delivery; and
6.9.4.2 96 hours for an uncomplicated caesarian delivery.
6.9.5 HMO must establish mechanisms to ensure that medically necessary
inpatient care is provided to either the Member or the newborn child
for complications following the birth of the newborn using HMO's
prior authorization procedures for a medically necessary
hospitalization.
6.9.6 HMO is responsible for all covered services provided to the newborn
Member unless and until the newborn is enrolled into another plan.
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6.10 EARLY CHILDHOOD INTERVENTION (ECI)
----------------------------------
6.10.1 ECI Services. HMO must provide all federally mandated services
contained at 34 C.F.R. 303.1 et seq., and 25 TAC ss.621.21 et seq.,
relating to identification, referral and delivery of health care
services contained in the Member's Individual Family Service Plan
(IFSP). An IFSP is the written plan which identifies a Member's
disability or chronic or complex condition(s) or developmental
delay, and describes the course of action developed to meet those
needs, and identifies the person or persons responsible for each
action in the plan. The plan is a mutual agreement of the Member's
Primary Care Physician (PCP), Case Manager, and the Member/family,
and is part of the Member's medical record.
6.10.2 ECI Providers. HMO must contract with qualified providers to provide
ECI services to Members under age 3 with developmental delays. HMO
may contract with local ECI programs or non-ECI providers who meet
qualifications for participation by the Texas Interagency Council on
Early Childhood Intervention to provide ECI services.
6.10.3 Identification and Referral. HMO must ensure that network providers
are educated regarding the identification of Members under age 3 who
have or are at risk for having disabilities and/or developmental
delays. HMO must use written education material developed or
approved by the Texas Interagency Council on Early Childhood
Intervention. HMO must ensure that all providers refer identified
Members to ECI service providers within two working days from the
day the Member is identified. Eligibility for ECI services is
determined by the local ECI program using the criteria contained in
25 TAC ss.621.21 et seq.
6.10.4 Coordination. HMO must coordinate and cooperate with local ECI
programs which perform assessment in the development of the
Individual Family Service Plan (IFSP), including on-going case
management and other non-capitated services required by the Member's
IFSP. Cooperation includes conducting medical diagnostic procedures
and providing medical records required to perform developmental
assessments and develop the IFSP within the time lines established
at 34 C.F.R. 303.1 et seq. ECI case management is not an HMO
capitated service.
6.10.5 Intervention. HMO must require, through contract provisions, that
all medically necessary health and behavioral health services
contained in the Member's IFSP are provided to the Member in amount,
duration and scope established by the IFSP. Medical necessity for
health and behavioral health services is determined by the
interdisciplinary team as approved by the Member's PCP. HMO cannot
modify the plan of care or alter the amount, duration and scope of
services required by the Member's IFSP. HMO cannot create
unnecessary barriers for the Member to obtain IFSP services,
including requiring prior authorization for the ECI assessment and
insufficient authorization periods for prior authorized services.
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6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN. INFANTS, AND
--------------------------------------------------------------
CHILDREN (WIC) - SPECIFIC REQUIREMENTS
--------------------------------------
6.11.1 HMO must coordinate with WIC to provide certain medical information
which is necessary to determine WIC eligibility, such as height,
weight, hematocrit or hemoglobin (see Article 7.16.4.2).
6.11.2 HMO must direct all eligible Members to the WIC program (Medicaid
recipients are automatically income-eligible for WIC).
6.11.3 HMO must coordinate with existing WIC providers to ensure Members
have access to the Special Supplemental Nutrition Program for Women,
Infants and Children; or HMO must provide these services.
6.11.4 HMO may use the nutrition education provided by WIC to satisfy
health education and promotion requirements described in this
contract.
6.12 TUBERCULOSIS (TB)
-----------------
6.12.1 Education, Screening, Diagnosis and Treatment. HMO must provide
Members and providers with education on the prevention, detection
and effective treatment of tuberculosis (TB). HMO must establish
mechanisms to ensure all procedures required to screen at-risk
Members and to form the basis for a diagnosis and proper prophylaxis
and management of TB are available to all Members, except services
listed in Appendix C as non-capitated services. HMO must develop
policies and procedures to ensure that Members who may be or are at
risk for exposure to TB are screened for TB. An at-risk Member
refers to a person who is susceptible to TB because of the
association with certain risk factors, behaviors or environmental
conditions. HMO must consult with the local TB control program to
ensure that all services and treatments provided by HMO are in
compliance with the guidelines recommended by the American Thoracic
Society (ATS) and the Centers for Disease Control and Prevention
(CDC) and TDH policies and standards.
6.12.2 Reporting and Referral. HMO must implement policies and procedures
requiring providers to report all confirmed or suspected cases of TB
to the local TB control program within one working day of
identification of a suspected case, using the forms and procedures
for reporting TB adopted by TDH (25 TAC ss.97). HMO must require
that in-state or out-of-state labs report positive mycobacteriology
results to TDH as required for in-state labs by 25 TAC ss.97.5(a).
Referral to state-operated hospitals specializing in the treatment
of tuberculosis should only be made for TB-related treatment.
6.12.3 Medical Records. HMO must provide access to Member medical records
to TDH and the local TB control program for all confirmed and
suspected TB cases upon request.
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6.12.4 Coordination and Cooperation with the Local TB Control Program. HMO
must coordinate with the local TB control program to ensure that
Members with confirmed or suspected TB have a contact investigation
and receive Directly Observed Therapy (DOT). HMO must require,
through contract provisions, that providers report any Member who is
non-compliant, drug resistant, or who is or may be posing a public
health threat to TDH or the local TB control program. HMO must
cooperate with the local TB control program in enforcing the control
measures and quarantine procedures contained in Chapter 81 of the
Texas Health and Safety Code.
6.12.4.1 HMO must have a mechanism for coordinating a post-discharge plan for
follow-up DOT with the local TB program.
6.12.4.2 HMO must coordinate with the TDH South Texas Hospital and Texas
Center for Infectious Disease for voluntary and court-ordered
admission, discharge plans, treatment objectives and projected
length of stay for Members with multi-drug resistant TB.
6.12.4.3 HMO may contract with the local TB control programs to perform any
of the capitated services required in Article 6.12.
6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS
---------------------------------------------------------
6.13.1 HMO shall provide the following services to persons with
disabilities or chronic or complex conditions. These services are in
addition to the services listed in Appendix C - Scope of Services.
6.13.2 HMO must develop and maintain a system and procedures for
identifying Members who have disabilities or chronic or complex
medical and behavioral health conditions. Once identified, HMO must
have effective health delivery systems to provide the covered
services to meet the special preventive, primary acute, and
speciality health care needs appropriate for treatment of the
individual's condition. The guidelines and standards established by
the American Academy of Pediatrics, the American College of
Obstetrics/Gynecologists, the U.S. Public Health Service, and other
medical and professional health organizations and associations'
practice guidelines whose standards are recognized by TDH must be
used in determining the medically necessary services and plan of
care for each individual.
6.13.3 HMO must require that the PCP for all persons with disabilities or
chronic or complex conditions develops a plan of care to meet the
needs of the Member. The plan of care must be based on health needs,
specialist(s) recommendations, and periodic reassessment of the
Member's functional status and service delivery needs. HMO must
require providers to maintain record keeping systems to ensure that
each Member who has been identified with a disability or chronic or
complex condition
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has an initial plan of care in the primary care provider's medical
records and that the plan is updated as often as the Member's needs
change, but at least annually.
6.13.4 HMO must provide primary care and specialty care provider network
for persons with disabilities or chronic or complex conditions.
Specialty and subspecialty providers serving all Members must be
Board Certified/Board Eligible in their specialty. HMO may request
exceptions from TDH for approval of traditional providers who are
not board-certified or board-eligible but who otherwise meet HMO's
credentialing requirements.
6.13.5 When treating Members with disabilities or chronic or complex
conditions, HMO must ensure that PCPs and specialty care providers
have documented experience in treating people with similar
disabilities or chronic or complex conditions. For services to
children with disabilities or chronic or complex conditions, HMO
must ensure that PCPs and specialty care providers have demonstrated
experience with children with disabilities or chronic or complex
conditions in pediatric specialty centers such as children's
hospitals, medical schools, teaching hospitals and tertiary center
levels.
6.13.6 HMO must provide information, education and training programs to
Members, families, PCPs , specialty physicians, and community
agencies about the care and treatment available in HMO's plan for
Members with disabilities or chronic or complex conditions.
6.13.7 HMO must coordinate care and establish linkages, as appropriate for
a particular Member, with existing community-based entities and
services, including but not limited to Maternal and Child Health,
Chronically Ill and Disabled Children's Services (CIDC), the
Medically Dependent Children Program (MDCP), Community Resource
Coordination Groups (CRCGs), Interagency Council on Early Childhood
Intervention (ECI), Home and Community-based Services (HCS),
Community Living Assistance and Support Services (CLASS), Community
Based Alternatives (CBA), In Home Family Support, Primary Home Care,
Day Activity and Health Services (DAHS), Deaf/Blind Multiple
Disabled waiver program and Medical Transportation Program (MTP).
6.13.8 HMO must include TDH approved pediatric transplant centers, TDH
designated trauma centers, and TDH designated hemophilia centers in
its provider network (see Appendices E, F, and G for a listing of
these facilities).
6.13.9 HMO must ensure Members with disabilities or chronic or complex
conditions have access to treatment by a multidisciplinary team when
determined to be medically necessary for effective treatment, or to
avoid separate and fragmented evaluations and service plans. The
teams must include both physician and non-physician providers
determined to be necessary by the Member's PCP for the comprehensive
treatment of the Member. The team must:
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6.13.9.1 Participate in hospital discharge planning;
6.13.9.2 Participate in pre-admission hospital planning for non-emergency
hospitalizations;
6.13.9.3 Develop specialty care and support service recommendations to be
incorporated into the primary care provider's plan of care;
6.13.9.4 Provide information to the Member and the Member's family concerning
the specialty care recommendations; and
6.13.9.5 Develop and implement training programs for primary care providers,
community agencies, ancillary care providers, and families
concerning the care and treatment of a Member with a disability or
chronic or complex conditions.
6.13.10 HMO must identify coordinators of medical care to assist providers
who serve Members with disabilities and chronic or complex
conditions and the Members and their families in locating and
accessing appropriate providers inside and outside HMO's network.
6.13.11 HMO must assist eligible Members in accessing providers of
non-capitated Medicaid services listed in Appendix C, as applicable.
6.13.12 HMO must ensure that Members who require routine or regular
laboratory and ancillary medical tests or procedures to monitor
disabilities or chronic or complex conditions are allowed by HMO to
receive the services from the provider ordering the procedure or at
a lab located at or near the provider's office.
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS
--------------------------------------------------
6.14.1 Group Needs Assessment. HMO must conduct a group needs assessment of
enrolled STAR Members to determine Member health education needs and
literacy levels. HMO may cooperatively conduct a group needs
assessment of all enrolled STAR Members with one or more HMOs also
contracting with TDH in the service area to provide services to
Medicaid recipients.
6.14.2 Group Needs Assessment Report. The Group Needs Assessment Report is
due six months after the Implementation Date. The Needs Assessment
Report would include, but not be limited to, demographic
information, prevalence of health conditions, and stated preferences
for health education.
6.14.2.1 Group Needs Assessment Methodology Report and Preliminary Health
Education Plan. The Group Needs Assessment Methodology Report and
the Preliminary Health Education Plan are due no later than 30 days
following the Implementation Date. They should be combined into one
document.
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6.14.2.1.1 Group Needs Assessment Methodology Report. HMO must submit a report
to TDH summarizing the methodology, key activities, timeline for
implementation and HMO personnel responsible for analyzing and
interpreting results of the assessment and establishing health
education priorities. The Group Needs Assessment Methodology must
evidence use or planned use of local and/or state public health
department information resources and how HMO will coordinate with
the TDH regional office.
6.14.2.1.2 Preliminary Health Education Plan. The Group Needs Assessment
Methodology Report must also include a preliminary health education
plan that uses local and/or state public health department
information resources.
6.14.3 Health Education Plan. The health education plan must tell Members
how HMO system operates, how to obtain services, including emergency
care and out-of-plan services. The plan must emphasize the value of
screening and preventive care and must contain disease-specific
information and educational materials. HMO must submit health
education plan updates annually. The final Health Education Plan is
due 30 days after the Group Needs Assessment Report has been
completed and filed with TDH.
6.14.3.1 Member Education Materials. Member education materials must be
approved in advance by TDH and must meet language and reading level
requirements. Materials must be submitted to TDH for approval not
later than 90 days prior to the Implementation Date. Modifications
or amendments to these materials must be submitted for approval
within 60 days prior to their implementation.
6.14.3.2 Wellness Promotion Programs. HMO must conduct wellness promotion
programs to improve the health status of its Members. HMO may
cooperatively conduct Health Education classes of all enrolled STAR
members with one or more HMOs also contracting with TDH in the
service area to provide services to Medicaid recipients in
contiguous counties of the service area. Providers and HMO staff
must integrate health education wellness and prevention training
into the care of each Member. HMO must provide a range of health
promotion and wellness information and activities for Members in
formats that meet the needs of all Members.
HMO must: (1) develop, maintain and distribute health education
services standards, policies and procedures to providers; (2)
monitor provider performance to ensure the standards for health
education services are complied with; (3) inform providers in
writing about any non-compliance with the plan standards, policies
and procedures; (4) establish systems and procedures that ensure
that provider's medical instruction and education on preventive
services provided to the Member are documented in the Member's
medical record; and (5) establish mechanisms for promoting
preventive care services to Members who do not access care, e.g.
newsletters, reminder cards, and mail-outs.
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6.14.4 Implementation of Health Education and Wellness Plan. HMO must
implement its health education and wellness plan. The plan could
include health education classes targeted to the needs of the
Members, distribution of health education and wellness promotion
pamphlets, audiovisual programs, health fairs, case management and
one-on-one education. HMO staff has the option to provide the
education directly or through contracted vendors and/or referrals to
community agencies. HMO may use the nutrition education provided to
WIC participants to satisfy nutrition counseling requirements. HMO
must coordinate and integrate the health education system with the
quality improvement program.
6.14.5 Health Education Activities Schedule. HMO must submit a proposed
Health Education Activities Schedule to TDH or its designee on the
last day of the month prior to the beginning of each State fiscal
year quarter. The schedule should include the time and location of
classes, health fairs or other events covering all areas of the
service area.
HMO may cooperatively conduct Health Education classes of all
enrolled STAR members with one or more HMOs also contracting with
TDH in the service area to provide services to Medicaid recipients
in contiguous counties of the service area.
6.14.5.1 HMO must submit quarterly summary reports of health education
activities. The reports are due thirty (30) days after the end of
each State fiscal year quarter.
6.15 SEXUALLY TRANSMITTED DISEASES (STDS) AND HUMAN IMMUNODEFICIENCY
---------------------------------------------------------------
VIRUS (HIV)
-----------
HMO must provide STD services that include STD/HIV prevention,
screening, counseling, diagnosis, and treatment. HMO is responsible
for implementing procedures to ensure that Members have prompt
access to appropriate services for STDs, including HIV.
6.15.1 HMO must allow Members access to STD services and HIV diagnosis
services without prior authorization or referral by PCP. HMO must
comply with Texas Family Code ss.32.003, relating to consent to
treatment by a child.
6.15.2 HMO must provide all covered services required to form the basis for
a diagnosis and treatment plan for STD/HIV by the provider.
6.15.3 HMO must consult with TDH regional public health authority to ensure
that Members receiving clinical care of STDs, including HIV, are
managed according to a protocol which has been approved by TDH (see
Article 7.16.1 relating to cooperative agreements with public health
authorities).
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6.15.4 HMO must make education available to providers and Members on the
prevention, detection and effective treatment of STDs, including
HIV.
6.15.5 HMO must require providers to report all confirmed cases of STDs,
including HIV, to the local or regional health authority according
to 25 Texas Administrative Code, Sections 97.131 - 97.134, using the
required forms and procedures for reporting STDs.
6.15.6 HMO must coordinate with the TDH regional health authority to ensure
that Members with confirmed cases of syphilis, chancroid, gonorrhea,
chlamydia and HIV receive risk reduction and partner
elicitation/notification counseling. Coordination must be included
in the subcontract required by Article 7.16.1. HMO may contract with
local or regional health authorities to perform any of the covered
services required in Article 6.15.
6.15.7 HMO's PCPs may enter into contracts or agreements with traditional
HIV service providers in the service area to provide services such
as case management, psychosocial support and other services. If the
service provided is a covered service under this contract, the
contract or agreement must include payment provisions.
6.15.8 The subcontract with the respective TDH regional offices and city
and county health departments, as described in Article 7.16.1, must
include, but not be limited to, the following topics:
6.15.8.1 Access for Case Investigation. Procedures must be established to
make Member records available to public health agencies with
authority to conduct disease investigation, receive confidential
Member information, and follow up.
6.15.8.2 Medical Records and Confidentiality. HMO must require that providers
have procedures in place to protect the confidentiality of Members
provided STD/HIV services. These procedures must include, but are
not limited to, the manner in which medical records are to be
safeguarded; how employees are to protect medical information; and
under what conditions information can be shared. HMO must inform and
require its providers who provide STD/HIV services to comply with
all state laws relating to communicable disease reporting
requirements. HMO must implement policies and procedures to monitor
provider compliance with confidentiality requirements.
6.15.8.3 Partner Referral and Treatment. Members who are named as contacts to
an STD, including HIV, should be evaluated and treated according to
HMO's protocol. All protocols must be approved by TDH. HMO's
providers must coordinate referral of non-Member partners to local
and regional health department STD staff.
6.15.8.4 Informed Consent and Counseling. HMO must have policies and
procedures in place regarding obtaining informed consent and
counseling Members. The Subcontracts
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with providers who treat HIV patients must include provisions
requiring the provider to refer Members with HIV infection to public
health agencies for in-depth prevention counseling, on-going partner
elicitation and notification services and other prevention support
services. The Subcontracts must also include provisions that require
the provider to direct-counsel or refer an HIV-infected Member about
the need to inform and refer all sex and/or needle-sharing partners
that might have been exposed to the infection for prevention
counseling and antibody testing.
6.16 BLIND AND DISABLED MEMBERS
--------------------------
6.16.1 HMO must arrange for all covered health and health-related services
required under this contract for all voluntarily enrolled Blind and
Disabled Members. HMO is not required to provide value-added
services to Blind and Disabled Members.
6.16.2 HMO must perform the same administrative services and functions as
are performed for mandatory Members under this contract. These
administrative services and functions include, but are not limited
to:
6.16.2.1 Prior authorization of services;
6.16.2.2 All customer services functions offered Members in mandatory
participation categories, including the complaint process,
enrollment services, and hotline services;
6.16.2.3 Linguistic services, including providing Member materials in
alternative formats for the blind and disabled;
6.16.2.4 Health education;
6.16.2.5 Utilization management using TDH Claims Administrator encounter data
to provide appropriate interventions for Members through
administrative case management;
6.16.2.6 Quality assurance activities as needed and Focused Studies as
required by TDH; and
6.16.2.7 Coordination to link Blind and Disabled Members with applicable
community resources and targeted case management programs (see
Non-Capitated Services in Appendix C - Scope of Services).
6.16.3 HMO must require network providers to submit claims for health and
health-related services to TDH's Claims Administrator for claims
adjudication and payment.
6.16.4 HMO must provide services to Blind and Disabled members within HMO's
network unless necessary services are unavailable within network.
HMO must also allow referrals to out-of-network providers if
necessary services are not available within
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HMO's network. Records must be forwarded to Member's PCP following a
referral visit.
ARTICLE VII PROVIDER NETWORK REQUIREMENTS
7.1 PROVIDER ACCESSIBILITY
----------------------
7.1.1 HMO must enter into written contracts with properly credentialed
health care service providers. The names of all providers must be
submitted to TDH as part of HMO subcontracting process. HMO must
have its own credentialing process to review, approve and
periodically recertify the credentials of all participating
providers in compliance with 28 TAC 11.1902, relating to
credentialing of providers in HMOs.
7.1.2 HMO must require tax I.D. numbers from all providers. HMO is
required to do backup withholding from all payments to providers who
fail to give tax I.D. numbers or who give incorrect numbers.
7.1.3 Timeframes for Access Requirements. HMO must have sufficient network
providers and establish procedures to ensure Members have access to
routine, urgent, and emergency services; telephone appointments;
advice and Member service lines. These services must be accessible
to Members within the following timeframes:
7.1.3.1 Urgent Care within 24 hours of request;
7.1.3.2 Routine care within 2 weeks of request;
7.1.3.3 Physical/Wellness Exams for adults must be provided within 8 to 10
weeks of the request;
7.1.3.4 HMO must establish policies and procedures to ensure that THSteps
Checkups be provided within 90 days of new enrollment, except
newborns should be seen within 2 weeks of enrollment, and in all
cases be consistent with the American Academy of Pediatrics and/or
THSteps periodicity schedule. If the Member does not request a
checkup, HMO must establish a procedure for contacting the Member to
schedule the checkup.
7.1.4 HMO is prohibited from requiring a provider or provider group to
enter into an exclusive contracting arrangement with HMO as a
condition for participation in its provider network.
7.2 PROVIDER CONTRACTS
------------------
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7.2.1 HMO must enter into written contracts with all providers (provider
contracts). Provider contracts include all contracts between
intermediary entities and the direct provider of health services.
HMO must make all contracts available to TDH at the time and
location requested by TDH. All standard formats of provider
contracts must be submitted to TDH for approval no later than 120
days prior to the Implementation Date. Standard formats of provider
contracts to be executed later than 120 days prior to the
Implementation Date must be submitted to TDH prior to use of the
standard format. All contracts are subject to the terms and
conditions of this contract and must contain the provisions of
Article V, Statutory and Regulatory Compliance, and the provisions
contained in Article 3.2.4. HMO must notify TDH not less than 90
days prior to terminating any subcontract affecting a major
performance function of this contract. TDH will require assurances
that any contract termination will not result in an interruption of
an essential service or major contract function.
7.2.2 Primary Care Provider (PCP) contracts and specialty care contracts
must contain provisions relating to the requirements of the provider
types found in this contract. For example, PCP contracts must
contain the requirements of Article 7.8 relating to Primary Care
Providers.
7.2.3 Provider contracts that are requested by any agency with authority
to investigate and prosecute fraud and abuse must be produced at the
time and place required by TDH or the requesting agency. Provider
contracts requested in response to a Public Information request must
be produced within 48 hours of the request. Requested contracts and
all related records must be provided free-of-charge to the
requesting agency.
7.2.4 The form and substance of all provider contracts are subject to
approval by TDH. TDH retains the authority to reject or require
changes to any contract that do not comply with the requirements or
duties and responsibilities of this contract. HMO REMAINS
RESPONSIBLE FOR PERFORMING AND FOR ANY FAILURE TO PERFORM ALL
DUTIES, RESPONSIBILITIES AND SERVICES UNDER THIS CONTRACT REGARDLESS
OF WHETHER THE DUTY, RESPONSIBILITY OR SERVICE IS CONTRACTED TO
ANOTHER FOR ACTUAL PERFORMANCE.
7.2.5 TDH reserves the right and retains the authority to make reasonable
inquiry and conduct investigations into patterns of provider and
Member complaints against HMO or any intermediary entity with whom
HMO contracts to deliver health services under this contract. TDH
may impose appropriate sanctions and contract remedies to ensure HMO
compliance with the provisions of this contract.
7.2.6 HMO must not restrict a provider's ability to provide opinions or
counsel to a Member with respect to benefits, treatment options, and
provider's change in network status.
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7.2.7 HMO, all IPAs, and other intermediary entities must include contract
language which substantially complies with the following standard
contract provisions in each Medicaid provider contract. This
language must be included in each contract with an actual provider
of services, whether through a direct contract or through
intermediary provider contracts:
7.2.7.1 [Provider] is being contracted to deliver Medicaid managed care
under the TDH STAR program. HMO must provide copies of the TDH/HMO
Contract to the [Provider] upon request. [Provider] understands that
services provided under this contract are funded by State and
federal funds under the Medicaid program. [Provider] is subject to
all state and federal laws, rules and regulations that apply to all
persons or entities receiving state and federal funds. [Provider]
understands that any violation by a provider of a State or federal
law relating to the delivery of services by the provider under this
HMO/Provider contract, or any violation of the TDH/HMO contract
could result in liability for money damages, and/or civil or
criminal penalties and sanctions under state and/or federal law.
7.2.7.2 [Provider] understands and agrees that HMO has the sole
responsibility for payment of covered services rendered by the
provider under HMO/Provider contract. In the event of HMO insolvency
or cessation of operations, [Provider's] sole recourse is against
HMO through the bankruptcy, conservatorship, or receivership estate
of HMO.
7.2.7.3 [Provider] understands and agrees TDH is not liable or responsible
for payment for any Medicaid covered services provided to mandatory
Members under HMO/Provider contract. Federal and State laws provide
severe penalties for any provider who attempts to collect any
payment from or bill a Medicaid recipient for a covered service.
7.2.7.4 [Provider] agrees that any modification, addition, or deletion of
the provisions of this contract will become effective no earlier
than 30 days after HMO notifies TDH of the change in writing. If TDH
does not provide written approval within 30 days from receipt of
notification from HMO, changes can be considered provisionally
approved, and will become effective. Modifications, additions or
deletions which are required by TDH or by changes in state or
federal law are effective immediately.
7.2.7.5 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. [Provider] must cooperate and assist TDH and any
state or federal agency that is charged with the duty of
identifying, investigating, sanctioning or prosecuting suspected
fraud and abuse. [Provider] must provide originals and/or copies of
any and all information, allow access to premises and provide
records to TDH or its authorized agent(s), THHSC, HCFA, the U.S.
Department of Health and Human Services, FBI, TDI, and the Texas
Attorney General's Medicaid Fraud Control Unit, upon request, and
free-of-charge.
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[Provider] must report any suspected fraud or abuse including any
suspected fraud and abuse committed by HMO or a Medicaid recipient
to TDH for referral to THHSC.
7.2.7.6 [Provider] is required to submit proxy claims forms to HMO for
services provided to all STAR Members that are capitated by HMO in
accordance with the encounter data submissions requirements
established by HMO and TDH.
7.2.7.7 HMO is prohibited from imposing restrictions upon the [Provider's]
free communication with members about a Member's medical conditions,
treatment options, HMO referral policies, and other HMO policies,
including financial incentives or arrangements and all STAR managed
care plans with whom [Provider] contracts.
7.2.7.8 The Texas Medicaid Fraud Control Unit must be allowed to conduct
private interviews of [Providers] and the [Providers'] employees,
contractors, and patients. Requests for information must be complied
with, in the form and language requested. [Providers] and their
employees and contractors must cooperate fully in making themselves
available in person for interviews, consultation, grand jury
proceedings, pre-trial conference, hearings, trial and in any other
process, including investigations. Compliance with this Article is
at HMO's and [Provider's] own expense.
7.2.7.9 HMO must include the method of payment and payment amounts in all
provider contracts.
7.2.7.10 All provider clean claims must be adjudicated within 30 days. HMO
must pay provider interest on all clean claims that are not paid
within 30 days at a rate of 1.5% per month (18% annual) for each
month the claim remains unadjudicated.
7.2.7.11 HMO must prohibit network providers from interfering with or placing
liens upon the state's right or HMO's right, acting as the state's
agent, to recovery from third party resources. HMO must prohibit
network providers from seeking recovery in excess of the Medicaid
payable amount or otherwise violating state and federal laws.
7.2.8 HMO must comply with the provisions of Chapter 20A ss.18A of HMO Act
relating to Physician and Provider contracts, except Subpart (e),
which relates to capitation payments.
7.2.9 HMO must include a complaint and appeals process which complies with
the requirements of Article 20A.12 of the Texas Insurance Code
relating to Complaint System in all subcontracts. HMO's complaint
and appeals process must be the same for all Contractors.
7.3 PHYSICIAN INCENTIVE PLANS
-------------------------
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7.3.1 HMO may operate a physician incentive plan only if: (1) no specific
payment may be made directly or indirectly under a physician
incentive plan to a physician or physician group as an inducement to
reduce or limit medically necessary services furnished to a Member;
and (2) the stop-loss protection, enrollee surveys and disclosure
requirements of this Article are met.
7.3.2 HMO must disclose to TDH information required by federal regulations
found at 42 C.F.R.ss.417.479. The information must be disclosed in
sufficient detail to determine whether the incentive plan complies
with the requirements at 42 C.F.R. ss.417.479. The disclosure must
contain the following information:
7.3.2.1 Whether services not furnished by a physician or physician group
(referral services) are covered by the incentive plan. If only
services furnished by the physician or physician group are covered
by the incentive plan, disclosure of other aspects of the incentive
plan are not required to be disclosed.
7.3.2.2 The type of incentive arrangement (e.g. withhold, bonus,
capitation).
7.3.2.3 The percent of the withhold or bonus, if the incentive plan involves
a withhold bonus.
7.3.2.4 Whether the physician or physician group has evidence of a stop-loss
protection, including the amount and type of stop-loss protection.
7.3.2.5 The panel size and the method used for pooling patients, if patients
are pooled.
7.3.2.6 The results of Member and disenrollee surveys, if HMO is required
under 42 C.F.R.ss.417.479 to conduct Member and disenrollee surveys.
7.3.3 HMO must submit the information required in Articles 7.3.2.1 -
7.3.2.5 to TDH 90 days prior to the Implementation Date of the
program in the service area and each anniversary date of the
contract.
7.3.4 HMO must submit the information required in Article 7.3.2.6 one year
after the effective date of initial contract or effective date of
renewal contract, and annually each subsequent year under the
contract.
7.3.5 HMO must provide Members with information regarding Physician
Incentive Plans upon request. The information must include the
following:
7.3.5.1 whether HMO uses a physician incentive plan that covers referral
services;
7.3.5.2 the type of incentive arrangement (i.e., withhold, bonus,
capitation);
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7.3.5.3 whether stop-loss protection is provided; and
7.3.5.4 results of enrollee and disenrollee surveys, if required under 42
C.F.R.ss.417.479.
7.3.5.5 HMO must ensure that IPAs and ANHCs with whom HMO contracts comply
with the requirements above. HMO is required to meet the
requirements above for all levels of subcontracting.
7.4 PROVIDER MANUAL AND PROVIDER TRAINING
-------------------------------------
7.4.1 HMO must prepare and issue a Provider Manual(s), including any
necessary specialty manuals (e.g. behavioral health), to the
providers in HMO network and to newly contracted providers in HMO
network within five (5) working days from inclusion of the provider
into the network. The Provider Manual must contain sections relating
to special requirements of the STAR Program as required under this
contract. See Appendix M, Required Critical Elements, for specific
details regarding content requirements.
HMO must submit a Provider Manual to TDH for approval 120 days prior
to the Implementation Date (see Article 3.4.1 regarding the process
for plan materials review).
7.4.2 HMO must provide training to all network providers and their staff
regarding the requirements of the TDH/HMO contract and special needs
of STAR Members.
7.4.2.1 HMO training for all providers must be completed within 30 days of
placing a newly contracted provider on active status. HMO must
provide on-going training to new and existing providers as required
by HMO or TDH to comply with this contract.
7.4.2.2 HMO must include in all PCP training how to screen for and identify
behavioral health disorders, HMO's referral process to behavioral
health services and clinical coordination requirements for
behavioral health. HMO must include in all training for behavioral
health providers how to identify physical health disorders, HMO's
referral process to primary care and clinical coordination
requirements between physical medicine and behavioral health
providers. HMO must include training on coordination and quality of
care such as behavioral health screening techniques for PCPs and new
models of behavioral health interventions.
7.4.3 HMO must provide primary care and behavioral health providers with
screening tools and instruments approved by TDH.
7.4.4 HMO must maintain and make available upon request enrollment or
attendance rosters dated and signed by each attendee or other
written evidence of training of each network provider and their
staff.
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7.4.5 HMO must have its written policies and procedures for the screening,
assessment and referral processes between behavioral health
providers and physical medicine providers available for TDH review
not later than 120 days before the Implementation Date.
7.5 MEMBER PANEL REPORTS
--------------------
HMO must furnish each provider with a current list of enrolled
Members enrolled or assigned to that Provider within 5 days from HMO
receiving the Member list from the Enrollment Broker each month.
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
7.6.1 HMO must establish a written provider complaint and appeal procedure
for network providers. HMO must submit the written complaint and
appeal procedure to TDH by Phase II of Readiness Review. The
complaint and appeals procedure must be the same for all providers
and must comply with Texas Insurance Code, Art. 20A.12.
7.6.2 HMO must include the provider complaint and appeal procedure in all
network provider contracts or in the provider manual.
7.6.3 HMO's complaint and appeal process cannot contain provisions
referring the complaint or appeal to TDH for resolution.
7.6.4 HMO must establish mechanisms to ensure that network providers have
access to a person who can assist providers in resolving issues
relating to claims payment, plan administration, education and
training, and complaint procedures.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following qualifications:
--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center meets the standards
established by federal rules and procedures. The FQHC must
also be an eligible provider enrolled in the Medicaid
program.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an M.D.
or a D.O. in the State of Texas either as a primary care
provider or in the area of specialization under which they
will provide medical services under contract with HMO; who is
a provider enrolled in the Medicaid program; and who has a
valid Drug Enforcement Agency registration number and a Texas
Controlled Substance Certificate, if either is required in
their
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by
the State of Texas under Chapter 241 of the Health and Safety
Code and Private Psychiatric Hospitals under Chapter 577 of
the Health and Safety Code (or is a provider which is a
component part of a State or local government entity which
does not require a license under the laws of the State of
Texas), which is enrolled as a provider in the Texas Medicaid
Program. HMO will require that all facilities in the network
used for acute inpatient specialty care for people under age
21 with disabilities or chronic or complex conditions will
have a designated pediatric unit; 24-hour laboratory and
blood bank availability; pediatric radiological capability;
meet JCAHO standards; and have discharge planning and social
service units.
--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the State of Texas who is enrolled in the
Provider Texas Medicaid Program or an individual properly trained to
provide behavioral health support services who practices
under the direct supervision of an appropriately licensed
professional.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the
Laboratory Federal Clinical Laboratory Improvement Act (CLIA), and
enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for
Clinic (RHC) designation as a rural health clinic, and enrolled in the
Texas Medicaid Program.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization Act
ss.121.031ff.
--------------------------------------------------------------------------------
Local Mental Under Section 531.002(8) of the Health and Safety Code, the
Health Authority local component of the TXMHMR system designated by TDMHMR to
(LMHA) carry out the legislative mandate for planning, policy
development, coordination, and resource
development/allocation and for supervising and ensuring the
provision of mental health services to persons with mental
illness in one or more local service areas.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility Provider credentialed to provide services, and enrolled in the Texas
Medicaid Program.
--------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide on-site
Health Clinic primary and preventive care to children and adolescents.
(SBHC)
--------------------------------------------------------------------------------
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7.8 PRIMARY CARE PROVIDERS
----------------------
7.8.1 HMO must have a system for monitoring Member enrollment into its
plan to allow HMO to effectively plan for future needs and recruit
network providers as necessary to ensure adequate access to primary
care and specialty care. The Member enrollment monitoring system
must include the length of time required for Members to access care
within the network. The monitoring system must also include
monitoring after-hours availability and accessibility of PCPs.
7.8.2 HMO must maintain a primary care provider network in sufficient
numbers and geographic distribution to serve a minimum of forty-five
percent (45%) of the mandatory STAR eligibles in each county of the
service area, unless an exception to this requirement is made by
TDH. HMO is required to increase the capacity of the network as
necessary to accommodate enrollment growth beyond the forty-fifth
percentile (45%).
7.8.3 HMO must maintain a provider network that includes pediatricians and
physicians with pediatric experience in sufficient numbers and
geographic distribution to serve eligible children and adolescents
in the service area and provide timely access to the full scope of
benefits, especially THSteps checkups and immunizations.
7.8.4 HMO must comply with the access requirements as established by the
Texas Department of Insurance for all HMOs doing business in Texas,
except as otherwise required by this contract.
7.8.5 HMO must have the equivalent of one full-time-equivalent (FTE)
primary care provider (PCP) for every 2,000 Members. HMO must have
one FTE PCP with pediatric training or experience for every 2,500
Members under the age of 21.
7.8.5.1 Individual PCPs may serve more than 2,000 Members. However, if TDH
determines that a PCP's Member enrollment exceeds the PCP's ability
to provide accessible, quality care, TDH may prohibit the PCP from
receiving further enrollments. TDH may disenroll Members if required
accessibility and quality of care to all Members is jeopardized.
7.8.6 HMO must have PCPs available throughout the service area to ensure
that no Member must travel more than 30 miles to access the PCP,
unless an exception to this distance requirement is made by TDH.
7.8.7 HMO's primary care provider network may include providers from any
of the following practice areas: General Practitioners; Family
Practitioners; Internists; Pediatricians;
Obstetricians/Gynecologists (OB/GYN); Pediatric and Family Advanced
Practice Nurses (APNs) and Certified Nurse Midwives (CNMs)
practicing under the supervision of a physician; Physician
Assistants (PAs) practicing under the
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supervision of a specialist in Internal Medicine, Pediatric or
Obstetric/Gynecology provider; or Federally Qualified Health Centers
(FQHCs); Rural Health Clinics (RCHs) and similar community clinics;
and specialists who are willing to provide medical homes to selected
Members with special needs and conditions (see Article 7.8.8).
7.8.8 The PCP for a Member with disabilities or chronic or complex
conditions may be a specialist who agrees to provide PCP services to
the Member. The specialty provider must agree to perform all PCP
duties required in the contract and PCP duties must be within the
scope of the specialist's license. Any interested person may
initiate the request for a specialist to serve as a PCP for a member
with disabilities or chronic or complex conditions.
7.8.9 PCPs must either have admitting privileges at a hospital, which is
part of HMO network of providers, or make referral arrangements with
an HMO provider who has admitting privileges to a network hospital.
7.8.10 HMO must require, through contract provisions, that PCPs are
accessible to Members 24 hours a day, 7 days a week. The following
are acceptable and unacceptable phone arrangements for contacting
PCPs after normal business hours.
Acceptable:
(1) Office phone is answered after-hours by an answering service
which meets language requirements of the major population
groups and which can contact the PCP or another designated
medical practitioner. All calls answered by an answering
service must be returned within 30 minutes.
(2) Office phone is answered after normal business hours by a
recording in the language of each of the major population
groups served directing the patient to call another number to
reach the PCP or another provider designated by the PCP.
Someone must be available to answer the designated provider's
phone. Another recording is not acceptable.
(3) Office phone is transferred after office hours to another
location where someone will answer the phone and be able to
contact the PCP or another designated medical practitioner, who
can return the call within 30 minutes.
Unacceptable:
(1) Office phone is only answered during office hours.
(2) Office phone is answered after-hours by a recording which tells
patients to leave a message.
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(3) Office phone is answered after-hours by a recording which
directs patients to go to an Emergency Room for any services
needed.
(4) Returning after-hours calls outside of 30 minutes.
7.8.11 HMO must require PCPs, through contract provisions or provider
manual, to provide primary care services and continuity of care to
Members who are enrolled with or assigned to the PCP. Primary care
services are all services required by a Member for the prevention,
detection, treatment and cure of illness, trauma, disease or
disorder, which are covered and/or required services under this
contract. All services must be provided in compliance with generally
accepted medical and behavioral health standards for the community
in which services are rendered. HMO must require PCPs, through
contract provisions or provider manual, to provide children under
the age of 21 services in accordance with the American Academy of
Pediatric recommendations and the THSteps periodicity schedule and
provide adults services in accordance with the U.S. Preventive
Services Task Force's publication "Put Prevention Into Practice".
7.8.11.1 HMO must require PCPs, through contract provisions or provider
manual, to assess the medical needs of Members for referral to
specialty care providers and provide referrals as needed. PCP must
coordinate care with specialty care providers after referral.
7.8.11.2 HMO must require PCPs, through contract provisions or provider
manual, to make necessary arrangements with home and community
support services to integrate the Member's needs. This integration
may be delivered by coordinating the care of Members with other
programs, public health agencies and community resources which
provide medical, nutritional, behavioral, educational and outreach
services available to Members.
7.8.11.3 HMO must require, through contract provisions or provider manual,
that the Member's PCP or HMO provider through whom PCP has made
arrangements, be the admitting or attending physician for inpatient
hospital care, except for emergency medical or behavioral health
conditions or when the admission is made by a specialist to whom the
Member has been referred by the PCP. HMO must require, through
contract provisions or provider manual, that PCP assess the
advisability and availability of outpatient treatment alternatives
to inpatient admissions. HMO must require, through contract
provisions or provider manual, that PCP provide or arrange for
pre-admission planning for non-emergency inpatient admissions, and
discharge planning for Members. PCP must call the emergency room
with relevant information about the Member. PCP must provide or
arrange for follow-up care after emergency or inpatient care.
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7.8.11.4 HMO must require PCPs for children under the age of 21 to provide or
arrange to have provided all services required under Article 6.8
relating to Texas Health Steps, Article 6.9 relating to Perinatal
Services, Article 6.10 relating to Early Childhood Intervention,
Article 6.11 relating to WIC, Article 6.13 relating to People With
Disabilities or Chronic or Complex Conditions, and Article 6.14
relating to Health Education and Wellness and Prevention Plans. PCP
must cooperate and coordinate with HMO to provide Member and the
Member's family with knowledge of and access to available services.
7.8.12 All Medicaid recipients who are eligible for participation in the
STAR program have the right to select the PCP and HMO to whom they
will be assigned. Female recipients also have the right to select an
OB/GYN in addition to a PCP. Recipients who are mandatory STAR
participants who do not select a PCP or HMO during the time period
allowed will be defaulted to a PCP and/or HMO using the TDH default
process. Members may change PCPs at any time, but these changes are
limited to four (4) times per year. An HMO may limit a Member's
request to change an obstetrician or gynecologist to no more than
four changes in any 12-month period. If a PCP or OB/GYN who has been
selected by or assigned to a Member is no longer in HMO's provider
network, HMO must contact the Member and provide them an opportunity
to reselect. If the Member does not want to change the PCP or OB/GYN
to another provider in HMO network, the Member must be directed to
the Enrollment Broker for resolution or reselection. If a PCP or
OB/GYN who has been selected by or assigned to a Member is no longer
in an IPA's provider network but continues to participate in HMO
network, HMO or IPA may not change the Member's PCP or OB/GYN.
7.9 OB/GYN PROVIDERS
----------------
HMO must allow a female Member to select an OB/GYN within its
network or a limited provider network in addition to a PCP, to
provide health care services within the scope of the professional
specialty practice of a properly credentialed OB/GYN, in accordance
with Article 21.53D of the Texas Insurance Code and rules
promulgated under the law. A Member who selects an OB/GYN must have
direct access to the health care services of the OB/GYN without a
referral by the woman's PCP or prior authorization or
precertification from HMO. HMO must allow Members to change OB/GYNs
up to four times per year. Health care services must include, but
not be limited to:
7.9.1 One well-woman examination per year;
7.9.2 Care related to pregnancy;
7.9.3 Care for all active gynecological conditions; and
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7.9.4 Diagnosis, treatment, and referral for any disease or condition
within the scope of the professional practice of a properly
credentialed obstetrician or gynecologist.
7.10 SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, including pediatric specialty
providers, within the network in sufficient numbers and areas of
practice to meet the needs of all Members requiring specialty care
or services.
7.10.2 HMO must require, through contract provisions or provider manual,
that specialty providers send a record of consultation and
recommendations to a Member's PCP for inclusion in Member's medical
record and report encounters to the PCP and/or HMO.
7.10.3 HMO must ensure availability and accessibility to appropriate
specialists.
7.10.4 HMO must ensure that no Member is required to travel in excess of 75
miles to secure initial contact with referral specialists; special
hospitals, psychiatric hospitals; diagnostic and therapeutic
services; and single service health care physicians, dentists or
providers. Exceptions to this requirement may be allowed when an HMO
has established, through utilization data provided to TDH, that a
normal pattern for securing health care services within an area
exists or HMO is providing care of a higher skill level or specialty
than the level which is available within the service area such as,
but not limited to, treatment of cancer, burns, and cardiac
diseases.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services through
its network specialists, subspecialists and specialty care
facilities (e.g., children's hospitals, and tertiary care
hospitals).
7.11.2 HMO must include requirements for pre-admission and discharge
planning in its contracts with network hospitals. Discharge plans
for a Member must be provided by HMO or the hospital to the
Member/family, the PCP and specialty care physicians.
7.11.3 HMO must have appropriate multidisciplinary teams for people with
disabilities or chronic or complex medical conditions. These teams
must include the PCP and any individuals or providers involved in
the day-to-day or on-going care of the Member.
7.11.4 HMO must include in its provider network a TDH-designated perinatal
care facility, as established by ss.32.042, Texas Health and Safety
Code, once the designated system is finalized and perinatal care
facilities have been approved for the service area (see Article
6.9.1).
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7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA)
--------------------------------------------------------
7.12.1 Assessment to determine eligibility for rehabilitative and targeted
MHMR case management services is a function of the LMHA. HMO must
provide all services listed in Appendix C to Members with SPMI and
SED, when medically necessary, whether or not they are also
receiving targeted case management or rehabilitation services
through the LMHA.
7.12.2 HMO will coordinate with the LMHA and state psychiatric facility
regarding admission and discharge planning, treatment objectives and
projected length of stay for Members committed by a court of law to
the state psychiatric facility.
7.12.3 HMO must enter into written agreements with all LMHAs in the service
area which describes the process(es) which HMO and LMHA will use to
coordinate services for STAR Members with SPMI or SED. The agreement
will contain the following provisions:
7.12.3.1 Describe the behavioral health services in Appendix C, including the
amount, duration, and scope of basic and value-added services, and
HMO's responsibility to provide these services;
7.12.3.2 Describe criteria, protocols, procedures and instrumentation for
referral of STAR Members from and to HMO and LMHA;
7.12.3.3 Describe processes and procedures for referring Members with SPMI or
SED to LMHA for assessment and determination of eligibility for
rehabilitation or targeted case management services;
7.12.3.4 Describe how the LMHA and HMO will coordinate providing behavioral
health services to Members with SPMI or SED;
7.12.3.5 Establish clinical consultation procedures between HMO and LMHA
including consultation to effect referrals and on-going consultation
regarding the Member's progress;
7.12.3.6 Establish procedures to authorize release and exchange of clinical
treatment records;
7.12.3.7 Establish procedures for coordination of assessment, intake/triage,
utilization review/utilization management and care for persons with
SPMI or SED;
7.12.3.8 Establish procedures for coordination of inpatient psychiatric
services (including court ordered commitment of Members under 21) in
state psychiatric facilities within the LMHA's catchment area;
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7.12.3.9 Establish procedures for coordination of emergency and urgent
services to Members; and
7.12.3.10 Establish procedures for coordination of care and transition of care
for new HMO Members who are receiving treatment through the LMHA.
7.12.4 HMO must offer licensed practitioners of the healing arts, who are
part of the Member's treatment team for rehabilitation services, the
opportunity to participate in HMO's network. The practitioner must
agree to accept the standard provider reimbursement rate, meet the
credentialing requirements, comply with all the terms and conditions
of the standard provider contract of HMO.
7.12.5 Members receiving rehabilitation services must be allowed to choose
the licensed practitioners of the healing arts who are currently a
part of the Member's treatment team for rehabilitation services. If
the Member chooses to receive these services from licensed
practitioners of the healing arts who are part of the Member's
rehabilitation services treatment team, HMO must reimburse the LMHA
at current Medicaid fee-for-service amounts.
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPS)
----------------------------------------
7.13.1 HMO must include STPs as designated by TDH in its provider network
to provide primary care and specialty care services. HMO must
include STPs in its provider network for at least three (3) years
following the Implementation Date in the service area.
7.13.2 STPs must agree to the contract requirements contained in Article
7.2, unless exempted from a requirement by law or rule. STPs must
also agree to the following contract requirements.
7.13.2.1 STP must agree to accept the standard reimbursement rate offered by
HMO to other providers for the same or similar services.
7.13.2.2 STP must meet the credentialing requirements of HMO. HMO must not
require STPs to meet a different or higher credentialing standard
than is required of other providers providing the same or similar
services. HMO must not require STP's to contract with a
Subcontractor which requires a different or higher credentialing
standard than the HMO's if the application of the higher standard
results in a disproportionate number of STPs being excluded from the
Subcontractor.
7.13.3 HMO must demonstrate a good faith effort to include STPs in its
provider network. HMO's compliance with TDH's good faith effort
requirement for STPs must be reported using report requirements
defined by TDH. HMO must submit quarterly
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reports, in a format provided by TDH, documenting HMO's compliance
with TDH's good faith effort requirement for STP's.
7.13.4 Failure to demonstrate a good faith effort to meet TDH's compliance
objectives to include STPs in HMO's provider network, or failure to
report efforts and compliance as required in Article 7.13.3, are
defaults under this contract and may result in any or all of the
sanctions and remedies included in Article XVIII of this contract.
7.14 RURAL HEALTH PROVIDERS
----------------------
7.14.1 In rural areas of the service area, HMO must seek the participation
in its provider network of rural hospitals, physicians, home and
community support service agencies, and other rural health care
providers who:
7.14.1.1 are the only providers located in the service area; and
7.14.1.2 are Significant Traditional Providers.
7.14.2 In order to contract with HMO, rural health providers must:
7.14.2.1 agree to accept the prevailing provider contract rate of HMO based
on provider type; and
7.14.2.2 have the credentials required by HMO, provided that lack of board
certification or accreditation by JCAHO may not be the only grounds
for exclusion from the provider network.
7.14.3 HMO must reimburse rural hospitals with 100 or fewer licensed beds
in counties with fewer than 50,000 persons for acute care services
at a rate calculated using the higher of the prospective payment
system rate or the cost reimbursed methodology authorized under the
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Hospitals
reimbursed under TEFRA cost principles shall be paid without the
imposition of the TEFRA cap.
7.14.4 HMO must reimburse physicians who practice in rural counties with
fewer than 50,000 persons at a rate using the current Medicaid fee
schedule.
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS) AND RURAL HEALTH CLINICS
-------------------------------------------------------------------
(RHCS)
------
7.15.1 HMO must make reasonable efforts to include FQHCs and RHCs
(Freestanding and hospital-based) in its provider network.
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7.15.2 FQHCs or RHCs will receive a cost settlement from TDH and must agree
to accept initial payments from HMO in an amount that is equal to or
greater than HMO's payment terms for other providers providing the
same or similar services.
7.15.2.1 HMO must submit monthly FQHC and RHC encounter and payment reports
to all contracted FQHCs and RHCs, and FQHCs and RHCs with whom there
have been encounters, not later than 21 days from the end of the
month for which the report is submitted. The format will be
developed by TDH. The FQHC and RHC must validate the encounter and
payment information contained in the report(s). HMO and the FQHC/RHC
must both sign the report(s) after each party agrees that it
accurately reflects encounters and payments for the month reported.
HMO must submit the signed FQHC and RHC encounter and payment
reports to TDH not later than 45 days from the end of the month for
which the report is submitted.
7.15.2.2 For FQHCs, TDH will determine the amount of the interim settlement
based on the difference between: an amount equal to the number of
Medicaid allowable encounters multiplied by the rate per encounter
from the latest settled FQHC fiscal year cost report, and the amount
paid by HMO to the FQHC for the quarter. For RHCs, TDH will
determine the amount of the interim settlement based on the
difference between a reasonable cost amount methodology provided by
TDH and the amount paid by HMO to the RHC for the quarter. TDH will
pay the FQHC or the RHC the amount of the interim settlement, if
any, as determined by TDH or collect and retain the quarterly
recoupment amount, if any.
7.15.2.3 TDH will cost settle with each FQHC and RHC annually, based on the
FQHC or the RHC fiscal year cost report and the methodology
described in Article 7.15.2.2. TDH will make additional payments or
recoup payments from the FQHC or the RHC based on reasonable costs
less prior interim payment settlements.
7.16 COORDINATION WITH PUBLIC HEALTH
-------------------------------
7.16.1 Reimbursed Arrangements. HMO must make a good faith effort to enter
into a subcontract for the covered health care services as specified
below with TDH Public Health Regions, city and/or county health
departments or districts in each county of the service area that
will be providing these services to the Members (Public Health
Entities), who will be paid for services by HMO, including any or
all of the following services:
7.16.1.1 Sexually Transmitted Diseases (STDs) Services (see Article 6.15);
7.16.1.2 Confidential HIV Testing (see Article 6.15);
7.16.1.3 Immunizations (see Article 6.8.9); and
7.16.1.4 Tuberculosis (TB) Care (see Article 6.12).
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7.16.2 The subcontract must include any covered services which the public
health department has agreed to provide:
7.16.2.1 Family Planning Services (see Article 6.7);
7.16.2.2 THSteps checkups (see Article 6.8); and
7.16.2.3 Prenatal services.
7.16.3 HMO must make a good faith effort to enter into subcontracts with
public health entities at least 90 days prior to the Implementation
Date for the service area. The subcontracts must be available for
review by TDH or its designated agent(s) on the same basis as all
other subcontracts. If an HMO's unable to enter into a contract with
any of the public health entities, HMO must submit documentation
substantiating its reasonable efforts to enter into such an
agreement, to TDH. The subcontracts must include the following
areas:
7.16.3.1 General Relationship Between HMO and the Public Health Entity. The
subcontracts must specify the scope and responsibilities of both
parties, the methodology and agreements regarding billing and
reimbursements, reporting responsibilities, Member and provider
educational responsibilities, and the methodology and agreements
regarding sharing of confidential medical record information between
the public health entity and the PCP.
7.16.3.2 Public Health Entity Responsibilities:
(1) Public health providers must inform Members that confidential
health care information will be provided to the PCP.
(2) Public health providers must refer Members back to PCP for
any follow-up diagnostic, treatment, or referral services.
(3) Public health providers must educate Members about the
importance of having a PCP and assessing PCP services during
office hours rather than seeking care from Emergency
Departments, Public Health Clinics, or other Primary Care
Providers or Specialists.
(4) Public health entities must identify a staff person to act as
liaison to HMO to coordinate Member needs, Member referral,
Member and provider education, and the transfer of
confidential medical record information.
7.16.3.3 HMO Responsibilities:
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(1) HMO must identify care coordinators who will be available to
assist public health providers and PCPs in getting efficient
referrals of Members to the public health providers,
specialists, and health-related service providers either
within or outside HMO's network.
(2) HMO must inform Members that confidential healthcare
information will be provided to the PCP.
(3) HMO must educate Members on how to better utilize their PCPs,
public health providers, emergency departments, specialists,
and health-related service providers.
7.16.4 Non-Reimbursed Arrangements with Public Health Entities
7.16.4.1 Coordination with Public Health Entities. HMO must make a good faith
effort to enter into a Memorandum of Understanding (MOU) with Public
Health Entities regarding the provision of services for essential
public health services. These MOUs must be entered into at least 90
days before the Implementation Date in the service area and are
subject to TDH approval. If HMO is unable to enter into an MOU with
any public entity, HMO must submit documentation substantiating
reasonable efforts to enter into such an agreement to TDH. These
MOUs must contain the roles and responsibilities of HMO and the
public health department for the following services:
(1) Public health reporting requirements regarding communicable
diseases and/or diseases which are preventable by
immunization as defined by state law;
(2) Notification of and referral to the local Public Health
Entity, as defined by state law, of communicable disease
outbreaks involving Members;
(3) Referral to the local Public Health Entity for TB contact
investigation and evaluation and preventive treatment of
persons whom the Member has come into contact;
(4) Referral to the local Public Health Entity for STD/HIV
contact investigation and evaluation and preventive treatment
of persons whom the Member has come into contact;
|
(5) Referral for WIC services and information sharing; and
(6) Coordination and follow-up of suspected or confirmed cases of
childhood lead exposure.
7.16.4.2 Coordination with Other TDH Programs. HMOs must make a good faith
effort to enter into a Memorandum of Understanding (MOU) with other
TDH programs regarding the provision of services for essential
public health services. These MOUs
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must be entered into at least 90 days before the Implementation Date
in the service area and are subject to TDH approval. If HMO is
unable to enter into an MOU with any public health entity, HMO must
submit documentation substantiating reasonable efforts to enter into
such an agreement to TDH. These MOUs must delineate the roles and
responsibilities of HMO and the public health department for the
following services:
(1) Use of the TDH laboratory for THSteps newborn screens; lead
testing; and hemoglobin/hematocrit tests;
(2) Availability of vaccines through the Vaccines for Children
Program;
(3) Reporting of immunizations provided to the statewide ImmTrac
Registry including parental consent to share data;
|
(4) Referral for WIC services and information sharing;
(5) Pregnant, Women and Infant (PWI) Targeted Case Management;
(6) THSteps outreach, informing and Medical Case Management;
(7) Participation in the community-based coalitions with the Medicaid-funded case management programs in MHMR, ECI, TCB, and TDH (PWI, CIDC and THSteps Medical Case Management);
(8) Referral to the TDH Medical Transportation Program (MTP);
(9) Cooperation with activities required of public health authorities to conduct the annual population and community based needs assessment; and
(10) Coordination and follow-up of suspected or confirmed cases of childhood lead exposure.
7.16.5 All public health contracts must contain provider network
requirements in Article VII, as applicable.
7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY
---------------------------------------------------------------
SERVICES
--------
7.17.1 HMO must cooperate and coordinate with the Texas Department of
Protective and Regulatory Services (TDPRS) for the care of a child
who is receiving services from or has been placed in the
conservatorship of TDPRS.
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7.17.2 HMO must comply with all provisions of a Court Order or TDPRS
Service Plan with respect to a child in the conservatorship of TDPRS
(Order) entered by a Court of Continuing Jurisdiction placing a
child under the protective custody of TDPRS or a Service Plan
voluntarily entered into by the parents or person having legal
custody of a minor and TDPRS, which relates to the health and
behavioral health services required to be provided to the Member.
7.17.3 HMO cannot deny, reduce, or controvert the medical necessity of any
health or behavioral health services included in an Order. Any
modification or termination of ordered services must be presented
and approved by the court with jurisdiction over the matter for
decision.
7.17.4 A Member or the parent or guardian whose rights are subject to an
Order or Service Plan cannot appeal the necessity of the services
ordered through HMO's complaint or appeal processes, or to TDH for a
Fair Hearing.
7.17.5 HMO must include information in its provider training and manuals
regarding:
7.17.5.1 providing medical records;
7.17.5.2 scheduling medical and behavioral health appointments within 14 days
unless requested earlier by TDPRS; and
7.17.5.3 recognition of abuse and neglect and appropriate referral to TDPRS.
7.17.6 HMO must continue to provide all covered services to a Member
receiving services from or in the protective custody of TDPRS until
the Member has been disenrolled from HMO as a result of loss of
eligibility in Medicaid managed care or placement into foster care.
7.18 PROVIDER NETWORKS (IPAS, LIMITED PROVIDER NETWORKS AND ANHCS)
-------------------------------------------------------------
7.18.1 All HMO contracts with independent physician, provider associations
or similar provider groups, organizations, or networks (IPA
contracts) and standard IPA contracts with contracted providers
(IPA/Provider contracts) must be submitted to TDH no later than 120
days prior to Implementation Date. The form and substance of all
HMO/IPA and IPA/Provider contracts are subject to approval by TDH.
TDH retains the authority to reject and require changes to any
HMO/IPA or IPA/Provider contract which:
7.18.1.1 does not contain the mandatory contract provisions for all
Subcontractors in this contract;
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7.18.1.2 does not comply with the requirements, duties and responsibilities
of this contract;
7.18.1.3 creates a barrier for full participation to significant traditional
providers;
7.18.1.4 interferes with TDH's oversight and audit responsibilities including
collection and validation of encounter data; or
7.18.1.5 is inconsistent with the federal requirement for simplicity in the
administration of the Medicaid program.
7.18.1.6 HMO must include this contract as an attachment to any IPA contract
for Medicaid managed care services.
7.18.2 HMO cannot delegate claims payment to an IPA, even under a capitated
partial or full-risk arrangement. This provision does not apply to a
limited healthcare service plan, a single healthcare service plan or
a basic healthcare service plan.
7.18.3 In addition to the mandatory provisions for all subcontracts under
Articles 3.2 and 7.2, all HMO/IPA contracts must include the
following mandatory standard provisions:
7.18.3.1 HMO is required to include subcontract provisions in its IPA
contracts which require the UM protocol used by an IPA to produce
substantially similar outcomes, as approved by TDH, as the UM
protocol employed by the contracting HMO. The responsibilities of an
HMO in delegating UM functions to an IPA will be governed by Article
16.11.
7.18.3.2 The IPA must comply with the same encounter, utilization, quality,
and financial reporting requirements as HMO under this contract. The
IPA must comply with the same report filing timelines and include
the same information and use the same format as HMO under this
contract.
7.18.3.3 The IPA must comply with the same records retention and production
requirements as HMO under this contract, including Public
Information requests.
7.18.3.4 The IPA is subject to the same marketing restrictions and
requirements as HMO under this contract.
7.18.3.5 HMO is responsible for ensuring that IPAs comply with the
requirements and provisions of the TDH/HMO contract. TDH will impose
appropriate sanctions and remedies upon HMO for any default under
the TDH/HMO contract which is caused directly or indirectly by the
acts or omissions of the IPA. Sanctions imposed by TDH upon HMO
cannot be passed through or recouped from the IPA or network
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providers unless specifically allowed by TDH in the Notice of
Default and the pass through or recoupment is disclosed as an
HMO/IPA contract provision.
7.18.4 HMO cannot enter into contracts with IPAs to provide services under
this contract which require the participating providers to enter
into exclusive contracts with the IPA as a condition for
participation in the IPA.
7.18.4.1 Article 7.18.4 does not apply to providers who are employees or
participants in limited or closed panel provider networks.
7.18.5 All limited provider or closed panel IPA networks with whom HMO
contracts must either independently meet the access provisions of 28
Texas Administrative Code ss.11.1607, relating to access
requirements, or HMO must provide for access through other network
providers outside the closed panel IPA.
7.18.6 HMO cannot delegate to an IPA the enrollment, reenrollment,
assignment or reassignment of a Member.
7.18.7 In addition to the above provision HMO and Approved Non-Profit
Health Corporations (ANHCs) must comply with all of the requirements
contained in 28 TAC ss.11.1604, relating to Requirements of Certain
Contracts between Primary HMOs and ANHCs and Primary HMOs and
Provider HMOs.
7.18.8 HMO REMAINS RESPONSIBLE FOR PERFORMING ALL DUTIES, RESPONSIBILITIES
AND SERVICES UNDER THIS CONTRACT REGARDLESS OF WHETHER THE DUTY,
RESPONSIBILITY OR SERVICE IS CONTRACTED OR DELEGATED TO ANOTHER. HMO
MUST PROVIDE A COMPLETE COPY OF THIS CONTRACT TO ANY PROVIDER
NETWORK OR GROUP WITH WHOM HMO CONTRACTS TO PROVIDE HEALTH CARE
SERVICES ON A RISK SHARING OR CAPITATED BASIS OR TO PROVIDE HEALTH
CARE SERVICES OTHER THAN MEDICAL CARE SERVICE OR ANCILLARY SERVICES.
ARTICLE VIII MEMBER SERVICES REQUIREMENTS
8.1 MEMBER EDUCATION
----------------
HMO must provide the Member education requirements as contained in
Article VI at 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14
and this Article of the contract.
8.2 MEMBER HANDBOOK
---------------
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8.2.1 HMO must mail each Member a Member Handbook within five (5) days
from the date that the Member's name appears on the Enrollment
Report. The Member Handbook must be written at a 4th - 6th grade
reading comprehension level. The Member Handbook must contain all
critical elements specified by TDH. See Appendix M, Required
Critical Elements, for specific details regarding content
requirements. HMO must submit a Member Handbook to TDH for approval
not later than 90 days before the Implementation Date (see Article
3.4.1 regarding the process for plan materials review).
8.2.2. Member Handbook Updates. HMO must provide updates to the Handbook to
all Members as changes are made to the above policies. HMO must make
the Member Handbook available in the languages of the major
population groups and in a format accessible to blind or visually
impaired Members.
8.2.3 THE MEMBER HANDBOOK AND ANY REVISIONS OR CHANGES MUST BE APPROVED BY
TDH PRIOR TO PUBLICATION AND DISTRIBUTION TO MEMBERS.
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal Law requires HMOs and providers to maintain written policies
and procedures for informing and providing written information to
all adult Members about their rights under state and federal law, in
advance of their receiving care (Social Security Act ss.1902(a)(57)
and ss.1903(m)(1)(A)). The written policies and procedures must
contain procedures for providing written information regarding the
Member's right to refuse, withhold or withdraw medical treatment
advance directives. HMO's policies and procedures must comply with
provisions contained in 42 CFR ss.434.28 and 42 CFR ss.489, SubPart
I, relating to advance directives for all hospitals, critical access
hospitals, skilled nursing facilities, home health agencies,
providers of home health care, providers of personal care services
and hospices, as well as the following state laws and rules:
8.3.1.1 the Member's right to self-determination in making health care
decisions;
8.3.1.2 the Member's rights under the Natural Death Act (Texas Health and
Safety Code, Chapter 672) to execute an advance written Directive to
Physicians, or to make a non-written directive regarding their right
to withhold or withdraw life sustaining procedures in the event of a
terminal condition;
8.3.1.3 the Member's rights under Texas Health and Safety Code, Chapter 674,
relating to written and non-written Out-of-Hospital
Do-Not-Resuscitate Orders;
8.3.1.4 the Member's right to execute a Durable Power of Attorney for Health
Care regarding their right to appoint an agent to make medical
treatment decisions on their behalf
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if the member becomes incapacitated (Civil Practice and Remedies
Code, Chapter 135); and
8.3.1.5 HMO's policies for implementing a Member's advance directives,
including a clear and concise statement of limitations if HMO or a
participating provider cannot or will not be able to carry out a
Member's advance directive.
8.3.2 A statement of limitation on implementing a Member's advance
directive should include at least the following information:
8.3.2.1 clarify any differences between HMO's conscience objections and
those which may be raised by the Member's PCP or other providers;
8.3.2.2 identify the state legal authority permitting HMO's conscience
objections to carrying out an advance directive; and
8.3.2.3 describe the range of medical conditions or procedures affected by
the conscience objection.
8.3.3 The policies and procedures must require HMO and Subcontractor to
comply with the requirements of state and federal laws relating to
advance directives. HMO must provide education and training to
employees, Members and the community on issues concerning advance
directives. HMO must submit a copy of its policies and procedures
for TDH review and approval during Phase I of Readiness Review.
8.3.4 All materials provided to Members regarding advance directives must
be written at a 7th - 8th grade reading comprehension level, except
where a provision is required by state or federal law, and the
provision cannot be reduced or modified to a 7th - 8th grade reading
level because it is a reference to the law or is required to be
included "as written" in the state or federal law. HMO must submit
any revisions to existing approved advanced directive materials.
8.3.5 HMO must notify Members of any changes in state or federal laws
relating to advance directives within 90 days from the effective
date of the change, unless the law or regulation contains a specific
time requirement for notification.
8.4 MEMBER ID CARDS
---------------
8.4.1 A Medicaid Identification Form (Form 3087) is issued monthly by the
TDHS and includes the "STAR" Program, the name of the Member's PCP
and health plan. A Member may have a temporary Medicaid
Identification (Form 1027-A) which will include a STAR indicator.
8.4.2 HMO must issue a Member Identification Card to the Member within
five (5) days from receiving notice of enrollment of the Member into
HMO. The Member
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Identification Card must include, at a minimum, the following:
Member's name; Member's Medicaid number, the effective date of the
card; PCP's name, address, and telephone number; name of HMO; name
of IPA to which the Member's PCP belongs, if applicable; the
24-hour, seven (7) day a week toll-free telephone number operated by
HMO; the toll-free number for behavioral health services; and
directions for what to do in an emergency. Identification Card must
be reissued if the Member reports a lost card, there is a Member
name change, if Member requests a new PCP, or for any other reason
which results in a change to the information disclosed on the
Identification Card.
8.5 MEMBER HOTLINE
--------------
HMO must maintain a toll-free Member telephone hotline 24 hours a
day, seven days a week for Members to obtain assistance in accessing
services under this contract. Telephone availability must be
demonstrated through an abandonment rate of less than 10%.
8.6 MEMBER COMPLAINT PROCESS
------------------------
8.6.1 HMO must develop, implement and maintain a Member complaint system
that complies with the requirements of Article 20A.12 of the Texas
Insurance Code, relating to the Complaint System, except where
otherwise provided in this contract or in federal law.
8.6.2 HMO must have written policies and procedures for taking, tracking,
reviewing, and reporting and resolving of member complaints. The
procedures must be reviewed and approved in writing by TDH before
Phase I of Readiness Review. Any amendments to the procedures must
be submitted to TDH for approval thirty (30) days prior to the
effective date of the amendment.
8.6.3 HMO must designate an officer of HMO to have primary responsibility
for ensuring that complaints are resolved in compliance with written
policy and within the time required. An "officer" of HMO means a
president, vice president, secretary, treasurer, or chairperson of
the board for a corporation, the sole proprietor, the managing
general partner of a partnership, or a person having similar
executive authority in the organization.
8.6.4 HMO must have a routine process to detect patterns of complaints and
disenrollments and involve management and supervisory staff to
develop policy and procedural improvements to address the
complaints. HMO must cooperate with TDH and TDH's enrollment broker
in addressing Member complaints relating to enrollment and
disenrollment.
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8.6.5 HMO's complaint procedures must be provided to Members in writing
and in alternative communications formats. A written description of
HMO's complaint procedures must be in appropriate languages and easy
for Members to understand. HMO must include a written description of
the complaint procedures in the Member Handbook. HMO must maintain
at least one local and one toll-free telephone number for making
complaints.
8.6.6 HMO's process must require that every complaint received in person,
by telephone or in writing, is recorded in a written record and is
logged with the following details: date, identification of the
individual filing the complaint, identification of the individual
recording the complaint, disposition of the complaint, corrective
action required, and date resolved.
8.6.7 HMO's process must include a requirement that the Governing Body of
HMO reviews the written records (logs) for complaints and appeals.
An officer of HMO must be designated to have direct responsibility
for the complaint system.
8.6.8 HMO is prohibited from discriminating against a Member because that
Member is making or has made a complaint.
8.6.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be referred
to TDH within five (5) business days after the Member makes a
disenrollment request.
8.6.10 If a complaint relates to the denial, delay, reduction, termination
or suspension of covered services by either HMO or a utilization
review agent contracted to perform utilization review by HMO, HMO
must inform Members they have the right to access the TDH Fair
Hearing process at any time in lieu of the internal complaint system
provided by HMO. HMO is required to comply with the notice
requirements contained in 25 TAC Chapter 36, relating to notice and
Fair Hearings in the Medicaid program, whenever an action is taken
to deny, delay, reduce, terminate or suspend a covered service.
8.6.11 If Members utilize HMO's internal complaint system and the complaint
relates to the denial, delay reduction, termination or suspension of
covered services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must inform the
Member that they continue to have a right to appeal the decision
through the TDH Fair Hearing Process.
8.6.12 The provisions of Article 21.58A, Texas Insurance Code, relating to
a Member's right to appeal an adverse determination made by HMO or a
utilization review agent by an independent review organization, do
not apply to a Medicaid recipient. Federal fair hearing regulations
(Social Security Actss.1902a(3), codified at 42 C.F.R. 431.200 et.
seq.) require the agency to make a final decision after a Fair
Hearing,
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which conflicts with the State requirement that the IRO make a final
decision. Therefore, the State requirement is pre-empted by the
federal requirement.
8.6.13 HMO will cooperate with the Enrollment Broker and TDH to resolve all
Member complaints. Such cooperation may include, but is not limited
to, participation by HMO or Enrollment Broker and/or TDH internal
complaint committees.
8.6.14 HMO must have policies and procedures in place outlining the role of
HMO's Medical Director in the Member Complaint System. The Medical
Director must have a significant role in monitoring, investigating
and hearing complaints.
8.6.15 HMO must provide Member Advocates to assist Members in understanding
and using HMO's complaint system.
8.6.16 HMO's Member Advocates must assist Members in writing or filing a
complaint and monitoring the complaint through the Contractor's
complaint process until the issue is resolved.
8.6.17 Member Advocates must file a Member Advocate Report of their review
and participation in the complaint procedure for each complaint
brought by a Member and a summary of each complaint resolution. A
copy of the Member Advocate Report must be included in HMO's
quarterly report (see Article 12.6).
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS
----------------------------------------
8.7.1 HMO must send Members the notice required by 25 TAC, Chapter 36,
whenever HMO takes an action to deny, delay, reduce or terminate
covered services to a Member. The notice must be mailed to the
Member no less than 10 days before HMO intends to take an action. If
an emergency exists, or if the time within which the service must be
provided makes giving 10 days notice impractical or impossible,
notice must be provided by the most expedient means reasonably
calculated to provide actual notice to the Member, including by
phone or through the provider's office.
8.7.2 The notice must contain the following information:
8.7.2.1 Member's right to immediately access TDH's Fair Hearing process;
8.7.2.2 a statement of the action HMO will take;
8.7.2.3 an explanation of the reasons HMO will take the action;
8.7.2.4 a reference to the state and/or federal regulations which support
HMO's action;
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8.7.2.5 an address where written requests may be sent and a toll-free number
Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair Hearing;
8.7.2.6 a procedure by which Member may appeal HMO's action through either
HMO's complaint process or TDH's Fair Hearing process;
8.7.2.7 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative, legal
counsel or another spokesperson;
8.7.2.8 an explanation of whether, and under what circumstances, services
may be continued if a complaint is filed or a Fair Hearing
requested;
8.7.2.9 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within 90
days of the date on the notice;
8.7.2.10 an explanation that the Member may request that resolution through
HMO complaint process or TDH Fair Hearing be conducted based on
written information without the necessity of taking oral testimony;
and
8.7.2.11 a statement explaining that HMO must make a decision, or a final
decision must be made by TDH, within 90 days from the date the
complaint is filed or a Fair Hearing requested.
8.8 MEMBER ADVOCATES
----------------
8.8.1 HMO must provide Member Advocates to assist Members. Member
Advocates must be physically located within the service area. Member
Advocates must inform Members of their rights and responsibilities,
the complaint process, the health education and the services
available to them, including preventive services.
8.8.2 Member Advocates must assist Members in writing complaints and are
responsible for monitoring the complaint through HMO's complaint
process until the Member's issues are resolved or a TDH Fair Hearing
requested (see Articles 8.6.15, 8.6.16, and 8.6.17).
8.8.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care provided
or the way care is delivered. Member Advocates are also responsible
for helping or referring Members to community resources available to
meet Member needs that are not available from HMO as Medicaid
covered services.
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8.8.4 Member Advocates must provide outreach to Members and participate in
TDH-sponsored enrollment activities and participate in the Group
Needs Assessment process.
8.8.5 HMO must designate an individual to act as the tribal liaison with
the Tigua Indians. This individual must be qualified to represent
the interests of the Tigua Indian tribe. HMO-designated individual
must attend cultural competency training as provided by the tribe. A
Member Advocate of HMO could serve this function.
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.9.1 Linguistic Services and Cultural Competency Plan. HMO must have a
comprehensive written Linguistic Services and Cultural Competency
Plan describing how HMO will meet the linguistic and cultural needs
of Members. The Plan must describe how the individuals and systems
within HMO will effectively provide services to people of all
cultures, races, ethnic backgrounds, and religions in a manner that
recognizes, values, affirms, and respects the worth of the
individuals and protects and preserves the dignity of each. HMO must
submit a written plan to TDH not later than 90 days prior to the
Implementation Date. The Plan must also be made available to HMO's
network of providers.
8.9.2 HMO must develop and implement written policies and procedures for
the provision of linguistic services following Title VI of the Civil
Rights Act guidelines and must monitor the performance of the
individuals who provide linguistic services. HMO must disseminate
these policies and procedures to ensure that both Staff and
Subcontractors are aware of their responsibilities under Title VI.
8.9.3 The Linguistic Services and Cultural Competency Plan must include
but no be limited to the following:
8.9.3.1 A description of how HMO will educate its staff on linguistic and
cultural needs and the characteristics of its Members:
8.9.3.2 A description of how HMO will implement the plan in its
organization, including the designation of staff responsible for
carrying out all portions of the Linguistic Services and Cultural
Competency Plan;
8.9.3.3 A description of how HMO will develop standards and performance
requirements for the delivery of linguistic services and culturally
competent care, and monitor adherence with those standards and
requirements;
8.9.3.4 A description of how HMO will assist Members in writing/filing a
complaint and monitoring the complaint through the Contractor's
complaint process until the issue is resolved;
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8.9.3.5 Recommendations to HMO management on any changes needed to improve
either the care provided or the way care is delivered;
8.9.3.6 A description of how HMO will provide outreach to Members and
participate in TDH-sponsored enrollment activities;
8.9.3.7 A description of how HMO will help Members access community health
or social services resources that are not covered under the contract
with TDH; and
8.9.3.8 A description of how HMO will participate in the Group Needs
Assessment process.
8.9.4 HMO must provide the following types of linguistic services;
interpreters, translated signage, and referrals to culturally and
linguistically appropriate community services programs.
8.9.5 HMO must forward all approved English versions of materials to DHS
for DHS to translate into Spanish. DHS must provide the written and
approved translation into Spanish to HMO within 15 days from receipt
of the English version. HMO must incorporate the approved
translations into all materials distributed to Members. TDH reserves
the right to require revisions to materials if inaccuracies are
discovered, or if changes are required by changes in policy or law.
8.9.6 Interpreter Services. HMO must provide trained, professional
interpreters when technical, medical, or treatment information is to
be discussed.
8.9.6.1 HMO must adhere to and provide to Members the Member Bill of Rights
and Responsibilities as adopted by the Texas Health and Human
Services Commission and contained at 1 Texas Administrative Code
(TAC) ss.ss.353.202-353.203. The Member Bill of Rights and
Responsibilities assures Members to the right "to have interpreters,
if needed, during appointments with [their] providers and when
talking to [their] health plan. Interpreters include people who can
speak in [their] native language, assist with a disability, or help
[them] understand the information."
8.9.6.2 HMO must have in place policies and procedures that outline how
Members can access face-to-face interpreter services in a provider's
office if necessary to ensure the availability of effective
communication regarding treatment, medical history or health
education for a Member.
8.9.6.3 A current copy of the list of interpreters must be provided to each
provider in HMO's provider network and updated as necessary. This
list must be available to Members and TDH or its agent(s) upon
request. A competent interpreter is defined a someone who is:
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8.9.6.3.1 proficient in both English and the other language;
8.9.6.3.2 has had orientation or training in the ethics of interpreting; and
8.9.6.3.3 has fundamental knowledge in both languages of any specialized
medical terms and concepts.
8.9.6.4 HMO must provide 24-hour access to interpreter services for Members
to access emergency medical services within HMO's network.
8.9.6.5 Family Members, especially minor children, should not be used as
interpreters in assessments, therapy or other medical situations in
which impartiality and confidentiality are critical, unless
specifically requested by the Member. However, a family member or
friend may be used as an interpreter if they can be relied upon to
provide a complete and accurate translation of the information being
provided to the Member; the Member is advised that a free
interpreter is available; and the Member expresses a preference to
rely on the family member or friend.
8.9.7 All Member orientation presentations and education classes must be
conducted in the languages of the major population groups, as
specified by TDH, in the service area(s) as the identified need
arises.
8.9.8 HMO must provide TDD access to Members who are deaf or hearing
impaired.
ARTICLE IX MARKETING AND PROHIBITED PRACTICES
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION
-----------------------------------------
HMOs may present their marketing materials to eligible Medicaid
recipients through any method or media determined to be acceptable
by TDH. The media may include but are not limited to: written
materials, such as brochures, posters, or fliers which can be mailed
directly to the client or left at Texas Department of Human Services
eligibility offices; TDH-sponsored community enrollment events; and
paid or public service announcements on radio. All marketing
materials must be approved by TDH prior to distribution (see Article
3.4).
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
HMO must require that all HMO staff having direct contact with
Members as part of their job duties and their supervisors
satisfactorily complete TDH's marketing orientation and training
program prior to engaging in marketing activities on behalf of HMO.
TDH will notify HMO of scheduled orientations.
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9.3 PROHIBITED MARKETING PRACTICES
------------------------------
9.3.1 HMO and its agents, Subcontractors and providers are prohibited from
engaging in the following marketing practices:
9.3.1.1 conducting any direct-contact marketing to prospective Members
except through TDH-sponsored enrollment events;
9.3.1.2 making any written or oral statement containing material
misrepresentations of fact or law relating to HMO's plan or the STAR
program;
9.3.1.3 making false, misleading or inaccurate statements relating to
services or benefits of HMO or the STAR program;
9.3.1.4 offering prospective Members anything of material or financial value
as an incentive to enroll with a particular PCP or HMO; and
9.3.1.5 discriminating against an eligible Member because of race, creed,
age, color, sex, religion, national origin, ancestry, marital
status, sexual orientation, physical or mental handicap, health
status, or requirements for health care services.
9.3.2 HMO may offer nominal gifts with a retail value of no more than $10
and/or free health screens to potential Members, as long as these
gifts and free health screenings are offered whether or not the
client enrolls in their HMO. Free health screenings cannot be used
to discourage less healthy potential Members from joining the HMO.
All gifts must be approved by TDH prior to distribution to Members.
The results of free screenings must be shared with the Member's PCP
if the Member enrolls with the HMO providing the screen.
9.3.3 Marketing representatives may not conduct or participate in
marketing activities for more than one HMO.
9.4 NETWORK PROVIDER DIRECTORY
--------------------------
9.4.1 HMO must submit a provider directory to TDH no later than 180 days
prior to the Implementation Date. HMO must provide the provider
directory to the Enrollment Broker for prospective members. The
directory must contain all critical elements specified by TDH. See
Appendix M, Required Critical Elements, for specific details
regarding content requirements.
9.4.2 If HMO contracts with limited provider networks, the provider
directory must comply with the requirements of 28 TAC
11.1600(b)(11), relating to the disclosure and notice of limited
provider networks.
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9.4.3 Updates to the provider directory must be provided to the Enrollment
Broker at the beginning of each State fiscal year quarter. This
includes the months of September, December, March and June. HMO is
responsible for submitting draft updates to TDH only if changes
other than PCP information are incorporated. HMO is responsible for
sending five final copies of the updated provider directory to TDH
each quarter. TDH will forward two updated provider directories,
along with its approval notice, to the Enrollment Broker to
facilitate their distribution.
ARTICLE X MIS SYSTEM REQUIREMENTS
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.1 HMO must maintain a MIS that will provide support for all functions
of HMO's processes and procedures related to the flow and use of
data within HMO. The MIS must enable HMO to meet the requirements of
this contract. The MIS must have the capacity and capability of
capturing and utilizing various data elements to develop information
for HMO administration.
10.1.2 HMO must maintain a claim retrieval service processing system that
can identify date of receipt, action taken on all provider claims or
encounters (i.e., paid, denied, other), and when any action was
taken in real time.
10.1.3 HMO must have a system that can be adapted to the change in Business
Practices/Policies within a short period of time.
10.1.4 HMO is required to submit and receive data as specified in this
contract and HMO Encounter Data Submissions Manual. The MIS must
provide complete encounter data for 100% of all capitated services
within the scope of services of the contract between HMO and TDH.
Encounter data must follow the format, data elements and method of
transmission specified in the contract and HMO Encounter Data
Submissions Manual. HMO must submit encounter data, including
adjustments to encounter data, by the 10th day of each month. The
Encounter transmission will include 100% of all encounter data and
encounter data adjustments processed by HMO for the previous month.
Data quality validation will incorporate assessment standards
developed jointly by HMO and TDH. Original records will be made
available for inspection by TDH for validation purposes. Data which
do not meet quality standards must be corrected and returned within
a time period specified by TDH.
10.1.5 HMO must use the procedure codes, diagnosis codes, and other codes
used for reporting encounters and fee-for-service claims in the most
recent edition of the Medicaid Provider Procedures Manual or as
otherwise directed by TDH. Any
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exceptions will be considered on a code-by-code basis after TDH
receives written notice from HMO requesting an exception. HMO must
also use the provider numbers as directed by TDH for both encounter
and fee-for-service claims submissions.
10.1.6 HMO must have hardware, software, network and communications system
with the capability and capacity to handle and operate all MIS
subsystems.
10.1.7 HMO must provide an organizational chart and description of
responsibilities of HMO's MIS department dedicated to or supporting
this Contract by Phase I of Readiness Review. Any updates to the
organizational chart and the description of responsibilities must be
provided to TDH at least 30 days prior to the effective date of the
change. Official points of contact must be provided to TDH on an
on-going basis. An Internet E-mail address must be provided for each
point of contact.
10.1.8 HMO must operate and maintain a MIS that meets or exceeds the
requirements outlined in the Model MIS Guidelines that follow:
10.1.8.1 The Contractor's system must be able to meet all eight MIS Model
Guidelines as listed below. The eight subsystems are used in the
Model MIS Requirements to identify specific functions or features
required by HMO's MIS. These subsystems focus on the individual
systems functions or capabilities to support the following
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operational and administrative areas:
(1) Enrollment/Eligibility Subsystem
(2) Provider Subsystem
(3) Encounter/Claims Processing Subsystem
(4) Financial Subsystem
(5) Utilization/Quality Improvement Subsystem
(6) Reporting Subsystem
(7) Interface Subsystem
(8) TPR Subsystem
10.2 SYSTEM-WIDE FUNCTIONS
---------------------
HMO MIS system must include functions and/or features which must
apply across all subsystems as follows:
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(1) Ability to update and edit data.
(2) Maintain a history of changes and adjustments and audit trails for current and retroactive data. Audit trails will capture date, time, and reasons for the change, as well as who made the change.
(3) Allow input mechanisms through manual and electronic transmissions.
(4) Have procedures and processes for accumulating, archiving, and restoring data in the event of a system or subsystem failure.
(5) Maintain automated or manual linkages between and among all MIS subsystems and interfaces.
(6) Ability to relate Member and provider data with utilization, service, accounting data, and reporting functions.
(7) Ability to relate and extract data elements into summary and reporting formats attached as Appendices to contract.
(8) Must have written process and procedures manuals which document and describe all manual and automated system procedures and processes for all the above functions and features, and the various subsystem components.
(9) Maintain and cross-reference all Member-related information
with the most current Medicaid number.
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM
--------------------------------
The Enrollment/Eligibility Subsystem is the central processing point
for the entire MIS. It must be constructed and programmed to secure
all functions which require Membership data. It must have functions
and/or features which support requirements as follows:
(1) Identify other health coverage available or third party
liability (TPL), including type of coverage and effective
dates.
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(2) Maintain historical data (files) as required by TDH.
(3) Maintain data on enrollments/disenrollments and complaint activities. The data must include reason or type of disenrollment, complaint, and resolution - by incident.
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(4) Receive, translate, edit and update files in accordance with TDH requirements prior to inclusion in HMO's MIS. Updates will be received from TDH's agent and processed within two working days after receipt.
(5) Provide error reports and a reconciliation process between new data and data existing in MIS.
(6) Identify enrollee changes in primary care provider and the reason(s) for those changes and effective dates.
(7) Monitor PCP capacity and limitations prior to connecting the enrollee to PCP in the system, and provide a kick-out report when capacity and limitations are exceeded.
(8) Verify enrollee eligibility for medical services rendered or for other enrollee inquiries.
(9) Generate and track referrals, e.g., Hospitals/Specialists.
(10) Search records by a variety of fields (e.g., name, unique identification numbers, date of birth, SSN, etc.) for eligibility verification.
(11) Send PCP assignment updates to TDH in the format as specified by TDH.
10.4 PROVIDER SUBSYSTEM
------------------
The provider subsystem must accept, process, store and retrieve
current and historical data on providers, including services,
payment methodology, license information, service capacity, and
facility linkages.
Functions and Features:
(1) Identify specialty(s), admission privileges, enrollee
linkage, capacity, facility linkages, emergency arrangements
or contact, and other limitations, affiliations, or
restrictions.
(2) Maintain provider history files to include audit trails and
effective dates of information.
(3) Maintain provider fee schedules/remuneration agreements to
permit accurate payment for services based on the financial
agreement in effect on the date of service.
(4) Support HMO credentialing, recredentialing, and credential
tracking processes; incorporates or links information to
provider record.
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(5) Support monitoring activity for physician to enrollee ratios
(actual to maximum) and total provider enrollment to
physician and HMO capacity.
(6) Flag and identify providers with restrictive conditions
(e.g., limits to capacity, type of patient, age restrictions,
and other services if approved out- of- network).
(7) Support national provider number format (UPIN, NPIN, CLIA,
etc., as required by TDH).
(8) Provide provider network files 90 days prior to
implementation and updates monthly. Format will be provided
by TDH to contracted entities.
(9) Support the national CLIA certification numbers for clinical
laboratories.
(10) Exclude providers from participation that have been
identified by TDH as ineligible or excluded. Files must be
updated to reflect period and reason for exclusion.
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM
-------------------------------------
The encounter/claims processing subsystem must collect, process, and
store data on 100% of all health services delivered for which HMO is
responsible. The functions of these subsystems are claims/encounter
processing and capturing health service utilization data. The
subsystem must capture all health-related services, including
medical supplies, using standard codes (e.g., CPT-4, HCPCS, ICD9-CM,
UB92 Revenue Codes), rendered by health-care providers to an
eligible enrollee regardless of payment arrangement (e.g. capitation
or fee-for-service). It approves, prepares for payment, or may
return or deny claims submitted. This subsystem may integrate manual
and automated systems to validate and adjudicate claims and
encounters. HMO must use encounter data validation methodologies
prescribed by TDH.
Functions and Features:
(1) Accommodate multiple input methods: electronic submission,
tape, claim document, and media.
(2) Support entry and capture of a minimum of two diagnosis codes
for each individual service as defined by TDH.
(3) Edit and audit to ensure allowed services are provided by
eligible providers for eligible recipients.
(4) Interface with Member and provider subsystems.
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(5) Capture and report TPL potential, reimbursement or denial.
(6) Edit for utilization and service criteria, medical policy, fee schedules, multiple contracts, contract periods and conditions.
(7) Submit data to TDH through electronic transmission using specified formats.
(8) Support multiple fee schedule benefit packages and capitation rates for all contract periods for individual providers, groups, services, etc. A claim encounter must be initially adjudicated and all adjustments must use the fee applicable to the date of service.
(9) Provide timely, accurate, and complete data for monitoring claims processing performance.
(10) Provide timely, accurate, and complete data for reporting medical service utilization.
(11) Maintain and apply prepayment edits to verify accuracy and validity of claims data for proper adjudication.
(12) Maintain and apply edits and audits to verify timely, accurate, and complete encounter data reporting.
(13) Submit reimbursement to non-contracted providers for emergency care rendered to enrollees in a timely and accurate fashion.
(14) Validate approval and denials of precertification and prior authorization requests during adjudication of claims/encounters.
(15) Track and report the exact date a service was performed. Use of date ranges must have State approval.
(16) Receive and capture claim and encounter data from TDH.
(17) Receive and capture value-added services codes.
10.6 FINANCIAL SUBSYSTEM
-------------------
The financial subsystem must provide the necessary data for 100% of
all accounting functions including cost accounting, inventory, fixed
assets, payroll, general ledger, accounts receivable, accounts
payable, financial statement presentation, and any additional data
required by TDH. The financial subsystem must provide
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management with information that can demonstrate that the proposed
or existing HMO is meeting, exceeding, or falling short of fiscal
goals. The information must also provide management with the
necessary data to spot the early signs of fiscal distress, far
enough in advance to allow management to take corrective action
where appropriate.
Functions and Features:
(1) Provide information on HMO's economic resources, assets, and
liabilities and present accurate historical data and
projections based on historical performance and current
assets and liabilities.
(2) Produce financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) and in the format
prescribed by TDH.
(3) Provide information on potential third party payers;
information specific to the client; claims made against third
party payers; collection amounts and dates; denials, and
reasons for denials.
(4) Track and report savings by category as a result of cost
avoidance activities.
(5) Track payments per Member made to network providers compared
to utilization of the provider's services.
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(6) Generate Remittance and Status Reports.
(7) Make claim and capitation payments to providers or groups.
(8) Reduce/increase accounts payable/receivable based on
adjustments to claims or recoveries from third party
resources.
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM
-----------------------------------------
The quality management/quality improvement/utilization review
subsystem combines data from other subsystems, and/or external
systems, to produce reports for analysis which focus on the review
and assessment of quality of care given, detection of over and under
utilization, and the development of user defined reporting criteria
and standards. This system profiles utilization of providers and
enrollees and compares them against experience and norms for
comparable individuals. This system also supports the quality
assessment function.
The subsystem tracks utilization control function(s) and monitoring
inpatient admissions, emergency room use, ancillary, and out-of-area
services. It provides provider profiles, occurrence reporting,
monitoring and evaluation studies, and
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enrollee satisfaction survey compilations. The subsystem may
integrate HMO's manual and automated processes or incorporate other
software reporting and/or analysis programs.
The subsystem incorporates and summarizes information from enrollee
surveys, provider and enrollee complaints, and appeal processes.
Functions and Features:
(1) Supports provider credentialing and recredentialing
activities.
(2) Supports HMO processes to monitor and identify deviations in
patterns of treatment from established standards or norms.
Provides feedback information for monitoring progress toward
goals, identifying optimal practices, and promoting
continuous improvement.
(3) Supports development of cost and utilization data by provider
and service.
(4) Provides aggregate performance and outcome measures using
standardized quality indicators similar to HEDIS or as
specified by TDH.
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(5) Supports quality-of-care Focused Studies.
(6) Supports the management of referral/utilization control processes and procedures, including prior authorization and precertifications and denials of services.
(7) Monitors primary care provider referral patterns.
(8) Supports functions of reviewing access, use and coordination of services (i.e. actions of Peer Review and alert/flag for review and/or follow-up; laboratory, x-ray and other ancillary service utilization per visit).
(9) Stores and reports patient satisfaction data through use of enrollee surveys.
(10) Provides fraud and abuse detection, monitoring and reporting.
(11) Meets minimum report/data collection/analysis functions of Article XI and Appendix A - Standards For Quality Improvement Programs.
(12) Monitors and tracks provider and enrollee complaints and appeals from receipt to disposition or resolution by
provider.
10.8 REPORT SUBSYSTEM
----------------
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The reporting subsystem supports reporting requirements of all HMO operations to HMO management and TDH. It allows HMO to develop various reports to enable HMO management and TDH to make decisions regarding HMO activity.
Functions and Capabilities:
(1) Produces standard, TDH-required reports and ad hoc reports from the data available in all MIS subsystems. All reports will be submitted on hard copy or electronically in a format approved by TDH.
(2) Have system flexibility to permit the development of reports at irregular periods as needed.
(3) Generate reports that provide unduplicated counts of enrollees, providers, payments and units of service unless otherwise specified.
(4) Generate an alphabetic Member listing.
(5) Generate a numeric Member listing.
(6) Generate a client eligibility listing by PCP (panel report).
(7) Report on PCP change by reason code.
(8) Report on TPL (COB) information to TDH.
(9) Report on provider capacity and assignment from date of service to date received.
(10) Generate or produce an aged outstanding liability report.
(11) Produce a Member ID Card.
(12) Produce client/provider mailing labels.
10.9 DATA INTERFACE SUBSYSTEM
------------------------
10.9.1 The interface subsystem supports incoming and outgoing data from and
to other organizations. It allows HMO to maintain enrollee, benefit
package, eligibility, disenrollment/enrollment status, and medical
services received outside of capitated services and associated cost.
All interfaces must follow the specifications frequencies and
formats listed in the Interface Manual.
10.9.2 HMO must obtain access to the TexMedNet BBS. Some file transfers and
E-mail will be handled through this mechanism.
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10.9.3 Provider Network File. The provider file shall supply Network
Provider data between an HMO and TDH. This process shall accomplish
the following:
(1) Provide identifying information for all managed care
providers (e.g. name, address, etc.).
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(2) Maintain history on provider enrollment/disenrollment.
(3) Identify PCP capacity.
(4) Identify any restrictions (e.g., age, sex, etc.).
(5) Identify number and types of specialty providers available to
Members.
10.9.4 Eligibility/Enrollment Interface. The enrollment interface must
provide eligibility data between TDH and HMOs.
(1) Provides benefit package data to HMOs in accordance with
capitated services.
|
(2) Provides PCP assignments.
(3) Provides Member eligibility status data.
(4) Provides Member demographics data.
(5) Provides HMOs with cross-reference data to identify duplicate
Members.
10.9.5 Encounter/Claim Data Interface. The encounter/claim interface must
transfer paid fee-for-service claims data to HMOs and capitated
services/encounters from HMO, including adjustments. This file will
include all service types, such as inpatient, outpatient, and
medical services. TDH's agent will process claims for non-capitated
services.
10.9.6 Capitation Interface. The capitation interface must transfer premium
and Member information to HMO. This interface's basic purpose is to
balance HMO's Members and premium amount.
10.9.7 TPR Interface. TDH will provide a data file that contains
information on enrollees that have other insurance. Because Medicaid
is the payer of last resort, all services and encounters should be
billed to the other insurance companies for recovery. TDH will also
provide an insurance company data file which contains the name and
address of each insurance company.
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10.9.8 TDH will provide a diagnosis file which will give the code and
description of each diagnosis permitted by TDH.
10.9.9 TDH will provide a procedure file which contains the procedures
which must be used on all claims and encounters. This file contains
HCPCS, revenue, and ICD9-CM surgical procedure codes.
10.9.10 TDH will provide a provider file that contains the Medicaid provider
numbers, and the provider's names and addresses. The provider number
authorized by TDH must be submitted on all claims, encounters, and
network provider submissions.
10.10 TPR SUBSYSTEM
-------------
HMO's third party recovery system must have the following
capabilities and capacities:
(1) Identify, store, and use other health coverage available to
eligible Members or third party liability (TPL) including
type of coverage and effective dates.
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(2) Provide changes in information to TDH as specified by TDH.
(3) Receive TPL data from TDH to be used in claim and encounter
processing.
10.11 YEAR 2000 (Y2K COMPLIANCE)
--------------------------
10.11.1 HMO must take all appropriate measures to make all software which
will record, store, and process and present calendar dates falling
on or after January 1, 2000, perform in the same manner and with the
same functionality, data integrity and performance, as dates falling
on or before December 31, 1999, at no added cost to TDH. HMO must
take all appropriate measures to ensure that the software will not
lose, alter or destroy records containing dates falling on or after
January 1, 2000. HMO will ensure that all software will interface
and operate with all TDH, or its agent's, data systems which
exchange data, including but not limited to historical and archived
data. In addition, HMO guarantees that the year 2000 leap year
calculations will be accommodated and will not result in software,
firmware or hardware failures.
10.11.2 TDH and all subcontracted entities are required by state and federal
law to meet Y2K compliance standards. Failure of TDH or a TDH
contractor other than an HMO to meet Y2K compliance standards which
results in an HMO's failure to meet the Y2K requirements of this
contract is a defense against a declaration of default under this
contract.
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM
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11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM
----------------------------------------
HMO must develop, maintain, and operate a Quality Improvement
Program (QIP) system which complies with federal regulations
relating to Quality Assurance systems, found at 42 C.F.R. ss.434.34.
The system must meet the Standards for Quality Improvement Programs
contained in Appendix A.
11.2 WRITTEN QIP PLAN
----------------
HMO must have an approved plan describing its Quality Improvement
Plan (QIP), including how HMO will accomplish the activities
pertaining to each Standard (I-XVI) in Appendix A on file with TDH.
11.3 QIP SUBCONTRACTING
------------------
If HMO subcontracts any of the essential functions or reporting
requirements of QIP to another entity, HMO must submit a list - 60
days prior to the Implementation Date - of the Subcontractors and a
description of how the Subcontractors will meet the standards and
reporting requirements of this contract. HMO must notify TDH no
later than 90 days prior to terminating any subcontract affecting a
major performance function of this contract (see Article 3.2.1.1).
11.4 ACCREDITATION
-------------
If HMO is accredited by an external accrediting agency,
documentation of accreditation must be provided to TDH. HMO must
provide TDH with their accreditation status upon request.
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP
--------------------------------------
HMO must integrate behavioral health into its QIP system and include
a systematic and on-going process for monitoring, evaluating, and
improving the quality and appropriateness of behavioral health
services provided to Members. HMO's QIP must enable HMO to collect
data, monitor and evaluate for improvements to physical health
outcomes resulting from behavioral health integration into the
overall care of the Member.
11.6 QIP REPORTING REQUIREMENTS
--------------------------
HMO must meet all of the QIP Reporting Requirements contained in
Article XII.
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ARTICLE XII REPORTING REQUIREMENTS
12.1 FINANCIAL REPORTS
-----------------
12.1.1 Monthly MCFS Report. HMO must submit the Managed Care
Financial-Statistical Report (MCFS) included in Appendix I as may be
modified or amended by TDH. The report must be submitted to TDH 30
days after the end of each state fiscal year quarter and must
include complete financial and statistical information for each
month. The MCFS Report must be submitted for each claims processing
Subcontractor in accordance with this Article. HMO must incorporate
financial and statistical data received by its provider networks
(IPAs, ANHCs, Limited Provider Networks) in its MCFS Report.
12.1.2 For any given month in which an HMO has a net loss of $200,000 or
more for the contract period to date, HMO must submit an MCFS Report
for that month by the 30th day after the end of the reporting month.
The MCFS Report must be completed in accordance with the
Instructions for Completion of the Managed Care
Financial-Statistical Report developed by TDH.
12.1.3 An HMO must submit monthly reports for each of the first 6 months
following the Implementation Date of the contract between TDH and
HMO. If the cumulative net loss for the contract period to date
after the 6th month is less than $200,000, HMO may submit quarterly
reports in accordance with the above provisions unless the condition
in Article 12.1.2 exists, in which case monthly reports must be
submitted.
12.1.4 Annual MCFS Report. HMO must file two annual Managed Care
Financial-Statistical Reports. The first annual report must reflect
expenses incurred through the 90th day after the end of the contract
year. The first annual report must be filed on or before the 120th
day after the end of the contract year. The second annual report
must reflect data completed through the 334th day after the end of
the contract year and must be filed on or before the 365th day
following the end of the contract year.
12.1.5 Administrative expenses reported in the monthly and annual MCFS
Reports must be reported in accordance with Appendix L, Cost
Principles for Administrative Expenses. Indirect administrative
expenses must be based on an allocation methodology for Medicaid
managed care activities and services that is developed or approved
by TDH.
12.1.6 Affiliated Related Parties Report. HMO must submit an Affiliated
Related Parties Report to TDH not later than 90 days prior to the
Implementation Date. The report must contain the following
information:
12.1.6.1 A listing of all Affiliates/Related parties; and
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12.1.6.2 A schedule of all transactions with Affiliates which, under the
provisions of this Contract, will be allowable as expenses in either
Line 4 or Line 5 of Part I of the MCFS Report for services provided
to HMO by the Affiliates for the prior approval of TDH. Include
financial terms, a detailed description of the services to be
provided, and an estimated amount which will be incurred by HMO for
such services during the Contract period.
12.1.7 Annual Audited Financial Report. On or before June 30th of each
year, HMO must submit to TDH a copy of the annual audited financial
report filed with TDI.
12.1.8 Form HCFA-1513. HMO must file an updated Form HCFA-1513 regarding
control, ownership, or affiliation of HMO 30 days prior to the end
of the contract year. An updated Form HCFA-1513 must also be filed
within 30 days of any change in control, ownership, or affiliation
of HMO. Forms may be obtained from TDH.
12.1.9 Section 1318 Financial Disclosure Report. HMO must file an updated
HCFA Public Health Service (PHS) "Section 1318 Financial Disclosure
Report" within 30 days from the end of the contract year and within
30 days of entering into, renewing, or terminating a relationship
with an affiliated party. These forms may be obtained from TDH.
12.1.10 TDI Examination Report. HMO must furnish a copy of any TDI
Examination Report no later than 10 days after receipt of the final
report from TDI.
12.1.11 IBNR Plan. HMO must furnish a written IBNR Plan to manage
incurred-but-not-reported (IBNR) expenses, and a description of the
method of insuring against insolvency, including information on all
existing or proposed insurance policies. The Plan must include the
methodology for estimating IBNR. The plan and description must be
submitted to TDH not later than 60 days prior to the Implementation
Date.
12.1.12 Third Party Recovery (TPR) Reports. HMO must file quarterly Third
Party Recovery (TPR) Reports in accordance with the format developed
by TDH. TPR reports must include total dollars recovered from third
party payers for services to HMO's Members for each month and the
total dollars recovered through coordination of benefits,
subrogation, and worker's compensation.
12.1.13 Pre-implementation Expenses. Pre-implementation expenses (i.e.,
expenses incurred between the effective date of the contract and the
Implementation Date) will be allowable expenses as determined by
TDH. Such expenses must be reported for each month in which the
expenses were incurred. Such expenses shall be counted toward the
calculation of total expenses for the first contract year for
purposes of calculating the net income before taxes. Such expenses
shall not be allocated or amortized beyond the first contract year.
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12.1.14 Each report required under this Article must be mailed to: Bureau of
Managed Care; Texas Dept. of Health; 1100 West 49th Street; Austin,
TX 78756-3168. HMO must also mail a copy of the reports, except for
items in Article 12.1.7 and Article 12.1.10 to Texas Department of
Insurance, Mail Code 106-3A, HMO Division, Attention: HMO Division
Director, P.O. Box 149104, Austin, TX 78714-9104.
12.2 STATISTICAL REPORTS
-------------------
12.2.1 HMO must electronically file the following monthly reports: (1)
encounter; (2) encounter detail; (3) institutional; (4)
institutional detail; and (5) claims detail for cost-reimbursed
services filed, if any, with HMO. Monthly reports must be submitted
by the 10th day following the end of the reporting month. Encounter
data must include the data elements, follow the format, and use the
transmission method specified by TDH.
12.2.2 Monthly reports must include current month encounter data and
encounter data adjustments to the previous month's data.
12.2.3 Data quality standards will be developed jointly by HMO and TDH.
Encounter data must meet or exceed data quality standards. Data that
does not meet quality standards must be corrected and returned
within the period specified by TDH. Original records must be made
available to validate all encounter data.
12.2.4 HMO must require providers to submit claims and encounter data to
HMO no later than 95 days after the date services are provided.
12.2.5 HMO must use the procedure codes, diagnosis codes and other codes
contained in the most recent edition of the Texas Medicaid Provider
Procedures Manual and as otherwise provided by TDH. Exceptions or
additional codes must be submitted for approval before HMO uses the
codes.
12.2.6 HMO must use Medicaid provider numbers on all encounter and
fee-for-service claim submissions. Any exceptions must be approved
by TDH.
12.2.7 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission of
encounter data to TDH.
12.2.8 Claims Aging and Summary Report. HMO must submit the monthly Claims
Aging and Summary Reports identified in the Texas Managed Care
Claims Manual by the third Monday of the month following the
reporting period. The reports must be submitted to TDH in a format
using the instructions specified by TDH.
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12.2.9 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO must
file preliminary and final Medicaid Disproportionate Share Hospital
(DSH) reports, required by TDH to identify and reimburse hospitals
that qualify for Medicaid DSH funds. The preliminary and final DSH
reports must include the data elements and be submitted in the form
and format specified by TDH. The preliminary DSH reports are due on
or before June 1 of the year following the state fiscal year for
which data is being reported. The final DSH reports are due on or
before August 15 of the year following the state fiscal year for
which data is being reported.
12.3 ARBITRATION/LITIGATION CLAIMS REPORT
------------------------------------
HMO must submit a monthly Arbitration/Litigation Claims Report in a
form developed by TDH identifying all provider complaints that are
in arbitration or litigation. The report is to be submitted by the
last working day of the month following the reporting month.
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS
-------------------------------------
HMO must submit a Summary Report of Provider Complaints. The report
must include a copy of any complaints submitted to either HMO or an
arbitrator, or both. The report must also include a copy of the
provider complaint log. HMO must also report complaints submitted to
its subcontracted risk groups (e.g., IPAs). The report must be
submitted on or before the fifteenth of the month following the end
of the state fiscal quarter using a form specified by TDH.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.1 Provider Network Change Reports. HMO must submit a monthly report
summarizing changes in HMO's provider network. The report must be
submitted to TDH in the format specified by TDH. HMO will submit the
report thirty (30) days following the end of the reporting month.
The report must identify provider additions and deletions and the
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impact to the following:
(1) geographic access for the Members;
(2) cultural and linguistic services;
(3) the ethnic composition of providers;
(4) the number of Members assigned to PCPs;
(5) the change in the ration of providers with pediatric experience to the number of Members under age 21; and
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(6) number of specialists serving as PCPs.
12.5.1.1 Provider Termination Report. HMO must also include in the Provider
Network Change Report information identifying any providers who
cease to participate in HMO's provider network, either voluntarily
or involuntarily. The information must include the provider's name,
Medicaid number, the reason for the provider's termination, and
whether the termination was voluntary or involuntary.
12.5.2 PCP Network and Capacity Report. HMO must submit electronically to
Enrollment Broker a weekly report that shows changes to the PCP
network and PCP capacity.
12.6 MEMBER COMPLAINTS
-----------------
HMO must submit a quarterly summary report of Member complaints. The
report must show the date upon which each complaint was filed, a
summary of the facts surrounding the complaint, the date of the
resolution of the complaint, an explanation of the procedure
followed, and the outcome of the complaint process. It should also
include the Member Advocate Report (see Article 8.6.17). The
complaint report format must be approved by TDH and submitted in
hard copy and diskette. HMO must also report complaints submitted to
its subcontracted risk groups (e.g., IPAs).
12.7 FRAUDULENT PRACTICES
--------------------
HMO must report all fraud and abuse enforcement actions or
investigations taken against HMO and/or any of its Subcontractors or
providers by any state or federal agency for fraud or abuse under
Title XVIII or Title XIX of the Social Security Act or any State law
or regulation and any basis upon which an action for fraud or abuse
may be brought by a State or federal agency as soon as such
information comes to the attention of HMO.
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH
--------------------------------------------------
Several behavioral health (BH) utilization management reports are
required on a quarterly basis and are due 120 days following the end
of the State fiscal quarter and are to be provided in hard copy and
in a format specified by TDH. Refer to Appendix H for the
standardized reporting format for each report and detailed
instructions for obtaining the specific data required in the report.
The BH utilization report instructions may periodically be updated
by TDH to include new codes and to facilitate clear communication to
the health plan.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are required on
a quarterly basis and are due no later than 120 days after the end
of the State Fiscal Quarter and are
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to be provided in hard copy and in a format specified by TDH. Refer
to Appendix J for the standardized reporting format for each report
and detailed instructions for obtaining specific data required in
the report. The PH Utilization Management Report instructions may
periodically be updated by TDH to include new codes and to
facilitate clear communication to the health plan.
12.10 QUALITY IMPROVEMENT REPORTS
---------------------------
12.10.1 HMO must conduct health Focused Studies in pregnancy and prenatal
care, THSteps, asthma (or another chronic disease as required by
TDH). HMO will be required to conduct no more than two Focused
Studies, as instructed by TDH. These studies shall be conducted and
data collected using criteria and methods developed by TDH. The
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following format shall be utilized:
(1) Executive Summary.
(2) Definition of the population and health areas of concern.
(3) Clinical guidelines/standards, quality indicators, and audit tools.
(4) Sources of information and data collection methodology.
(5) Data analysis and information/results.
(6) Corrective actions if any, implementation, and follow-up
plans including monitoring, assessment of effectiveness, and
methods for provider feedback.
12.10.2 Annual Focused Studies. Focused Studies on well child, asthma, and
Attention Deficit Hyperactivity Disorder (ADHD) must be submitted to
TDH no later than March 1, 2001. Focused Studies on pregnancy and
substance abuse in pregnancy must be submitted no later than June 1,
2001.
12.10.3 Annual QIP Summary Report. An annual QIP summary report must be
conducted yearly based on the state fiscal year. The annual QIP
summary report must be submitted by March 31 of each year. This
report must provide summary information on HMO's QIP system and
include the following:
(1) Executive summary of QIP - include results of all QI reports
and interventions.
(2) Activities pertaining to each standard (I through XVI) in
Appendix A. Report must list each standard.
(3) Methodologies for collecting, assessing data and measuring
outcomes.
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(4) Tracking and monitoring quality of care.
(5) Role of health professionals in QIP review.
(6) Methodology for collection data and providing feedback to provider and staff.
(7) Outcomes and/or action plan.
12.10.4 Provider Medical Record Audit and Report. HMO must submit
semi-annual provider medical record audits that conform to the
medical record requirements fond in Standard XII in Appendix A. The
audits are alternated between PCPs and behavioral health providers.
12.10.4.1 HMO must submit a written plan for correcting the noncompliance
(<80% compliance rate) and a time line for achieving compliance if
audits reveal non-compliance with TDH medical records standards.
12.10.5 HMO must submit to TDH semi-annual reports on its subspecialty
network in a format provided by TDH.
12.11 HUB REPORTS
-----------
HMO must submit quarterly reports documenting HMO's HUB program
efforts and accomplishments. The report must include a narrative
description of HMO's program efforts and a financial report
reflecting payments made to HUB. HMO must use the format included in
Appendix B for HUB quarterly reports.
12.12 THSTEPS REPORTS
---------------
Minimum reporting requirements. HMO must submit, at a minimum, 80%
of all THSteps checkups on HCFA 1500 claim forms as part of the
encounter file submission to the TDH Claims Administrator no later
than 120 days after the date of service. Failure to comply with
these minimum reporting requirements will result in Article XVIII
sanctions and money damages.
12.13 REPORTING REQUIREMENTS DUE DATES
--------------------------------
TDH will provide HMO with a matrix of all contract deliverables,
with due dates. The due dates for deliverables may be changed by
TDH. TDH will provide HMO with 30 days notice of a change in a
deliverable due date.
ARTICLE XIII PAYMENT PROVISIONS
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13.1 CAPITATION AMOUNTS
------------------
13.1.1 TDH will pay HMO monthly premiums calculated by multiplying the
number of Member months by Member risk group times the monthly
capitation amount by Member risk group. HMO and network providers
are prohibited from billing or collecting any amount from a Member
for health care services covered by this contract, in which case the
Member must be informed of such costs prior to providing non-covered
services.
13.1.2 Delivery Supplemental Payment (DSP). DSP is a payment process to HMO
is which the costs of delivery were extracted from the Standard
Capitation Payment Methodology of other risk groups and included in
a one-time payment for each delivery. TDH has submitted the DSP
methodology to HCFA for approval. The monthly capitation amounts
established for each risk group in the El Paso Service Area using
the DSP methodology will apply only if the methodology is approved
by HCFA, and the methodology is implemented for all HMOs in all
existing service areas by contract. The rates for December 1, 1999,
through August 31, 2000, and related contract provisions will be
provided upon approval by HCFA and will supersede the Standard
Methodology of Article 13.1.3.
13.1.3 Standard Methodology. If the DSP methodology is not approved by
HCFA, the monthly capitation amounts established for each risk group
in the El Paso Service Area using the methodology set forth in
Article 13.1.1, without the DSP, are as follows:
-------------------------------------------------------------
Risk Group December 1, 1999 - August 31,
2000
-------------------------------------------------------------
TANF Adults $150.27
-------------------------------------------------------------
TANF Children $ 66.93
-------------------------------------------------------------
Expansion Children $ 83.66
-------------------------------------------------------------
Newborns $317.14
-------------------------------------------------------------
Federal Mandate Children $ 43.21
-------------------------------------------------------------
CHIP $ 85.35
-------------------------------------------------------------
Pregnant Women $531.65
-------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
-------------------------------------------------------------
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13.1.4 The monthly capitation amounts for each risk group for state fiscal
year 2001 will be provided to HMO by September 1, 2000, based on the
most recent available traditional Medicaid cost data for the
contracted risk groups, trended forward and discounted.
13.1.5 The monthly premium payment to HMO is based on monthly enrollments
adjusted to reflect money damages set out in Article 18.8 and
adjustments to premiums in Article 13.5.
13.1.6 The monthly premium payments will be made to HMO no later than the
10th working day of the month for which premiums are paid. HMO must
accept payment for premiums by direct deposit into an HMO account.
13.1.7 Payment of monthly capitation amounts is subject to availability of
appropriations. If appropriations are not available to pay the full
monthly capitation amounts, TDH will equitably adjust capitation
amounts for all participating HMOs, and reduce scope of service
requirements as appropriate.
13.2 EXPERIENCE REBATE TO STATE
--------------------------
13.2.1 HMO must pay to TDH an experience rebate equal to fifty percent
(50%) of the excess of allowable HMO STAR revenues over allowable
HMO STAR expenses as measured by any positive amount on Line 7 of
"Part 1: Financial Summary, All Coverage Groups Combined" of the
annual Managed Care Financial-Statistical Report set forth in
Appendix I, as audited and confirmed by TDH.
13.2.2 There will be two settlements for payment of the experience rebate.
The first settlement shall equal 100 percent of the experience
rebate as derived from Line 7 of Part I (Net Income Before Taxes) of
the annual Managed Care Financial-Statistical (MCFS) Report. The
second settlement shall be an adjustment to the first settlement and
shall be paid to TDH if the adjustment is a payment from HMO to TDH.
TDH or its agent may audit or review the MCFS reports. If TDH
determines that corrections to the MCFS reports are required, based
on a TDH audit/review or other documentation acceptable to TDH, to
determine an adjustment to the amount of the second settlement, then
final adjustment shall be made within two years from the date that
HMO submits the second annual MCFS report. HMO must pay the first
and second settlements on the due dates for the first and second
MCFS reports respectively as identified in Article 12.1.4. TDH may
adjust the experience rebate if TDH determines HMO has paid
affiliates amounts for goods or services that are higher than the
fair market value of the goods and services in the service area.
Fair market value may be based on the amount HMO pays a
non-affiliate(s) or the amount
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another HMO pays for the same or similar service in the service
area. TDH will have final authority in assessing the amount of the
experience rebate.
13.3 PERFORMANCE OBJECTIVES
----------------------
13.3.1 Preventive Health Performance Objectives are contained in this
contract at Appendix K. HMO must accomplish the performance
objectives or a designated percentage in order to be eligible for
payment of financial incentives. Performance objectives are subject
to change. TDH will consult with HMO prior to revising performance
objectives.
13.3.2 HMO will receive credit for accomplishing a performance objective
upon receipt of accurate encounter data required under Articles 10.5
and 12.2 of this contract and/or a Detailed Data Element Report from
HMO with report format as determined by TDH and aggregate data
reported by HMO in accordance with a report format as determined by
TDH (Performance Objectives Report). Accuracy and completeness of
the detailed data element report and the aggregate data Performance
Objectives Report will be determined by TDH through a TDH audit of
HMO claims processing system. If TDH determines that the Detailed
Data Element Report and Performance Objectives Report are
sufficiently supported by the results of the TDH audit, the payment
of financial incentives will be made to HMO. Conversely, if the
audit results do not support the reports as determined by TDH, HMO
will not receive payment of the financial incentive. TDH may conduct
provider chart reviews to validate the accuracy of the claims data
related to HMO accomplishment of performance objectives. If the
results of the chart review do not support HMO claims system data or
HMO Detailed Data Element Report and the Performance Objectives
Report, TDH may recoup payments made to HMO for performance
objectives incentives.
13.3.3 HMO will also receive credit for performance objectives performed by
other organizations if a network primary care provider or HMO
retains documentation from the performing organization which
satisfies the requirements contained in Appendix K of this contract.
13.3.4 HMO will receive performance objective bonuses for accomplishing the
following percentages of performance objectives:
-------------------------------------------------------------------
Percent of Each Performance Percent of Performance Objective
Objective Accomplished Allocations Paid to HMO
-------------------------------------------------------------------
60% to 65% 20%
-------------------------------------------------------------------
65% to 70% 30%
-------------------------------------------------------------------
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-------------------------------------------------------------------
70% to 75% 40%
-------------------------------------------------------------------
75% to 80% 50%
-------------------------------------------------------------------
80% to 85% 60%
-------------------------------------------------------------------
85% to 90% 70%
-------------------------------------------------------------------
90% to 95% 80%
-------------------------------------------------------------------
95% to 100% 90%
-------------------------------------------------------------------
100% 100%
-------------------------------------------------------------------
13.3.5 HMO must submit the Detailed Data Element Report and the Performance
Objectives Report regardless of whether or not HMO intends to claim
payment of performance objective bonuses.
13.4 PAYMENT OF PERFORMANCE OBJECTIVE BONUSES
----------------------------------------
13.4.1 Payment of performance objective bonuses is contingent upon
availability of appropriations. If appropriations are not available
to pay performance objective bonuses as set out below, TDH will
equitably distribute all available funds to each HMO that has
accomplished the performance objectives.
13.4.2 In addition to the capitation amounts set forth in Article 13.1.2, a
performance premium of two dollars ($2.00) per Member month will be
allocated by TDH for the accomplishment of performance objectives.
13.4.3 HMO must submit the Performance Objectives Report and the Detailed
Data Element Report as referenced in Article 13.3.2, no later than
150 days after the end of each State fiscal year. Performance
premiums will be paid to HMO no later than 120 days after the State
receives and validates the data contained in each required
Performance Objectives Report.
13.4.4 The performance objective allocation for HMO shall be assigned to
each performance objective, described in Appendix K, in accordance
with the following percentages:
--------------------------------------------------------
EPSDT SCREENS Percent of Performance
Objective Incentive Fund
--------------------------------------------------------
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El Paso Service Area HMO Contract
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--------------------------------------------------------
IMMUNIZATIONS Percent of Performance
Objective Incentive Fund
--------------------------------------------------------
6. <12 months 6%
--------------------------------------------------------
7. 12 to 24 months 3%
--------------------------------------------------------
--------------------------------------------------------
ADULT ANNUAL VISITS Percent of Performance
Objective Incentive Fund
--------------------------------------------------------
8. Adult Annual Visits 2%
--------------------------------------------------------
--------------------------------------------------------
PREGNANCY VISITS Percent of Performance
Objective Incentive Fund
--------------------------------------------------------
9. Initial Prenatal Exam 6%
--------------------------------------------------------
10. Visits by Gestational Age 10%
--------------------------------------------------------
11. Postpartum Visit 5%
--------------------------------------------------------
13.5 ADJUSTMENTS TO PREMIUM
----------------------
13.5.1 TDH may recoup premiums paid to HMO in error. Error may be either
human or machine error on the part of TDH or an agent or contractor
of TDH. TDH may recoup premiums paid to HMO if a Member is enrolled
into HMO in error, and HMO provided no covered services to Member
for the period of time for which premium was paid. If services were
provided to Member as a result of the error, recoupment will not be
made.
13.5.2 TDH may recoup premium paid to HMO if a Member for whom premium is
paid moves outside the United States, and HMO has not provided
covered services to the Member for the period of time for which
premium has been paid. TDH will not recoup premium if HMO has
provided covered services to the Member during the period of time
for which premium has been paid.
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13.5.3 TDH may recoup premium paid to HMO if a Member for whom premium is
paid dies before the first day of the month for which premium is
paid.
13.5.4 TDH may recoup or adjust premium paid to HMO for a Member if the
Member's eligibility status or program type is changed, corrected as
a result of error, or is retroactively adjusted.
13.5.5 Recoupment or adjustment or premium under Articles 13.5.1 through
13.5.4 may be appealed using the TDH dispute resolution process.
13.5.6 TDH may adjust premiums for all Members within an eligibility status
or program type if adjustment is required by reductions in
appropriations and/or if a benefit or category of benefits is
excluded or included as a covered service. Adjustment must be made
by amendment as required by Article 15.2. Adjustment to premium
under this subsection may not be appealed using the TDH dispute
resolution process.
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT
14.1 ELIGIBILITY DETERMINATION
-------------------------
14.1.1 TDH will identify Medicaid recipients who are eligible for
participation in the STAR program using the eligibility status
described below.
14.1.2 Individuals in the following categories who reside in any part of
the Service Area must enroll in one of the health plans providing
services in the Service Areas:
14.1.2.1 TANF ADULTS - Individuals age 21 and over who are eligible for the
TANF program. This category may also include some pregnant women.
14.1.2.2 TANF CHILDREN - Individuals under age 21 who are eligible for the
TANF program. This category may also include some pregnant women and
some children less than one year of age.
14.1.2.3 PREGNANT WOMEN receiving Medical Assistance Only (MAO) - Pregnant
women whose families' income is below 185% of the Federal Poverty
Level (FPL).
14.1.2.4 NEWBORN (MAO) - Children under age one born to Medicaid-eligible
mothers.
14.1.2.5 EXPANSION CHILDREN (MAO) - Children under age 18, ineligible for
TANF because of the applied income of their stepparents or
grandparents.
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14.1.2.6 EXPANSION CHILDREN (MAO) - Children under age 1 whose families'
income is below 185% FPL.
14.1.2.7 EXPANSION CHILDREN MAO - Children age 1-5 whose families' income is
at or below 133% of FPL.
14.1.2.8 FEDERAL MANDATE CHILDREN (MAO) - Children under age 19 born before
October 10, 1983, whose families' income is below the TANF income
limit.
14.1.2.9 CHIP PHASE I - Children's Health Insurance Program Phase I (Federal
Mandate Acceleration) Children under age nineteen (19) born before
October 1, 1983, with family income below 100% Federal Poverty
Income Level.
14.1.3 The following individuals are eligible for the STAR Program and are
not required to enroll in a health plan but have the option to
enroll in a plan. HMO will be required to accept enrollment of those
recipients from this group who elect to enroll in HMO.
14.1.3.1 DISABLED AND BLIND INDIVIDUALS WITHOUT MEDICARE - Recipients with
Supplemental Security Income (SSI) benefits who are not eligible for
Medicare may elect to participate in the STAR program on a voluntary
basis.
14.1.3.2 Certain blind or disabled individuals who lose SSI eligibility
because of Title II income and who are not eligible for Medicare.
14.1.3.3 Non-institutionalized blind and disabled people enrolled in 1915(c)
waivers whose income is above SSI limits, whose eligibility was
determined using the institutional cap (300%), and who are not
Medicare eligible. (TDH will be phasing out this population during
FY 99.)
14.1.3.4 Members of the Tigua Indian tribe.
14.1.4 During the period after which the Medicaid eligibility determination
has been made but prior to enrollment in HMO, Members will be
enrolled under the traditional Medicaid program. All Medicaid
eligible recipients will remain in the fee-for-service Medicaid
program until enrolled in or assigned to an HMO.
14.2 ENROLLMENT
----------
14.2.1 TDH has the right and responsibility to enroll and disenroll
eligible individuals into the STAR program. TDH will conduct
continuous open enrollment for Medicaid recipients and HMO must
accept all persons who chose to enroll as Members in HMO or who are
assigned as Members in HMO by TDH, without regard to the Member's
health status or any other factor.
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14.2.2 All enrollments are subject to the accessibility and availability
limitations and restrictions contained in the ss.1915(b) waiver
obtained by TDH. TDH has the authority to limit enrollment into HMO
if the number and distance limitations are exceeded.
14.2.3 TDH makes no guarantees or representations to HMO regarding the
number of eligible Medicaid recipients who will ultimately be
enrolled as STAR Members of HMO.
14.2.4 HMO must cooperate and participate in all TDH sponsored and
announced enrollment activities. HMO must have a representative at
all TDH enrollment activities unless an exception is given by TDH.
The representative must comply with HMO's cultural and linguistic
competency plan (see Cultural and Linguistic requirements in Article
8.9). HMO must provide marketing materials, HMO pamphlets, Member
Handbooks, a list of network providers, HMO's linguistic and
cultural capabilities and other information requested or required by
TDH or its Enrollment Broker to assist potential Members in making
informed choices.
14.2.5 TDH will provide HMO with at least 10 days written notice of all TDH
planned activities. Failure to participate in, or send a
representative to a TDH sponsored enrollment activity is a default
of the terms of the contract. Default may be excused if HMO can show
that TDH failed to provide the required notice, or if HMO's absence
is excused by TDH.
14.3 DISENROLLMENT
-------------
14.3.1 HMO has a limited right to request a Member be disenrolled from HMO
without the Member's consent. TDH must approve any HMO request for
disenrollment of a Member for cause. Disenrollment of a Member may
be permitted under the following circumstances:
14.3.1.1 Member misuses or loans Member's HMO membership card to another
person to obtain services.
14.3.1.2 Member is disruptive, unruly, threatening or uncooperative to the
extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain new
Members, and Member's behavior is not caused by a physical or
behavioral health condition.
14.3.1.3 Member steadfastly refuses to comply with managed care restrictions
(e.g., repeatedly using emergency room in combination with refusing
to allow HMO to treat the underlying medical condition).
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14.3.2 HMO must take reasonable measures to correct Member behavior prior
to requesting disenrollment. Reasonable measures may include
providing education and counseling regarding the offensive acts or
behaviors.
14.3.3 HMO must notify the Member of HMO's decision to disenroll the Member
if all reasonable measures have failed to remedy the problem.
14.3.4 If the Member disagrees with the decision to disenroll the Member
from HMO, HMO must notify the Member of the availability of the
complaint procedure and TDH's Fair Hearing process.
14.3.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN THE
MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH ARE
MEDICALLY NECESSARY FOR TREATMENT OF A MEMBER'S CONDITION.
14.4 AUTOMATIC RE-ENROLLMENT
-----------------------
14.4.1 Members who are disenrolled because they are temporarily ineligible
for Medicaid will be automatically re-enrolled into the same health
plan. Temporary loss of eligibility is defined as a period of 3
months or less.
14.4.2 HMO must inform its Members of the automatic re-enrollment
procedure. Automatic re-enrollment must be included in the Member
Handbook (see Article 8.2.1).
14.5 ENROLLMENT REPORTS
------------------
14.5.1 TDH will provide HMO enrollment reports listing all STAR Members who
have enrolled in or were assigned to HMO during the initial
enrollment period.
14.5.2 TDH will provide monthly HMO Enrollment Reports to HMO on or before
the first of the month.
14.5.3 TDH will provide Member verification to HMO and network providers
through telephone verification or TexMedNet.
ARTICLE XV GENERAL PROVISIONS
15.1 INDEPENDENT CONTRACTOR
----------------------
HMO, its agents, employees, network providers, and Subcontractors
are independent contractors and do not perform services under this
contract as employees or agents
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of TDH. HMO is given express, limited authority to exercise the
State's right of recovery as provided in Article 4.9.
15.2 AMENDMENT
---------
15.2.1 This contract must be amended by TDH if amendment is required to
comply with changes in state or federal laws, rules, or regulations.
15.2.2 TDH and HMO may amend this contract if reductions in funding or
appropriations make full performance by either party impracticable
or impossible, and amendment could provide a reasonable alternative
to termination. If HMO does not agree to the amendment, contract may
be terminated under Article XVIII.
15.2.3 This contract must be amended if either party discovers a material
omission of a negotiated or required term, which is essential to the
successful performance or maintaining compliance with the terms of
the contract. The party discovering the omission must notify the
other party of the omission in writing as soon as possible after
discovery. If there is a disagreement regarding whether the omission
was intended to be a term of the contract, the parties must submit
the dispute to dispute resolution under Article 15.8.
15.2.4 This contract may be amended by mutual agreement at any time.
15.2.5 All amendments to this contract must be in writing and signed by
both parties.
15.2.6 No agreement shall be used to amend this contract unless it is made
a part of this contract by specific reference, and is numbered
sequentially by order of its adoption.
15.3 LAW, JURISDICTION AND VENUE
---------------------------
Venue and jurisdiction shall be in the state and federal district
courts of Travis County, Texas. The laws of the State of Texas shall
be applied in all matters of state law.
15.4 NON-WAIVER
----------
Failure to enforce any provision or breach shall not be taken by
either party as a waiver of the right to enforce the provision or
breach in the future.
15.5 SEVERABILITY
------------
Any part of this contract which is found to be unenforceable,
invalid, void, or illegal shall be severed from the contract. The
remainder of the contract shall be effective.
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15.6 ASSIGNMENT
----------
This contract was awarded to HMO based on HMO's qualifications to
perform personal and professional services. HMO cannot assign this
contract without the written consent of TDI and TDH. This provision
does not prevent HMO from subcontracting duties and responsibilities
to qualified Subcontractors.
15.7 NON-EXCLUSIVE
-------------
This contract is a non-exclusive agreement. Either party may
contract with other entities for similar services in the same
service area.
15.8 DISPUTE RESOLUTION
------------------
All dispute arising under this contract shall be resolved through
TDH's dispute resolution procedures, except where a remedy is
provided for through TDH's administrative rules or processes. All
administrative remedies must be exhausted prior to other methods of
dispute resolution.
15.9 DOCUMENTS CONSTITUTING CONTRACT
-------------------------------
This contract includes this document and all amendments and
appendices to this document, the Request for Application, the
Application submitted in response to the Request for Application,
the Texas Medicaid Provider Procedures Manual and Texas Medicaid
Bulletins addressed to HMOs, contract interpretation memoranda
issued by TDH for this contract, and the federal waiver granting TDH
authority to contract with HMO. If any conflict in provisions
between these documents occurs, the terms of this contract and any
amendments shall prevail. The documents listed above constitute the
entire contract between the parties.
15.10 FORCE MAJEURE
-------------
TDH and HMO are excused from performing the duties and obligations
under this contract for any period that they are prevented from
performing their services as a result of a catastrophic occurrence,
or natural disaster, clearly beyond the control of either party,
including but not limited to an act of war, but excluding labor
disputes.
15.11 NOTICES
-------
Notice may be given by any means which provides for verification of
receipt. All notices to TDH shall be addressed to Bureau Chief,
Texas Department of Health, Bureau of Managed Care, 1100 W. 49th
Street, Austin, TX 78756-3168, with a copy to the Contract
Administrator. Notices to HMO shall be addressed to CEO/President,
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15.12 SURVIVAL
----- --------
The provisions of this contract which relate to the obligations of
HMO to maintain records and reports shall survive the expiration or
earlier termination of this contract for a period not to exceed six
(6) years unless another period may be required by record retention
policies of the State of Texas or HCFA.
ARTICLE XVI DEFAULT
16.1 FAILURE TO PROVIDE COVERED SERVICES
-----------------------------------
If a member requests a Fair Hearing before TDH because HMO has
failed to provide a covered service, the Bureau of Managed Care may
recommend to the hearing officer that a determination be made to
impose sanctions upon HMO, in addition to any remedy entered for an
on behalf of the Member. The recommendation to impose sanctions must
include an amount of recommended sanctions. The amount of the
sanction may be in any amount of not less than $1,000 or more than
$25,000 depending upon the nature of the denial and the hardship or
health threat that the denial placed upon the Member.
16.2 FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION
---------------------------------------------
Failure of HMO to perform an administrative function is a default
under this contract. Administrative functions are any requirements
under this contract which are not direct delivery of health or
health-related services, including claims payments, encounter data
submissions, filing any reports when due, providing or producing
records upon request or failing to enter into contracts or
implementing procedures necessary to carry out contract obligations.
16.3 HMO CERTIFICATE OF AUTHORITY
----------------------------
Termination or suspension of HMO's TDI Certificate of Authority or
any adverse action taken by TDI which TDH determines will affect the
ability of HMO to provide health care services to Members is a
default under this contract.
16.4 INSOLVENCY
----------
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El Paso Service Area HMO Contract
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Failure of HMO to maintain protection against fiscal insolvency as
required under State or federal law or incapacity of HMO to meet its
financial obligations as they come due is a default under this
contract.
16.5 FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS
---------------------------------------------------
Failure of HMO to comply with the federal requirements for Medicare
or Medicaid standards, requirements, or prohibitions, is a default
under this contract.
16.6 EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID
----------------------------------------------------
16.6.1 Exclusion of HMO or any of the managing employees or persons with an
ownership interest whose disclosure is required by ss. 1124(a) of
the Social Security Act (the Act), under the provisions of
ss. 1128(a) and/or (b) of the Act, is a default of this contract.
16.6.2 Exclusion of any provider or Subcontractor or any of the managing
employees or persons with an ownership interest of the provider or
Subcontractor whose disclosure is required by ss. 1124(a) of the
Act, under the provisions of ss. 1128(a) and/or (b) of the Act, is a
default of this contract if the exclusion will materially affect
HMO's performance under this contract.
16.7 MISREPRESENTATION, FRAUD OR ABUSE
---------------------------------
Misrepresentation or fraud under the provisions of Article 4.8 of
this contract is a default under this contract.
Misrepresentation or fraud and abuse under any state or federal law,
regulation or rule or under the common law of the State of Texas, is
a default under this contract.
16.8 FAILURE TO MAKE CAPITATION PAYMENTS
-----------------------------------
Failure by TDH to make capitation payments when due is a default
under this contract.
16.9 FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS AND SUBCONTRACTORS
----------------------------------------------------------------
Failure to make timely and appropriate payments to network providers
and Subcontractors is a default under this contract. Withholding or
recouping capitation payments as allowed or required under other
Articles of this contract is not a default under this contract.
16.10 FAILURE TO DEMONSTRATE THE ABILITY TO PERFORM CONTRACT FUNCTIONS
----------------------------------------------------------------
El Paso Service Area HMO Contract
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Failure to pass any of the mandatory system or delivery function
requirements of Readiness Review outlined in Article I is a default
under the contract.
16.11 FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF CONTRACTORS OR
----------------------------------------------------------------
NETWORK PROVIDERS
-----------------
16.11.1 Failure of HMO to audit, monitor, supervise, or enforce functions
delegated by contract to another entity which results in a default
under this contract or constitutes a violation of state or federal
laws, rules, or regulations is a default under this contract.
16.11.2 Failure of HMO to properly credential, conduct reasonable
utilization review, and quality monitoring is a default under this
contract.
16.11.3 Failure of HMO to require providers and contractors to provide
timely and accurate encounter, financial, statistical and
utilization data is a default under this contract.
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT
17.1 TDH will provide HMO with written notice of default under this
contract. The written notice must contain the following information:
17.1.1 A clear and concise statement of the circumstances or conditions
which constitute a default under this contract;
17.1.2 The contract provision(s) under which default is being declared;
17.1.3 A clear and concise statement of how and/or whether the default may
be cured;
17.1.4 A clear and concise statement of the time period HMO will be allowed
to cure the default;
17.1.5 The amount of damages or the types of sanctions which are being or
will be imposed pending cure, and the date they began or will begin;
17.1.6 Whether any part of the damages or sanctions may be recouped from or
passed through to an individual or entity who is or may be
responsible for the act or omission for which default is declared;
and
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17.1.7 Whether failure to cure within the given time period will result in
additional damages or sanctions and/or referral for investigation or
action by another agency, and/or termination of the contract.
17.2 Sanctions and damages for acts or omissions which are events of
default under Article XVI will be imposed from the date of
occurrence until cured, unless otherwise stated in the notice of
default.
ARTICLE XVIII REMEDIES AND SANCTIONS
18.1 TERMINATION BY TDH
------------------
18.1.1 TDH may terminate this contract if:
18.1.1.1 HMO repeatedly fails or refuses to provide services and perform
administrative functions under this contract after notice and
opportunity to cure;
18.1.1.2 HMO materially defaults under any of the provisions of Article XVI;
18.1.1.3 Federal or state funds for the Medicaid program are no longer
available; or
18.1.1.4 TDH has a reasonable belief that HMO has placed the health or
welfare of Members in jeopardy.
18.1.2 TDH must give HMO 30 days written notice of intent to terminate this
contract if termination is a result of HMO's failure to cure a
default under Article XVIII. If termination is a result of Article
18.1.1.3, TDH will provide HMO with reasonable notice under the
circumstances. If termination is a result of Article 18.1.1.4, TDH
will give the notice required under the provisions of TDH's formal
hearing procedures in 25 Texas Administrative Code ss. 1.2.1.
Notice may be given by any means that gives verification of receipt.
The termination date will be calculated as 30 days following the
date that HMO receives the notice of intent to terminate.
18.1.3 HMO must continue to perform services until the last day of the
month following 30 days from the date of receipt of notice if the
termination is a result of Articles 18.1.1.1, 18.1.1.2, or 18.1.1.3.
TDH may prohibit HMO's further performance of services under the
contract if the reason for termination is Article 18.1.1.4.
18.1.4 HMO may appeal the termination of this contract under the provisions
of the Texas Human Resources Code,ss.32.034.
18.1.5 The remedies available to TDH set forth above are in addition to all
other remedies available to TDH by law or in equity, are joint and
several, and may be exercised
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concurrently or consecutively. Exercise of any remedy in whole or in
part shall not limit TDH in exercising all or part of any remaining
remedies.
18.2 TERMINATION BY HMO
------------------
18.2.1 HMO may terminate this contract if TDH fails to pay HMO as required
under Article XIII or otherwise materially defaults in its duties
and responsibilities under this contract. Retaining premium,
recoupment, sanctions, or penalties which are allowed under this
contract or which result from HMO's failure to perform or a default
under the terms of the contract are not cause for termination.
18.2.2 HMO must give TDH 60 days written notice of intent to terminate this
contract. Notice may be given by any means that gives verification
of receipt. The termination date will be calculated as the last day
of the month following 60 days from the date the notice of intent to
termination is received by TDH.
18.2.3 TDH must be given 30 days to pay all amounts due. If TDH pays all
amounts then due, HMO cannot terminate the contract under this
Article.
18.3 TERMINATION BY MUTUAL CONSENT
-----------------------------
This contract may be terminated at any time by mutual consent of
both HMO and TDH.
18.4 DUTIES UPON TERMINATION OF CONTRACTING PARTIES
----------------------------------------------
When termination of the contract occurs, TDH and HMO must meet the
following obligations:
18.4.1 If the contract is terminated unilaterally by TDH, because of
failure of HMO to perform duties and obligations required by the
contract or by mutual consent with termination initiated by HMO:
18.4.1.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services; and
18.4.1.2 HMO is responsible for all expenses related to giving notice to
Members.
18.4.2 If the contract is terminated for any reason other than those
included in Article 18.4.1:
18.4.2.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services; and
18.4.2.2 TDH is responsible for all expenses related to giving notice to
Members.
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18.5 STATE AND FEDERAL DAMAGES, PENALTIES AND SANCTIONS
--------------------------------------------------
18.5.1 TDH may recommend to HCFA that sanctions be taken against HMO for
violations of 42 C.F.R. 434.67(a), relating to sanctions against
HMOs with risk comprehensive contracts. These violations are also
defaults of Article XVI of this contract. If HCFA determines that
HMO has violated one or more of these provisions of the regulations
and determines that federal payments will be withheld, TDH will deny
and withhold payments for new enrollees of HMO.
18.5.1.1 HMO must be given notice and opportunity to appeal a decision of TDH
and HCFA as required in 42 C.F.R. 434.67(c) and (d).
18.5.1.2 HMO may be subject to civil money penalties under the provisions of
42 C.F.R. 1003 in addition to or in place of withholding payments
under Article 18.5.1.
18.5.2 HMO may be subject to damages and penalties under the Human
Resources Code, ss.32.039, relating to damages and penalties for
events of default under this contract and violations of the
provisions of ss.32.039.
18.5.2.1 HMO will be given notice of the default or violation upon which
damages or penalties are based and an opportunity to appeal under
the provision of ss.32.039.
18.6 SUSPENSION OF NEW ENROLLMENT
----------------------------
18.6.1 TDH may suspend new enrollment into HMO for any default under this
contract.
18.6.2 TDH must give HMO 30 days written notice of intent to suspend new
enrollment other than for defaults which are imposed as a result of
fraud and abuse or imminent danger to the health or safety of
Members. Notice may be given by any means which gives verification
of receipt. The suspension date will be calculated as 30 days
following the date that HMO receives the notice of intent to suspend
new enrollment. During the 30-day notice period, HMO will be given
an opportunity to cure the defaults, if a cure is possible.
18.6.3 TDH may immediately suspend new enrollment into HMO for a default
declared as a result of fraud and abuse or imminent danger to the
health and safety of Members or investigation, prosecution, or
suspension by an agency charged with the duty of investigation of
state and federal laws.
18.6.4 The suspension of new enrollment may be for any duration, up to the
termination date of the contract. TDH will impose a duration of
suspension based upon the type and severity of the default and HMO's
ability to cure the default.
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18.7 TDH INITIATED DISENROLLMENT
---------------------------
18.7.1 TDH may initiate disenrollment of a Member or reduce the total
number of Members enrolled in HMO through disenrollment if HMO fails
to provide covered services to a Member or if TDH determines that
HMO has a pattern or practice of failing to provide covered services
to Members.
18.7.2 TDH must give HMO 30 days written notice of intent to initiate
disenrollment of a Member. Notice may be given by any means which
gives verification of receipt. The TDH initiated disenrollment date
will be calculated as 30 days following the date that HMO receives
the notice of intent to disenroll. HMO will not be given an
opportunity to cure the default unless the right to cure is
expressly authorized in the notice letter.
18.7.3 TDH may continue to reduce the number of Members enrolled in HMO
until HMO demonstrates that it can and/or will provide covered
services as required under this contract.
18.8 LIQUIDATED MONEY DAMAGES - WITHHOLDING PAYMENTS
-----------------------------------------------
18.8.1 TDH may impose liquidated money damages in addition to other
remedies and sanctions provided under this contract. If money
damages are imposed, TDH may either reduce the amount of any monthly
premium payments otherwise due to HMO by the amount of the damages
or require direct payment. Money damages, which are withheld, are
forfeited and will not be subsequently paid to HMO upon compliance
or cure of default, unless a determination is made after appeal that
the damages should not have been imposed.
18.8.2 Failure to perform or comply with an administrative function. TDH
may impose and withhold the following money damages for each event
of default:
18.8.2.1 Failure to file or filing incomplete or inaccurate annual or
quarterly reports will result in money damages of not less than
$3,000.00 or more than $11,000.00 for every month from the month the
report is due until submitted in the form and format required by
TDH. These money damages apply separately to each report.
18.8.2.2 Failure to produce or provide records and information requested by
TDH, or an entity acting on behalf of TDH, or an agency authorized
by statute or law to require production of records at the time and
place the records were required or requested, will result in money
damages of not less than $1,000.00 per day for each day the records
are not produced as required by the requesting entity or agency if
the requesting entity or agency is conducting an investigation or
audit relating to fraud or abuse, and $500.00 per day for each day
records are not produced if the requesting entity or agency is
conducting routine audits or monitoring activities.
El Paso Service Area HMO Contract
5/14/99
|
18.8.2.3 Failure to file or filing incomplete or inaccurate encounter data
will result in money damages of not less than $10,000 nor more than
$25,000 for each month HMO fails to submit encounter data in the
form and format required by TDH. These damages are in addition to
the damages contained in Article 18.8.2.1. TDH will use the
encounter data validation methodology established by TDH to
determine the numbers of encounter data and the number of days for
which damages will be assessed.
18.8.2.4 Failing or refusing to cooperate with TDH, an entity acting on
behalf of TDH, or an agency authorized by statute or law to require
the cooperation of HMO, in carrying out an administrative,
investigative, or prosecutorial function of the Medicaid program,
will result in money damages of not less than $ 1,000.00 per day for
each day HMO fails to cooperate.
18.8.3 Failure to provide or pay for covered services. TDH will impose and
withhold the following money damages for each event of default:
18.8.3.1 Failure to provide mandatory and/or benchmarked services. If HMO
fails to deliver services or to report encounter data documenting
the delivery of services which are mandated by federal law or for
which a benchmark is established under this contract, TDH will
impose money damages. Damages imposed will be not less than $10,000
nor more than $25,000 for each month that HMO substantially fails to
deliver the services and/or report the encounter data documenting
the delivery of the services, or fails to meet the established
benchmark. These damages are in addition to failure to document or
submit encounter data and reports required elsewhere in this
contract.
18.8.3.2 Failure to provide a covered service requested or required by a
Member. If a Member requests a Fair Hearing before TDH because HMO
has substantially failed to provide a covered service, the Bureau of
Managed Care may make a recommendation to the hearing officer
conducting the Fair Hearing to impose sanctions upon HMO. The
recommendation of the Bureau of Managed Care to impose sanctions
must include an amount of recommended sanctions, and the
justification for entering a finding that HMO has substantially
failed to deliver the requested service. The amount of the sanction
may be in any amount of not less than $ 1,000.00 nor more than
$25,000.00 depending upon the nature of the denial and the hardship
or health threat that the denial placed upon the Member.
18.8.3.3 If TDH has provided or paid for a service requested by a Member
pending a decision after a Fair Hearing and the decision is adverse
to HMO, TDH will withhold the entire amount TDH paid for the service
in addition to the damages under Article 18.8.3.
18.8.3.4 Failure to enter into a required or mandatory contract or failure to
contract for or arrange to have all services required under this
contract provided will result in money
El Paso Service Area HMO Contract
5/14/99
|
damages of $1,000.00 per day that HMO either fails to negotiate in
good faith to enter into the required contract or fails to arrange
to have required services delivered.
18.8.3.5 Failing to pay providers claims for covered services. TDH will
impose and withhold the following money damages for each event of
default. These money damages are in addition to the interest HMO is
required to pay to providers under the provisions of Article
7.2.7.10.
18.8.3.6 If TDH determines that HMO has failed to pay a provider for a claim
or claims for which provider should have been paid, TDH will impose
money damages of $2 per day for each day the claim is not paid from
the date the claim should have been paid (calculated as 30 days from
the date a clean claim was received by HMO) until the claim is paid
by HMO.
18.8.3.7 If TDH determines that HMO has failed to pay a capitation amount to
a provider who has contracted with IB40 to provide services on a
capitated basis, TDH will impose money damages of $10 per day, per
Member for whom the capitation is not paid, from the date on which
the payment was due until the capitation amount is paid.
18.8.4 TDH must provide HMO with 7 days written notice of intent to
withhold capitation amounts under this Article 18.8. The notice will
include the reason for the withhold, the amount that TDH intends to
withhold, and the facts and detail sufficient for HMO to determine
the accuracy of the proposed withhold. Notice may be given by any
means that gives verification of receipt.
18.8.5 HMO may appeal the decision of TDH to withhold capitation amounts by
filing a written response to the notice clearly stating the reason
that HMO disputes the withhold and include any supporting
documentation with the response. HMO must file the appeal within 15
days from HMO's receipt of the notice. Filing an appeal will not
pend or suspend the withhold.
18.8.6 HMO and TDH must attempt to informally resolve the dispute. If HMO
and TDH are unable to informally resolve the dispute, HMO must
notify the Bureau Chief of Managed Care that they are unable to come
to an agreement. The Bureau Chief will refer the dispute to the
Associate Commissioner for Health Care Financing who will appoint a
committee to review the dispute under TDH's dispute resolution
procedures. The decision of the dispute resolution committee will be
the final administrative decision by TDH.
18.9 FORFEITURE OF TDI PERFORMANCE BOND
----------------------------------
TDH may require forfeiture of all or a portion of the face amount of
the TDI performance bond if TDH determines that an event of default
has occurred. Partial payment of the face amount shall reduce the
total bond amount available pro rata.
El Paso Service Area HMO Contract
5/14/99
|
ARTICLE XIX TERM
19.1 The effective date of this contract is _________________________,
1999. This contract will terminate on August 31, 2001, unless
terminated earlier as provided elsewhere in this contract.
19.2 The contract will not automatically renew beyond the initial term.
TDH will notify HMO not less than 60 days before the end of the
contract term of its intent not to renew the contract.
19.3 If HMO does not intend to renew beyond the initial term of the
contract, HMO must submit a written Notice of Intent Not to Renew,
along with a transition plan for its existing Members, not less than
90 days before the end of the contract term in Article 19.1. HMO
will be responsible for paying all costs of providing notice to
Members and any additional costs incurred by TDH to ensure that
Members are reassigned to other plans without interruption of
services.
19.4 HMO may enter into a new contract to continue to provide managed
care services under the following terms and conditions:
19.4.1 HMO submits a written Request to Continue Operations Without
Interruption not less than 90 days before the end of the contract
term in Article 19.1;
19.4.2 HMO submits to a Readiness Review by TDH under the provisions of
Gov. Code ss.533.107;
19.4.3 HMO cures any past defaults or deficiencies or submits a written
plan documenting how past defaults or deficiencies will be avoided
under a future contract, and the written plan is approved by TDH;
and
19.4.4 HMO submits all reports and encounter data currently due or past due
under this contract before the termination date of this contract.
19.4.5 If HMO submits a Request to Continue Operations Without Interruption
but either fails to meet the requirements of this Article or decides
prior to execution of a renewal contract not to continue operations,
HMO will be responsible for paying all costs of providing notice to
Members and any additional costs incurred by TDH to ensure that
Members are reassigned to other plans without interruption of
services. HMO must continue to provide services to Members for 60
days or until all Members have been reassigned to other plans.
El Paso Service Area HMO Contract
5/14/99
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19.5 This contract may be extended on a temporary basis if the
requirements of this section have been initiated but the
requirements of Article 19.3 have not been completed and/or
evaluated by TDH before the termination date.
19.6 Non-renewal of this contract is not a contract termination for
purposes of appeal rights under the Human Resources Code ss.32.034.
SIGNED twenty-second day of July , 1999.
----------------------------- -----------------------------
TEXAS DEPARTMENT OF HEALTH Name of HMO
BY: /s/ WILLIAM R. ARCHER, III BY: /s/ Michael McKinney
------------------------------ -----------------------------
William R. Archer III, M.D. Printed Name: Michael D. McKinney M.D.
Commissioner of Health -----------------------------
Title: President/CEO
-----------------------------
Approved as to Form: /s/ Illegible
Office of General Counsel
El Paso Service Area HMO Contract
5/14/99
|
TDH Doc. No. 7427705425*2001-01A
AMENDMENT NO. 1
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. I is entered into between the Texas Department of Health and Superior Health Plan, Inc., to amend the Contract for Services between the Texas Department of Health and HMO in the El Paso Service Area, dated July 22, 1999. The effective date of this amendment is January 1, 2000. All other contract provisions remain in full force and effect.
The Parties agree to amend the Contract as follows:
1. Article XIII is amended by deleting the stricken language and adding the bold and italicized language to Article 13.1.2 as follows:
13.1.2 Delivery Supplemental Payment (DSP). DSP is a payment
process to HMO in which the costs of delivery were extracted
from the Standard Capitation Payment Methodology of other
risk groups and included in a one-time payment for each
delivery. TDH has submitted the delivery supplemental
payment methodology to HCFA for approval. The monthly
capitation amounts established for each risk group in the El
Paso Service Area using the DSP methodology will apply only
if the methodology is approved by HCFA, and the methodology
is implemented for all HMOs in all existing service areas by
contract. [DELETED] The monthly capitation amounts for
January 1, 2000, through August 31, 2000, using the DSP
methodology, and the DSP amounts are listed below. These
amounts are effective January 1, 2000. The monthly
capitation amounts established for each risk group in the El
Paso Service Area using the Standard methodology (listed in
Article 13.1.3) will apply if the DSP methodology is not
approved by HCFA.
El Paso SDA
1
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-----------------------------------------------------------------
Risk Group Monthly Capitation Amounts
January 1, 2000 August 31,
2000
-----------------------------------------------------------------
TANF Adults $123.17
-----------------------------------------------------------------
TANF Children > 12 $ 60.59
Months of Age
-----------------------------------------------------------------
Expansion Children > 12 $ 83.90
Months of Age
-----------------------------------------------------------------
Newborns < 12 Months of $299.20
Age
-----------------------------------------------------------------
TANF Children < 12 $299.20
Months of Age
-----------------------------------------------------------------
Expansion Children < 12 $299.20
Months of Age
-----------------------------------------------------------------
Federal Mandate Children $ 46.44
-----------------------------------------------------------------
CHIP Phase I $ 68.70
-----------------------------------------------------------------
Pregnant Women $206.20
-----------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
-----------------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy
supplemental payment for each delivery shall be paid to HMO
as provided below in the following amount: $2,885.39.
13.1.2.1 HMO will receive a DSP for each live or still birth. The
one-time payment is made regardless of whether there is a
single or multiple births at time of delivery. A delivery is
the birth of a liveborn infant, regardless of the duration
of the pregnancy, or a stillborn (fetal death) infant of 20
weeks or more gestation. A delivery does not include a
spontaneous or induced abortion, regardless of the duration
of the pregnancy.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women,
TANF Adults, TANF Children > 12 months, Expansion Children >
12 months, Federal Mandate Children, or CHIP risk group, HMO
will be paid the monthly capitation amount identified in
Article 13.1.2 for each month of classification, plus the
DSP amount identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes
the data elements specified by TDH. TDH will consult with
contracted
El Paso SDA
2
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HMOs prior to revising the report data elements and
requirements. The reports must be submitted to TDH in the
format and time specified by TDH. The report must include
only unduplicated deliveries. The report must include only
deliveries for which HMO has made a payment for the
delivery, to either a hospital or other provider. No DSP
will be made for deliveries which are not reported by HMO to
TDH within 210 days after the date of delivery, or within 30
days from the date of discharge from the hospital for the
stay related to the delivery, whichever is later.
13.1.2.4 HMO must maintain complete claims and adjudication
disposition documentation, including paid and denied amounts
for each delivery. HMO must submit the documentation to TDH
within five (5) days from the date of a TDH request for
documents.
13.1.2.5 The DSP will be made by TDH to HMO within twenty (20) state
working days after receiving an accurate report from HMO.
13.1.2.6 All infants of age equal to or less than twelve months
(Newborns) in the TANF Children, Expansion Children, and
Newborns risk groups will be capitated at the Newborns
classification capitation amount in Article 13.1.2.
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AGREED AND SIGNED by an authorized representative of the parties on 1/3/2000.
TEXAS DEPARTMENT OF HEALTH Superior Health Plan, Inc.
By: /s/ WILLIAM R. ARCHER, III By: /s/ MICHAEL D. MCKINNEY
------------------------------ ------------------------------
William R. Archer, III., M.D. Michael D. McKinney, M.D.
Commissioner of Health CEO
|
Approved as to Form:
/s/ L. WIEGMAN 1-3-2000 -------------------------------- Office of General Counsel |
TDH Doc. No. 7427705425*2001-01A El Paso SDA
DR# 026906
DOC# 7427705425*2001 O1B
AMENDMENT NO 3
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 3 is entered into between the Texas Department of Health (TDH) and Superior Health Plan, Inc. (HMO). to amend the Contract for Services between the Texas Department of Health and HMO in the El Paso Service Area. dated September 1, 1999. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect.
1. Article II is amended by adding the bold and italicized language
DEFINITIONS
Call coverage means arrangements made by a facility or an attending physician with all appropriate level of health care provider who agrees to be available oil all as-needed basis to provide medically appropriate services for routine/high risk/or emergency medical conditions or emergency Behavioral Health condition that present without being scheduled at the facility or when the attending physician is unavailable.
[DELETED] Enrollment report/enrollment file means the daily or monthly list of Medicaid recipients who are enrolled with an HMO as Members oil the day or for the month the report is issued.
2. Article VI is amended by adding the bold and italicized language and deleting the stricken language.
6.9 PERINATAL SERVICES
------------------
6.9.2 HMO must have a perinatal health care system in place that. at a
minimum, provides the following services:
6.9.3 HMO must have a process to expedite scheduling a prenatal
appointment for all obstetrical exam for a TP40 Member no later than
two weeks after receiving the daily enrollment file verifying
enrollment of the Member into the HMO.
6.9.3.4 HM0 must have procedures in place to contact and assist a
pregnant/delivering Member in selecting a PCP for her baby either
before the birth or as soon as the
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baby is born. [DELETED]
6.9.4.5 HMO must provide inpatient care and professional services related to
labor and delivery for its pregnant/delivering Members and neonatal
care for its newborn Members (see Article 14.3.1) at the time of
delivery and for up to 48 hours following an uncomplicated vaginal
delivery and 96 hours following an uncomplicated Caesarian delivery.
[DELETED]
6.9.5.1 HMO must reimburse in-network providers, out-of-network providers,
and specialty physicians who are providing call coverage, routine,
and/or specialty consultation services for the period of time
covered in Article 6.9.5.
6.9.5.1.1 HMO must adjudicate provider claims for services provided to a
newborn Member in accordance with TDH's claims processing
requirements using the proxy ID number or State-issued Medicaid ID
number (see Article 4.10). HMO cannot deny claims based on provider
non-use of State-issued Medicaid ID number for a newborn Member.
HMO must accept provider claims for newborn services based on
mother's name and/or Medicaid ID number with accommodations for
multiple births. as specified by the HMO.
6.9.5.2 HMO cannot require prior authorization or PCP assignment to
adjudicate newborn claims for the period of time covered by 6.9.5
[DELETED]
6.9.6 [DELETED] HMO may require prior authorization requests for hospital
or professional services provided beyond the time limits in Article
6.9.5. HMO must respond to these prior authorization within the
requirements of 28 TAC ss.19.1710 - 19.1712
|
and Article 21.58a of the Texas Insurance Code.
6.9.6.1 HMO must notify providers involved in the care of
pregnant/delivering women and newborns (including out-of-network
providers and hospitals) regarding the HMO's prior authorization
requirements.
6.9.6.2 HMO cannot require a prior authorization for services provided to a
pregnant/delivering Member or newborn Member for a medical condition
which requires emergency services, regardless of when the emergency
condition arises (see Article 6.5.6).
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3. Article VIII is amended by adding the bold and italicized language and deleting the stricken language
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from the date the HMO receives the monthly
Enrollment File from the Enrollment Broker. If the 5th day falls on
a weekend or state holiday, the ID Card must be issued by the
following working day. The ID Card must include, at a minimum, the
following Member's name, Member's Medicaid number, either the issue
date of the card or effective date of the PCP assignment: PCP's
name, address, and telephone number; name of HMO; name of IPA to
which the Member's PCP belongs, if applicable; the 24-hour, seven
(7) day a week toll-free telephone number operated by HMO; the
toll-free number for behavioral health care services; and directions
for what to do in an emergency. The ID Card must be reissued if the
Member reports a lost card, there is a Member name change, if Member
requests a new PCP, or for any other reason which results in a
change to the information disclosed on the ID Card.
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4. Article XII is amended by adding the bold and italicized language and deleting the stricken language.
12.2 STATISTICAL REPORTS
-------------------
12.2.4 HMO cannot submit newborn encounters to TDH until the State-issued
Medicaid ID number is received for a newborn. HMO must match the
proxy ID number issued by the HMO with the State-issued Medicaid ID
number prior to submission of encounters to TDH and submit the
encounter in accordance to the HMO Encounter Data Submission Manual.
The encounter must include the State issued Medicaid ID number.
Exceptions to the 45-day deadline will be granted in cases in which
the Medicaid ID number is not available for a newborn Member.
12.2.5 HMO must require providers to submit claims and encounter data to
HMO no later than 95 days after the date services are provided.
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12.2.6 HMO must use the procedure codes. diagnosis codes and other codes
contained in the most recent edition of the Texas Medicaid Provider
Procedures Manual and as otherwise provided by TDH. Exceptions or
additional codes must be submitted for approval before HMO uses the
codes.
12.2.7 HMO Must Use its TDH-specified identification numbers on all
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encounter data Submissions. Please refer to the TDH Encounter Data Submission Manual for further specifications.
12.2.8 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission of
encounter data to TDH.
12.2.9 All Claims Summary Report. HMO must submit the "All Claims Summary
Report" identified in the Texas Managed Care Claims Manual as a
contract year-to-date report. The report must be submitted quarterly
by the last day of the month following the reporting period. The
reports must be submitted to TDH in a format specified by TDH.
12.2.10 Medicaid Disproportionate Share Hospital (DSH) Report HMO must file
preliminarv and final Medicaid Disproportionate Share Hospital (DSH)
reports. required by TDH to identify and reimburse hospitals that
qualify for Medicaid DSH funds. The preliminary and final DSH
reports must include the data elements and be submitted in the form
and format specified b TDH. The preliminary DSH reports are due on
or before June 1 of the year following the state fiscal year for
which data is being reported. The final DSH reports are due on or
before August 15 of the year following the state fiscal year for
which data is being reported.
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5. Article XIII is amended by adding the bold and italicized language.
13.5 NEWBORN AND PREGNANT WOMEN PAYMENT PROVISIONS
---------------------------------------------
13.5.1 Newborns born to Medicaid eligible mothers who are enrolled in HMO
are enrolled into HMO for 90 days following the date of birth.
13.5.1.1 The mother of the newborn Member may change her newborn to another
HMO during the first 90 days following the date of birth, but may
only do so through TDH Customer Services.
13.5.2 MAXIMUS will provide HMO with a daily enrollment file which will
list all newborns who have received State-issued Medicaid ID
numbers. This file will include the Medicaid eligible mother's
Medicaid ID number to allow the HMO to link the newborn's
State-issued Medicaid ID numbers with the proxy ID number. TDH will
guarantee capitation payments to HMO for all newborns who appear on
the MAXIMUS daily enrollment file as HMO Members for each month the
newborn is enrolled in the HMO.
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13.5.3 All non-TP45 newborns whose mothers are HMO Members at the time of
the birth of the newborn will be retroactively enrolled into the HMO
through a manual process by DHS Data Control.
13.5.4 Newborns who do not appear on the MAXIMUS daily enrollment file
before the end of the sixth month following the date of birth will
not be retroactively enrolled into the HMO TDH will manually
reconcile payment to the HMO for services provided from the date of
birth for TP45 and all other eligibility categories of newborns.
Payment will cover services rendered from the effective date of the
proxy ID number when first issued by the HMO regardless of plan
assignment at the time the State-issued Medicaid ID number is
received.
13.5.5 MAXIMUS will provide HMO with a daily enrollment file which will
list all TP40. Members who have received State-issued Medicaid ID
numbers. TDH will guarantee capitation payments to HMO for all TP40
Members who appear on the MAXIMUS daily enrollment file as HMO
Members for each month the TP40 Member enrollment is effective.
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6. Article XIV is amended by adding the bold and italicized language.
14.3 NEWBORN ENROLLMENT
------------------
The HMO is responsible for newborns who are born to mothers who are
enrolled in HMO on the date of birth as follows:
14.3.1 Newborns are presumed Medicaid eligible and enrolled in the mother's
HMO for at least 90 days from the date of birth.
14.3.1.1 A mother of a newborn Member may change plans for her newborn during
the first 90 days by contacting TDH Customer Services. TDH will
notify HMO of newborn plan changes made by a mother when the change
is made by TDH Customer Services.
14.3.2 HMO must establish and implement written policies and procedures to
require professional and facility providers to notify HMOs of a
birth of a newborn to a Member at the time of delivery.
14.3.2.1 HMO must create a proxy ID number in the HMO's
Enrollment/Eligibility and claims processing systems. HMO proxy ID
number effective date is equal to the date of birth of the newborn.
14.3.2.2 HMO must match the proxy ID number and the State-issued Medicaid ID
number once the State-issued Medicaid ID number is received.
14.3.2.3 HMO must submit a Form 7484A to DHS Data Control requesting DHS Data
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Control to research DHS's files for a Medicaid ID number if HMO has
not received a State-issued Medicaid ID number for a newborn within
30 days froM the date of birth. If DHS finds that no Medicaid ID
number has been issued to the newborn. DHS Data Control will issue
the Medicaid ID number using the information provided on the Form
7484A.
14.3.3 Newborns certified Medicaid eligible after the end of the sixth
month following the date of birth will not be retroactively enrolled
to an HMO, but will be enrolled in Medicaid fee-for-service TDH will
manually reconcile payment to the HMO for services provided from
the date of birth for all Medicaid eligible newborns as described in
Article 13.5.4.
14.4 DISENROLLMENT
-------------
14.4.1 HMO has a limited right to request a Member be disenrolled from HMO
without the Member's consent. TDH must approve any HMO request for
disenrollment of a Member for cause. Disenrollment of a Member may
be permitted under the following circumstances:
14.4.1.1 Member misuses or loans Member's HMO membership card to another
person to obtain services.
14.4.1.2 Member is disruptive, unruly, threatening or uncooperative to the
extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain new
Members, and Member's behavior is not caused by a physical or
behavioral health condition.
14.4.1.3 Member steadfastly refuses to comply with managed care restrictions
(e.g. repeatedly using emergency room in combination with refusing
to allow HMO to treat the underlying medical condition).
14.4.2.1 HMO must take reasonable measures to correct Member behavior prior
to requesting disenrollment. Reasonable measures may include
providing education and counseling regarding the offensive acts or
behaviors.
14.4.3 HMO must notify the Member of HMO's decision to disenroll the Member
if all reasonable measures have failed to remedy the problem.
14.4.4 If the Member disagrees with the decision to disenroll the Member
from HMO, HMO
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must notify the Member of the availability of the complaint
procedure and TDH's Fair Hearing process.
14.4.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN THE
MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH ARE
MEDICALLY NECESSARY FOR TREATMENT OF A MEMBER'S CONDITION.
14.5 AUTOMATIC RE-ENROLLMENT
-----------------------
14.5.1 Members who are disenrolled because they are temporarily ineligible
for Medicaid will be automatically re-enrolled Into the same health
plan. Temporary loss of eligibility is defined as a period of 6
months or less.
14.5.2 HMO must inform its Members of the automatic re-enrollment
procedure. Automatic re-enrollment must be included in the Member
Handbook (see Article 8.2.1).
14.6 ENROLLMENT REPORTS
------------------
14.6.1 TDH will provide HMO enrollment reports listing all STAR Members who
have enrolled in or were assigned to HMO during the initial
enrollment period.
14.6.2 TDH will provide monthly HMO Enrollment Reports to HMO on or before
the first or the month.
14.6.3 TDH will provide Member verification to HMO and network providers
through telephone verification or TexMedNet.
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AGREED AND SIGNED by an authorized representative of the parties on _______________ 2000.
TEXAS DEPARTMENT OF HEALTH Superior Health Plan, Inc.
By: /s/ WILLIAM R. ARCHER, III By: /s/ MICHAEL D. MCKINNEY
----------------------------- ------------------------------
William R. Archer, III, M.D. Michael D. McKinney,
Commissioner of Health President and CEO
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Approved as to Form:
TDH Doc. # 7427705425* 2001-01G
AMENDMENT NO. 4
TO THE
1999 and CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 4 is entered into between the Texas Department of Health (TDH) and Superior Health Plan, Inc. (HMO) in El Paso Service Area, to amend the 1999 Contract for Services between the Texas Department of Health and HMO. The effective date of this Amendment is the date TDH signs this Amendment. All other contract provisions remain in full force and effect. The parties agree to amend the Contract as follows:
1. The previous amendment to this contract identified as Amendment No. 3 to the 1999 TDH/HMO contract should be Amendment No. 2, and the previous amendment to this contract identified as Amendment No. 5 should be Amendment No. 3. This mistake is corrected by this amendment and Amendment No. 3 will be renumbered as Amendment No. 2, and Amendment No. 5 will be renumbered as Amendment No. 3 from this point forward.
Article XII is amended to read as follows:
Behavioral health (BH) utilization management reports are required on a semi-annual basis. Refer to Appendix H for the standardized
reporting format for each report and detailed instructions for
obtaining the specific data required in the report.
12.8.1 In addition, data files are due to TDH or its designee no later than
the fifth working day following the end of each month. See
Utilization Data Transfer Encounter Submission Manual for submission
instructions. The BH utilization report and data file submission
instructions may periodically be updated by TDH to facilitate clear
communication to the health plans.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are required on
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a semi-annual basis. Refer to Appendix J for the standardized reporting format for each report and detailed instructions for obtaining the specific data required in the report.
12.9.1 In addition, data files are due to TDH or its designee no later than
the fifth working day following the end of each month. See
Utilization Data Transfer Encounter Submission Manual for submission
instructions. The PH utilization report and data file submission
instructions may periodically be updated by TDH to facilitate clear
communication to the health plans.
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AGREED AND SIGNED by an authorized representative of the parties on August 2, 2001.
TEXAS DEPARTMENT OF HEALTH Superior Health Plan, Inc.
By: /s/ CHARLES E. BELL, M.D. By: /s/ MICHAEL D. MCKINNEY
------------------------------ ------------------------------
Charles E. Bell M.D. Michael D. McKinney, M.D.
Executive Deputy Commissioner of Health President
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Approved as to Form:
/s/ MARY ANN GLAVIN ------------------------------ Office of General Counsel |
TDH Doc. # 7427705425* 2001-01G
TDH Doc. # 7427705425* 2001-01F
AMENDMENT No. 5
TO THE 1999
CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 5 is entered into between the Texas Department of Health (TDH) and Superior Health Plan, Inc. (HMO), to amend the 1999 Contract for services between the Texas Department of Health and HMO. The effective date of this Amendment is the date TDH signs this Amendment. All other contract provisions remain in full force and effect. The Parties agree to amend the Contract as follows:
1. Article I
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT
1.2 HMO is a corporation with authority to conduct business in the State
of Texas and has a certificate of authority from the Texas
department of Insurance (TDI) to operate as Health Maintenance
Organization (HMO) under Chapter 20A of the Insurance Code. HMO is
in compliance with all TDI rules and laws that apply to HMOs. HMO
has been authorized to enter into this contract by its Board of
Directors or other governing body. HMO is an authorized vendor with
TDH and has received a Vendor Identification number from the Texas
Comptroller of Public Accounts.
2. Article II
ARTICLE II DEFINITIONS
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Adverse determination means a determination by a utilization review agent that the health care services furnished, or proposed to be furnished to a patient, are not medically necessary or not appropriate.
Appeal of adverse determination means the formal process by which a utilization review agent offers a mechanism to address adverse determinations as defined in Article 21.58A, Texas Insurance Code.
Auxiliary aids and services includes qualified interpreters or other effective methods of making aurally delivered materials understood by persons with hearing impairments; and, taped texts, large print, Braille, or other effective methods to ensure visually delivered materials are available to individuals with visual impairments. Auxiliary aids and services also includes effective methods to ensure that materials (delivered both aurally and visually) are available to those with cognitive or other disabilities affecting communication.
1 May 31, 2001
Benchmark means a target or standard based on historical data or an objective/goal.
Capitation means a method of payment in which HMO or a health care provider receives a fixed amount of money each month for each enrolled Member, regardless of the amount of covered services used by the enrolled Member.
Community Resource Coordination Groups (CRCGs) means a statewide system of local interagency groups, including both public and private providers, which coordinate services for "multi-need" children and youth. CRCGs develop individual service plans for children and adolescents whose needs can be met only through interagency cooperation. CRCGs address complex needs in a model that promotes local decision-making and ensures that children receive the integrated combination of social, medical and other services needed to address their individual problems.
Complaint means any dissatisfaction, expressed by a complainant orally or in writing to HMO, with any aspect of HMO's operation, including, but not limited to, dissatisfaction with plan administration; procedures related to review or appeal of an adverse determination, as that term is defined by Texas Insurance Code article 20A.12, with the exception of the Independent Review Organization requirements; the denial, reduction, or termination of a service for reasons not related to medical necessity; the way a service is provided; or disenrollment decisions, expressed by complainant. The term does not include misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the Member. The term also does not include a provider's or enrollee's oral/written dissatisfaction or disagreement with an adverse determination or a request for a Fair Hearing to TDH.
Comprehensive Care Program: See definition for Texas Health Steps.
Covered Service means health care services HMO must arrange to provide Members, including all services required by this contract and state and federal law, and all value-added services described by HMO in its response to the Request For Application (RFA) for this contract.
Cultural competency means the ability of individuals and systems to provide services effectively to people of various cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity.
Disability-related access means that facilities are readily accessible to and usable by individuals with disabilities, and that auxiliary aids and services are provided to ensure effective communication, in compliance with Title III of the Americans with Disabilities Act.
Effective date means the date on which TDH signs the contract following signature of the contract by HMO.
2 May 31, 2001
Emergency services means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish such services under this contract and are needed to evaluate or stabilize an emergency medical condition and/or an emergency behavioral health condition.
Experience Rebate means the state's share of excess of allowable HMO STAR revenues over allowable HMO STAR expenses.
Fair Hearings means the process adopted and implemented by the Texas Department of Health, 25 TAC Chapter 1, in compliance with federal regulations and state rules relating to Medicaid Fair Hearings Part 431, found at 42 CFR Subpart E, and 1 TAC, Chapter 357.
Health care services means medically necessary physical medicine, behavioral health care and health-related services which an enrolled population might reasonably require in order to be maintained in health, including, as a minimum, emergency services and inpatient and outpatient services.
Linguistic access means translation and interpreter services, for written and spoken language to ensure effective communication. Linguistic access includes sign language interpretation and the provision of other auxiliary aids and services to persons with disabilities.
Medically necessary health care services means health care services, other than behavioral health care services which are:
(a) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, and/or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a Member, or endanger life;
(b) provided at appropriate facilities and at the appropriate levels of care for the treatment of a Member's health conditions;
(c) consistent with health care practice guidelines and standards that are endorsed by professionally recognized health care organizations or governmental agencies:.
(d) consistent with the diagnoses of the conditions; and
(e) No more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency.
Non-provider subcontract means a contract between HMO and a third party which performs a function, excluding delivery of health care services, that HMO is required to perform under its contract with TDH.
3 May 31, 2001
Proxy Claim Form means a form submitted by providers to document services delivered to Medicaid Members under capitated arrangement. It is not a claim for payment.
Real Time Captioning (also known as CART, Communication Access Real-Time Translation) means a process by which a trained individual uses a shorthand machine, a computer, and real-time translation software to type simultaneously translate spoken language into text on a computer screen. Real Time Captioning is provided for individuals who are deaf, have hearing impairments, or have unintelligible speech; it is usually used to interpret spoken English into text English but may be used to translate other spoken language into text.
Texas Medicaid Provider Procedures Manual means the policy and procedures manual published by or on behalf of TDH which contains policies and procedures required of all health care providers who participate in the Texas Medicaid program. The manual is published annually and is updated bi-monthly by the Medicaid Bulletin.
Value-added service means a service that the state has approved to be included in this contract for which HMO does not receive capitation.
3. Article III is amended by adding the following bolded and italicized
language and deleting the following stricken language:
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS
3.2 NON-PROVIDER SUBCONTRACTS
-------------------------
3.2.1 HMO must enter into written contracts with all Subcontractors and
maintain copies of the subcontracts in HMO's administrative office.
HMO must submit two copies of all non-provider subcontracts relating
to the delivery or payment of covered health services to TDH for
approval no later that 120 days prior to Implementation Date.
Subcontracts entered into after the Implementation Date of this
contract must be submitted no later than 10 days after the date of
execution of the subcontract. On an on-going basis, HMO must make
non-provider subcontracts available to TDH upon request, at the time
and location requested by TDH.
3.2.1.1 TDH has 15 working days to review the subcontract and recommend any
suggestions or required changes. If TDH has not responded to HMO by
the fifteenth day, HMO may consider the subcontract approved. TDH
reserves the right to request HMO to modify any subcontract that has
been deemed approved.
3.2.1.2 HMO must notify TDH no later than 90 days prior to terminating any
subcontract affecting a major performance function of this contract.
All major subcontractor terminations or substitutions require TDH
approval (see Article 15.7). TDH may require HMO to provide a
transition plan describing how the subcontracted function
4 May 31, 2001
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will continue to be provided. All subcontracts are subject to the
terms and conditions of this contract and must contain the
provisions of Article V, Statutory and Regulatory Compliance, and
the provisions contained in article 3.2.4.
3.2.2 Subcontracts which are requested by an agency with authority to
investigate and prosecute fraud and abuse must be produced at the
time and in the manner requested by the requesting Agency.
Subcontracts requested in response to a Public Information request
must be produced within 3 working days from TDH's notification to
HMO of the request. All requested records must be provided
free-of-charge.
3.3.1 HMO must have the equivalent of a full-time Medical Director
licensed under the Texas State Board of Medical Examiners (M.D. or
D.O.). HMO must have a written job description describing the
Medical Director's authority, duties and responsibilities as
follows:
3.3.1.1 Ensure that medical necessity decisions, including prior
authorization protocols, are rendered by qualified medical personnel
and are based on TDH's definition of medical necessity, and is in
compliance with the Utilization Review Act and 21.58a of the Texas
Insurance Code.
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS
-------------------------------------------------
3.4.1 HMO must receive written approval from TDH for all written
materials, produced or authorized by HMO, containing information
about STAR Program prior to distribution to Members, prospective
Members, providers within HMO's network, or potential providers who
HMO intends to recruit as network providers. This includes Member
education materials.
3.4.2 Member materials must meet cultural and linguistic requirements as
stated in Article VIII. Unless otherwise required, Member materials
must be written at a 4th-6th grade reading comprehensive level; and
translated into the language of any major population group, except
when TDH requires HMO to use statutory language (i.e., advance
directives, medical necessity, etc.).
3.4.3 All materials regarding the STAR Program, including Member education
materials, must be submitted to TDH for approval prior to
distribution. TDH has 15 working days to review the materials and
recommend any suggestions or required changes. If TDH has not
responded to HMO by the fifteenth day, HMO may print and distribute
STAR Program materials. TDH reserves the right to request HMO to
modify plan materials that are deemed approved and have been printed
or distributed. TDH-requested modifications of previously approved,
printed or distributed materials can be made at the next printing
unless substantial non-compliance exists.
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An exception to the 15 working day timeframe may be requested in
writing by HMO for written provider materials that require a quick
turn-around time (e.g., letters). Materials requiring a quick
turn-around time will be reviewed by TDH within 5 working days.
3.4.4 HMO must forward TDH-approved English versions of their Member
Handbook, Member Provider Directory, newsletters individual Member
letters and any written information that applies to
Medicaid-specific services to DHS for DHS to translate into Spanish.
DHS must provide the written and approved translation into Spanish
to HMO no later than 15 working days after receipt of the English
version by DHS. HMO must incorporate the approved translation into
Member materials. If DHS has not responded to HMO by the fifteenth
day, HMO may print and distribute the Member materials, with the
translation provided by HMO's outside translation source, rather
than DHS's translation. TDH reserves the right to require revisions
to materials if inaccuracies are discovered or if changes are
required by changes in policy or law. Any changes required by policy
or law can be made at the next printing unless substantial
non-compliance exists. HMO has the option of using the DHS
translation unit or their own translators for health education
materials that do not contain Medicaid-specific information and for
other marketing materials such as billboards, radio spots, and
television and newspaper advertisements.
3.4.5 HMO must reproduce all written instructional, educational, and
procedural documents required under this contract and distribute
them to its providers and Members. HMO must reproduce and distribute
instructions and forms to all network providers who have reporting
and audit requirements under this contract.
3.4.6 HMO must provide TDH with at least three paper copies and one
electronic copy of HMO's Member Handbook, Provider Manual and Member
Provider Directory. If an electronic format is not available, five
paper copies are required.
3.4.7 Changes to the Required Critical Elements for the Member Handbook,
Provider Manual, and Provider Directory may be included as inserts
into handbooks, manuals and directories until the next printing of
these documents.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.3 Accounting Records. HMO must create and keep accurate and complete
accounting records in compliance with Generally Accepted Accounting
Principles (GAAP). Records must be created and kept for all claims
payments, refunds and adjustment payments to providers, premium or
capitation payments, interest income and payments for administrative
services or functions. Separate records must be maintained for
medical and administrative fees, charges, and payments.
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3.6 HMO REVIEW OF TDH MATERIALS
---------------------------
TDH will submit all studies or audits that relate or refer to HMO
for review and comment to HMO 10 working days prior to releasing the
report to the public or to Members.
3.7 HMO TELEPHONE ACCESS REQUIREMENTS
---------------------------------
3.7.1 For all HMO telephone access (including Behavioral Health telephone
services), HMO must ensure adequately-staffed telephone lines.
Telephone personnel must receive customer service telephone
training. HMO must ensure that telephone staffing is adequate to
fulfill the standards of promptness and quality listed below:
1. 80% of all telephone calls must be answered within an average
of 30 seconds;
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2. The lost (abandonment) rate must not exceed 10%;
3. HMO cannot impose maximum call duration limits but must allow
calls to be of sufficient length to ensure adequate
information is provided to the Member or Provider.
4. Telephone services must meet cultural competency requirements
(see Article 8.9) and provide "linguistic access" to all
members as defined in Article II. This would include the
provision of interpretive services required for effective
communication for Members and providers.
3.7.2 Member Helpline: The HMO must furnish a toll free phone line which
members may call 24 hours a day, 7 days a week. An answering service
or other similar mechanism, which allows callers to obtain
information from a live person, may be used for after-hours and
weekend coverage.
3.7.2.1 HMO must provide coverage for the following services at least during
HMO's regular business hours, (a minimum of 9 hours a day, between 8
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a.m. and 6 p.m.), Monday through Friday:
1. Member ID information
2. PCP Change
3. Benefit understanding
4. PCP verification
5. Access issues (including referrals to specialists)
6. Unavailability of PCP
7. Member eligibility
8. Complaints
9. Service area issues (including when member is temporarily
out-of-service area)
10. Other services covered by member services.
7 May 31, 2001
3.7.2.2 HMO must provide TDH with policies and procedures indicating how the
HMO will meet the needs of members who are unable to contact HMO
during regular business hours.
3.7.3 HMO must ensure that PCPs are available 24 hours a day, 7 days a
week (see Article 7.8). This includes PCP telephone coverage (see 28
TAC 11.2001 (a)1A).
3.7.4 Behavioral Health Hotline Services. HMO must have emergency and
crisis Behavioral Health hotline services available 24 hours a day,
7 days a week, toll-free throughout the service area. Crisis hotline
staff must include or have access to qualified behavioral health
professionals to assess behavioral health emergencies. Emergency and
crisis behavioral health services may be arranged through mobile
crisis teams. It is not acceptable for an emergency intake line to
be answered by an answering machine. Hotline services must meet the
requirements described in Article 3.7.1
4. Article IV
ARTICLE IV FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS
4.1 FISCAL SOLVENCY
---------------
4.1.3 HMO must not have been placed under state conservatorship or
receivership or filed for protection under federal bankruptcy law.
None of HMO's property, plant or equipment must have been subject to
foreclosure or repossession within the preceding 10-year period. HMO
must not have any debt declared in default and accelerated to
maturity within the preceding 10-year period. HMO represents that
these statements are true as of the contract effective date. HMO
must inform TDH within 24 hours of a change in any of the preceding
representations.
4.2 MINIMUM NET WORTH
-----------------
4.2.1 HMO has minimum net worth to the greater of (a) $1,500,000; (b) an
amount equal to the sum of twenty-five dollars ($25) times the
number of all enrollees including Medicaid Members; or (c) an amount
that complies with standards adopted by TDI. Minimum net worth means
the excess total admitted assets over total liabilities, excluding
liability for subordinated debt issued in compliance with Article
1.39 of the Insurance Code.
4.6 AUDIT
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4.6.2 TDH is required to conduct an audit of HMO at least once every three
years. HMO is responsible for paying the costs of an audit conducted
under this Article. The costs of the audit paid by HMO are allowable
costs under this contract.
5. Article V
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS
5.3 FRAUD AND ABUSE COMPLIANCE PLAN
-------------------------------
5.3.1 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. HMO must cooperate and assist TDH and THHSC and
any other state or federal agency charged with the duty of
identifying, investigating, sanctioning or prosecuting suspected
fraud and abuse. HMO must provide originals and/or copies of all
records and information requested and allow access to premises and
provide records to TDH or its authorized agent(s), THHSC, HCFA, the
U.S. Department of Health and Human Services, FBI, TDI, and the
Texas Attorney General's Medicaid Fraud Control Unit. All copies of
records must be provided free of charge.
5.3.2 Compliance Plan. HMO must submit to TDH for approval a written fraud
and abuse compliance plan which is based on the Model Compliance
Plan issued by the U.S. Department of Health and Human Services, the
Office of Inspector General (OIG), at least 120 days prior to the
Implementation Date. HMO must designate an officer or director in
its organization who has the responsibility and authority for
carrying out the provisions of its compliance plan. HMO must submit
any updates or modifications in its compliance plan to TDH for
approval at least 30 days prior to the modifications going into
effect. HMO's fraud and abuse compliance plan must:
5.3.3 Training. HMO must designate executive and essential personnel to
attend mandatory training in fraud and abuse detection, prevention
and reporting. The training will be conducted by the Office of
Investigations and Enforcement, Health and Human Services
Commission, and will be provided free of charge. Training must be
scheduled not later than 150 days before the Implementation Date and
be completed by all designated personnel not later than 60 days
before the Implementation Date. HMO must schedule and complete
training no later than 90 days after the effective date of any
updates or modifications of its written compliance plan.
5.3.3.1 If HMO updates or modifies its written fraud and abuse compliance
plan, HMO must train its executive and essential personnel on these
updates or modifications to the compliance plan no later than 90
days after the effective date of the updates or modifications.
9 May 31, 2001
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5.3.3.2 If HMO's executive and essential personnel change or if HMO employs
additional executive and essential personnel, the new or additional
personnel must attend OIE training within 90 days of employment by
HMO.
5.3.4 HMO's failure to report potential or suspected fraud or abuse may
result in sanctions, cancellation of contract, or exclusion from
participation in the Medicaid program.
5.3.5 HMO must allow the Texas Medicaid Fraud Control Unit and THHSC's
Office of Investigations and Enforcement to conduct private
interviews of HMO's employees, subcontractors and their employees,
witnesses, and patients. Requests for information must be complied
within the form and the language requested. HMO's employees and its
subcontractors and their employees must cooperate fully and be
available in person for interviews, consultation, grand jury
proceedings, pre-trial conference, hearings, trial and in any other
process.
5.3.6 Subcontractors. HMO must submit the documentation described in
Articles 5.3.6.1 through 5.3.6.3, in compliance with Texas
Government Code ss.533.012, regarding any subcontractor providing
health care services under this contract except for those providers
who have re-enrolled as a provider in the Medicaid program as
required by Section 2.07, Chapter 1153, Acts of the 75th
Legislature, Regular Session, 1997, or who modified a contract in
compliance with that section. HMO must submit information in a
format as specified by TDH. Documentation must be submitted no later
than 120 days after the effective date of this contract.
Subcontracts entered into after the effective date of this contract
must be submitted no later than 90 days after the effective date of
the subcontract. The documentation required under this provision is
not subject to disclosure under Chapter 552, Government Code. The
information which must be submitted must include:
5.3.6.1 a description of any financial or other business relationship
between HMO and its subcontractor;
5.3.6.2 a copy of each type of contract between HMO and its subcontractor;
5.3.6.3 a description of the fraud control program used by any
subcontractor.
5.4 SAFEGUARDING INFORMATION
------------------------
5.4.3 HMO must assist network PCPs in developing and implementing policies
for protecting the confidentiality of AIDS and HIV-related medical
information and an anti-discrimination policy for employees and
Members with communicable diseases. Also see Health and Safety Code,
Chapter 85, Subchapter E, relating to the Duties of State Agencies
and State Contractors.
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5.5 NON-DISCRIMINATION
------------------
5.5.4 HMO must not discriminate with respect to participation,
reimbursement, or indemnification as to any provider who is acting
within the scope of the provider's license or certification under
applicable State law, solely on the basis of the provider's license
or certification. This requirement shall not be construed to
prohibit HMO from including providers only to the extent necessary
to meet the needs of HMO's Members or from establishing any measure
designed to maintain quality and control costs consistent with HMO's
responsibilities.
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.3 If HMO believes that the requested information qualifies as a trade
secret or as commercial or financial information, HMO must notify
TDH -- within three (3) working days after TDH gives notice that a
request has been made for public information -- and request TDH to
submit the request for public information to the Attorney General
for an Open Records Opinion. The HMO will be responsible for
presenting all exceptions to public disclosure to the Attorney
General if an opinion is requested.
6. Article VI
ARTICLE VI SCOPE OF SERVICES
6.1 SCOPE OF SERVICES
-----------------
HMO is paid capitation for all services included in the State of
Texas Title XIX State Plan and the 1915(b) waiver application for
the SDA currently filed and approved by HCFA, except those services
which are specifically excluded and listed in Article 6.1.8
(non-capitated services).
6.1.1 HMO must pay for or reimburse for all covered services provided to
mandatory enrolled Members for whom HMO is paid capitation.
6.1.2 TDH must pay for or reimburse for all covered services provided to
SSI voluntary Members who enroll with HMO on a voluntary basis. It
is at HMO's discretion whether to provide value-added services to
SSI voluntary Members.
6.1.3 HMO must provide covered services described in the 1999 Texas
Medicaid Provider Procedures Manual (Provider Procedures Manual),
subsequent editions of the Provider Procedures Manual also in effect
during the contract period, and all Texas Medicaid Bulletins which
update the 1999 Provider Procedures Manual and
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subsequent editions of the Provider Procedures Manual published
during the contract period.
6.1.4 Covered services are subject to change due to changes in federal
law, changes in Texas Medicaid policy, and/or responses to changes
in Medicine, Clinical protocols, or technology.
6.1.5 The STAR Program has obtained a waiver to the State Plan to include
three enhanced benefits to all voluntary and mandatory STAR Members.
Two of these enhanced benefits removed restrictions which previously
applied to Medicaid eligible individuals 21 years and older: the
three-prescriptions per month limit; and, the 30-day spell of
illness limit. One of these expanded the covered benefits to add an
annual adult well check.
6.1.6 Value-added Services. Value-added services that are approved by TDH
during the contracting process are included in the Scope of Services
under this contract. Value-added services are listed in Appendix C.
6.1.6.1 The approval request for value-added services must include:
6.1.6.1.1 A detailed description of the service to be offered;
6.1.6.1.2 Identification of the category or group of Members eligible to
receive the service if it is a type of service that is not
appropriate for all Members. (HMO has the discretion to determine if
voluntary Members are eligible for the value-added services);
6.1.6.1.3 Any limits or restrictions which apply to the service; and
6.1.6.1.4 A description of how a Member may obtain or access the service.
6.1.6.2 Value-added services can only be added or removed by written
amendment of this contract. HMO cannot include a value-added service
in any material distributed to Members or prospective Members until
this contract has been amended to include that value-added service
or HMO has received written approval from TDH pending finalization
of the contract amendment.
6.1.6.2.1 If a value-added service is deleted by amendment, HMO must notify
each Member that the service is no longer available through HMO, and
HMO must revise all materials distributed to prospective Members to
reflect the change in covered services.
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6.1.6.3 Value-added services must be offered to all mandatory HMO Members,
as indicated in Article 6.1.6.1.2, unless the contract is amended or
the contract terminates.
6.1.7 HMO may offer additional benefits that are outside the scope of
services of this contract to individual Members on a case-by-case
basis, based on medical necessity, cost effectiveness, and
satisfaction and improved health/behavioral health status of the
Member/Member family.
6.1.8 Non-Capitated Services. The following Texas Medicaid program
services have been excluded from the services included in the
calculation of HMO capitation rate:
THSteps Dental (including Orthodontia)
Early Childhood Intervention Case Management/Service Coordination
MHMR Targeted Case Management
Mental Health Rehabilitation
Pregnant Women and Infants Case Management
THSteps Medical Case Management
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Texas School Health and Related Services
Texas Commission for the Blind Case Management
Tuberculosis Services Provided by TDH-approved providers (Directly Observed Therapy and Contact Investigation)
Vendor Drugs (out-of-office drugs)
Medical Transportation
TDHS Hospice Services
Refer to relevant chapters in the Provider Procedures Manual and the Texas Medicaid Bulletins for more information.
Although HMO is not responsible for paying or reimbursing for these
non-capitated services, HMO remains responsible for providing
appropriate referrals for Members to obtain or access these
services.
6.1.8.1 HMO is responsible for informing providers that all non-capitated
services must be submitted to TDH's Claims Administrator for payment
or reimbursement.
6.3 SPAN OF ELIGIBILITY
-------------------
The following outlines HMO's responsibilities for payment of
hospital and freestanding psychiatric facility (facility)
admissions:
6.3.1 Inpatient Admission Prior to Enrollment in HMO. HMO is responsible
for payment of physician and non-hospital/facility charges for the
period for which HMO is paid
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a capitation payment for a Member. HMO is not responsible for
hospital/facility charges for Members admitted prior to the date of
enrollment in HMO.
6.3.2 Inpatient Admission After Enrollment in HMO. HMO is responsible for
all charges until the Member is discharged from the
hospital/facility or until the Member loses Medicaid eligibility.
6.3.2.1 If a Member regains Medicaid eligibility and the Member was enrolled
in HMO at the time the Member was admitted to the hospital, HMO is
responsible for charges as follows:
6.3.2.1.1 Member Re-enrolls into HMO After Regaining Medicaid Eligibility. HMO
is responsible for all charges for the period for which HMO receives
a capitation payment for the Member or until the Member is
discharged or loses Medicaid eligibility.
6.3.2.1.2 Member Re-enrolls in Another Health Plan After Regaining Medicaid
Eligibility. HMO is responsible for hospital/facility charges until
the Member is discharged or loses Medicaid eligibility.
6.3.3 Plan Change. A Member cannot change from one health plan to another
health plan during an inpatient hospital stay.
6.3.4 Hospital/Facility Transfer. Discharge from one acute care
hospital/facility and readmission to another acute care
hospital/facility within 24 hours for continued treatment is not a
discharge under this contract.
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.3 HMO must pay a Member's existing out-of-network providers for
covered services until the Member's records, clinical information
and care can be transferred to a network provider. Payment must be
made within the time period required for network providers. HMO may
pay any out-of-network provider a reasonable and customary amount
determined by the HMO. This Article does not extend the obligation
of HMO to reimburse the Member's existing out-of-network providers
of on-going care for more than 90 days after Member enrolls in HMO
or for more than nine months in the case of a Member who at the time
of enrollment in HMO has been diagnosed with and receiving treatment
for a terminal illness. The obligation of HMO to reimburse the
Member's existing out-of-network provider for services provided to a
pregnant Member with 12 weeks or less remaining before the expected
delivery date extends through delivery of the child, immediate
postpartum care, and the follow-up checkup within the first six
weeks of delivery.
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6.4.5 HMO must provide assistance to providers requiring PCP verification
24 hours a day 7 days a week.
6.4.5.1 HMO must provide TDH with policies and procedures indicating how the
HMO will provide PCP verification as indicated in Article 6.4.5.
HMOs providing PCP verification via a telephone must meet the
requirements of 3.7.1.
6.5 EMERGENCY SERVICES
------------------
6.5.1 HMO must pay for the professional, facility, and ancillary services
that are medically necessary to perform the medical screening
examination and stabilization of HMO Member presenting as an
emergency medical condition or an emergency behavioral health
condition to the hospital emergency department, 24 hours a day, 7
days a week, rendered by either HMO's in-network or out-of-network
providers. HMO may elect to pay any emergency services provider an
amount negotiated between the emergency provider and HMO, or a
reasonable and customary amount determined by the HMO.
6.5.2 HMO must ensure that its network primary care providers (PCPs) have
after-hours telephone availability 24 hours a day, 7 days a week
throughout the service area.
6.5.3 HMO cannot require prior authorization as a condition for payment
for an emergency medical condition, an emergency behavioral health
condition, or for a labor and delivery.
6.5.4 Medical Screening Examination. A medical screening examination may
range from a relatively simple history, physical examination,
diagnosis, and treatment, to a complex examination, diagnosis, and
treatment that requires substantial use of hospital emergency
department and physician services. HMO must pay for the emergency
medical screening examination required to determine whether an
emergency condition exists, as required by 42 U.S.C. 1395dd. HMOs
must reimburse for both the physician's services and the hospital's
emergency services, including the emergency room and its ancillary
services.
6.5.5 Stabilization Services. HMO must pay for emergency services
performed to stabilize the Member as documented by the Emergency
physician in the Member's medical record. HMOs must reimburse for
physician's services and hospital's emergency services including the
emergency room and its ancillary services. With respect to an
emergency medical condition, to stabilize is to provide such medical
care as to assure within reasonable medical probability that no
deterioration of the condition is likely to result from or occur
during discharge, transfer, or admission of the Member from the
emergency room.
15 May 31, 2001
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6.5.6 Post-stabilization Services. Post-stabilization services are
services subsequent to an emergency that a treating physician views
as medically necessary after an emergency medical condition has been
stabilized. They are not "emergency services" and are subject to
HMO's prior authorization process. HMO must be available to
authorize or deny post-stabilization services within one hour after
being contacted by the treating physician.
6.5.7 HMO must provide access to the TDH-designated Level I and Level II
trauma centers within the State or hospitals meeting the equivalent
level of trauma care. HMOs may make out-of-network reimbursement
arrangements with the TDH-designated Level I and Level II trauma
centers to satisfy this access requirement.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.1 HMO must provide or arrange to have provided to Members all
behavioral health care services included as covered services. These
services are described in detail in the Texas Medicaid Provider
Procedures Manual (Provider Procedures Manual) and the Texas
Medicaid Bulletin, which is the bi-monthly update to the Provider
Procedures Manual. Clinical information regarding covered services
is published by the Texas Medicaid program in the Texas Medicaid
Service Delivery Guide (See Article 6.1).
6.6.2 HMO must maintain a behavioral health provider network that includes
psychiatrists, psychologists and other behavioral health providers.
HMO must provide or arrange to have provided behavioral health
benefits described as covered services (see Article 6. 1). The
network must include providers with experience in serving children
and adolescents to ensure accessibility and availability of
qualified providers to all eligible children and adolescents in the
service area. The list of providers including names, addresses and
phone numbers must be available to TDH upon request.
6.6.10 HMO must require, through contract provisions, that all Members
receiving inpatient psychiatric services are scheduled for
outpatient follow-up and/or continuing treatment prior to discharge.
The outpatient treatment must occur within 7 days from the date of
discharge. HMO must ensure that behavioral health providers contact
Members who have missed appointments within 24 hours to reschedule
appointments.
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS
---------------------------------------
6.7.1 Counseling and Education. HMO must require, through contract
provisions, that Members requesting contraceptive services or family
planning services are also provided counseling and education about
family planning and family planning services are available to
Members. HMO must develop outreach programs to increase
16 May 31, 2001
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community support for family planning and encourage Members to use
available family planning services. HMO is encouraged to include a
representative cross-section of Members and family planning
providers who practice in the community in developing, planning and
implementing family planning outreach programs.
6.7.2 Freedom of Choice. HMO must ensure that the Members have the right
to choose any Medicaid participating family planning provider,
whether the provider chosen by the Member is in or outside HMO
provider network. HMO must provide Member access to information
about the providers of family planning services available and the
Member's right to choose any Medicaid family planning provider. HMO
must provide access to confidential family planning services.
6.7.3 Provider Standards and Payment. HMO must require all subcontractors
who are family planning agencies to deliver family planning services
according to the TDH Family Planning Service Delivery Standards. HMO
must provide, at minimum, the full scope of services available under
the Texas Medicaid program for family planning services. HMO will
reimburse family planning agencies and out-of-network family
planning providers the Medicaid fee-for-service amounts for family
planning services, including medically necessary medications,
contraceptives, and supplies.
6.7.6 HMO must develop, implement, monitor and maintain standards,
policies and procedures for providing information regarding family
planning to providers and Members, specifically regarding State and
federal laws governing Member confidentiality (including minors).
Providers and family planning agencies cannot require parental
consent for minors to receive family planning services.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.1 THSteps Services. HMO must develop effective methods to ensure that
children under the age of 21 receive THSteps services when due and
according to the recommendations established by the American Academy
of Pediatrics and the THSteps periodicity schedule for children. HMO
must arrange for THSteps services to be provided to all eligible
Members except when a Member knowingly and voluntarily declines or
refuses services after the Member has been provided information upon
which to make an informed decision.
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include THSteps
benefits, the periodicity schedule for THSteps checkups and
immunizations, and Comprehensive Care Program (CCP) services
available under the THSteps program to Members under age 21 years.
Providers must also be educated and
17 May 31, 2001
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trained regarding the requirements imposed upon TDH and contracting
HMOs under the Consent Decree entered in Frew v. McKinney, et. al.,
Civil Action No. 3:93CV65, in the United States District Court for
the Eastern District of Texas, Paris Division. Providers should be
educated and trained to treat each THSteps visit as an opportunity
for a comprehensive assessment of the Member.
6.8.4 Member Outreach. HMO must provide an outreach-unit that works with
Members to ensure they receive prompt services and are effectively
informed about available THSteps services. Each month HMO must
retrieve from the Enrollment Broker BBS a list of Members who are
due and overdue THSteps services. Using these lists and their own
internally generated lists, HMOs will contact Members and encourage
Members who are periodically due or overdue a THSteps service to
obtain the service as soon as possible. HMO outreach staff must
coordinate with TDH THSteps outreach staff to ensure that Members
have access to the Medical Transportation Program, and that any
coordination with other agencies is maintained.
6.8.7 Newborn Checkups. HMO must have mechanisms in place to ensure that
all newborn Members have an initial newborn checkup before discharge
from the hospital and again within two weeks from the time of birth.
HMO must require providers to send all THSteps newborn screens to
the TDH Bureau of Laboratories or a TDH certified laboratory.
Providers must include detailed identifying information for all
screened newborn Members and the Member's mother to allow TDH to
link the screens performed at the hospital with screens performed at
the two week follow-up.
6.8.7.1 Laboratory Tests: All laboratory specimens collected as a required
component of a THSteps checkup (see Medicaid Provider Procedures
Manual for age-specific requirements) must be submitted to the TDH
Laboratory for analysis. HMO must educate providers about THSteps
program requirements for submitting laboratory tests to the TDH
Bureau of Laboratories.
6.8.9 Immunizations. HMO must educate providers on the Immunization
Standard Requirements set forth in Chapter 161, Health and Safety
Code; the standards in the ACIP Immunization Schedule; and AAP
Periodicity Schedule.
6.8.9.1 ImmTrac Compliance. HMO must educate providers about and require
providers to comply with the requirements of Chapter 161, Health and
Safety Code, relating to the Texas Immunization Registry (ImmTrac),
to include parental consent on the Vaccine Information Statement.
6.8.11 Compliance with THSteps Performance Benchmark. TDH will establish
performance benchmarks against which HMO's full compliance with the
THSteps periodicity schedule will be measured. The performance
benchmarks will establish
18 May 31, 2001
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minimum compliance measures which will increase over time. HMO must
meet all performance benchmarks required for THSteps services.
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND
--------------------------------------------------------------
CHILDREN (WIC) - SPECIFIC REQUIREMENTS
--------------------------------------
6.11.4 HMO may use the nutrition education provided by WIC to satisfy
health education requirements described in this contract.
6.12 TUBERCULOSIS (TB)
-----------------
6.12.1 Education, Screening, Diagnosis and Treatment. HMO must provide
Members and providers with education on the prevention, detection
and effective treatment of tuberculosis (TB). HMO must establish
mechanisms to ensure all procedures required to screen at-risk
Members and to form the basis for a diagnosis and proper prophylaxis
and management of TB are available to all Members, except services
referenced in Article 6.1.8 as non-capitated services. HMO must
develop policies and procedures to ensure that Members who may be or
are at risk for exposure to TB are screened for TB. An at-risk
Member refers to a person who is susceptible to TB because of the
association with certain risk factors, behaviors, drug resistance,
or environmental conditions. HMO must consult with the local TB
control program to ensure that all services and treatments provided
by HMO are in compliance with the guidelines recommended by the
American Thoracic Society (ATS), the Centers for Disease Control and
Prevention (CDC), and TDH policies and standards.
6.12.2 Reporting and Referral. HMO must implement policies and procedures
requiring providers to report all confirmed or suspected cases of TB
to the local TB control program within one working day of
identification of a suspected case, using the forms and procedures
for reporting TB adopted by TDH (25 TAC ss.97). HMO must require
that in-state labs report mycobacteriology culture results positive
for M. Tuberculosis and M. Tuberculosis antibiotic susceptibility to
TDH as required for in state labs by 25 TAC ss.97.5(a). Referral to
state-operated hospitals specializing in the treatment of
tuberculosis should only be made for TB-related treatment.
6.12.4 Coordination and Cooperation with the Local TB Control Program. HMO
must coordinate with the local TB control program to ensure that all
Members with confirmed or suspected TB have a contact investigation
and receive Directly Observed Therapy (DOT). HMO must require,
through contract provisions, that providers report any Member who is
non-compliant, drug resistant, or who is or may be posing a public
health threat to TDH or the local TB control program. HMO must
cooperate with the local TB control program in enforcing the control
measures and quarantine procedures contained in Chapter 81 of the
Texas Health and Safety Code.
19 May 31, 2001
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6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS
---------------------------------------------------------
6.13.1 HMO shall provide the following services to persons with
disabilities or chronic or complex conditions. These services are in
addition to the covered services described in detail in Article 6.1
Scope of Services.
6.13.3 HMO must require that the PCP for all persons with disabilities or
chronic or complex conditions develops a plan of care to meet the
needs of the Member. The plan of care must be based on health needs,
specialist(s) recommendations, and periodic reassessment of the
Member's developmental and functional status and service delivery
needs. HMO must require providers to maintain record keeping systems
to ensure that each Member who has been identified with a disability
or chronic or complex condition has an initial plan of care in the
primary care provider's medical records, Member agrees to that plan
of care, and that the plan is updated as often as the Member's needs
change, but at least annually.
6.13.5 HMO must have in its network PCPs and specialty care providers that
have documented experience in treating people with disabilities or
chronic or complex conditions, including children. For services to
children with disabilities or chronic or complex conditions, HMO
must have in its network PCPs and specialty care providers that have
demonstrated experience with children with disabilities or chronic
or complex conditions in pediatric specialty centers such as
children's hospitals, medical schools, teaching hospitals, and
tertiary center levels.
6.13.11 HMO must assist, through information and referral, eligible Members
in accessing providers of non-capitated Medicaid services listed in
Article 6.1.8, as applicable.
6.13.12 HMO must ensure that Members who require routine or regular
laboratory and ancillary medical tests or procedures to monitor
disabilities or chronic or complex conditions are allowed by HMO to
receive the services from the provider in the provider's office or
at a contracted lab located at or near the provider's office.
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS
--------------------------------------------------
6.14.3 Health Education Plan. HMO must develop, implement and submit to TDH
a Health Education plan describing how it will provide health
education to Members. The health education plan must tell Members
how HMO system operates, how to obtain services, including emergency
care and out-of-plan services. The plan must emphasize the value of
screening and preventive care and must contain disease specific
information and education materials. The final Health Education Plan
is due to TDH 30 days after the Group Needs Assessment Report has
been completed and filed with TDH.
20 May 31, 2001
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6.14.3.1 Wellness Promotion Programs. HMO must conduct wellness promotion
programs to improve the health status of its Members. HMO may
cooperatively conduct Health Education classes for all enrolled STAR
Members with one or more HMOs also contracting with TDH in the
service area to provide services to Medicaid recipients in all
counties of the service area. Providers and HMO staff must integrate
health education, wellness and prevention training into the care of
each Member. HMO must provide a range of health promotion and
wellness information and activities for Members in formats that meet
the needs of all Members. HMO must:
(1) develop, maintain and distribute health education services
standards, policies and procedures to providers;
(2) monitor provider performance to ensure the standards for
health education services are complied with;
(3) inform providers in writing about any non-compliance with the
plan standards, policies or procedures;
(4) establish systems and procedures that ensure that provider's
medical instruction and education on preventive services
provided to the Member are documented in the Member's medical
record; and
(5) establish mechanisms for promoting preventive care services to
Members who do not access care, e.g. newsletters, reminder
cards, and mail outs.
6.14.4 Health Education Activities Report. HMO must submit, upon request, a
Health Education Activities Schedule to TDH or its designee listing
the time and location of classes, health fairs or other events
conducted during the time period of the request.
6.16 BLIND AND DISABLED MEMBERS
--------------------------
6.16.2.7 Coordination to link Blind and Disabled Members with applicable
community resources and targeted case management programs (see
Non-Capitated Services in Article 6.1.8).
7. Article VII
ARTICLE VII PROVIDER NETWORK REQUIREMENTS
7.1 PROVIDER ACCESSIBILITY
----------------------
7.1.3.4 HMO must establish policies and procedures to ensure that THSteps
checkups be provided within 90 days of new enrollment, except
newborns Members should be seen within 2 weeks of enrollment, and in
all cases for all Members be consistent with the American Academy of
Pediatrics and THSteps periodicity schedule which
21 May 31, 2001
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is based on the American Academy of Pediatrics schedule and
delineated in the Texas Medicaid Provider Procedures Manual and the
bi-monthly Medicaid Bulletin (see also Article 6. 1, Scope of
Services). If the Member does not request a checkup, HMO must
establish a procedure for contacting the Member to schedule the
checkup.
7.2 PROVIDER CONTRACTS
------------------
7.2.1 All providers must have a written contract, either with an
intermediary entity or an HMO, to participate in the Medicaid
program (provider contract). HMO must make all contracts available
to TDH upon request, at the time and location requested by TDH. All
standard formats of provider contracts must be submitted to TDH for
approval no later than 120 days prior to the Implementation Date.
Standard formats of provider contracts to be executed later than 120
days prior to the Implementation Date must be submitted to TDH prior
to use of the standard format. HMO must submit 1 paper copy and 1
electronic copy in a form specified by TDH. Any substantive change
to the standard format must be submitted to TDH for approval no
later than 30 days prior to the implementation of the new standard
format. All provider contracts are subject to the terms and
conditions of this contract and must contain the provisions of
Article V, Statutory and Regulatory Compliance, and the provisions
contained in Article 3.2.4.
7.2.1.1 TDH has 15 working days to review the materials and recommend any
suggestions or required changes. If TDH has not responded to HMO by
the fifteenth day, HMO may execute the contract. TDH reserves the
right to request HMO to modify any contract that has been deemed
approved.
7.2.7 To the extent feasible within HMO's existing claims processing
systems, HMO should have a single or central address to which
providers must submit claims. If a central processing center is not
possible within HMO's existing claims processing systems, HMO must
provide each network provider a complete list of all entities to
whom the providers must submit claims for processing and/or
adjudication. The list must include the name of the entity, the
address to which claims must be sent, explanation for determination
of the correct claims payer based on services rendered, and a phone
number the provider may call to make claim inquiries. HMO must
notify providers in writing of any changes in the claims filing list
at least 30 days prior to the effective date of change. If HMO is
unable to provide 30 days notice, providers must be given a 30-day
extension on their claims filing deadline to ensure claims are
routed to correct processing center.
7.2.8 HMO, all IPAs, and other intermediary entities must include contract
language which substantially complies with the following standard
contract provisions in each Medicaid provider contract. This
language must be included in each contract with
22 May 31, 2001
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an actual provider of services, whether through a direct contract or
through intermediary provider contracts:
7.2.8.1 [Provider] is being contracted to deliver Medicaid managed care
under the TDH STAR program. HMO must provide copies of the TDH/HMO
Contract to the [Provider) upon request. [Provider) understands that
services provided under this contract are funded by State and
federal funds under the Medicaid program. [Provider) is subject to
all state and federal laws, rules and regulations that apply to all
persons or entities receiving state and federal funds. [Provider]
understands that any violation by a provider of a State or federal
law relating to the delivery of services by the provider under this
HMO/Provider contract, or any violation of the TDH/HMO contract
could result in liability for money damages, and/or civil or
criminal penalties and sanctions under state and/or federal law.
7.2.8.2 [Provider] understands and agrees that HMO has the sole
responsibility for payment of covered services rendered by the
provider under HMO/Provider contract. In the event of HMO insolvency
or cessation of operations, [Provider's] sole recourse is against
HMO through the bankruptcy, conservatorship, or receivership estate
of HMO.
7.2.8.3 [Provider) understands and agrees TDH is not liable or responsible
for payment for any Medicaid covered services provided to mandatory
Members under HMO/Provider contract. Federal and State laws provide
severe penalties for any provider who attempts to collect any
payment from or bill a Medicaid recipient for a covered service.
7.2.8.4 [Provider] agrees that any modification, addition, or deletion of
the provisions of this contract will become effective no earlier
than 30 days after HMO notifies TDH of the change in writing. If TDH
does not provide written approval within 30 days from receipt of
notification from HMO, changes can be considered provisionally
approved, and will become effective. Modifications, additions or
deletions which are required by TDH or by changes in state or
federal law are effective immediately.
7.2.8.5 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. [Provider] must cooperate and assist TDH and any
state or federal agency that is charged with the duty of
identifying, investigating, sanctioning or prosecuting suspected
fraud and abuse. [Provider) must provide originals and/or copies of
any and all information, allow access to premises and provide
records to TDH or its authorized agent(s), THHSC, HCFA, the U.S.
Department of Health and Human Services, FBI, TDI, and the Texas
Attorney General's Medicaid Fraud Control Unit, upon request, and
free-of-charge. [Provider] must report any suspected fraud or abuse
including any suspected fraud
23 May 31, 2001
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and abuse committed by HMO or a Medicaid recipient to TDH for
referral to THHSC.
7.2.8.6 [Provider] is required to submit proxy claims forms to HMO for
services provided to all STAR Members that are capitated by HMO in
accordance with the encounter data submissions requirements
established by HMO and TDH.
7.2.8.7 HMO is prohibited from imposing restrictions upon the [Provider's]
free communication with Members about a Member's medical conditions,
treatment options, HMO referral policies, and other HMO policies,
including financial incentives or arrangements and all STAR managed
care plans with whom [Provider] contracts.
7.2.8.8 The Texas Medicaid Fraud Control Unit must be allowed to conduct
private interviews of [Providers] and the [Providers'] employees,
contractors, and patients. Requests for information must be complied
with, in the form and language requested. [Providers] and their
employees and contractors must cooperate fully in making themselves
available in person for interviews, consultation, grand jury
proceedings, pre-trial conference, hearings, trial and in any other
process, including investigations. Compliance with this Article is
at HMO's and [Provider's] own expense.
7.2.8.9 HMO must include the method of payment and payment amounts in all
provider contracts.
7.2.8.10 All provider clean claims must be adjudicated within 30 days. HMO
must pay provider interest on all clean claims that are not paid
within 30 days at a rate of 1.5% per month (18% annual) for each
month the claim remains unadjudicated.
7.2.8.11 HMO must prohibit network providers from interfering with or placing
liens upon the state's right or HMO's right, acting as the state's
agent, to recovery from third party resources. HMO must prohibit
network providers from seeking recovery in excess of the Medicaid
payable amount or otherwise violating state and federal laws.
7.2.9 HMO must comply with the provisions of Chapter 20A ss. 18A of HMO
Act relating to Physician and Provider contracts, except Subpart
(e), which relates to capitation payments.
7.2.10 HMO must include a complaint and appeals process which complies with
the requirements of Article 20A.12 of the Texas Insurance Code
relating to Complaint System in all subcontracts. HMO's complaint
and appeals process must be the same for all Contractors.
24 May 31, 2001
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7.2.11 HMO must notify TDH no later than 90 days prior to terminating any
subcontract affecting a major performance function of this contract.
If HMO seeks to terminate a provider's contract for imminent harm to
patient health, actions against a license or practice, or fraud,
contract termination may be immediate. TDH will require assurances
that any contract termination will not result in an interruption of
an essential service or major contract function.
7.3 PHYSICIAN INCENTIVE PLANS
-------------------------
7.3.4 HMO must submit the information required in Article 7.3.2.6 one year
after the effective date of initial contract or effective date of
renewal contract, and annually each subsequent year under the
contract. HMO's who put physicians or physician groups at
substantial financial risk, as defined in 42 C.F.R. ss.417.479, must
conduct a survey of all Members who have voluntarily disenrolled in
the previous year. A list of voluntary disenrollees may be obtained
from the Enrollment Broker.
7.4 PROVIDER MANUAL AND PROVIDER TRAINING
-------------------------------------
7.4.1 HMO must prepare and issue a Provider Manual(s), including any
necessary specialty manuals (e.g. behavioral health) to the
providers in HMO network and to newly contracted providers in HMO
network within five (5) working days from inclusion of the provider
into the network. The Provider Manual must contain sections relating
to special requirements of the STAR Program as required under this
contract. See Appendix D, Required Critical Elements, for specific
details regarding content requirements. HMO must submit a Provider
Manual to TDH for approval 120 days prior to the Implementation Date
(see Article 3.4.1 regarding the process for plan materials review).
Any revisions must be approved by TDH prior to publication and
distribution to providers.
7.4.2.1 HMO training for all providers must be completed no later than 30
days after placing a newly contracted provider on active status. HMO
must provide on-going training to new and existing providers as
required by HMO or TDH to comply with this contract.
7.5 MEMBER PANEL REPORTS
--------------------
HMO must furnish each PCP with a current list of enrolled Members
enrolled or assigned to that Provider no later than 5 days after HMO
receives the Enrollment File from the Enrollment Broker each month.
If the 5th day falls on a weekend or state holiday, the file must be
provided by the following working day.
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
25 May 31, 2001
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7.6.1 HMO must develop, implement and maintain a provider complaint
system. HMO must submit the written complaint and appeal procedure
to TDH by Phase II of Readiness Review. The complaint and appeals
procedures must be in compliance with all applicable state and
federal law or regulations. All Member complaints and/or appeals of
an adverse determination requested by a physician or provider acting
on behalf of the enrollee must comply with the provisions of this
Article. Modifications and amendments to the complaint system must
be submitted to TDH no later than 30 days prior to the
implementation of the modification or amendment.
7.6.3 HMO's complaint and appeal process cannot contain provisions
requiring a Provider to submit a complaint or appeal to TDH for
resolution in lieu of the HMO's process.
7.8 PRIMARY CARE PROVIDERS
----------------------
7.8.5 HMO must have in its provider network physicians with board
eligibility/certification in pediatrics available for referral for
Members under the age of 21.
7.8.5.1 Individual PCPs may serve more than 2,000 Members. However, if TDH
determines that a PCP's Member enrollment exceeds the PCPs
availability to provide accessible, quality care, TDH may prohibit
the PCP from receiving further enrollments. TDH may direct HMOs to
assign or reassign Members to another PCP's panel.
7.8.7 HMO's primary care provider network may include providers from any
of the following practice areas: General Practitioners; Family
Practitioners; Internists; Pediatricians;
Obstetricians/Gynecologists (OB/GYN); Advanced Practice Nurses
(APNs) and Certified Nurse Midwives (CNMs) practicing under the
supervision of a physician; Physician Assistants (PAs) practicing
under the supervision of a physician specializing in Family
Practice, Internal Medicine, Pediatrics or Obstetrics/Gynecology who
also qualifies as a PCP under this contract; or Federally Qualified
Health Centers (FQHCs), Rural Health Clinics (RHCs) and similar
community clinics; and specialists who are willing to provide
medical homes to selected Members with special needs and conditions
(see Article 7.8.8).
7.8.12 PCP Selection and Changes. All Medicaid recipients who are eligible
for participation in the STAR program have the right to select their
PCP and HMO. Medicaid recipients who are mandatory STAR participants
who do not select a PCP and/or HMO during the time period allowed
will be assigned to a PCP and/or HMO using the TDH default process.
Members may change PCPs at any time, but these changes are limited
to four (4) times per year. If a PCP or OB/GYN who has been selected
by or assigned to a Member is no longer in HMO's provider network,
HMO
26 May 31, 2001
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must contact the Member and provide them an opportunity to reselect.
If the Member does not want to change the PCP or OB/GYN to another
provider in HMO network, the Member must be directed to the
Enrollment Broker for resolution or reselection. If a PCP or OB/GYN
who has been selected by or assigned to a Member is no longer in an
IPA's provider network but continues to participate in HMO network,
HMO or IPA may not change the Member's PCP or OB/GYN.
7.8.12.1 Voluntary SSI Members. PCP changes cannot be performed retroactively
for voluntary SSI Members. If an SSI Member requests a PCP change on
or before the 15th of the month, the change will be effective the
first day of the next month, if an SSI Member requests a PCP change
after the 15th of the month, the change will be effective the first
day of the second month that follows. Exceptions to this policy will
be allowed for reasons of medical necessity or other extenuating
circumstances.
7.8.12.2 Mandatory Members. Retroactive changes to a Member's PCP should only
be made if it is medically necessary or there are other
circumstances which necessitate a retroactive change. HMO must pay
claim's for services provided by the original PCP. If the original
PCP is paid on a capitated basis and services were provided during
the period for which capitation was paid, HMO cannot recoup the
capitation.
7.9 OBSTETRICAL/GYNECOLOGICAL (OB/GYN) PROVIDERS
--------------------------------------------
HMO must allow a female Member to select an OB/GYN within its
provider network or within a limited provider network in addition to
a PCP, to provide health care services within the scope of the
professional specialty practice of a properly credentialed OB/GYN.
See Article 21.53D of the Texas Insurance Code and 28 TAC Sections
11.506, 11.1600 and 11. 1608. A Member who selects an OB/GYN must be
allowed direct access to the health care services of the OB/GYN
without a referral by the woman's PCP or a prior authorization or
precertification from HMO. HMO must allow Members to change OB/GYNs
up to four times per year. Health care services must include, but
not be limited to:
7.9.5 HMOs which allow its Members to directly access any OB/GYN provider
within its network must ensure that the provisions of Articles 7.9.1
through 7.9.4 continue to be met.
7.9.6 OB/GYN providers must comply with HMO's procedures contained in
HMO's provider manual or provider contract for OB/GYN providers,
including but not limited to prior authorization procedures.
7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA)
--------------------------------------------------------
27 May 31, 2001
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7.12.1 Assessment to determine eligibility for rehabilitative and targeted
MHMR case management services is a function of the LMHA. HMO must
provide or arrange to have provided all covered services described
in detail in Article 6.1 Scope of Services. Covered services must be
provided to Members with severe and persistent mental illness (SPMI)
and severe emotional disturbance (SED), when medically necessary,
whether or not they are also receiving targeted case management or
rehabilitation services through the LMHA.
7.12.3 HMO must enter into written agreements with all LMHAs in the service
area which describes the process(es) which HMO and LMHA will use to
coordinate services for STAR Members with SPMI or SED. The agreement
will contain the following provisions:
7.12.3.1 Describe the behavioral health covered services indicated in detail
in Article 6.1 Scope of Services. Also include the amount, duration,
and scope of basic and value-added services, and HMO's
responsibility to provide these services;
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPS)
----------------------------------------
HMO must demonstrate a good faith effort to include STPs in its
provider network. HMO must seek participation in its provider
network from:
7.13.1 Each health care provider in the service area who has traditionally
provided care to Medicaid recipients;
7.13.2 Each hospital in the service area that has been designated as a
disproportionate share hospital under Medicaid; and
7.13.3 Each specialized pediatric laboratory in the service area, including
those laboratories located in children's hospitals.
7.13.4 HMO must include STPs as designated by TDH in its provider network
to provide primary care and specialty care services. HMO must
include STPs in its provider network for at least three (3) years
following the Implementation Date in the service area.
7.13.5 STPs must agree to the contract requirements contained in Article
7.2, unless exempted from a requirement by law or rule. STPs must
also agree to the following contract requirements:
7.13.5.1 STP must agree to accept the standard reimbursement rate offered by
HMO to other providers for the same or similar services.
28 May 31, 2001
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7.13.5.2 STP must meet the credentialing requirements of HMO. HMO must not
require STPs to meet a different or higher credentialing standard
than is required of other providers providing the same or similar
services. HMO must not require STP's to contract with a
Subcontractor which requires a different or higher credentialing
standard than the HMO's if the application of the higher standard
results in a disproportionate number of STPs being excluded from the
Subcontractor.
7.13.6 Failure to demonstrate a good faith effort to meet TDH's compliance
objectives to include STPs in HMO's provider network, is a defaults
under this contract and may result in any or all of the sanctions
and remedies included in Article XVIII of this contract. HMO's
fulfillment of TDH's compliance objectives for STP participation
will be monitored by TDH based on HMOs electronic file submission to
the Enrollment Broker as required in Article 12.5.1
7.14 RURAL HEALTH PROVIDERS
----------------------
7.14.4 HMO must reimburse physicians who practice in rural counties with
fewer than 50,000 persons at a rate using the current Medicaid fee
schedule.
7.16 COORDINATION WITH PUBLIC HEALTH
7.16.1 Reimbursed Arrangements. HMO must make a good faith effort to enter
into a subcontract for the covered health care services as specified
below with TDH Public Health Regions, city and/or county health
departments or districts in each county of the service area that
will be providing these services to the Members (Public Health
Entities), who will be paid for services by HMO, including any or
all of the following services or any covered service which the
public health department and HMO have agreed to provide:
7.16.1.1 Sexually Transmitted Diseases (STDs) Services (see Article 6.15);
7.16.1.2 Confidential HIV Testing (see Article 6.15);
7.16.1.3 Immunizations
7.16.1.4 Tuberculosis (TB) Care (see Article 6.12).
7.16.1.5 Family Planning Services (see Article 6.7);
7.16.1.6 THSteps checkups (see Article 6.8); and
7.16.1.7 Prenatal services.
29 May 31, 2001
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7.16.2 HMO must make a good faith effort to enter into subcontracts with
public health entities in the service area at least 90 days prior to
the Implementation Date. The subcontracts must be available for
review by TDH or its designated agent(s) on the same basis as all
other subcontracts. If any changes are made to the contract, it must
be resubmitted to TDH. If an HMO is unable to enter into a contract
with public health entities, HMO must document current and past
efforts to TDH. Documentation must be submitted no later than 120
days after the execution of this amendment. Public health
subcontracts must include the following areas:
7.16.2.1 General Relationship Between HMO and the Public Health Entity. The
subcontracts must specify the scope and responsibilities of both
parties, the methodology and agreements regarding billing and
reimbursements, reporting responsibilities, Member and provider
educational responsibilities, and the methodology and agreements
regarding sharing of confidential medical record information between
the public health entity and the PCP.
7.16.2.2 Public Health Entity Responsibilities:
(1) Public health providers must inform Members that confidential
health care information will be provided to the PCP.
(2) Public health providers must refer Members back to PCP for any
follow-up diagnostic, treatment, or referral services.
(3) Public health providers must educate Members about the
importance of having a PCP and assessing PCP services during
office hours rather than seeking care from Emergency
Departments, Public Health Clinics, or other Primary Care
Providers or Specialists.
(4) Public health entities must identify a staff person to act as
liaison to HMO to coordinate Member needs, Member referral,
Member and provider education, and the transfer of
confidential medical record information.
7.16.2.3 HMO Responsibilities:
(1) HMO must identify care coordinators who will be available to
assist public health providers and PCPs in getting efficient
referrals of Members to the public health providers,
specialists, and health-related service providers either
within or outside HMO's network.
(2) HMO must inform Members that confidential healthcare
information will be provided to the PCP.
(3) HMO must educate Members on how to better utilize their PCPs,
public health providers, emergency departments, specialists,
and health-related service providers.
7.16.3 Non-Reimbursed Arrangements with Public Health Entities
30 May 31, 2001
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7.16.3.1 Coordination with Public Health Entities. HMOs must make a good
faith effort to enter into a Memorandum of Understanding (MOU) with
Public Health Entities in the service area regarding the provision
of services for essential public health care services. These MOUs
must be entered into at least 90 days before the Implementation Date
in the service area and are subject to TDH approval. If any changes
are made to the MOU, it must be resubmitted to TDH. If HMO is unable
to enter into an MOU with a public entity, HMO must submit
documentation substantiating reasonable efforts to enter into such
an agreement to TDH. Documentation must be submitted no later than
120 days after the Implementation Date. MOUs must contain the roles
and responsibilities of HMO and the public health department for the
following services:
(1) Public health reporting requirements regarding communicable
diseases and/or diseases which are preventable by immunization
as defined by state law;
(2) Notification of and referral to the local Public Health
Entity, as defined by state law, of communicable disease
outbreaks involving Members;
(3) Referral to the local Public Health Entity for TB contact
investigation and evaluation and preventive treatment of
persons whom the Member has come into contact;
(4) Referral to the local Public Health Entity for STD/HIV contact
investigation and evaluation and preventive treatment of
persons whom the Member has come into contact; and,
|
(5) Referral for WIC services and information sharing;
(6) Coordination and follow-up of suspected or confirmed cases of
childhood lead exposure.
7.16.3.2 Coordination with Other TDH Programs. HMOs must make a good faith
effort to enter into a Memorandum of Understanding (MOU) with other
TDH programs regarding the provision of services for essential
public health care services. These MOUs must be entered into at
least 90 days before the Implementation Date in the service area and
are subject to TDH approval. If any changes are made to the MOU, it
must be resubmitted to TDH. If an HMO is unable to enter into an MOU
with other TDH programs, HMO must submit documentation
substantiating reasonable efforts to enter into such an agreement to
TDH. Documentation must be submitted no later than 120 days after
the Implementation Date. MOUs must delineate the roles and
responsibilities of HMO and the TDH programs for the following
services:
(1) Use of the TDH laboratory for THSteps newborn screens; lead
testing; and hemoglobin/hematocrit tests;
(2) Availability of vaccines through the Vaccines for Children
Program;
(3) Reporting of immunizations provided to the statewide ImmTrac
Registry including parental consent to share data;
(4) Referral for WIC services and information sharing;
31 May 31, 2001
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(5) Pregnant Women and Infant (PWI) Targeted Case Management;
(6) THSteps outreach, informing and Medical Case Management;
(7) Participation in the community-based coalitions with the
Medicaid-funded case management programs in MHMR, ECI, TCB,
and TDH (PWI, CIDC and THSteps Medical Case Management);
(8) Referral to the TDH Medical Transportation Program;
(9) Cooperation with activities required of public health
authorities to conduct the annual population and community
based needs assessment; and
(10) Coordination and follow-up of suspected or confirmed cases of
childhood lead exposure.
7.16.4 All public health contracts must contain provider network
requirements in Article VII, as applicable.
7.17 COORDINATION WITH THE TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY
-------------------------------------------------------------------
SERVICES
--------
7.17.3 HMO cannot deny, reduce, or controvert the medical necessity of any
health or behavioral health care services included in an Order
entered by a court. HMO may participate in the preparation of the
medical and behavioral care plan prior to TDPRS submitting the
health care plan to the Court. Any modification or termination of
court ordered services must be presented and approved by the court
with jurisdiction over the matter.
7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)
--------------------------------------------------------------
7.18.1 All HMO contracts with any of the entities described in Texas
Insurance Code Article 20A.02 (ee) or a group of providers who are
licensed to provide the same health care services or an entity that
is wholly-owned or controlled by one or more hospitals and
physicians including a physician-hospital organization (delegated
network contracts) must be submitted to TDH no later than 120 days
prior to Implementation Date. All delegated network contracts must:
7.18.1.1 contain the mandatory contract provisions for all subcontractors in
Article 3.2 of this contract;
7.18.1.2 comply with the requirements, duties and responsibilities of this
contract;
7.18.1.3 not create a barrier for full participation to significant
traditional providers;
7.18.1.4 not interfere with TDH's oversight and audit responsibilities
including collection and validation of encounter data; or
32 May 31, 2001
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7.18.1.5 be consistent with the federal requirement for simplicity in the
administration of the Medicaid program.
7.18.2 In addition to the mandatory provisions for all subcontracts under
Articles 3.2 and 7.2, all HMO delegated network contracts must
include the following mandatory standard provisions:
7.18.2.1 HMO is required to include subcontract provisions in its delegated
network contracts which require the UM protocol used by a delegated
network to produce substantially similar outcomes, as approved by
TDH, as the UM protocol employed by the contracting HMO. The
responsibilities of an HMO in delegating UM functions to a delegated
network will be governed by Article 16.3.12 of this contract.
7.18.2.2 Delegated networks that have been delegated claims payment
responsibilities by HMO must also have the responsibility to submit
encounter, utilization, quality, and financial data to HMO. HMO
remains responsible for integrating all delegated network data
reports into HMO's reports required under this contract. If HMO is
not able to collect and report all delegated network data for HMO
reports required by this contract, HMO must not delegate claims
processing to the delegated network.
7.18.2.3 The delegated network must comply with the same records retention
and production requirements, including Open Records requirements, as
the HMO under this contract.
7.18.2.4 The delegated network is subject to the same marketing restrictions
and requirements as the HMO under this contract.
7.18.2.5 HMO is responsible for ensuring that delegated network contracts
comply with the requirements and provisions of the TDH/HMO contract.
TDH will impose appropriate sanctions and remedies upon HMO for any
default under the TDH/HMO contract which is caused directly or
indirectly by the acts or omissions of the delegated network.
7.18.3 HMO cannot enter into contracts with delegated networks to provide
services under this contract which require the delegated network to
enter into exclusive contracts with HMO as a condition for
participation with HMO.
7.18.3.1 Article 7.18.3 does not apply to providers who are employees or
participants in limited or closed panel provider networks.
7.18.4 All delegated networks that limit Member access to those providers
contracted with the delegated network (closed or limited panel
networks) with whom HMO contracts must either independently meet the
access provisions of 28 Texas Administrative Code ss. 11.1607,
relating to access requirements for those Members enrolled or
33 May 31, 2001
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assigned to the delegated network, or HA40 must provide for access
through other network providers outside the closed panel delegated
network.
7.18.5 HMO cannot delegate to delegated network the enrollment,
re-enrollment, assignment or reassignment of a Member.
7.18.6 In addition to the above provision HMO and Approved Non-Profit
Health Corporations (ANHCs) must comply with all of the requirements
contained in 28 TAC ss. 11.1604, relating to Requirements of
Certain Contracts between Primary HMOs and ANHCs and Primary HMOs
and Provider HMOs.
7.18.7 HMO REMAINS RESPONSIBLE FOR PERFORMING ALL DUTIES, RESPONSIBILITIES
AND SERVICES UNDER THIS CONTRACT REGARDLESS OF WHETHER THE DUTY,
RESPONSIBILITY OR SERVICE IS CONTRACTED OR DELEGATED TO ANOTHER. HMO
MUST PROVIDE A COPY OF THE CONTRACT PROVISIONS THAT SET OUT HMO'S
DUTIES, RESPONSIBILITIES, AND SERVICES TO ANY PROVIDER NETWORK OR
GROUP WITH WHOM HMO CONTRACTS TO ANY PROVIDER NETWORK OR GROUP WITH
WHOM HMO CONTRACTS TO PROVIDE HEALTH CARE SERVICES ON A RISK SHARING
OR CAPITATED BASIS OR TO PROVIDE HEALTH CARE SERVICES.
8. Article VIII
ARTICLE VIII MEMBER SERVICES REQUIREMENTS
8.2 MEMBER HANDBOOK
---------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no later
than five (5) days after. HMO receives the Enrollment File. If the
5th day falls on a weekend or state holiday, the Member Handbook
must be mailed by the following working day. The Member Handbook
must be written at a 4th - 6th grade reading comprehension level.
The Member Handbook must contain all critical elements specified by
TDH. See Appendix D, Required Critical Elements, for specific
details regarding content requirements. HMO must submit a Member
Handbook to TDH for approval not later than 90 days before the
Implementation Date (see Article 3.4.1 regarding the process for
plan materials review).
8.2.2 Member Handbook Updates. HMO must provide updates to the Handbook to
all Members as changes are made to the Required Critical Elements in
Appendix D. HMO must make the Member Handbook available in the
languages of the major
34 May 31, 2001
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population groups and in a format accessible to the visually
impaired served by HMO.
8.2.3 THE MEMBER HANDBOOK AND ANY REVISIONS OR CHANGES MUST BE APPROVED BY
TDH PRIOR TO PUBLICATION AND DISTRIBUTION TO MEMBERS (See Article
3.4.1 regarding the process for plan materials review).
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal and state law require HMOs and providers to maintain written
policies and procedures for informing and providing written
information to all adult Members 18 years of age and older about
their rights under state and federal law, in advance of their
receiving care (Social Security Act ss.1902(a)(57)
and ss.1903(m)(1)(A)). The written policies and procedures must
contain procedures for providing written information regarding the
Member's right to refuse, withhold or withdraw medical treatment and
mental health treatment advance directives. HMO policies and
procedures must comply with provisions contained in 42 CFR ss.434.28
and 42 CFR ss.489, Subpart I, relating to advance directives for all
hospitals, critical access hospitals, skilled nursing facilities,
home health agencies, providers of home health care, providers of
personal care services and hospices, as well as the following state
laws and rules:
8.3.1.1 a Member's right to self-determination in making health care
decisions; and
8.3.1.2 the Advance Directives Act, Chapter 166, Texas Health and Safety
Code, which includes:
8.3.1.2.1 a Member's right to execute an advance written directive to
physicians and family or surrogates, or to make a non-written
directive to administer, withhold or withdraw life-sustaining
treatment in the event of a terminal or irreversible condition;
8.3.1.2.2 a Member's right to make written and non-written Out-of-Hospital
Do-Not-Resuscitate Orders; and
8.3.1.2.3 a Member's right to execute a Medical Power of Attorney to appoint
an agent to make health care decisions on the Member's behalf if the
Member becomes incompetent; and
8.3.1.3 the declaration for Mental Health Treatment, Chapter 137, Texas
Civil Practices and Remedies Code, which includes: a Member's right
to execute a declaration for mental health treatment in a document
making a declaration of preferences or instructions regarding mental
health treatment.
35 May 31, 2001
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8.3.2 HMO must maintain written policies for implementing a Member's
advance directive. Those policies must include a clear and precise
statement of limitations if HMO or a participating provider cannot
or will not implement a Member's advance directive.
8.3.2.1 A statement of limitation on implementing a Member's advance
directive should include at least the following information:
8.3.2.1.1 a clarification of any differences between HMO's conscience
objections and those which may be raised by the Member's PCP or
other providers;
8.3.2.1.2 identification of the state legal authority permitting HMO's
conscience objections to carrying out an advance directive; and
8.3.2.1.3 a description of the medical and mental health conditions or
procedures affected by the conscience objection.
8.3.3 HMO cannot require a Member to execute or issue an advance directive
as a condition for receiving health care services.
8.3.4 HMO cannot discriminate against a Member based on whether or not the
Member executed or issued an advance directive.
8.3.5 HMO's policies and procedures must require HMO and subcontractor to
comply with the requirements of state and federal law relating to
advance directives. HMO must provide education and training to
employees, Members, and the community on issues concerning advance
directives. HMO must submit a copy of its policies and procedures
for TDH review and approval during Phase I of Readiness Review.
8.3.6 All materials provided to Members regarding advance directives must
be written at a 7th - 8th grade reading comprehension level, except
where a provision is required by state or federal law and the
provision cannot be reduced or modified to a 7th - 8th grade reading
level because it is a reference to the law or is required to be
included "as written" in the state or federal law. HMO must submit
to TDH any revisions to existing approved advance directive
materials.
8.3.7 HMO must notify Members of any changes in state or federal laws
relating to advance directives within 90 days from the effective
date of the change, unless the law or regulation contains a specific
time requirement for notification.
8.4 MEMBER ID CARDS
---------------
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8.4.1 A Medicaid Identification Form (Form 3087) is issued monthly by the
TDHS. The form includes the "STAR" Program logo and the name and
toll free number of the Member's health plan. A Member may have a
temporary Medicaid Identification (Form 1027-A) which will include a
STAR indicator.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from receiving the Enrollment File from the
Enrollment Broker. If the 5th day falls on a weekend or state
holiday, the ID Card must be issued by the following working day.
The ID Card must include, at a minimum, the following: Member's
name; Member's Medicaid number; either the issue date of the card or
effective date of the PCP assignment; PCP's name, address, and
telephone number; name of HMO; name of IPA to which the Member's PCP
belongs, if applicable; the 24-hour, seven (7) day a week toll-free
telephone number operated by HMO; the toll-free number for
behavioral health care services; and directions for what to do in an
emergency. The ID Card must be reissued if the Member reports a lost
card; there is a Member name change, if Member requests a new PCP,
or for any other reason which results in a change to the information
disclosed on the ID Card.
8.5 MEMBER COMPLAINT PROCESS
------------------------
8.5.1 HMO must develop, implement and maintain a Member complaint system
that complies with the requirements of Article 20A.12 of the Texas
Insurance Code, relating to the Complaint System, except where
otherwise provided in this contract and in applicable federal law.
The complaint and appeals procedure must be the same for all members
and must comply with Texas Insurance Code, Article 20A.12 or
applicable federal law. Modifications and amendments must be
submitted to TDH at least 30 days prior to the implementation of the
modification or amendment.
8.5.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving Member complaints.
The procedures must be reviewed and approved in writing by TDH
before Phase I of Readiness Renewal Review. Any changes or
modifications to the procedures must be submitted to TDH for
approval thirty (30) days prior to the effective date of the
amendment.
8.5.3 HMO must designate an officer of HMO who has primary responsibility
for ensuring that complaints are resolved in compliance with written
policy and within the time required. An "officer" of HMO means a
president, vice president, secretary, treasurer, or chairperson of
the board for a corporation, the sole proprietor, the managing
general partner of a partnership, or a person having similar
executive authority in the organization.
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8.4.1 A Medicaid Identification Form (Form 3087) is issued monthly by the
TDHS. The form includes the "STAR" Program logo and the name and
toll free number of the Member's health plan. A Member may have a
temporary Medicaid Identification (Form 1027-A) which will include a
STAR indicator.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from receiving the Enrollment File from the
Enrollment Broker. If the 5th day falls on a weekend or state
holiday, the ID Card must be issued by the following working day.
The ID Card must include, at a minimum, the following: Member's
name; Member's Medicaid number; either the issue date of the card or
effective date of the PCP assignment; PCP's name, address, and
telephone number; name of HMO; name of IPA to which the Member's PCP
belongs, if applicable; the 24-hour, seven (7) day a week toll-free
telephone number operated by HMO; the toll-free number for
behavioral health care services; and directions for what to do in an
emergency. The ID Card must be reissued if the Member reports a lost
card, there is a Member name change, if Member requests a new PCP,
or for any other reason which results in a change to the information
disclosed on the ID Card.
8.5 MEMBER COMPLAINT PROCESS
------------------------
8.5.1 HMO must develop, implement and maintain a Member complaint system
that complies with the requirements of Article 20A.12 of the Texas
Insurance Code, relating to the Complaint System, except where
otherwise provided in this contract and in applicable federal law.
The complaint and appeals procedure must be the same for all members
and must comply with Texas Insurance Code, Article 20A.12 or
applicable federal law. Modifications and amendments must be
submitted to TDH at least 30 days prior to the implementation of the
modification or amendment.
8.5.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving Member complaints.
The procedures must be reviewed and approved in writing by TDH
before Phase I of Readiness Renewal Review. Any changes or
modifications to the procedures must be submitted to TDH for
approval thirty (30) days prior to the effective date of the
amendment.
8.5.3 HMO must designate an officer of HMO who has primary responsibility
for ensuring that complaints are resolved in compliance with written
policy and within the time required. An "officer" of HMO means a
president, vice president, secretary, treasurer, or chairperson of
the board for a corporation, the sole proprietor, the managing
general partner of a partnership, or a person having similar
executive authority in the organization.
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8.5.4 HMO must have a routine process to detect patterns of complaints and
disenrollments and involve management and supervisory staff to
develop policy and procedural improvements to address the
complaints. HMO must cooperate with TDH and TDH's Enrollment Broker
in Member complaints relating to enrollment and disenrollment.
8.5.5 HMO's complaint procedures must be provided to Members in writing
and in alternative communication formats. A written description of
HMO's complaint procedures must be in appropriate languages and easy
for Members to understand. HMO must include a written description in
the Member Handbook. HMO must maintain at least one local and one
toll-free telephone number for making complaints.
8.5.6 HMO's process must require that every complaint received in person,
by telephone or in writing, is recorded in a written record and is
logged with the following details: date; identification of the
individual filing the complaint; identification of the individual
recording the complaint; nature of the complaint; disposition of the
complaint; corrective action required; and date resolved.
8.5.7 HMO's process must include a requirement that the Governing Body of
HMO reviews the written records (logs) for complaints and appeals.
8.5.8 HMO is prohibited from discriminating against a Member because that
Member is making or has made a complaint.
8.5.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be referred
to TDH within five (5) business days after the Member makes a
disenrollment request.
8.5.10 HMO must develop, implement and maintain an appeal of adverse
determination procedure that complies with the requirements of
Article 21.58A of the Texas Insurance Code, relating to the
utilization review, except where otherwise provided in this contract
and in applicable federal law. The appeal of an adverse
determination procedure must be the same for all Members and must
comply with Texas Insurance Code, Article 21.58A or applicable
federal law. Modifications and amendments must be submitted to TDH
no less than 30 days prior to the implementation of the modification
or amendment. When an enrollee, a person acting on behalf of an
enrollee, or an enrollee's provider of record expresses orally or in
writing any dissatisfaction or disagreement with an adverse
determination, HMO or UR agent must regard the expression of
dissatisfaction as a request to appeal an adverse determination.
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8.5.11 If a complaint or appeal of an adverse determination relates to the
denial, delay, reduction, termination or suspension of covered
services by either HMO or a utilization review agent contracted to
perform utilization review by HMO, HMO must inform Members they have
the right to access the TDH Fair Hearing process at any time in lieu
of the internal complaint system provided by HMO. HMO is required to
comply with the requirements contained in 1 TAC Chapter 357,
relating to notice and Fair Hearings in the Medicaid program,
whenever an action is taken to deny, delay, reduce, terminate or
suspend a covered service.
8.5.12 If Members utilize HMO's internal complaint or appeal of adverse
determination system and the complaint relates to the denial, delay,
reduction, termination or suspension of covered services by either
HMO or a utilization review agent contracted to perform utilization
review by HMO, HMO must inform the Member that they continue to have
a right to appeal the decision through the TDH Fair Hearing process.
8.5.13 The provisions of Article 21.58A, Texas Insurance Code, relating to
a Member's right to appeal an adverse determination made by HMO or a
utilization review agent by an independent review organization, do
not apply to a Medicaid recipient. Federal fair hearing regulations
(Social Security Act ss.1902a(3), codified at 42 C.F.R. 431.200 et
seq.) require the agency to make a final decision after a Fair
Hearing, which conflicts with the State requirement that the IRO
make a final decision. Therefore, the State requirement is
pre-empted by the federal requirement.
8.5.14 HMO will cooperate with the Enrollment Broker and TDH to resolve all
Member complaints. Such cooperation may include, but is not limited
to, participation by HMO or Enrollment Broker and/or TDH internal
complaint committees.
8.5.15 HMO must have policies and procedures in place outlining the role of
HMO's Medical Director in the Member Complaint System and appeal of
an adverse determination. The Medical Director must have a
significant role in monitoring, investigating and hearing
complaints.
8.5.16 HMO must provide Member Advocates to assist Members in understanding
and using HMO's complaint system and appeal of an adverse
determination.
39 May 31, 2001
|
8.5.17 HMO's Member Advocates must assist Members in writing or filing a
complaint or appeal of an adverse determination and monitoring the
complaint or appeal through the Contractor's complaint or appeal of
an adverse determination process until the issue is resolved.
8.6 MEMBER NOTICE, APPEAL AND FAIR HEARING
--------------------------------------
8.6.1 HMO must send Members the notice required by 1 Texas Administrative
Code ss.357.5, whenever HMO takes an action to deny, delay, reduce
or terminate covered services to a Member. The notice must be mailed
to the Member no less than 10 days before HMO intends to take an
action. If an emergency exists, or if the time within which the
service must be provided makes giving 10 days notice impractical or
impossible, notice must be provided by the most expedient means
reasonably calculated to provide actual notice to the Member,
including by phone, direct contact with the Member, or through the
provider's office.
8.6.2 The notice must contain the following information:
8.6.2.1 Member's right to immediately access TDH's Fair Hearing process;
8.6.2.2 a statement of the action HMO will take;
8.6.2.3 the date the action will be taken;
8.6.2.4 an explanation of the reasons HMO will take the action;
8.6.2.5 a reference to the state and/or federal regulations which support
HMO's action;
8.6.2.6 an address where written requests may be sent and a toll-free number
Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair Hearing;
8.6.2.7 a procedure by which Member may appeal HMO's action through either
HMO's complaint process or TDH's Fair Hearings process;
8.6.2.8 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative, legal
counsel or another spokesperson;
40 May 31, 2001
|
8.6.2.9 an explanation of whether, and under what circumstances, services
may be continued if a complaint is filed or a Fair Hearing
requested;
8.6.2.10 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within 90
days of the date on the notice or the right to request a hearing is
waived;
8.6.2.11 a statement explaining that HMO must make its decision within 30
days from the date the complaint is received by HMO; and
8.6.2.12 a statement explaining that a final decision must be made by TDH
within 90 days from the date a Fair Hearing is requested.
8.7 MEMBER ADVOCATES
----------------
8.7.1 HMO must provide Member Advocates to assist Members. Member
Advocates must be physically located within the service area. Member
Advocates must inform Members of their rights and responsibilities,
the complaint process, the health education and the services
available to them, including preventive services.
8.7.2 Member Advocates must assist Members in writing complaints and are
responsible for monitoring the complaint through HMO's complaint
process until the Member's issues are resolved or a TDH Fair Hearing
requested (see Articles 8.6.15, 8.6.16, and 8.6.17).
8.7.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care provided
or the way care is delivered. Member Advocates are also responsible
for helping or referring Members to community resources available to
meet Member needs that are not available from HMO as Medicaid
covered services.
8.7.4 Member Advocates must provide outreach to Members and participate in
TDH-sponsored enrollment activities.
8.8 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.8.1 Cultural Competency Plan. HMO must have a comprehensive written
Cultural Competency Plan describing how HMO will ensure culturally
competent services, and provide linguistic and disability related
access. The Plan must describe how the individuals and systems
within HMO will effectively provide services to people of
41 May 31, 2001
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all cultures, races, ethnic backgrounds, and religions, as well as
those with disabilities, in a manner that recognizes, values,
affirms, and respects the worth of the individuals and protects and
preserves the dignity of each. HMO must submit a written plan to TDH
no later than 90 days prior to the Implementation Date.
Modifications and amendments to the written plan must be submitted
to TDH no less than 30 days prior to implementation of the
modification or amendment. The Plan must also be made available to
HMO's network of providers.
8.8.2 The and Cultural Competency Plan must include the following:
8.8.2.1 HMO's written policies and procedures for ensuring effective
communication through the provision of linguistic services following
Title VI of the Civil Rights Act guidelines and the provision of
auxiliary aids and services, in compliance with the Americans with
Disabilities Act, Title III, Department of Justice Regulation
36.303. HMO must disseminate these policies and procedures to ensure
that both Staff and subcontractors are aware of their
responsibilities under this provision of the contract.
8.8.2.2 A description of how HMO will educate and train its staff and
subcontractors on culturally competent service delivery, and the
provision of linguistic and/or disability-related access as related
to the characteristics of its members;
8.8.2.3 A description of how HMO will implement the plan in its
organization, identifying a person in the organization who will
serve as the contact with TDH on the Cultural Competency Plan;
8.8.2.4 A description of how HMO will develop standards and performance
requirements for the delivery of culturally competent care and
linguistic access, and monitor adherence with those standards and
requirements;
8.8.2.5 A description of how HMO will provide outreach and health education
to Members, including racial and ethnic minorities, non-English
speakers or limited-English speakers, and those with disabilities;
and
8.8.2.6 A description of how HMO will help Members access culturally and
linguistically appropriate community health or social service
resources;
8.8.3 Linguistic, Interpreter Services, and Provision of Auxiliary Aids
and Services. HMO must provide experienced, professional
interpreters when technical, medical or
42 May 31, 2001
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treatment information is to be discussed. See Title VI of the Civil
Rights Act of 1964, 42 U.S.C. ss.ss.2000d, et seq. HMO must ensure
the provision of auxiliary aids and services necessary for effective
communication, as per the Americans with Disabilities Act, Title
III, Department of Justice Regulations 36.303.
8.8.3.1 HMO must adhere to and provide to Members the Member Bill of Rights
and Responsibilities as adopted by the Texas Health and Human
Services Commission and contained at 1 Texas Administrative Code
(TAC) ss.ss.353.202-353.203. The Member Bill of Rights and
Responsibilities assures Members the right "to have interpreters, if
needed, during appointments with [their] providers and when talking
to [their] health plan. Interpreters include people who can speak in
[their] native language, assist with a disability, or help [them]
understand the information."
8.8.3.2 HMO must have in place policies and procedures that outline how
Members can access face-to-face interpreter services in a provider's
office if necessary to ensure the availability of effective
communication regarding treatment, medical history or health
education for a Member. HMOs must inform its providers on how to
obtain an updated list of participating, qualified interpreters.
8.8.3.3 A competent interpreter is defined as someone who is:
8.8.3.4 proficient in both English and the other language;
8.8.3.5 has had orientation or training in the ethics of interpreting; and
8.8.3.6 has the ability to interpret accurately and impartially.
8.8.3.7 HMO must provide 24-hour access to interpreter services for Members
to access emergency medical services within HMO's network.
8.8.3.8 Family Members, especially minor children, should not be used as
interpreters in assessments, therapy or other medical situations in
which impartiality and confidentiality are critical, unless
specifically requested by the Member. However, a family member or
friend may be used as an interpreter if they can be relied upon to
provide a complete and accurate translation of the information being
provided to the Member; the Member is advised that a free
interpreter is available; and the Member expresses a preference to
rely on the family member or friend.
8.8.4 All Member orientation presentations, education classes and
materials must be presented in the languages of the major population
groups making up 10% or more
43 May 31, 2001
|
of the Medicaid population in the service area, as specified by TDH.
HMO must provide auxiliary aids and services, as needed, including
materials in alternative formats (i.e., large print, tape or
Braille), and interpreters or real-time captioning to accommodate
the needs of persons with disabilities that affect communication.
8.8.5 HMO must provide or arrange access to TDD to Members who are deaf or
hearing impaired.
8.9 CERTIFICATION DATE
------------------
8.9.1 On the date of the new Member's enrollment, TDH will provide HMOs
with the Member's Medicaid certification date.
9. Article IX is amended by adding the following bolded and italicized
language and deleting the following stricken language:
ARTICLE IX MARKETING AND PROHIBITED PRACTICES
9.4 NETWORK PROVIDER DIRECTORY
--------------------------
9.4.1 HMO must submit a provider directory to TDH no later than 180 days
prior to the Implementation Date. Any revisions must be approved by
TDH prior to publication and distribution to prospective Members
(see Article 3.4.1 regarding the process for plan materials review).
The directory must contain all critical elements specified by TDH.
|
See Appendix, Required Critical Elements, for specific details regarding content requirements.
9.4.3 Updates to the provider directory must be provided to the Enrollment
Broker at the beginning of each State fiscal year quarter. This
includes the months of September, December, March and June. HMO is
responsible for submitting draft updates to TDH only if changes
other than PCP information are incorporated. HMO is responsible for
sending three final paper copies and one electronic copy of the
updated provider directory to TDH each quarter. If an electronic
format is not available, five paper copies must be sent. TDH will
forward two updated provider directories, along with its approval
notice, to the Enrollment Broker to facilitate their distribution of
the directories.
10. Article X is amended by adding the following bolded and italicized
language and deleting the following stricken language:
ARTICLE X MANAGEMENT INFORMATION SYSTEM (MIS) REQUIREMENTS
44 May 31, 2001
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10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.4 HMO is required to submit and receive data as specified in this
contract and HMO Encounter Data Submission Manual. HMO must provide
complete encounter data of all capitated services within the scope
of services of the contract between HMO and TDH. Encounter data must
follow the format, data elements and methods of transmission
specified in the contract and HMO Encounter Data Submission Manual.
HMO must submit encounter data, including adjustments to encounter
data. The Encounter transmission will include all encounter data and
encounter data adjustments processed by HMO for the previous month.
Data quality validation will incorporate assessment standards
developed jointly by HMO and TDH. Original records will be made
available for inspection by TDH for validation purposes. Data which
do not meet quality standards must be corrected and returned within
a time period specified by TDH.
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM
-------------------------------------
The encounter/claims processing subsystem must collect, process, and
store data on all health care services delivered for which HMO is
responsible. The functions of these subsystems are claims/encounter
processing and capturing health service utilization data. The
subsystem must capture all health-care services, including medical
supplies, using standard codes (e.g. CPT-4, HCPCS, ICD9-CM, UB92
Revenue Codes), rendered by health-care providers to an eligible
enrollee regardless of payment arrangement (e.g. capitation or
fee-for-service). It approves, prepares for payment, or may return,
reject or deny claims submitted. This subsystem may integrate manual
and automated systems to validate and adjudicate claims and
encounters. HMO must use encounter data validation methodologies
prescribed by TDH.
Functions and Features:
(1) Accommodate multiple input methods: electronic submission,
tape, claim document, and media.
(2) Support entry and capture of a minimum of all required data
elements specified in the Encounter Data Submissions manual
and the Texas Medicaid Managed Care Claims Manual.
(3) Edit and audit to ensure allowed services are provided by
eligible providers for eligible recipients.
|
(4) Interface with Member and provider subsystems.
(5) Capture and report TPL potential, reimbursement or denial.
(6) Edit for utilization and service criteria, medical policy, fee schedules, multiple contracts, contract periods and conditions.
(7) Submit data to TDH through electronic transmission using specified formats.
45 May 31, 2001
(8) Support multiple fee schedule benefit packages and capitation
rates for all contract periods for individual providers,
groups, services, etc. A claim encounter must be initially
adjudicated and all adjustments must use the fee applicable to
the date of service.
(9) Provide timely, accurate, and complete data for monitoring
claims processing performance.
(10) Provide timely, accurate, and complete data for reporting
medical service utilization.
(11) Maintain and apply prepayment edits to verify accuracy and
validity of claims data for proper adjudication.
(12) Maintain and apply edits and audits to verify timely,
accurate, and complete encounter data reporting.
(13) Submit reimbursement to non-contracted providers for emergency
care rendered to enrollees in a timely and accurate fashion.
(14) Validate approval and denials of precertification and prior
authorization requests during adjudication of
claims/encounters.
(15) Track and report the exact date a service was performed. Use
of date ranges must have State approval.
(16) Receive and capture claim and encounter data from TDH.
(17) Receive and capture value-added services codes.
(18) Capability of identifying adjustments and linking them to the
original claims/encounters.
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM
-----------------------------------------
The quality management/quality improvement/utilization review
subsystem combines data from other subsystems, and/or external
systems, to produce reports for analysis which focus on the review
and assessment of quality of care given, detection of over and under
utilization, and the development of user defined reporting criteria
and standards. This system profiles utilization of providers and
enrollees and compares them against experience and norms for
comparable individuals. This system also supports the quality
assessment function.
The subsystem tracks utilization control function(s) and monitoring
inpatient admissions, emergency room use, ancillary, and out-of-area
services. It provides provider profiles, occurrence reporting, and
monitoring and evaluation studies. The subsystem may integrate HMO's
manual and automated processes or incorporate other software
reporting and/or analysis programs.
The subsystem incorporates and summarizes information from enrollee
surveys, provider and enrollee complaints, and appeal processes.
Functions and Features:
46 May 31, 2001
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(1) Supports provider credentialing and recredentialing
activities.
(2) Supports HMO processes to monitor and identify deviations in
patterns of treatment from established standards or norms.
Provides feedback information for monitoring progress toward
goals, identifying optimal practices, and promoting continuous
improvement.
(3) Supports development of cost and utilization data by provider
and service.
(4) Provides aggregate performance and outcome measures using
standardized quality indicators similar to HEDIS or as
specified by TDH.
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(5) Supports quality-of-care Focused Studies.
(6) Supports the management of referral/utilization control processes and procedures, including prior authorization and precertifications and denials of services.
(7) Monitors primary care provider referral patterns.
(8) Supports functions of reviewing access, use and coordination of services (i.e. actions of Peer Review and alert/flag for review and/or follow-up; laboratory, x-ray and other ancillary service utilization per visit).
(9) Stores and reports patient satisfaction data through use of enrollee surveys.
(10) Provides fraud and abuse detection, monitoring and reporting.
(11) Meets minimum report/data collection/analysis functions of
Article XI and Appendix A - Standards For Quality Improvement
Programs.
(12) Monitors and tracks provider and enrollee complaints and
appeals from receipt to disposition or resolution by provider.
11. Article XI is amended by adding the following bolded and italicized
language and deleting the following stricken language:
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM
11.2 WRITTEN QIP PLAN
----------------
HMO must have on file with TDH an approved plan describing its
Quality Improvement Plan (QIP), including how HMO will accomplish
the activities pertaining to each Standard (I-XVI) in Appendix A.
Modifications and amendments must be submitted to TDH upon review
and approval of the QI Committee and Board of Director's of HMO.
11.3 QIP SUBCONTRACTING
------------------
If HMO subcontracts any of the essential functions or reporting
requirements of QIP to another entity, HMO must maintain a file of
the subcontractors. The file must be available for review by TDH or
its designee upon request. HMO must notify
47 May 31, 2001
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TDH no later than 90 days prior to terminating any subcontract
affecting a major performance function of this contract (see Article
3.2.1.2).
12. Article XII is amended by adding the following bolded and italicized
language and deleting the following stricken language:
ARTICLE XII REPORTING REQUIREMENTS
12.1 FINANCIAL REPORTS
-----------------
12.1.1 MCFS Report. HMO must submit the Managed Care Financial Statistical
Report (MCFS) included in Appendix I. The report must be submitted
to TDH no later than 30 days after the end of each state fiscal year
quarter (i.e., Dec. 30, March 30, June 30, Sept. 30) and must
include complete financial and statistical information for each
month. The MCFS Report must be submitted for each claims processing
subcontractor in accordance with this Article. HMO must incorporate
financial and statistical data received by its delegated networks
(IPAs, ANHCs, Limited Provider Networks) in its MCFS Report.
12.1.3 An HMO must submit monthly reports for each of the first 6 months
following the Implementation Date. If the cumulative net loss for
the contract period to date after the 6th month is less than
$200,000, HMO may submit quarterly reports in accordance with the
above provisions unless the condition in Article 12.1.2 exists, in
which case monthly reports must be submitted.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care Financial
Statistical Reports. The first final report must reflect expenses
incurred through the 90th day after the end of the contract. The
first final report must be filed on or before the 120th day after
the end of the contract. The second final report must reflect data
completed through the 334th day after the end of the contract and
must be filed on or before the 365th day following the end of the
contract.
12.1.5 Administrative expenses reported in the monthly and Final MCFS
Reports must be reported in accordance with Appendix L, Cost
Principles for Administrative Expenses. Indirect administrative
expenses must be based on an allocation methodology for Medicaid
managed care activities and services that is developed or approved
by TDH.
12.1.6 Affiliate Report. HMO must submit an Affiliates Report to TDH no
later than 90 days prior to the Implementation Date. The report must
contain the following information:
48 May 31, 2001
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12.1.6.1 A listing of all Affiliates; and
12.1.6.2 A schedule of all transactions with Affiliates which, under the
provisions of this Contract, will be allowable as expenses in either
Line 4 or Line 5 of Part 1 of the MCFS Report for services provided
to HMO by the Affiliates for the prior approval of TDH. Include
financial terms, a detailed description of the services to be
provided, and an estimated amount which will be incurred by HMO for
such services during the Contract period.
12.1.11 IBNR Plan. HMO must furnish a written IBNR Plan to manage
incurred-but-not- reported (IBNR) expenses, and a description of the
method of insuring against insolvency, including information on all
existing or proposed insurance policies. The Plan must include the
methodology for estimating IBNR. The plan and description must be
submitted to TDH not later than 60 days prior to the Implementation
Date. Changes to the IBNR plan and description must be submitted to
TDH no later than 30 days before changes to the plan are implemented
by HMO.
12.1.14 Each report required under this Article must be mailed to: Bureau of
Managed Care; Texas Dept. Of Health; 1100 West 49th Street; Austin,
TX 78756-3168 (exceptions: The MCFS Report may be submitted to TDH
via E-mail). HMO must also mail a copy of the reports, except for
items in Article 12.1.7 and Article 12.1.10 to Texas Department of
Insurance, Mail Code 106-3A, HMO Division, Attention: HMO Division
Director, PO Box 149104, Austin, TX 78714-9104.
12.2 STATISTICAL REPORTS
-------------------
12.2.1 HMO must electronically file the following monthly reports: (1)
encounter; (2) encounter detail; (3) institutional; (4)
institutional detail; and (5) claims detail for cost-reimbursed
services filed, if any, with HMO. Encounter data must include the
data elements, follow the format, and use the transmission method
specified by TDH in the Encounter Data Submission Manual. Encounters
must be submitted by HMO to TDH no later than 45 days after the date
of adjudication (finalization) of the claims.
12.2.6 HMO must use its TDH-specified identification numbers on all
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encounter data submissions. Please refer to the TDH Encounter Data Submission Manual for further specifications.
12.2.8 All Claims Summary Report. HMO must submit the "All Claims Summary
Report" identified in the Texas Managed Care Claims Manual as a
contract year-to-date report. The report must be submitted quarterly
by the last day of the month following the reporting period. The
reports must be submitted to TDH in a format specified by TDH.
49 May 31, 2001
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12.2.9 Medicaid Disproportionate Share Hospital (DHS) Reports. HMO must
file preliminary and final Medicaid Disproportionate Share Hospital
(DSH) reports, required by TDH to identify and reimburse hospitals
that qualify for Medicaid SDH funds. The preliminary and final DSH
reports must include the data element and be submitted in the form
and format specified by TDH. The preliminary DSH reports are due on
or before June of the year following the state fiscal year for which
data is being reported. The final DSH reports re due no later than
July 15 of the year following the state fiscal year for which data
is being reported.
12.3 ARBITRATION/LITIGATION CLAIMS REPORT
------------------------------------
HMO must submit an Arbitration/Litigation Claims Report in a format
provided by TDH (see Appendix M) identifying all provider or HMO
requests for arbitration or matters in litigation. The report must
be submitted within 30 days from the date the matter is referred to
arbitration or suit is filed, or whenever there is a change of
status in a matter referred to arbitration or litigation.
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS
-------------------------------------
HMO must submit a Summary Report of Provider Complaints. HMO must
also report complaints submitted to its subcontracted risk groups
(e.g., IPAs). The complaint report must be submitted in two paper
copies and one electronic copy no later than 45 days after the end
of the state fiscal quarter using a form specified by TDH.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.1 Provider Network Reports. HMO must submit to the Enrollment Broker
an electronic file summarizing changes in HMO's provider network
including PCPs, specialists, ancillary providers and hospitals. The
file must indicate if the PCPs and specialists participate in a
closed network and the name of the delegated network. The electronic
file must be submitted in the format specified by TDH and can be
submitted as often as daily, but must be submitted at least weekly.
12.5.1.1 Provider Termination Report. HMO must submit a monthly report which
identifies any providers who cease to participate in HMO's provider
network, either voluntarily or involuntarily. The report must be
submitted to TDH in the format specified by TDH. HMO will submit the
report no later than thirty (30) days after the end of the reporting
month. The information must include the provider's name, Medicaid
number, the reason for the provider's termination, and whether the
termination was voluntary or involuntary.
50 May 31, 2001
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12.6 MEMBER COMPLAINTS
-----------------
HMO must submit a quarterly summary report of Member complaints. HMO
must also report complaints submitted to its delegated networks
(e.g., IPAs). The complaint report format must be submitted to TDH
as two paper copies and one electronic copy on or before 45 days
following the end of the state fiscal quarter using a form specified
by TDH.
12.10 QUALITY IMPROVEMENT REPORTS
---------------------------
12.10.2 Annual Focused Studies. Focused Studies on well child, pregnancy,
and a study chosen by the plan must be submitted to TDH according to
due dates established by TDH.
12.10.4 Provider Medical Record Audit and Report. HMO is required to conform
to commonly accepted medical record standards such as those used by
NCQA, JCAHO, or those used for credentialing review such as the
Texas Environment of Care Assessment Program (TECAP), and have
documentation on file at HMO for review by TDH or its designee
during an on-site review.
12.11 HUB Reports
-----------
HMO must submit quarterly reports documenting HMO's HUB program
efforts and accomplishments. The report must include a narrative
description of HMO's program efforts and a financial report
reflecting payments made to HUB. HMO must use the format included in
Appendix B for HUB Quarterly reports. For HUB Certified Entities:
HMO must include the General Service Commission (GSC) Vendor Number
and the ethnicity/gender under which a contracting entity is
registered with GSC. For HUB Qualified (but not certified) Entities:
HMO must include the ethnicity /gender of the major owner(s) (51 %)
of the entity. Any entities for which HMO cannot provide this
information cannot be included in the HUB report. For both types of
entities, an entity will not be included in the HUB Report if HMO
does not list ethnicity/gender information.
12.12 THSTEPS REPORTS
---------------
Minimum reporting requirements. HMO must submit, at a minimum, 80%
of all THSteps checkups on HCFA 1500 claim forms as part of the
encounter file submission to the TDH Claims Administrator no later
than thirty (30) days after the date of final adjudication
(finalization) of the claims. Failure to comply with these minimum
reporting requirements will result in Article XVIII sanctions and
money damages.
51 May 31, 2001
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13. Article XIII is amended by adding the following bolded and
italicized language and striking the following stricken language:
ARTICLE XIII PAYMENT PROVISIONS
13.1 CAPITATION AMOUNTS
------------------
13.2 EXPERIENCE REBATE TO STATE
--------------------------
13.2.1 For the contract period, HMO must pay to TDH an experience rebate
calculated in accordance with the tiered rebate method listed below
based on the excess of allowable HMO STAR revenues over allowable
HMO STAR expenses as measured by any positive amount on Line 7 of
"Part 1: Financial Summary, All Coverage Groups Combined" of the
Final Managed Care Financial-Statistical Report set forth in
Appendix I, as reviewed and confirmed by TDH. TDH reserves the right
to have an independent audit performed to verify the information
provided by HMO.
-----------------------------------------------------------
Graduated Rebate Method
-----------------------------------------------------------
Experience Rebate as a HMO Share State Share
Percentage of
Revenues
-----------------------------------------------------------
0%-3% 100% 0%
-----------------------------------------------------------
Over 3% - 7% 75% 25%
-----------------------------------------------------------
Over 7% - 10% 50% 50%
-----------------------------------------------------------
Over 10% - 15% 25% 75%
-----------------------------------------------------------
Over 15% 0% 100%
-----------------------------------------------------------
13.2.2 Carry Forward of Prior Contract Period Losses: Losses incurred for
one contract period can only be carried forward to the next contract
period.
13.2.2.1 Carry Forward of Loss from one Service Delivery Area to Another: If
HMO operates in multiple Service Delivery Areas (SDAs), losses in
one SDA cannot be used to offset net income before taxes in another
SDA.
13.2.3 Experience rebate will be based on a pre-tax basis.
52 May 31, 2001
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13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates: HMO may
subtract from an experience rebate owed to the State, expenses for
population-based health initiatives that have been approved by TDH.
A population-based initiative (PBI) is a project or program designed
to improve some aspect of quality of care, quality of life, or
health care knowledge for the community as a whole. Value-added
service does not constitute a PBI. Contractually required services
and activities do not constitute a PBI.
13.2.5 There will be two settlements for payment(s) of the experience
rebate. The first settlement shall equal 100 percent of the
experience rebate as derived from Line 7 of Part 1 (Net Income
Before Taxes) of the first Final Managed Care Financial Statistical
(MCFS) Report and shall be paid on the same day the first annual
MCFS Report is submitted to TDH. The second settlement shall be an
adjustment to the first settlement and shall be paid to TDH on the
same day that the second Final MCFS Report is submitted to TDH if
the adjustment is a payment from HMO to TDH. TDH or its agent may
audit or review the MCFS reports. If TDH determines that corrections
to the MCFS reports are required, based on a TDH audit/review or
other documentation acceptable to TDH, to determine an adjustment to
the amount of the second settlement, then final adjustment shall be
made within two years from the date that HMO submits the second
Final MCFS report. HMO must pay the first and second settlements on
the due dates for the first and second Final MCFS reports
respectively as identified in Article 12.1.4. TDH may adjust the
experience rebate if TDH determines HMO has paid affiliates amounts
for goods or services that are higher than the fair market value of
the goods and services in the service area. Fair market value may be
based on the amount HMO pays a non-affiliate(s) or the amount
another HMO pays for the same or similar service in the service
area. TDH has final authority in auditing and determining the amount
of the experience rebate.
13.4 PAYMENT OF PERFORMANCE OBJECTIVE BONUSES
----------------------------------------
13.4.3 The HMO must submit the Performance Objectives Report and the
Detailed Data Element Report as referenced in Article 13.3.2, within
150 days from the end of each State fiscal year. Performance
premiums will be paid to HMO within 120 days after the State
receives and validates the data contained in each required
Performance Objectives Report.
13.4.4 The performance objective allocation for HMO shall be assigned to
each performance objective, described in Appendix K, in accordance
with the following percentages:
53 May 31, 2001
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---------------------------------------------------------------
EPSDT SCREENS Percent of Performance
Objective Incentive Fund
---------------------------------------------------------------
1. <12 months 12%
---------------------------------------------------------------
2. 12 to 24 months 12%
---------------------------------------------------------------
3. 25 months - 20 years 20%
---------------------------------------------------------------
---------------------------------------------------------------
IMMUNIZATIONS Percent of Performance
Objective Incentive Fund
---------------------------------------------------------------
4. <12 months 7%
---------------------------------------------------------------
5. 12 to 24 months 5%
---------------------------------------------------------------
---------------------------------------------------------------
ADULT ANNUAL VISITS Percent of Performance
Objective Incentive Fund
---------------------------------------------------------------
6. Adult Annual Visits 3%
---------------------------------------------------------------
---------------------------------------------------------------
PREGNANCY VISITS Percent of Performance
Objective Incentive Fund
---------------------------------------------------------------
7. Initial Prenatal Exam 15%
---------------------------------------------------------------
8. Visits by Gestational Age 14%
---------------------------------------------------------------
9. Postpartum Visit 12%
---------------------------------------------------------------
14. Article XIV is amended by adding the following bolded and italicized
language and deleting the following stricken language:
14.1 ELIGIBILITY DETERMINATION
-------------------------
14.1.3.3 Members of the Tigua Indian tribe.
14.4 AUTOMATIC RE-ENROLLMENT
-----------------------
14.4.1 Members who are disenrolled because they are temporarily ineligible
for Medicaid will be automatically re-enrolled in the same health
plan. Temporary loss of eligibility is defined as a period of 6
months or less.
54 May 31, 2001
|
15. Article XV is amended by adding the following bolded and italicized
language and deleting the following stricken language:
15.6 ASSIGNMENT
----------
This contract was awarded to HMO based on HMO's qualifications to
perform personal and professional services. HMO cannot assign this
contract without the written consent of TDI and TDH. This provision
does not prevent HMO from subcontracting duties and responsibilities
to qualified subcontractors. If TDI and TDH consent to an assignment
of this contract, a transition period of 90 days will run from the
date the assignment is approved by TDI and TDH so that Members'
services are not interrupted and, if necessary, the notice provided
for in Article 15.7 can be sent to Members. The assigning HMO must
also submit a transition plan, as set out in Article 18.2.1, subject
to TDH's approval.
15.7 MAJOR CHANGE IN CONTRACTING
---------------------------
TDH may send notice to Members when a major change affecting HMO
occurs. A "major change" includes, but is not limited to, a
substantial change of subcontractors and assignment of this
contract. TDH will provide HMO with an advanced copy of such letter
prior to its printing and distribution. The notice letter to Members
may permit the Members to re-select their plan and PCP. TDH will
bear the cost of preparing and sending the notice letter in the
event of an approved assignment of the contract. For any other major
change in contracting, HMO will prepare the notice letter and submit
it to TDH for review and approval. After TDH has approved the letter
for distribution to Members, HMO will bear the cost of sending the
notice letter.
15.8 NON-EXCLUSIVE
-------------
This contract is a non-exclusive agreement. Either party may
contract with other entities for similar services in the same
service area.
15.9 DISPUTE RESOLUTION
------------------
The dispute resolution process adopted by TDH in accordance with
Chapter 2260, Texas Government Code, will be used to attempt to
resolve all disputes arising under this contract. All disputes
arising under this contract shall be resolved through TDH's dispute
resolution procedures, except where a remedy is provided for through
55 May 31, 2001
|
TDH's administrative rules or processes. All administrative remedies
must be exhausted prior to other methods of dispute resolution.
15.10 DOCUMENTS CONSTITUTING CONTRACT
-------------------------------
This contract includes this document and all amendments and
appendices to this document, the Request for Application, the
Application submitted in response to the Request for Application,
the Texas Medicaid Provider Procedures Manual and Texas Medicaid
Bulletins addressed to HMOs, contract interpretation memoranda
issued by TDH for this contract, and the federal waiver granting TDH
authority to contract with HMO. If any conflict in provisions
between these documents occurs, the terms of this contract and any
amendments shall prevail. The documents listed above constitute the
entire contract between the parties.
15.11 FORCE MAJEURE
-------------
TDH and HMO are excused from performing the duties and obligations
under this contract for any period that they are prevented from
performing their services as a result of a catastrophic occurrence,
or natural disaster, clearly beyond the control of either party,
including but not limited to an act of war, but excluding labor
disputes.
15.12 NOTICES
-------
Notice may be given by any means which provides for verification of
receipt. All notices to TDH shall be addressed to Bureau Chief,
Texas Department of Health, Bureau of Managed Care, 1100 W. 49th
Street, Austin, TX 78756-3168, with a copy to the Contract
Administrator. Notices to HMO shall be addressed to CEO/President,
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
15.13 SURVIVAL
--------
The provisions of this contract which relate to the obligations of
HMO to maintain records and reports shall survive the expiration or
earlier termination of this contract for a period not to exceed six
(6) years unless another period may be required by record retention
policies of the State of Texas or HCFA.
56 May 31, 2001
|
16. Article XVI is amended by adding the bolded and italicized language
and deleting the following stricken language:
ARTICLE XVI DEFAULT AND REMEDIES
16.1 DEFAULT BY TDH
--------------
16.1.11 FAILURE TO MAKE CAPITATION PAYMENTS
-----------------------------------
Failure by TDH to make capitation payments when due is a default
under this contract.
16.1.2 FAILURE TO PERFORM DUTIES AND RESPONSIBILITIES
----------------------------------------------
Failure by TDH to perform a material duty or responsibility as set
out in this contract is a default under this contract.
16.2 REMEDIES AVAILABLE TO HMO FOR TDH'S DEFAULT
-------------------------------------------
HMO may terminate this contract as set out in Article 18.1.5 of this
contract if TDH commits either of the events of default set out in
Article 16.1.
16.3 DEFAULT BY HMO
--------------
16.3.1 FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION
---------------------------------------------
Failure of HMO to perform an administrative function is a default
under this contract. Administrative functions are any requirements
under this contract that are not direct delivery of health care
services, including claims payments, encounter data submission,
filing any reports when due, cooperating in good faith with TDH, an
entity acting on behalf of TDH, or an agency authorized by statute
or law to require the cooperation of HMO in carrying out an
administrative, investigative, or prosecutorial function of the
Medicaid program, providing or producing records upon request, or
entering into contracts or implementing procedures necessary to
carry out contract obligations.
16.3.1.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
57 May 31, 2001
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All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's failure to perform an administrative function under this
contract, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.2 ADVERSE ACTION AGAINST HMO BY TDI
---------------------------------
Termination or suspension of HMO's TDI Certificate of Authority or
any adverse action taken by TDI that TDH determines will affect the
ability of HMO to provide health care services to Members is a
default under this contract.
16.3.2.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For an adverse action against HMO by TDI, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.3 INSOLVENCY
----------
Failure of HMO to comply with state and federal solvency standards
or incapacity of HMO to meet its financial obligations as they come
due is a default under this contract.
58 May 31, 2001
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16.3.3.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's insolvency, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.4 FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS
---------------------------------------------------
Failure of HMO to comply with the federal requirements for Medicaid,
including, but not limited to, federal law regarding
misrepresentation, fraud, or abuse; and, by incorporation, Medicare
standards, requirements, or prohibitions, is a default under this
contract.
The following events are defaults under this contract pursuant to 42
U.S.C. ss.ss.1396b(m)(5), 1396u-2(e)(1)(A):
16.3.4.1 HMO's substantial failure to provide medically necessary items and
services that are required under this contract to be provided to
Members;
16.3.4.2 HMO's imposition of premiums or charges on Members in excess of the
premiums or charges permitted by federal law;
16.3.4.3 HMO's acting to discriminate among Members on the basis of their
health status or requirements for health care services, including
expulsion or refusal to enroll an individual, except as permitted by
federal law, or engaging in any practice that would reasonably be
expected to have the effect of denying or discouraging enrollment
with HMO by eligible individuals whose medical condition or history
indicates a need for substantial future medical services;
16.3.4.4 HMO's misrepresentation or falsification of information that is
furnished to HCFA, TDH, a Member, a potential Member, or a health
care provider;
59 May 31, 2001
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16.3.4.5 HMO's failure to comply with the physician incentive requirements
under 42 U.S.C. ss.1396b(m)(2)(A)(x); or
16.3.4.6 HMO's distribution, either directly or through any agent or
independent contractor, of marketing materials that contain false or
misleading information, excluding materials prior approved by TDH.
16.3.5 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. If HMO repeatedly fails
to meet the requirements of Articles 16.3.4.1 through and including
16.3.4.6, TDH must, regardless of what other sanctions are provided,
appoint temporary management and permit Members to disenroll without
cause. Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to comply with federal laws and regulations, TDH
may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Appoint temporary management as set out in Article 18.5;
o Initiate disenrollment of a Member or Members without cause as set
out in Article 18.6;
o Suspend or default all enrollment of individuals;
o Suspend payment to HMO;
o Recommend to HCFA that sanctions be taken against HMO as set out
in Article 18.7;
o Assess civil monetary penalties as set out in Article 18.8; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.6 FAILURE TO COMPLY WITH APPLICABLE STATE LAW
-------------------------------------------
HMO's failure to comply with Texas law applicable to Medicaid,
including, but not limited to, Article 32.039 of the Texas Human
Resources Code and state law regarding misrepresentation, fraud, or
abuse, is a default under this contract.
16.3.6.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or
60 May 31, 2001
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consecutively. Exercise of any remedy in whole or in part does not
limit TDH in exercising all or part of any remaining remedies.
For HMO's failure to comply with applicable state law, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess administrative penalties as set out in Article 32.039,
Government Code, with the opportunity for notice and appeal as
required by Article 32.039; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.7 MISREPRESENTATION, FRAUD UNDER ARTICLE 4.8
------------------------------------------
HMO's misrepresentation or fraud under Article 4.8 of this contract
is a default under this contract.
16.3.7.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's misrepresentation or fraud under Article 4.8, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.8 EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID
----------------------------------------------------
16.3.8.1 Exclusion of HMO or any of the managing employees or persons with an
ownership interest whose disclosure is required by ss. 1124(a) of
the Social Security Act (the Act) from the Medicaid or Medicare
program under the provisions of ss. 1128(a) and/or (b) of the Act is
a default under this contract.
61 May 31, 2001
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16.3.8.2 Exclusion of any provider or subcontractor or any of the managing
employees or persons with an ownership interest of the provider or
subcontractor whose disclosure is required by ss. 1124(a) of the
Social Security Act (the Act) from the Medicaid or Medicare program
from the Medicaid or Medicare program under the provisions of ss.
1128(a) and/or (b) of the Act is a default under this contract if
the exclusion will materially affect HMO's performance under this
contract.
16.3.8.3 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's exclusion from Medicare or Medicaid, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.9 FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS AND SUBCONTRACTORS
----------------------------------------------------------------
HMO's failure to make timely and appropriate payments to network
providers and Subcontractors is a default under this contract.
Withholding or recouping capitation payments as allowed or required
under other articles of this contract is not a default under this
contract.
16.3.9.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's failure to make timely and appropriate payments to network
providers and subcontractors, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
62 May 31, 2001
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o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.10 FAILURE TO TIMELY ADJUDICATE CLAIMS
-----------------------------------
Failure of HMO to adjudicate (paid, denied, or external pended) at
least ninety (90%) of all claims within thirty (30) days of receipt
and ninety-nine percent (99%) of all claims within ninety days of
receipt for the contract year is a default under this contract.
16.3.10.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consequently. Exercise of any remedy in
whole or in part does not limit TDH in exercising all or part of any
remaining remedies.
For HMO's failure to timely adjudicate claims, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.11 FAILURE TO DEMONSTRATE THE ABILITY TO PERFORM CONTRACT FUNCTIONS
----------------------------------------------------------------
Failure to pass any of the mandatory system or delivery functions of
the Readiness Review required in Article I of this contract is a
default under the contract.
16.3.11.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's failure to demonstrate the ability to perform contract
functions, TDH may:
63 May 31, 2001
|
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.12 FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF CONTRACTORS OR
----------------------------------------------------------------
NETWORK PROVIDERS
-----------------
16.3.12.1 Failure of HMO to audit, monitor, supervise, or enforce functions
delegated by contract to another entity that results in a default
under this contract or constitutes a violation of state or federal
laws, rules, or regulations is a default under this contract.
16.3.12.2 Failure of HMO to properly credential its providers, conduct
reasonable utilization review, or conduct quality monitoring is a
default under this contract.
16.3.12.3 Failure of HMO to require providers and contractors to provide
timely and accurate encounter, financial, statistical, and
utilization data is a default under this contract.
16.3.12.4 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's failure to monitor and/or supervise activities of
contractors or network providers, TDH may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.13 PLACING THE HEALTH AND SAFETY OF MEMBERS IN JEOPARDY
----------------------------------------------------
HMO's placing the health and safety of the Members in jeopardy is a
default under this contract.
64 May 31, 2001
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16.3.13.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's placing the health and safety of Members in jeopardy, TDH
may:
o Terminate the contract if the applicable conditions set out in
Article 18. 1.1 are met;
o Suspend new enrollment as set out in Article 18.3; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.14 FAILURE TO MEET ESTABLISHED BENCHMARK
-------------------------------------
Failure of HMO to meet any benchmark established by TDH under this
contract is a default under this contract.
16.3.14.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and may
be exercised concurrently or consecutively. Exercise of any remedy
in whole or in part does not limit TDH in exercising all or part of
any remaining remedies.
For HMO's failure to meet any benchmark established by TDH under
this contract, TDH may:
o Remove the THSteps component from the capitation paid to HMO if
the benchmark(s) missed is for THSteps;
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
17. Article XVII is amended by adding bolded and italicized language and
deleting the following stricken language:
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT
65 May 31, 2001
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17.1 TDH will provide HMO with written notice of default (Notice of
Default) under this contract. The Notice of Default may be given by
any means that provides verification of receipt. The notice of
default must contain the following information:
17.1.4 A clear and concise statement of the time period during which HMO
may cure the default if HMO is allowed to cure;
17.1.5 The remedy or remedies TDH is electing to pursue and when the remedy
or remedies will take effect;
17.1.6 If TDH is electing to impose money damages and/or civil monetary
penalties, the amount that TDH intends to withhold or impose and the
factual basis on which TDH is imposing the chosen remedy or
remedies;
17.1.7 Whether any part of money damages or civil monetary penalties, if
TDH elects to pursue one or both of those remedies, may be passed
through to an individual or entity who is or may be responsible for
the act or omission for which default is declared;
17.1.8 Whether failure to cure the default within the given time period, if
any, will result in TDH pursuing an additional remedy or remedies,
including, but not limited to, additional damages or sanctions,
referral for investigation or action by another agency, and/or
termination of the contract.
18. Article XVIII is amended by deleting existing Article XVIII and
|
replacing it with new Article XVIII as follows:
ARTICLE XVIII EXPLANATION OF REMEDIES
18.1 TERMINATION
-----------
18.1.1 TERMINATION BY TDH
------------------
TDH may terminate this contract if:
18.1.1.1 HMO substantially fails or refuses to provide medically necessary
services and items that are required under this contract to be
provided to Members after notice and opportunity to cure;
66 May 31, 2001
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18.1.1.2 HMO substantially fails or refuses to perform administrative
functions under this contract after notice and opportunity to cure;
18.1.1.3 HMO materially defaults under any of the provisions of Article XVI;
18.1.1.4 Federal or state funds for the Medicaid program are no longer
available; or
18.1.1.5 TDH has a reasonable belief that HMO has placed the health or
welfare of Members in jeopardy.
18.1.2 TDH must give HMO 90 days written notice of intent to terminate this
contract if termination is the result of HMO's substantial failure
or refusal to perform administrative functions or a material default
under any of the provisions of Article XVI. TDH must give HMO
reasonable notice under the circumstances if termination is the
result of federal or state funds for the Medicaid program no longer
being available. TDH must give the notice required under TDH's
formal hearing procedures set out in Section 1.2.1 in Title 25 of
the Texas Administrative Code if termination is the result of HMO's
substantial failure or refusal to provide medically necessary
services and items that are required under the contract to be
provided to Members or TDH's reasonable belief that HMO has placed
the health or welfare of Members in jeopardy.
18.1.2.1 Notice may be given by any means that gives verification of receipt.
18.1.2.2 Unless termination is the result of HMO's substantial failure or
refusal to provide medically necessary services and items that are
required under this contract to be provided to Members or is the
result of TDH's reasonable belief that HMO has placed the health or
welfare of Members in jeopardy, the termination date is 90 days
following the date that HMO receives the notice of intent to
terminate. For HMO's substantial failure or refusal to provide
services and items, HMO is entitled to request a pre-termination
hearing under TDH's formal hearing procedures set out in Section
1.2.1 of Title 25, Texas Administrative Code.
18.1.3 TDH may, for termination for HMO's substantial failure or refusal to
provide medically necessary services and items, notify HMO's Members
of any hearing requested by HMO and permit Members to disenroll
immediately without cause. Additionally, if TDH terminates for this
reason, TDH may enroll HMO's Members with another HMO or permit
HMO's Members to receive Medicaid-covered services other than from
an HMO.
18.1.4 HMO must continue to perform services under the transition plan
described in Article 18.2.1 until the last day of the month
following 90 days from the date of receipt of
67 May 31, 2001
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notice if the termination is for any reason other than TDH's
reasonable belief that HMO is placing the health and safety of the
Members in jeopardy. If termination is due to this reason, TDH may
prohibit HMO's further performance of services under the contract.
18.1.5 If TDH terminates this contract, HMO may appeal the termination
under ss.32.034, Texas Human Resources Code.
18.1.6 TERMINATION BY HMO
------------------
HMO may terminate this contract if TDH fails to pay HMO as required
under Article XIII of this contract or otherwise materially defaults
in its duties and responsibilities under this contract, or by giving
notice no later than 30 days after receiving the capitation rates
for the second contract year. Retaining premium, recoupment,
sanctions, or penalties that are allowed under this contract or that
result from HMO's failure to perform or HMO's default under the
terms of this contract is not cause for termination.
18.1.7 HMO must give TDH 90 days written notice of intent to terminate this
contract. Notice may be given by any means that gives verification
of receipt. The termination date will be calculated as the last day
of the month following 90 days from the date the notice of intent to
terminate is received by TDH.
18.1.8 TDH must be given 30 days from the date TDH receives HMO's written
notice of intent to terminate for failure to pay HMO to pay all
amounts due. If TDH pays all amounts then due within this 30-day
period, HMO cannot terminate the contract under this article for
that reason.
18.1.9 TERMINATION BY MUTUAL CONSENT
-----------------------------
This contract may be terminated at any time by mutual consent of
both HMO and TDH.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
----------------------------------------------
When termination of the contract occurs, TDH and HMO must meet the
following obligations:
18.2.1 TDH and HMO must prepare a transition plan, which is acceptable to
and approved by TDH, to ensure that Members are reassigned to other
plans without interruption of services. That transition plan will be
implemented during the 90-day period between receipt of notice and
the termination date unless termination is the result of
68 May 31, 2001
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TDH's reasonable belief that HMO is placing the health or welfare of
Members in jeopardy.
18.2.2 If the contract is terminated by TDH for any reason other than
federal or state funds for the Medicaid program no longer being
available or if HMO terminates the contract based on lower
capitation rates for the second contract year as set out in Article
13.1.4.1:
18.2.2.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.2.2 HMO is responsible for all expenses related to giving notice to
Members; and
18.2.2.3 HMO is responsible for all expenses incurred by TDH in implementing
the transition plan.
18.2.3 If the contract is terminated by HMO for any reason other than based
on lower capitation rates for the second contract year as set out in
Article 13.1.4.1:
18.2.3.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.3.2 TDH is responsible for all expenses related to giving notice to
Members; and.
18.2.3.3 TDH is responsible for all expenses it incurs in implementing the
transition plan.
18.2.4 If the contract is terminated by mutual consent:
18.2.4.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services
18.2.4.2 HMO is responsible for all expenses related to giving notice to
Members; and
18.2.4.3 TDH is responsible for all expenses it incurs in implementing the
transition plan.
18.3 SUSPENSION OF NEW ENROLLMENT
----------------------------
18.3.1 TDH must give HMO 30 days notice of intent to suspend new enrollment
in the Notice of Default other than for default for fraud and abuse
or imminent danger to the health or safety of Members. The
suspension date will be calculated as 30 days following the date
that HMO receives the Notice of Default.
69 May 31, 2001
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18.3.2 TDH may immediately suspend new enrollment into HMO for a default
declared as a result of fraud and abuse or imminent danger to the
health and safety of Members.
18.3.3 The suspension of new enrollment may be for any duration, up to the
termination date of the contract. TDH will base the duration of the
suspension upon the type and severity of the default and HMO's
ability, if any, to cure the default.
18.4 LIQUIDATED MONEY DAMAGES
------------------------
18.4.1 The measure of damages in the event that HMO fails to perform its
obligations under this contract may be difficult or impossible to
calculate or quantify. Therefore, should HMO fail to perform in
accordance with the terms and conditions of this contract, TDH may
require HMO to pay sums as specified below as liquidated damages.
The liquidated damages set out in this Article are not intended to
be in the nature of a penalty but are intended to be reasonable
estimates of TDH's financial loss and damage resulting from HMO's
non-performance.
18.4.2 If TDH imposes money damages, TDH may collect those damages by
reducing the amount of any monthly premium payments otherwise due to
HMO by the amount of the damages. Money damages that are withheld
from monthly premium payments are forfeited and will not be
subsequently paid to HMO upon compliance or cure of default unless a
determination is made after appeal that the damages should not have
been imposed.
18.4.3 Failure to file or filing incomplete or inaccurate annual,
semi-annual or quarterly reports may result in money damages of not
more than $11,000.00 for every month from the month the report is
due until submitted in the form and format required by TDH. These
money damages apply separately to each report.
18.4.4 Failure to produce or provide records and information requested by
TDH, an entity acting on behalf of TDH, or an agency authorized by
statute or law to require production of records at the time and
place the records were required or requested may result in money
damages of not more than $5,000.00 per day for each day the records
are not produced as required by the requesting entity or agency if
the requesting entity or agency is conducting an investigation or
audit relating to fraud or abuse, and not more than $1,000.00 per
day for each day records are not produced if the requesting entity
or agency is conducting routine audits or monitoring activities.
18.4.5 Failure to file or filing incomplete or inaccurate encounter data
may result in money damages of not more than $25,000 for each month
HMO fails to submit encounter data in the form and format required
by TDH. TDH will use the encounter data
70 May 31, 2001
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validation methodology established by TDH to determine the number of
encounter data and the number of months for which damages will be
assessed.
18.4.6 Failing or refusing to cooperate with TDH, an entity acting on
behalf of TDH, or an agency authorized by statute or law to require
the cooperation of HMO in carrying out an administrative,
investigative, or prosecutorial function of the Medicaid program may
result in money damages of not more than $8,000.00 per day for each
day HMO fails to cooperate.
18.4.7 Failure to enter into a required or mandatory contract or failure to
contract for or arrange to have all services required under this
contract provided may result in money damages of not more than
$1,000.00 per day that HMO either fails to negotiate in good faith
to enter into the required contract or fails to arrange to have
required services delivered.
18.4.8 Failure to meet the benchmark for benchmarked services under this
contract may result in money damages of not more than $25,000 for
each month that HMO fails to meet the established benchmark.
18.4.9 TDH may also impose money damages for a default under Article
16.3.9, Failure to Make Payments to Network Providers and
subcontractors, of this contract. These money damages are in
addition to the interest HMO is required to pay to providers under
the provisions of Articles 4.10.4 and 7.2.8.10 of this contract.
18.4.9.1 If TDH determines that HMO has failed to pay a provider for a claim
or claims for which the provider should have been paid, TDH may
impose money damages of $2 per day for each day the claim is not
paid from the date the claim should have been paid (calculated as 30
days from the date a clean claim was received by HMO) until the
claim is paid by HMO.
18.4.9.2 If TDH determines that HMO has failed to pay a capitation amount to
a provider who has contracted with HMO to provide services on a
capitated basis, TDH may impose money damages of $10 per day, per
Member for whom the capitation is not paid, from the date on which
the payment was due until the capitation amount is paid.
18.5 APPOINTMENT OF TEMPORARY MANAGEMENT
-----------------------------------
18.5.1 TDH may appoint temporary management to oversee the operation of HMO
upon a finding that there is continued egregious behavior by HMO or
there is a substantial risk to the health of the Members.
71 May 31, 2001
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18.5.2 TDH may appoint temporary management to assure the health of HMO's
Members if there is a need for temporary management while:
18.5.2.1 there is an orderly termination or reorganization of HMO; or
18.5.2.2 improvements are made to remedy violations found under Article
16.3.4.
18.5.3 Temporary management will not be terminated until TDH has determined
that HMO has the capability to ensure that the violations that
triggered appointment of temporary management will not recur.
18.5.4 TDH is not required to appoint temporary management before
terminating this contract.
18.5.5 No pre-termination hearing is required before appointing temporary
management.
18.5.6 As with any other remedy provided under this contract, TDH will
provide notice of default as is set out in Article XVII to HMO.
Additionally, as with any other remedy provided under this contract,
under Article 18.1 of this contract, HMO may dispute the imposition
of this remedy and seek review of the proposed remedy.
18.6 TDH-INITIATED DISENROLLMENT OF A MEMBER OR MEMBERS WITHOUT CAUSE
----------------------------------------------------------------
TDH must give HMO 30 days notice of intent to initiate disenrollment
of a Member of Members in the Notice of Default. The TDH-initiated
disenrollment date will be calculated as 30 days following the date
that HMO receives the Notice of Default.
18.7 RECOMMENDATION TO HCFA THAT SANCTIONS BE TAKEN AGAINST HMO
----------------------------------------------------------
18.7.1 If HCFA determines that HMO has violated federal law or regulations
and that federal payments will be withheld, TDH will deny and
withhold payments for new enrollees of HMO.
18.7.2 HMO must be given notice and opportunity to appeal a decision of TDH
and HCFA pursuant to 42 CFR ss.434.67.
18.8 CIVIL MONETARY PENALTIES
------------------------
18.8.1 For a default under Article 16.3.4.1, TDH may assess not more than
$25,000 for each default;
72 May 31, 2001
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18.8.2 For a default under Article 16.3.4.2, TDH may assess double the
excess amount charged in violation of the federal requirements for
each default. The excess amount shall be deducted from the penalty
and returned to the Member concerned.
18.8.3 For a default under Article 16.3.4.3, TDH may assess not more than $
100,000 for each default, including $15,000 for each individual not
enrolled as a result of the practice described in Article 16.3.4.3.
18.8.4 For a default under Article 16.3.4.4, TDH may assess not more than
$100,000 for each default if the material was provided to HCFA or
TDH and not more than $25,000 for each default if the material was
provided to a Member, a potential Member, or a health care provider.
18.8.5 For a default under Article 16.3.4.5, TDH may assess not more than
$25,000 for each default.
18.8.6 For a default under Article 16.3.4.6, TDH may assess not more than
$25,000 for each default.
18.8.7 HMO may be subject to civil money penalties under the provisions of
42 CFR 1003 in addition to or in place of withholding payments for a
default under Article 16.3.4.
18.9 FORFEITURE OF ALL OR A PART OF THE TDI PERFORMANCE BOND
-------------------------------------------------------
TDH may require forfeiture of all or a portion of the face amount of
the TDI performance bond if TDH determines that an event of default
has occurred. Partial payment of the face amount shall reduce the
total bond amount available pro rata.
18.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED
------------------------------------------
18.10.1 HMO may dispute the imposition of any sanction under this contract.
HMO notifies TDH of its dispute by filing a written response to the
Notice of Default, clearly stating the reason HMO disputes the
proposed sanction. With the written response, HMO must submit to TDH
any documentation that supports HMO's position. HMO must file the
review within 15 days from HMO's receipt of the Notice of Default.
Filing a dispute in a written response to the Notice of Default
suspends imposition of the proposed sanction.
18.10.2 HMO and TDH must attempt to informally resolve the dispute. If HMO
and TDH are unable to informally resolve the dispute, HMO must
notify the Bureau Chief of Managed Care that HMO and TDH cannot
agree. The Bureau Chief will refer the dispute to the Associate
Commissioner for Health Care Financing who will appoint
73 May 31, 2001
|
a committee to review the dispute under TDH's dispute resolution
procedures. The decision of the dispute resolution committee will be
TDH's final administrative decision.
19. Article XIX is amended by adding the following bold and italicized
language and deleting the stricken language as follows:
ARTICLE XIX TERM
19.2 This contract may be renewed for an additional one-year period by
written amendment to the contract executed by the parties prior to
the termination date of the present contract. TDH will notify HMO no
later than 90 days before the end of the contract period of its
intent not to renew the contract.
19.3 If either party does not intend to renew the contract beyond its
contract period, the party intending not to renew must submit a
written notice of its intent not to renew to the other party no
later than 90 days before the termination date set out in Article
19.1.
19.4 If either party does not intend to renew the contract beyond its
contract period and sends the notice required in Article 19.3, a
transition period of 90 days will run from the date the notice of
intent not to renew is received by the other party. By signing this
contract, the parties agree that the terms of this contract shall
automatically continue during any transition period.
19.5 The party that does not intend to renew the contract beyond its
contract period and sends the notice required by Article 19.3 is
responsible for sending notices to all Members on how the Member can
continue to receive covered services. The expense of sending the
notices will be paid by the non-renewing party. If TDH does not
intend to renew and sends the required notice, TDH is responsible
for any costs it incurs in ensuring that Members are reassigned to
other plans without interruption of services. If HMO does not intend
to renew and sends the required notice, HMO is responsible for any
costs TDH incurs in ensuring that Members are reassigned to other
plans without interruption of services. If both parties do not
intend to renew the contract beyond its contract period, TDH will
send the notices to Members and the parties will share equally in
the cost of sending the notices and of implementing the transition
plan.
74 May 31, 2001
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20. The Appendices are amended by deleting existing Appendix A,
"Standards for Quality Improvement Programs" and replacing it with
new Appendix A "Standards for Quality Improvement Programs", as
attached.
21. The Appendices are amended by deleting from Appendix B "HUB Progress
Assessment Reports" the reporting sheet entitled "Progress
Assessment Report By Non-Historically Utilized Business of Work
Sub-Contracted (Non-HUB-PAR)" and replacing it with new reporting
sheet in Appendix B, as attached.
22. The Appendices are amended by deleting the current Appendix C,
"Scope of Services" and replacing it with new Appendix C
"Value-added Services", as attached.
23. The Appendices are amended by deleting current Appendix D, "Family
Planning Providers" and replacing it with new Appendix D "Required
Critical Elements", which was formerly Appendix M and has been
redesignated.
24. The Appendices are amended by deleting existing Appendix E,
"Transplant Facilities" and replacing it with new Appendix E
"Transplant Facilities", as attached.
25. The Appendices are amended by deleting existing Appendix F, "Trauma
Facilities" and replacing it with new Appendix F "Trauma
Facilities", as attached.
26. The Appendices are amended by deleting existing Appendix G,
"Hemophilia Treatment Centers and Programs" and replacing it with
new Appendix G, "Hemophilia Treatment Centers and Programs", as
attached.
27. The Appendices are amended by deleting existing Appendix H,
"Utilization Management Report - Behavioral Health" and replacing it
with new Appendix H, "Utilization Management Report - Behavioral
Health", as attached.
28. The Appendices are amended by deleting existing Appendix I, "Managed
Care Financial-Statistical Report" and replacing it with new
Appendix I, "Managed Care Financial-Statistical Report", as
attached.
29. The Appendices are amended by deleting existing Appendix J,
"Utilization Management Report - Physical Health" and replacing it
with new Appendix J, "Utilization Management Report - Physical
Health", as attached.
30. The Appendices are amended by deleting existing Appendix K,
"Preventive Performance Objectives" and replacing it with new
Appendix K, "Preventive Performance Objectives", as attached.
75 May 31, 2001
|
31. The current Appendix M, "Required Critical Elements" is replaced by
new Appendix M, "Arbitration/Litigation Report", as attached.
|
AGREED AND SIGNED by an authorized representative of the parties on Aug. 2, 2001.
TEXAS DEPARTMENT OF HEALTH Superior Health Plan, Inc.
By: /s/ C. E. BELL, M.D. By: /s/ MICHAEL D MCKINNEY, M.D.
------------------------------ ------------------------------
Charles E. Bell, M.D. Michael D. McKinney, M.D.
Executive Deputy Commissioner President and CEO
of Health
Approved as to Form:
/s/ MAS
------------------------------
Office of General Counsel
TDH Doc. # 7427705425* 2001-01F
76 May 31, 2001
|
AMENDMENT NO. 6
TO THE
|
1999 CONTRACT FOR SERVICES
BETWEEN
HEALTH AND HUMAN SERVICES COMMISSION AND HMO
This Amendment No. 6 is entered into between the Health and Human Services Commission (HHSC) and Superior Health Plan, Inc. (HMO), to amend the Contract for Services between the Health and Human Services Commission and HMO in the El Paso Service Area. The effective date of this amendment is September 1, 2001. The Parties agree to amend the Contract as follows:
1. HHSC and HMO acknowledge the transfer of responsibility and the assignment of the original Contract for Services from TDH to HHSC on September 1, 2001. Where the original Contract for Services and any Amendment to the original Contract for Services assigns a right, duty, or responsibility to TDH, that right, duty, or responsibility may be exercised by HHSC or its designee.
2. Articles II, III, VI, VII, VIII, IX, X, XII, XIII, XV, XVI, XVIII and XIX are amended to read as follows:
2.0 DEFINITIONS
-----------
Chemical Dependency Treatment Facility means a facility licensed by
the Texas Commission on Alcohol and Drug Abuse (TCADA) under Sec.
464.002 of the Health and Safety Code to provide chemical dependency
treatment.
Chemical Dependency Treatment means treatment provided for a
chemical dependency condition by a Chemical Dependency Treatment
Facility, Chemical Dependency Counselor or Hospital.
Chemical Dependency Condition means a condition which meets at least
three of the diagnostic criteria for psychoactive substance
dependence in the American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders (DSM IV).
Chemical Dependency Counselor means an individual licensed by TCADA
under Sec. 504 of the Occupations Code to provide chemical
dependency treatment or a master's level therapist (LMSW-ACP, LMFT
or LPC) or a master's level therapist (LMSW-ACP, LMFT or LPC) with a
minimum of two years of post licensure experience in chemical
dependency treatment.
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Experience rebate means the portion of the HMO's net income before
taxes (financial Statistical Report, Part 1, Line 7) that is
returned to the state in accordance with Article 13.2.1.
Joint Interface Plan (JIP) means a document used to communicate
basic system interface information of the Texas Medicaid
Administrative System (TMAS) among and across State TMAS Contractors
and Partners so that all entities are aware of the interfaces that
affect their business. This information includes: file structure,
data elements, frequency, media, type of file, receiver and sender
of the file, and file I.D. The JIP must include each of the HMO's
interfaces required to conduct State TMAS business. The JIP must
address the coordination with each of the Contractor's interface
partners to ensure the development and maintenance of the interface;
and the timely transfer of required data elements between
contractors and partners.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.8 The use of Medicaid funds for abortion is prohibited unless the
pregnancy is the result of a rape, incest, or continuation of the
pregnancy endangers the life of the woman. A physician must certify
in writing that based on his/her professional judgment, the life of
the mother would be endangered if the fetus were carried to term.
HMO must maintain a copy of the certification for at least three
years.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.13 Chemical dependency treatment must conform to the standards set
forth in the Texas Administrative Code, Title 28, Part 1, Chapter 3,
Subchapter HH.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include THSteps
benefits, the periodicity schedule for THSteps checkups, and
immunizations, the required elements of a THSteps medical screen,
providing or arranging for all required lab screening tests
(including lead screening), and Comprehensive Care Program (CCP)
services available under the THSteps program to Members under age 21
years. Providers must also be educated and trained regarding the
requirements imposed upon the department and contracting HMOs under
the Consent Decree entered in Frew vs. McKinney, et al., Civil
Action No. 3:93CV65, in the United States District Court for the
Eastern District of Texas, Paris Division. Providers should be
educated and trained to treat each THSteps visit as an opportunity
for a comprehensive assessment of the Member.
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HMO must report provider education and training regarding THSteps in
accordance with Article 7.4.4.
7.2 PROVIDER CONTRACTS
------------------
7.2.5 HHSC reserves the right and retains the authority to make reasonable
inquiry and conduct investigations into provider and Member
complaints against HMO or any intermediary entity with whom HMO
contracts to deliver health care services under this contract. HHSC
may impose appropriate sanctions and contract remedies to ensure HMO
compliance with the provisions of this contract.
7.5 MEMBER PANEL REPORTS
--------------------
7.5 HMO must furnish each PCP with a current list of enrolled Members
enrolled or assigned to that Provider no later than 5 working days
after HMO receives the Enrollment File from the Enrollment Broker
each month.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following qualifications:
--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center meets the standards
established by federal rules and procedures. The FQHC must
also be an eligible provider enrolled in the Medicaid.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an MD
or a DO in the State of Texas either as a primary care
provider or in the area of specialization under which they
will provide medical services under contract with HMO; who
is a provider enrolled in the Medicaid; who has a valid Drug
Enforcement Agency registration number, and a Texas
Controlled Substance Certificate, if either is required in
their practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by
the State of Texas under Chapter 241 of the Health and
Safety Code which is enrolled as a provider in the Texas
Medicaid Program. HMO will require that all facilities in
the network used for acute inpatient specialty care for
people under age 21 with disabilities or chronic or complex
conditions will have a designated pediatric unit; 24 hour
laboratory and blood bank availability; pediatric
radiological capability; meet JCAHO standards; and have
discharge planning and social service units.
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--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the State of Texas who is enrolled in
Provider the Texas Medicaid Program.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the
Laboratory Federal Clinical Laboratory Improvement Act (CLIA), and
is enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for
Clinic (RHC) designation as a rural health clinic and is enrolled in the
Texas Medicaid Program.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization
Act ss.121.031ff.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility Provider credentialed to provide services and is enrolled in the
Texas Medicaid Program.
--------------------------------------------------------------------------------
School-Based Clinics located at school campuses that provide on site
Health Clinic primary and preventive care to children and adolescents.
(SBHC)
--------------------------------------------------------------------------------
Chemical A facility licensed by the Texas Commission on Alcohol and
Dependency Drug Abuse (TCADA) under Sec. 464.002 of the Health and
Treatment Safety Code to provide chemical dependency treatment.
Facility
--------------------------------------------------------------------------------
Chemical An individual licensed by TCADA under Sec. 504 of the
Dependency Occupations Code to provide chemical dependency treatment or
Counselor a master's level therapist (LMSW-ACP, LMFT or LPC) with a
minimum of two years of post-licensure experience in
chemical dependency treatment.
--------------------------------------------------------------------------------
7.10 SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, actively serving within that
specialty, including pediatric specialty providers and chemical
dependency specialty providers, within the network in sufficient
numbers and areas of practice to meet the needs of all Members
requiring specialty care services.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services through
its network specialists, sub-specialists and specialty care
facilities (e.g., children's hospitals, licensed chemical dependency
treatment facilities and tertiary care hospitals).
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8.2 MEMBER HANDBOOK
---------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no later
than 5 working days after HMO receives the Enrollment File. The
Member Handbook must be written at a 4th - 6th grade reading
comprehension level. The Member Handbook must contain all critical
elements specified by TDH. See Appendix D, Required Critical
Elements, for specific details regarding content requirements. HMO
must submit a Member Handbook to TDH for approval prior to the
effective date of the contract unless previously approved (see
Article 3.4.1 regarding the process for plan materials review).
8.4 MEMBER ID CARDS
---------------
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within 5 working days from the date the HMO receives the monthly
Enrollment File from the Enrollment Broker. The ID Card must
include, at a minimum, the following: Member's name; Member's
Medicaid number; either the issue date of the card or effective date
of the PCP assignment, PCP's name, address, and telephone number;
name of HMO; name of IPA to which the Member's PCP belongs, if
applicable; the 24-hour, seven (7) day a week toll-free telephone
number operated by HMO; the toll-free number for behavioral health
care services; and directions for what to do in an emergency. The ID
Card must be reissued if the Member reports a lost card, there is a
Member name change, if Member requests a new PCP, or for any other
reason which results in a change to the information disclosed on the
ID Card.
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
9.2.1 HMO must require that all HMO staff having direct marketing contact
with Members as part of their job duties and their supervisors
satisfactorily complete HHSC's marketing orientation and training
program, conducted by HHSC or health plan staff trained by HHSC,
prior to engaging in marketing activities on behalf of HMO. HHSC
will notify HMO of scheduled orientations.
9.2.2 Marketing Policies and Procedures. HMO must adhere to the Marketing
Policies and Procedures as set forth by the Health and Human
Services Commission.
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.3 HMO must have a system that can be adapted to the change in Business
Practices/Policies within the timeframe negotiated between HHSC and
the HMO.
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10.1.3.1 HMO must notify and advise BIR of major systems changes and
implementations. HMO is required to provide an implementation plan
and schedule of proposed system change at the time of this
notification.
10.1.3.2 BIR conducts a Systems Readiness test to validate the contractor's
ability to meet the MMIS requirements. This is done through systems
demonstration and performance of specific MMIS and subsystem
functions. The System Readiness test may include a desk review
and/or an onsite review and is conducted for the following events:
o A new plan is brought into the program
o An existing plan begins business in a new SDA
o An existing plan changes location
o An existing plan changes their processing system
10.1.3.3 Desk Review. HMO must complete and pass systems desk review prior to
onsite systems testing conducted by HHSC.
10.1.3.4 Onsite Review. HMO is required to provide a detailed and
comprehensive Disaster and Recovery Plan, and complete and pass an
onsite Systems Facility Review during the State's onsite systems
testing.
10.1.3.5 HMO is required to provide a Corrective Action Plan in response to
HHSC Systems Readiness Testing Deficiencies no later than 10 working
days after notification of deficiencies by HHSC.
10.1.3.6 HMO is required to provide representation to attend and participate
in the HHSC Systems Workgroup as a part of the weekly Systems Scan
Call.
10.1.9 HMO must submit a joint interface plan (JIP) in a format specified
by HHSC. The JIP will include required information on all contractor
interfaces that support the Medicaid Information Systems. The
submission of the JIP will be in coordination with other TMAS
contractors and is due no later than 10 working days after the end
of each state fiscal year calendar.
10.3 ENROLLMENT ELIGIBILITY SUBSYSTEM
--------------------------------
(11) Send PCP assignment updates to HHSC or its designee, in the format
specified by HHSC or its designee. Updates can be sent as often as
daily but must be sent at least weekly.
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12.1 FINANCIAL REPORTS
-----------------
12.1.1 MCFS Report. HMO must submit the Managed Care Financial Statistical
Report (MCFS) included in Appendix I. The report must be submitted
to HHSC no later than 30 days after the end of each state fiscal
year quarter (i.e., Dec. 30, March 30, June 30, Sept. 30) and must
include complete and updated financial and statistical information
for each month of the state fiscal year-to-date reporting period.
The MCFS Report must be submitted for each claims processing
subcontractor in accordance with this Article. HMO must incorporate
financial and statistical data received by its delegated networks
(IPAs, ANHCs, Limited Provider Networks) in its MCFS Report.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
Financial-Statistical Reports after the end of the second year of
the contract for the first two year portion of the contract and
again after the third year of the contract for the third year
(second portion) of the contract. The first final report must
reflect expenses incurred through the 90th day after the end of the
first two-year portion of the contract and again after the end of
the third year of the contract for the third year (second portion)
of the contract. The first final report must be filed on or before
the 120th day after the end of each portion of the contract. The
second final report must reflect data completed through the 334th
day after the end of the second year of the contract for the first
two year portion of the contract and again after the end of the
third year of the contract for the third year (second portion) of
the contract and must be filed on or before the 365th day following
the end of each portion of the contract year.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.3 PCP Error Report. HMO must submit to the Enrollment Broker an
electronic file summarizing changes in PCP assignments. The file
must be submitted in a format specified by HHSC and can be submitted
as often as daily but must be submitted at least weekly. When HMO
receives a PCP assignment Error Report /File, HMO must send
corrections to HHSC or its designee within five working days.
12.13 EXPEDITED PRENATAL OUTREACH REPORT
----------------------------------
12.13 HMO must submit the Expedited Prenatal Outreach Report for each
monthly reporting period in accordance with a format developed by
HHSC in consultation with the HMOs. The report must include elements
that demonstrate the level of effort and the outcomes of the HMO in
outreaching to pregnant women for the purpose of scheduling and/or
completing the initial obstetrical examination prior to 14 days
after the receipt of the daily enrollment file by the HMO. Each
monthly report is due by the last day of the month following each
monthly reporting period.
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13.1 CAPITATION AMOUNTS
------------------
13.1.2 Delivery Supplemental Payment (DSP). The monthly capatation amounts
and the DSP amount are listed below.
--------------------------------------------------------
Risk Group Monthly Capatation Amounts
--------------------------------------------------------
TANF Adults $178.01
--------------------------------------------------------
TANF Children greater than 12 $ 83.96
Months of Age
--------------------------------------------------------
Expansion Children greater than 12 $ 72.32
Months of Age
--------------------------------------------------------
Newborns less than/= 12 Months of $362.28
Age
--------------------------------------------------------
TANF Children less than/= 12 $362.28
Months of Age
--------------------------------------------------------
Expansion Children less than/= 12 $362.28
Months of Age
--------------------------------------------------------
Federal Mandate Children $ 47.77
--------------------------------------------------------
CHIP Phase 1 $ 61.85
--------------------------------------------------------
Pregnant Women $213.88
--------------------------------------------------------
Disabled/Blind $ 14.00
Administration
--------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy supplemental
payment for each delivery shall be paid to HMO as provided below in
the following amount: $2,992.02.
13.1.3.1 Once HMO has received its capitation rates established by HHSC for
the second or third year of this contract, HMO may terminate this
contract as provided in Article 18.1.6.
13.1.7 HMO renewal rates reflect program increases appropriated by the 76th
and 77th legislature for physician (to include THSteps providers)
and outpatient facility services. HMO must report to HHSC any change
in rates for participating physicians (to include THSteps providers)
and outpatient facilities resulting from this increase. The report
must be submitted to HHSC at the end of the first quarter of the
FY2000, FY2001 and FY2002 contract years according to the
deliverables matrix schedule set for HMO.
Contract Extension Amendment
7/18/01
8
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13.2 EXPERIENCE REBATE TO THE STATE
------------------------------
13.2.1 For the contract period, HMO must pay to TDH an experience rebate
calculated in accordance with the tiered rebate method listed below
based on the excess of allowable HMO STAR revenues over allowable
HMO STAR expenses as measured by any positive amount on Line 7 of
"Part 1: Financial Summary, All Coverage Groups Combined" of the
annual Managed Care Financial-Statistical Report set forth in
Appendix I, as reviewed and confirmed by TDH. TDH reserves the right
to have an independent audit performed to verify the information
provided by HMO.
-----------------------------------------------------------
Graduated Rebate Method
-----------------------------------------------------------
Net income before HMO Share State Share
taxes as a Percentage
of Revenues
-----------------------------------------------------------
0% -3% 100% 0%
-----------------------------------------------------------
Over 3% - 7% 75% 25%
-----------------------------------------------------------
Over 7% - 10% 50% 50%
-----------------------------------------------------------
Over 10% - 15% 25% 75%
-----------------------------------------------------------
Over 15% 0% 100%
-----------------------------------------------------------
13.2.2.1 The experience rebate for the HMO shall be calculated by applying
the experience rebate formula in Article 13.2.1 to the sum of the
net income before taxes (Financial Statistical Report, Part 1, Line
7) for all STAR Medicaid service areas contracted between the State
and HMO.
13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates: HMO may
subtract from an experience rebate owed to the State, expenses for
population-based health initiatives that have been approved by HHSC.
A population-based initiative (PBI) is a project or program designed
to improve some aspect of quality of care, quality of life, or
health care knowledge for the Medicaid population that may also
benefit the community as a whole. Value-added service does not
constitute a PBI. Contractually required services and activities do
not constitute a PBI.
13.2.5 There will be two settlements for payment(s) of the experience
rebate for FY 2000-2001 and two settlements for payment(s) for the
experience rebate for FY 2002. The first settlement for the
specified time period shall equal 100 percent
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Replacement Page Contract Extension Amendment 8/15/01 7/18/01
of the experience rebate as derived from Line 7 of Part 1 (Net
Income Before Taxes) of the first final Managed Care Financial
Statistical (MCFS) Report and shall be paid on the same day the
first final MCFS Repot is submitted to HHSC for the specified time
period. The second settlement shall be an adjustment to the first
settlement and shall be paid to HHSC on the same day that the second
final MCFS Report is submitted to HHSC for that specified time
period if the adjustment is a payment from HMO to HHSC. If the
adjustment is a payment from HHSC to HMO, HHSC shall pay such
adjustment to HMO within thirty (30) days of receipt of the second
final MCFS Report. HHSC or its agent may audit or review the MCFS
report. If HHSC determines that corrections to the MCFS reports are
required, based on a HHSC audit/review of other documentation
acceptable to HHSC, to determine an adjustment to the amount of the
second settlement, then final adjustment shall be made within two
years from the date that HMO submits the second final MCFS report.
HMO must pay the first and second settlements on the due dates for
the first and second final MCFS reports respectively as identified
in Article 12.1.4. HHSC may adjust the experience rebate if HHSC
determines HMO has paid affiliates amounts for goods or services
that are higher than the fair market value of the goods and services
in the service area. Fair market value may be based on the amount
HMO pays a non-affiliate(s) or the amount another HMO pays for the
same or similar service in the service area. HHSC has final
authority in auditing and determining the amount of the experience
rebate.
13.3 PERFORMANCE OBJECTIVES INCENTIVES
---------------------------------
13.3.1 Preventive Health Performance Objectives. Preventive Health
Performance Objectives are contained in this contract at Appendix K.
HMO must accomplish the performance objectives or a designated
percentage in order to be eligible for payment of financial
incentives. Performance objectives are subject to change. HHSC will
consult with HMO prior to revising performance objectives.
13.3.2 HMO will receive credit for accomplishing a performance objective
upon receipt of accurate encounter data required under Article 10.5
and 12.2 of this contract and/or a Detailed Data Element Report from
HMO with report format as determined by HHSC and aggregate data
report by HMO in accordance with a report format as determined by
HHSC (Performance Objective Report). Accuracy and completeness of
the Detailed Data Element Report and the Aggregate Data Performance
Objective Report will be determined by HHSC through an HHSC audit of
the HMO claims processing system. If HHSC determines that the
Detailed Data Element Report and Performance Objectives Report are
sufficiently supported by the results of the HHSC audit, the payment
of financial incentives will be made to HMO. Conversely, if the
audit results do not support the reports as determined by HHSC, HMO
will not receive payment
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Replacement Page Contract Extension Amendment 8/15/01 7/18/01
of the financial incentive. HHSC may conduct provider chart reviews
to validate the accuracy of the claims data related to HMO
accomplishment of performance objectives. If the results of the
chart review do not support the HMO claims system data or the HMO
Detailed Data Element Report and the Performance Objectives Report,
HHSC may recoup payment made to the HMO for performance objectives
incentives.
13.3.3 HMO will also receive credit for performance objectives performed by
other organizations if a network primary care provider or the HMO
retains documentation from the performing organization which
satisfies the requirements contained in Appendix K of this contract.
13.3.4 HMO will receive performance objective bonuses for accomplishing the
following percentages of performance objectives:
--------------------------------------------------------------------
Percent of Each Performance Percent of Performance Objective
Objective Accomplished Allocations Paid to HMO
--------------------------------------------------------------------
60% to 65% 20%
--------------------------------------------------------------------
65% to 70% 30%
--------------------------------------------------------------------
70% to 75% 40%
--------------------------------------------------------------------
75% to 80% 50%
--------------------------------------------------------------------
80% to 85% 60%
--------------------------------------------------------------------
85% to 90% 70%
--------------------------------------------------------------------
90% to 95% 80%
--------------------------------------------------------------------
95% to 100% 90%
--------------------------------------------------------------------
100% 100%
--------------------------------------------------------------------
13.3.5 HMO must submit the Detailed Data Element Report and the Performance
Objectives Report regardless of whether or not the HMO intends to
claim payment of performance objective bonuses.
13.3.6 Payment of performance objective bonus is contingent upon
availability of appropriations. If appropriations are not available
to pay performance objective bonuses as set out below, HHSC will
equitably distribute all available funds to each HMO that has
accomplished performance objectives.
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Replacement Page Contract Extension Amendment 8/15/01 7/18/01
13.3.7 In addition to the capitation amounts set forth in Article 13.1.2, a
performance premium of two dollars ($2.00) per Member month will be
allocated by HHSC for the accomplishment of performance objectives.
13.3.8 The HMO must submit the Performance Objectives Report and the
Detailed Data Element Report as referenced in Article 13.3.2, within
150 days from the end of each State fiscal year. Performance
premiums will be paid to HMO within 120 days after the State
receives and validates the data contained in each required
Performance Objectives Report.
13.3.9 The performance objective allocation for HMO shall be assigned to
each performance objective, described in Appendix K, in accordance
with the following percentages:
--------------------------------------------------------------------
EPSDT SCREENS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------------
1. < 12 months 12%
--------------------------------------------------------------------
2. 12 to 24 months 12%
--------------------------------------------------------------------
3. 25 months - 20 years 20%
--------------------------------------------------------------------
--------------------------------------------------------------------
IMMUNIZATIONS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------------
4. < 12 months 7%
--------------------------------------------------------------------
5. 12 to 24 months 5%
--------------------------------------------------------------------
--------------------------------------------------------------------
ADULT ANNUAL VISITS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------------
6. Adult Annual Visits 3%
--------------------------------------------------------------------
--------------------------------------------------------------------
PREGNANCY VISITS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------------
7. Initial prenatal exam 15%
--------------------------------------------------------------------
8. Visits by Gestational Age 14%
--------------------------------------------------------------------
9. Postpartum visit 12%
--------------------------------------------------------------------
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13.3.10 Compass 21 Encounter Data Conversion Performance Incentive. A
Compass 21 encounter data conversion performance incentive payment
will be paid by the State to each HMO that achieves the identified
conversion performance standard for at least one month in the first
quarter of SFY 2002 as demonstration of successful conversion to the
C21 system. The encounter data conversion performance standard is as
follows:
--------------------------------------------------------------------
Performance Objective Encounter Data Conversion
Performance Incentive
--------------------------------------------------------------------
Percentage of encounters submitted 65%
that are successfully accepted into
C21
--------------------------------------------------------------------
13.3.10.1 The amount of the incentive will be based on the total amount
identified by the state for the encounter data conversion
performance incentive pool ("Pool"). The pool will be equally
distributed between all the HMOs that achieve the performance
objective within the first quarter of SFY 2002. HMOs with multiple
contracts with HHSC are eligible to receive only one allocation from
the Pool. Required HMO performance for the identified objectives
will be verified by HHSC for accuracy and completeness. The
incentive will be paid only after HHSC has verified that HMO
performance has met the required performance standard. Payments will
be made in the second quarter of the fiscal year.
13.5.4 NEWBORN AND PREGNANT WOMAN PAYMENT PROVISIONS
---------------------------------------------
13.5.4 Newborns who appear on the MAXIMUS daily enrollment file but do not
appear on the MAXIMUS monthly enrollment or adjustment file before
the end of the sixth month following the date of birth will not be
retroactively enrolled into the HMO. HHSC will manually reconcile
payment to the HMO for services provided from the date of birth for
TP45 and all other eligibility categories of newborns. Payment will
cover services rendered from the effective date of the proxy ID
number when first issued by the HMO regardless of plan assignment at
the time the State-issued Medicaid ID number is received.
15.6 ASSIGNMENT
----------
15.6 This contract was awarded to HMO based on HMO's qualifications to
perform personal and professional services. HMO cannot assign this
contract without the written consent of HHSC. This provision does
not prevent HMO from
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Replacement Page Contract Extension Amendment 8/15/01 7/18/01
subcontracting duties and responsibilities to qualified
subcontractors. If HHSC consents to an assignment of this contract,
a transition period of 90 days will run from the date the assignment
is approved by HHSC so that Members' services are not interrupted
and, if necessary, the notice provided for in Article 15.7 can be
sent to Members. The assigning HMO must also submit a transition
plan, as set out in Article 18.2.1, subject to HHSC 's approval.
16.3 DEFAULT BY HMO
--------------
16.3.14.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to HHSC by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit HHSC in exercising all or
part of any remaining remedies.
For HMO's failure to meet any benchmark established by HHSC under
this contract, or for failure to meet improvement targets, as
identified by HHSC, HHSC may:
o Remove all or part of the THSteps component from the capitation
paid to HMO
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.15 FAILURE TO PERFORM A MATERIAL DUTY OR RESPONSIBILITY
----------------------------------------------------
Failure of HMO to perform a material duty or responsibility as set
out in this Contract is a default under this contract and HHSC may
impose one or more of the remedies contained within its provisions
and all other remedies available to HHSC by law or in equity.
16.3.15.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to HHSC by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit HHSC in exercising all or
part of any remaining remedies.
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Replacement Page Contract Extension Amendment 8/15/01 7/18/01
For HMO's failure to perform an administrative function under this
Contract, HHSC may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4; and/or
o Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
18.1.6 TERMINATION BY HMO
------------------
18.1.6 HMO may terminate this contract if HHSC fails to pay HMO as required
under Article XIII of this contract or otherwise materially defaults
in its duties and responsibilities under this contract, or by giving
notice no later than 30 days after receiving the capitation rates
for the second or third contract years. Retaining premium,
recoupment, sanctions, or penalties that are allowed under this
contract or that result from HMO's failure to perform or HMO's
default under the terms of this contract is not cause for
termination.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
----------------------------------------------
18.2.2 If the contract is terminated by HHSC for any reason other than
federal or state funds for the Medicaid program no longer being
available or if HMO terminates the contract based on lower
capitation rates for the second or third contract years as set out
in Article 13.1.3.1:
18.2.3 If the contract is terminated by HMO for any reason other than based
on lower capitation rates for the second or third contract years as
set out in Article 13.1.3.1:
Article XIX TERM
----
19.1 The effective date of this contract is August 30, 1999. This
contract will terminate on August 31, 2002, unless terminated
earlier as provided for elsewhere in the contract.
|
3. The Appendices are amended by replacing page 10 of Appendix A "Standards for Quality Improvement Programs" to incorporate a change in item F, number 1 on recredentialing.
4. The Appendices are amended by deleting Appendix D, "Required Critical Elements," and replacing it with new Appendix D, "Required Critical Elements", as attached.
Replacement Page Contract Extension Amendment 8/15/01 7/18/01
AGREED AND SIGNED by an authorized representative of the parties on
August 24 2001.
---------
Health and Human Services Commission Superior Health Plan, Inc.
By: /s/ DON A. GILBERT By:/s/ MICHAEL D. MCKINNEY, M.D.
------------------------------ ------------------------------
Don A. Gilbert Michael D. McKinney, M.D.
President & CEO
Approved as to Form:
/s/ ILLEGIBLE
------------------------------
Office of General Counsel
Replacement Page Contract Extension Amendment
8/15/01 7/18/01
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Exhibit 10.5
TDH Document No. 4810323494* 2001A-C
Orig #23923
1999
CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
TABLE OF CONTENTS
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT.......................... 1
ARTICLE II DEFINITIONS................................................ 2
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS........ 14
3.1 ORGANIZATION AND ADMINISTRATION.................................. 14
3.2 NON-PROVIDER SUECONTRACTS........................................ 15
3.3 MEDICAL DIRECTOR................................................. 17
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS................ 18
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION....................... 19
3.6 HMO REVIEW OF TDH MATERIALS...................................... 20
3.7 HMO TELEPHONE ACCESS REQUIREMENTS................................ 21
ARTICLE IV FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS........ 21
4.1 FISCAL SOLVENCY.................................................. 21
4.2 MINIMUM NET WORTH................................................ 22
4.3 PERFORMANCE BOND................................................. 22
4.4 INSURANCE........................................................ 22
4.5 FRANCHISE TAX.................................................... 23
4.6 AUDIT............................................................ 23
4.7 PENDING OR THREATENED LITIGATION................................. 23
4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN
HMO OPERATIONS................................................... 23
4.9 THIRD PARTY RECOVERY............................................. 24
4.10 CLAIMS PROCESSING REQUIREMENTS................................... 25
4.11 INDEMNIFICATION.................................................. 27
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS............ 28
5.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS................... 28
5.2 PROGRAM INTEGRITY................................................ 28
5.3 FRAUD AND ABUSE COMPLIANCE PLAN.................................. 28
5.4 SAFEGUARDING INFORMATION......................................... 31
5.5 NON-DISCRIMINATION............................................... 31
5.6 HISTORICALLY UNDERUTILIZED BUSINESSES (HUBs)..................... 32
5.7 BUY TEXAS........................................................ 33
5.8 CHILD SUPPORT.................................................... 33
5.9 REQUESTS FOR PUBLIC INFORMATION.................................. 33
5.10 NOTICE AND APPEAL................................................ 34
1999 Renewal Contract
Travis Service Area
August 9, 1999
ii
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ARTICLE VI SCOPE OF SERVICES........................................... 34
6.1 SCOPE OF SERVICES................................................ 34
6.2 PRE-EXISTING CONDITIONS.......................................... 37
6.3 SPAN OF ELIGIBILITY.............................................. 37
6.4 CONTINUITY OF CARE AND OUT-OF-NET WORK PROVIDERS................. 38
6.5 EMERGENCY SERVICES............................................... 39
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS.......... 40
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS.......................... 42
6.8 TEXAS HEALTH STEPS (EPSDT)....................................... 43
6.9 PERINATAL SERVICES............................................... 46
6.10 EARLY CHILDHOOD INTERVENTION (ECI)............................... 47
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN,
INFANTS, AND CHILDREN
(WIC) - SPECIFIC REQUIREMENTS.................................... 48
6.12 TUBERCULOSIS (TB)................................................ 49
6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS........ 50
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS............... 52
6.15 SEXUALLY TRANSMITTED DISEASES (STDs) AND HUMAN
IMMUNODEFICIENCY VIRUS (HIV)..................................... 53
6.16 BLIND AND DISABLED MEMBERS....................................... 55
ARTICLE VII PROVIDER NETWORK REQUIREMENTS............................... 56
7.1 PROVIDER ACCESSIBILITY........................................... 56
7.2 PROVIDER CONTRACTS............................................... 57
7.3 PHYSICIAN INCENTIVE PLANS........................................ 61
7.4 PROVIDER MANUAL AND PROVIDER TRAINING............................ 63
7.5 MEMBER PANEL REPORTS............................................. 64
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURE.......................... 64
7.7 PROVIDER QUALIFICATIONS - GENERAL................................ 64
7.8 PRIMARY CARE PROVIDERS........................................... 66
7.9 OB/GYN PROVIDERS................................................. 70
7.10 SPECIALTY CARE PROVIDERS......................................... 70
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES.................. 71
7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA)......... 71
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPs)......................... 73
7.14 RURAL HEALTH PROVIDERS........................................... 73
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FOHC) AND RURAL HEALTH
CLINICS (RHC).................................................... 74
7.16 COORDINATION WITH PUBLIC HEALTH.................................. 75
7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND
REGULATORY SERVICES.............................................. 79
1999 Renewal Contract
Travis Service Area
August 9, 1999
iii
|
7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS
AND ANHCs)....................................................... 80
ARTICLE VIII MEMBER SERVICES REQUIREMENTS................................ 82
8.1 MEMBER EDUCATION................................................. 82
8.2 MEMBER HANDBOOK.................................................. 82
8.3 ADVANCE DIRECTIVES............................................... 82
8.4 MEMBER ID CARDS.................................................. 84
8.5 MEMBER HOTLINE................................................... 85
8.6 MEMBER COMPLAINT PROCESS......................................... 85
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS......................... 87
8.8 MEMBER ADVOCATES................................................. 89
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES.......................... 89
ARTICLE IX MARKETING AND PROHIBITED PRACTICES.......................... 91
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION........................ 91
9.2 MARKETING ORIENTATION AND TRAINING............................... 92
9.3 PROHIBITED MARKETING PRACTICES................................... 92
9.4 NETWORK PROVIDER DIRECTORY....................................... 93
ARTICLE X MIS SYSTEM REQUIREMENTS..................................... 93
10.1 MODEL MIS REQUIREMENTS........................................... 93
10.2 SYSTEM-WIDE FUNCTIONS............................................ 95
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM................................. 96
10.4 PROVIDER SUBSYSTEM............................................... 97
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM............................ 98
10.6 FINANCIAL SUBSYSTEM.............................................. 99
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM........................ 100
10.8 REPORT SUBSYSTEM................................................. 102
10.9 DATA INTERFACE SUBSYSTEM......................................... 103
10.10 TPR SUBSYSTEM.................................................... 104
10.11 YEAR 2000 (Y2K) COMPLIANCE....................................... 105
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM........... 105
11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM......................... 105
11.2 WRITTEN QIP PLAN................................................. 105
11.3 QIP SUBCONTRACTING............................................... 105
11.4 ACCREDITATION.................................................... 106
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP........................... 106
11.6 QIP REPORTING REQUIREMENTS....................................... 106
1999 Renewal Contract
Travis Service Area
August 9, 1999
iv
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ARTICLE XII REPORTING REQUIREMENTS...................................... 106
12.1 FINANCIAL REPORTS................................................ 106
12.2 STATISTICAL REPORTS.............................................. 108
12.3 ARBITRATION/LITIGATION CLAIMS REPORT............................. 110
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS............................ 110
12.5 PROVIDER NETWORK REPORTS......................................... 110
12.6 MEMBER COMPLAINTS................................................ 110
12.7 FRAUDULENT PRACTICES............................................. 111
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH............... 111
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH................. 111
12.10 QUALITY IMPROVEMENT REPORTS...................................... 111
12.11 HUB REPORTS...................................................... 113
12.12 THSTEPS REPORTS.................................................. 113
ARTICLE XIII PAYMENT PROVISIONS.......................................... 113
13.1 CAPITATION AMOUNTS............................................... 113
13.2 EXPERIENCE REBATE TO STATE....................................... 117
13.3 PERFORMANCE OBJECTIVES........................................... 118
13.4 ADJUSTMENTS TO PREMIUM........................................... 119
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT.................. 119
14.1 ELIGIBILITY DETERMINATION........................................ 119
14.2 ENROLLMENT....................................................... 121
14.3 DISENROLLMENT.................................................... 122
14.4 AUTOMATIC RE-ENROLLMENT.......................................... 122
14.5 ENROLLMENT REPORTS............................................... 123
ARTICLE XV GENERAL PROVISIONS.......................................... 123
15.1 INDEPENDENT CONTRACTOR........................................... 123
15.2 AMENDMENT........................................................ 123
15.3 LAW, JURISDICTION AND VENUE...................................... 124
15.4 NON-WAIVER....................................................... 124
15.5 SEVERABILITY..................................................... 124
15.6 ASSIGNMENT....................................................... 124
15.7 MAJOR CHANGE IN CONTRACTING...................................... 125
15.8 NON-EXCLUSIVE.................................................... 125
15.9 DISPUTE RESOLUTION............................................... 125
15.10 DOCUMENTS CONSTITUTING CONTRACT.................................. 125
15.11 FORCE MAJEURE.................................................... 125
15.12 NOTICES.......................................................... 126
15.13 SURVIVAL......................................................... 126
1999 Renewal Contract
Travis Service Area
August 9, 1999
v
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ARTICLE XVI DEFAULT AND REMEDIES........................................ 126
16.1 DEFAULT BY TDH................................................... 126
16.2 REMEDIES AVAILABLE TO HMO FOR TDH's DEFAULT...................... 126
16.3 DEFAULT BY HMO................................................... 127
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT....................... 135
ARTICLE XVIII EXPLANATION OF REMEDIES..................................... 136
18.1 TERMINATION...................................................... 136
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION................... 138
18.3 SUSPENSION OF NEW ENROLLMENT..................................... 139
18.4 LIQUIDATED MONEY DAMAGES......................................... 139
18.5 APPOINTMENT OF TEMPORARY MANAGEMENT.............................. 141
18.6 TDH-INITIATED DISENROLLMENT OF A MEMBER OR MEMBERS
WITHOUT CAUSE.................................................... 142
18.7 RECOMMENDATION TO HCFA THAT SANCTIONS BE TAKEN
AGAINST HMO...................................................... 142
18.8 CIVIL MONETARY PENALTIES......................................... 142
18.9 FORFEITURE OF ALL OR PART OF THE TDI PERFORMANCE BOND............ 143
18.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED....................... 143
ARTICLE XIX TERM........................................................ 143
1999 Renewal Contract
Travis Service Area
August 9, 1999
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APPENDICES
APPENDIX A
Standards For Quality Improvement Programs
APPENDIX B
HUB Progress Assessment Reports
APPENDIX C
Value-added Services
APPENDIX D
Required Critical Elements
APPENDIX E
Transplant Facilities
APPENDIX F
Trauma Facilities
APPENDIX G
Hemophilia Treatment Centers And Programs
APPENDIX H
Utilization Management Report - Behavioral Health
APPENDIX I
Managed Care Financial-Statistical Report
APPENDIX J
Utilization Management Report - Physical Health
APPENDIX K
Preventive Health Performance Objectives
APPENDIX L
Cost Principles For Administrative Expenses
APPENDIX M
Arbitration/Litigation Report
1999
1999 Renewal Contract
Travis Service Area
August 9, 1999
CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
This contract is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO). The purpose of this contract is to set forth the terms and conditions for HMO's participation as a managed care organization in the TDH STAR Program (STAR or STAR Program). Under the terms of this contract HMO will provide comprehensive health care services to qualified and Medicaid-eligible recipients through a managed care delivery system. This is a risk-based contract. HMO was selected to provide services under this contract under Health and Safety Code, Title 2, ss. 12.011 and ss.12.021, and Texas Government Code ss.533.001 et seq. HMO's selection for this contract was based upon HMO's Application submitted in response to TDH's Request for Application (RFA) in the service area. Representations and responses contained in HMO's Application are incorporated into and are enforceable provisions of this contract, except where changed by this contract.
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT
1.1 The Texas Legislature has designated the Texas Health and
Human Services Commission (THHSC) as the single State agency
to administer the Medicaid program in the State of Texas.
THHSC has delegated the authority to operate the Medicaid
managed care delivery system for acute care services to TDH.
TDH has authority to contract with HMO to carry out the duties
and functions of the Medicaid managed care program under
Health and Safety Code, Title 2, ss.12.011 and ss. 12.021 and
Texas Government Code ss.533.00 1 et seq.
1.2 HMO is a corporation with authority to conduct business in the
State of Texas and has a certificate of authority from the
Texas Department of Insurance (TDI) to operate as a Health
Maintenance Organization (HMO) under Chapter 20A of the
Insurance Code. HMO is in compliance with all TDI rules and
laws that apply to HMOs. HMO has been authorized to enter into
this contract by its Board of Directors or other governing
body. HMO is an authorized vendor with TDH and has received a
Vendor Identification number from the Texas Comptroller of
Public Accounts.
1.3 This contract is subject to the approval and on-going
monitoring of the federal Health Care Financing Administration
(HCFA).
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1.4 Renewal Review. TDH is required by Human Resources Code
ss.32.034(a) and Government Code 533.007 to conduct renewal
review of HMO's performance and compliance with this contract
as a condition for retention and renewal.
1.4.1 Renewal Review may include a review of HMO's past performance
and compliance with the requirements of this contract and
on-site inspection of any or all of HMO's systems or
processes.
1.4.2 TDH will provide HMO with at least 30 days written notice
prior to conducting an HMO renewal review. A report of the
results of the renewal review findings will be provided to HMO
within 10 weeks from the completion of the renewal review. The
renewal review report will include any deficiencies which must
be corrected and the timeline within which the deficiencies
must be corrected.
1.4.3 TDH reserves the right to conduct on-site inspections of any
or all of HMO's systems and processes as often as necessary to
ensure compliance with contract requirements. TDH may conduct
at least one complete on-site inspection of all systems and
processes every three years. TDH will provide six weeks
advance notice to HMO of the three year on-site inspection,
unless TDH enters into an MOU with the Texas Department of
Insurance to accept the TDI report in lieu of a TDH on-site
inspection. TDH will notify HMO prior to conducting an onsite
visit related to a regularly scheduled review specifically
described in this contract. Even in the case of a regularly
scheduled visit, TDH reserves the right to conduct an onsite
review without advance notice if TDH believes there may be
potentially serious or life-threatening deficiencies.
1.5 AUTHORITY OF HMO TO ACT ON BEHALF OF TDH. HMO is given
express, limited authority to exercise the State's right of
recovery as provided in Article 4.9, and to enforce provisions
of this contract which require providers or subcontractors to
produce records, reports, encounter data, public health data,
and other documents to comply with this contract and which TDH
has authority to require under State or federal laws.
ARTICLE II DEFINITIONS
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Terms used throughout this Contract have the following meaning, unless the context clearly indicates otherwise:
Abuse means provider practices that are inconsistent with sound fiscal, business, or medical practices and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are
1999 Renewal Contract Travis Service Area August 9, 1999
not medically necessary or that fail to meet professionally recognized standards for health care. It also includes Member practices that result in unnecessary cost to the Medicaid program.
Action means a denial, termination, suspension, or reduction of covered services or the failure of HMO to act upon request for covered services within a reasonable time or a denial of a request for prior authorization for covered services affecting a Member. This term does not include reaching the end of prior authorized services.
Adjudicate means to deny or pay a clean claim.
Adverse determination means a determination by a utilization review agent that the health care services furnished, or proposed to be furnished to a patient, are not medically necessary or not appropriate.
Affiliate means any individual or entity owning or holding more than a five percent (5%) interest in HMO; in which HMO owns or holds more than a five percent (5%) interest; any parent entity; or subsidiary entity of HMO, regardless of the organizational structure of the entity.
Allowable expenses means all expenses related to the Contract for Services between TDH and HMO that are incurred during the term of the contract that are not reimbursable or recovered from another source.
Allowable revenue means all Medicaid managed care revenue received by HMO for the contract period, including retroactive adjustments made by TDH.
Appeal of adverse determination means the formal process by which a utilization review agent offers a mechanism to address adverse determinations as defined in Article 21.58A, Texas Insurance Code.
Auxiliary aids and services includes qualified interpreters or other effective methods of making aurally delivered materials understood by persons with hearing impairments; and, taped texts, large print, Braille, or other effective methods to ensure visually delivered materials are available to individuals with visual impairments. Auxiliary aids and services also includes effective methods to ensure that materials (delivered both aurally and visually) are available to those with cognitive or other disabilities affecting communication.
Behavioral health care services means covered services for the treatment of mental or emotional disorders and treatment of chemical dependency disorders.
Benchmark means a target or standard based on historical data or an objective/goal.
1999 Renewal Contract Travis Service Area August 9, 1999
Capitation means a method of payment in which HMO or a health care provider receives a fixed amount of money each month for each enrolled Member, regardless of the amount of covered services used by the enrolled Member.
CHIP means Children's Health Insurance Program established by Title XXI of the Social Security Act to assist state efforts to initiate and expand child health assistance to uninsured, low-income children.
Chronic or complex condition means a physical, behavioral, or developmental condition which may have no known cure and/or is progressive and/or can be debilitating or fatal if left untreated or under-treated.
Clean claim means a TDH approved or identified claim format that contains all data fields required by HMO and TDH for final adjudication of the claim. The required data fields must be complete and accurate. Clean claim also includes HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Unclean Claim). The TDH required data fields are identified in TDH's AHMO Encounter Data Claims Submission Manual. @
CLIA means the federal legislation commonly known as the Clinical Laboratories Improvement Act of 1988 as found at Section 353 of the federal Public Health Services Act, and regulations adopted to implement the Act.
Community Management Team (CMT) means interagency groups responsible for developing and implementing the Texas Children's Mental Health Plan (TCMHP) at the local level. A CMT consists of local representatives from TXMHMR, the Mental Health Association of Texas, Texas Commission on Alcohol and Drug Abuse, Texas Department of Protective and Regulatory Services, Texas Department of Human Services, Texas Department of Health, Juvenile Probation Commission, Texas Youth Commission, Texas Rehabilitation Commission, Texas Education Agency, Council on Early Childhood Intervention and a parent representative. This organizational structure is also replicated in the State Management Team that sets overall policy direction for the TCMHP.
Community Resource Coordination Groups (CRCGs) means a statewide system of local interagency groups, including both public and private providers, which coordinate services for "Amulti-need" children and youth. CRCGs develop individual service plans for children and adolescents whose needs can be met only through interagency cooperation. CRCGs address complex needs in a model that promotes local decision-making and ensures that children receive the integrated combination of social, medical and other services needed to address their individual problems.
Complainant means a Member or a treating provider or other individual designated to act on behalf of the Member who files the complaint.
1999 Renewal Contract Travis Service Area August 9, 1999
Complaint means any dissatisfaction, expressed by a complainant orally or in writing to HMO, with any aspect of HMO's operation, including, but not limited to dissatisfaction with plan administration; procedures related to review or appeal of an adverse determination, as that term is defined by Texas Insurance Code Article 20A. 12, with the exception of the Independent Review Organization requirements; the denial, reduction, or termination of a service for reasons not related to medical necessity; the way a service is provided; or disenrollment decisions, expressed by a complainant. The term does not include misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the Member. The term also does not include a provider's or enrollee's oral/written dissatisfaction or disagreement with an adverse determination or a request for a Fair Hearing to TDH.
Comprehensive Care Program: See definition for Texas Health Steps.
Continuity of care means care provided to a Member by the same primary care provider or specialty provider to the greatest degree possible, so that the delivery, of care to the Member remains stable, and services are consistent and unduplicated.
Contract means this contract between TDH and HMO and documents included by reference and any of its written amendments, corrections or modifications.
Contract administrator means an entity contracting with TDH to carry out specific administrative functions under the State's Medicaid managed care program.
Contract anniversary date means September 1 of each year after the first year of this contract, regardless of the date of execution or effective date of the contract.
Contract period means the period of time starting with effective date of the contract and ending on the termination date of the contract.
Court-ordered commitment means a commitment of a STAR Member to a psychiatric facility for treatment that is ordered by a court of law pursuant to the Texas Health and Safety Code, Title VII Subtitle C.
Covered services means health care services HMO must arrange to provide to Members, including all services required by this contract and state and federal law, and all value-added services described by HMO in its response to the Request For Application (RFA) for this contract.
Cultural competency means the ability of individuals and systems to provide services effectively to people of various cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity.
Day means calendar day unless specified otherwise.
1999 Renewal Contract Travis Service Area August 9, 1999
Denied claim means a clean claim or a portion of a clean claim for which a determination is made that the claim cannot be paid.
Disability means a physical or mental impairment that substantially limits one or more of the major life activities of an individual.
Disability-related access means that facilities are readily accessible to and usable by individuals with disabilities, and that auxiliary aids and services are provided to ensure effective communication, in compliance with Title III of the Americans with Disabilities Act.
DSM-IV means the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, which is the American Psychiatric Association's official classification of behavioral health disorders.
ECI means Early Childhood Intervention which is a federally mandated program for infants and children under the age of three with or at risk for development delays and/or disabilities. The federal ECI regulations are found at 34 C.F.R. 303.1 et seq. The State ECI rules are found at 25 TAC '621.21 et seq.
Effective date means the date on which TDH signs the contract following signature of the contract by HMO.
Emergency behavioral health condition means any condition, without regard to the nature or cause of the condition, which in the opinion of a prudent layperson possessing an average knowledge of health and medicine requires immediate intervention and/or medical attention without which Members would present an immediate danger to themselves or others or which renders Members incapable of controlling, knowing or understanding the consequences of their actions.
Emergency services means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish such services under this contract and are needed to evaluate or stabilize an emergency medical condition and/or an emergency behavioral health condition.
Emergency Medical Condition means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical care could result in:
(a) placing the patient's health in serious jeopardy;
(b) serious impairment to bodily functions;
(c) serious dysfunction of any bodily organ or part;
(d) serious disfigurement; or
(e) in the case of a pregnant woman, serious jeopardy to the
health of the fetus.
1999 Renewal Contract Travis Service Area August 9, 1999
Encounter means a covered service or group of services delivered by a provider to a Member during a visit between the Member and provider. This also includes value-added services.
Encounter data means data elements from fee-for-service claims or capitated services proxy claims that are submitted to TDH by HMO in accordance with TDH's AHMO Encounter Data Claims Submission Manual.
Enrollment Broker means an entity contracting with TDH to carry out specific functions related to Member services (i.e., enrollment/disenrollment, complaints, etc.) under TDH's Medicaid managed care program.
Enrollment report means the list of Medicaid recipients who are enrolled with an HMO as Members for the month the report was issued.
EPSDT means the federally mandated Early and Periodic Screening, Diagnosis and Treatment program contained at 42 USC 1396d(r) (see definition for Texas Health Steps). The name has been changed to Texas Health Steps (THSteps) in the State of Texas.
Experience Rebate means excess of allowable HMO STAR revenues over allowable HMO STAR expenses.
Fair Hearing means the process adopted and implemented by the Texas Department of Health, 25 TAC Chapter 1, in compliance with federal regulations and state rules relating to Medicaid Fair Hearings found at 42 CFR Part 431, Subpart E, and 1 TAC, Chapter 357.
FQHC means a Federally Qualified Health Center that has been certified by HCFA to meet the requirements of '1861(aa)(3) of the Social Security Act as a federally qualified health center and is enrolled as a provider in the Texas Medicaid program.
Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state law.
HCFA means the federal Health Care Financing Administration.
Health care services means medically necessary physical medicine, behavioral health care and health-related services which an enrolled population might reasonably require in order to be maintained in good health, including, as a minimum, emergency care and inpatient and outpatient services.
Implementation Date means the first date that Medicaid managed care services are delivered to Members in a service area.
1999 Renewal Contract Travis Service Area August 9, 1999
Inpatient stay means at least a 24-hour stay in a facility licensed to provide hospital care.
JCAHO means Joint Commission on Accreditation of Health Care Organizations
Linguistic access means translation and interpreter services, for written and spoken language to ensure effective communication. Linguistic access includes sign language interpretation, and the provision of other auxiliary aids and services to persons with disabilities.
Local Health Department means a local health department established pursuant to Health and Safety Code, Title 2, Local Public Health Reorganization Act '121.031.
Local Mental Health Authority (LMHA) means an entity to which the TXMHMR board delegates its authority and responsibility within a specified region for planning, policy development, coordination, and resource development and allocation and for supervising and ensuring the provision of mental health care services to persons with mental illness in one or more local service areas.
Major life activities means functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
Major population group means any population which represents at least 10% of the Medicaid population in any of the counties in the service area served by the Contractor.
Medical home means a primary or specialty care provider who has accepted the responsibility for providing accessible, continuous, comprehensive and coordinated care to Members participating in TDH's Medicaid managed care program.
Medically necessary behavioral health care services means those behavioral health care services which:
(a) are reasonable and necessary for the diagnosis or treatment of a mental health or chemical dependency disorder or to improve or to maintain or to prevent deterioration of functioning resulting from such a disorder;
(b) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care;
(c) are furnished in the most appropriate and least restrictive setting in which services can be safely provided;
(d) are the most appropriate level or supply of service which can safely be provided; and
1999 Renewal Contract Travis Service Area August 9, 1999
(e) could not be omitted without adversely affecting the Member's mental and/or physical health or the quality of care rendered.
Medically necessary health care services means health care services, other than behavioral health care services which are:
(a) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, and/or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a Member, or endanger life;
(b) provided at appropriate facilities and at the appropriate levels of care for the treatment of a Member's health conditions;
(c) consistent with health care practice guidelines and standards that are endorsed by professionally recognized health care organizations or governmental agencies;
(d) consistent with the diagnoses of the conditions; and
(e) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency.
Member means a person who: is entitled to benefits under Title XIX of the Social Security Act and the Texas Medical Assistance Program (Medicaid), is in a Medicaid eligibility category included in the STAR Program, and is enrolled in the STAR Program.
Member month means one Member enrolled with an HMO during any given month. The total Member months for each month of a year comprise the annual Member months.
Mental health priority population means those individuals served by TXMHMR who meet the definition of the priority population. The priority population for mental health care services is defined as:
Children and adolescents under the age of 18 who have a diagnosis of mental illness who exhibit severe emotional or social disabilities which are life-threatening or require prolonged intervention.
Adults who have severe and persistent mental illnesses such as schizophrenia, major depression, manic depressive disorder, or other severely disabling mental disorders which require crisis resolution or ongoing and long-term support and treatment.
MIS means management information system.
1999 Renewal Contract Travis Service Area August 9, 1999
Non-provider subcontracts means contracts between HMO and a third party which performs a function, excluding delivery of health care services, that HMO is required to perform under its contract with TDH.
Pended claim means a claim for payment which requires additional information before the claim can be adjudicated as a clean claim.
Performance premium means an amount which may be paid to a managed care organization as a bonus for accomplishing a portion or all of the performance objectives contained in this contract.
Premium means the amount paid by TDH to a managed care organization on a monthly basis and is determined by multiplying the Member months times the capitation amount for each enrolled Member.
Primary care physician or primary care provider (PCP) means a physician or provider who has agreed with HMO to provide a medical home to Members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care (also see Medical home).
Provider means an individual or entity and its employees and subcontractors that directly provide health care services to HMO's Members under TDH's Medicaid managed care program.
Provider contract means an agreement entered into by a direct provider of health care services and HMO or an intermediary entity. New definitions (Proxy Claim Form means a form submitted by providers to document services delivered to Medicaid Members under a capitated arrangement. It is not a claim for payment.)
Public information means information that is collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business by a governmental body or for a governmental body and the governmental body owns the information or has a right of access.
Real Time Captioning (also known as CART, Communication Access Real-Time Translation) means a process by which a trained individual uses a shorthand machine, a computer, and real-time translation software to type and simultaneously translate spoken language into text on a computer screen. Real Time Captioning is provided for individuals who are deaf have hearing impairments, or have unintelligible speech; and it is usually used to interpret spoken English into text English but may be used to translate other spoken languages into text.
Renewal Review means a review process conducted by TDH or its agent(s) to assess HMO's capacity and capability to perform the duties and responsibilities required under the Contract. This process is required by Texas Government Code '533.007.
1999 Renewal Contract Travis Service Area August 9, 1999
RFA means Request For Application issued by TDH for the initial procurement in the service area and all RFA addenda, corrections or modifications.
Risk means the potential for loss as a result of expenses and costs of HMO exceeding payments made by TDH under this contract.
Rural Health Clinic (RHC) means an entity that meets all of the requirements for designation as a rural health clinic under '1861(aa)(1) of the Social Security Act and approved for participation in the Texas Medicaid Program.
SED means severe emotional disturbance as determined by a local mental health authority.
Service area means the counties included in a site selected for the STAR Program, within which a participating HMO must provide services.
SPMI means severe and persistent mental illness as determined by the Local Mental Health Authority.
Significant traditional provider (STP) means all hospitals receiving disproportionate share hospital funds (DSH) in FY >95 and all other providers in a county that, when listed by provider type in descending order by the number of recipient encounters, provided the top 80 percent of recipient encounters for each provider type in FY >95.
Special hospital means an establishment that:
(a) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated, and discharged and who require services more intensive than room, board, personal services, and general nursing care;
(b) has clinical laboratory facilities, diagnostic x-ray facilities, treatment facilities, or other definitive medical treatment;
(c) has a medical staff in regular attendance; and
(d) maintains records of the clinical work performed for each patient.
STAR Program is the name of the State of Texas Medicaid managed care program. ASTAR@ stands for the State of Texas Access Reform.
State fiscal year means the 12-month period beginning on September 1 and ending on August 31 of the next year.
1999 Renewal Contract Travis Service Area August 9, 1999
Subcontract means any written agreement between HMO and other party to fulfill the requirements of this contract. All subcontracts are required to be in writing.
Subcontractor means any individual or entity which has entered into a subcontract with HMO.
TAC means Texas Administrative Code.
TANF means Temporary Assistance to Needy Families.
TCADA means Texas Commission on Alcohol and Drug Abuse, the State agency responsible for licensing chemical dependency treatment facilities. TCADA also contracts with providers to deliver chemical dependency treatment services.
Texas Children 's Mental Health Plan (TCMHP) means the interagency, State-funded initiative that plans, coordinates, provides and evaluates service systems for children and adolescents with behavioral health needs. The Plan is operated at a state and local level by Community Management Teams representing the major child-serving state agencies.
TDD means telecommunication device for the deaf It is interchangeable with the term Teletype machine or TTY.
TDH means the Texas Department of Health or its designees.
TDHS means the Texas Department of Human Services.
TDI means the Texas Department of Insurance.
TDMHMR means the Texas Department of Mental Health and Mental Retardation, which is the State agency responsible for developing mental health policy for public and private sector providers.
Temporary Assistance to Needy Families (TANF) means the federally funded program that provides assistance to single-parent families with children who meet the categorical requirements for aid. This program was formerly known as Aid to Families with Dependent Children (AFDC) program.
Texas Health Steps (THSteps) is the name adopted by the State of Texas for the federally mandated Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. It includes the State's Comprehensive Care Program extension to EPSDT, which adds benefits to the federal EPSDT requirements contained in 42 United States Code '1396d(r), and defined and codified at 42 C.F.R. '440.40 and ("44 1.56-62.) TDH's rules are contained in 25 TAC, Chapter 33 (relating to Early and Periodic Screening, Diagnosis and Treatment).
Texas Medicaid Provider Procedures Manual means the policy and procedures manual published by or on behalf of TDH which contains policies and procedures required of all health care providers who
1999 Renewal Contract Travis Service Area August 9, 1999
Texas Medicaid Service Delivery Guide means an attachment to the Texas Medicaid Provider Procedures Manual.
THHSC means the Texas Health and Human Services Commission.
Third Party Liability (TPL) means the legal responsibility of another individual or entity to pay for all or part of the services provided to Members under this contract (see 25 TAC, Subchapter 28, relating to Third Party Resources).
Third Party Recovery (TPR) means the recovery of payments made on behalf of a Member by TDH or HMO from an individual or entity with the legal responsibility to pay for the services.
TXMHMR means Texas Mental Health and Mental Retardation system which includes the state agency, TDMHMR and the Local Mental Health and Mental Retardation Authorities.
Unclean claim means a claim that does not contain accurate and complete data in all claim fields that are required by HMO and TDH and other HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Clean Claim). Urgent behavioral health situations means conditions which require attention and assessment within 24 hours but which do not place the Member in immediate danger to themselves or others and the Member is able to cooperate with treatment.
Urgent condition means a health condition, including an urgent behavioral health situation, which is not an emergency but is severe or painful enough to cause a prudent layperson, possessing the average knowledge of medicine, to believe that his or her condition requires medical treatment evaluation or treatment within 24 hours by the Member's PCP or PCP designee to prevent serious deterioration of the Member's condition or health.
Value-added services means a service that the state has approved to be included in this contract for which HMO does not receive capitation.
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS
3.1 ORGANIZATION AND ADMINISTRATION
-------------------------------
3.1.1 HMO must maintain the organizational and administrative
capacity and capabilities to carry out all duties and
responsibilities under this contract.
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3.1.2 HMO must maintain assigned staff with the capacity and
capability to provide all services to all Members under this
contract.
3.1.3 HMO must maintain an administrative office in the service area
(local office). The local office must comply with the American
with Disabilities Act (ADA) requirements for public buildings.
Member Advocates for the service area must be located in this
office (see Article 8.8).
3.1.4 HMO must provide training and development programs to all
assigned staff to ensure they know and understand the service
requirements under this contract including the reporting
requirements, the policies and procedures, cultural and
linguistic requirements and the scope of services to be
provided.
3.1.5 HMO must notify TDH no later than 30 days after the effective
date of this contract of any changes in its organizational
chart as previously submitted to TDH.
3.1.5.1 HMO must notify TDH within fifteen (15) working days of any
change in key managers or behavioral health subcontractors.
This information must be updated whenever there is a
significant change in organizational structure or personnel.
3.1.6 Participation in Regional Advisory Committee. HMO must
participate on a Regional Advisory Committee established in
the service area in compliance with the Texas Government Code,
ss. ss. 533.021-533.029. The Regional Advisory Committee in
each managed care service area must include representatives
from at least the following entities: hospitals; managed care
organizations; primary care providers; state agencies;
consumer advocates; Medicaid recipients; rural providers;
long-term care providers; specialty care providers, including
pediatric providers; and political subdivisions with a
constitutional or statutory obligation to provide health care
to indigent patients. THHSC and TDH will determine the
composition of each Regional Advisory Committee.
3.1.6.1 The Regional Advisory Committee is required to meet at least
quarterly for the first year after appointment of the
committee and at least annually in subsequent years. The
actual frequency may vary depending on the needs and
requirements of the committee.
3.2 NON-PROVIDER SUBCONTRACTS
-------------------------
3.2.1 HMO must enter into written contracts with all subcontractors
and maintain copies of the subcontracts in HMO's
administrative office. HMO must submit two copies of all
non-provider subcontracts to TDH for approval no later than 60
days after the
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effective date of this contract, unless the subcontract has
already been submitted to and approved by TDH. Subcontracts
entered into after the effective date of this contract must be
submitted no later than 30 days prior to the date of execution
of the subcontract. HMO must also make non-provider
subcontracts available to TDH upon request, at the time and
location requested by TDH.
3.2.1.1 TDH has 15 working days to review the subcontract and
recommend any suggestions or required changes. If TDH has not
responded to HMO by the fifteenth day, HMO may execute the
subcontract. TDH reserves the right to request HMO to modify
any subcontract that has been deemed approved.
3.2.1.2 HMO must notify TDH no later than 90 days prior to terminating
any subcontract affecting a major performance function of this
contract. All major subcontractor terminations or
substitutions require TDH approval (see Article 15.7). TDH may
require HMO to provide a transition plan describing how the
subcontracted function will continue to be provided. All
subcontracts are subject to the terms and conditions of this
contract and must contain the provisions of Article V,
Statutory and Regulatory Compliance, and the provisions
contained in Article 3.2.4.
3.2.2 Subcontracts which are requested by any agency with authority
to investigate and prosecute fraud and abuse must be produced
at the time and in the manner requested by the requesting
Agency. Subcontracts requested in response to a Public
Information request must be produced within 3 working days
from TDH's notification to HMO of the request. All requested
records must be provided free-of-charge.
3.2.3 The form and substance of all subcontracts including
subsequent amendments are subject to approval by TDH. TDH
retains the authority to reject or require changes to any
provisions of the subcontract that do not comply with the
requirements or duties and responsibilities of this contract
or create significant barriers for TDH in carrying out its
duty to monitor compliance with the contract. HMO REMAINS
RESPONSIBLE FOR PERFORMING ALL DUTIES, RESPONSIBILITIES AND
SERVICES UNDER THIS CONTRACT REGARDLESS OF WHETHER THE DUTY,
RESPONSIBILITY OR SERVICE IS SUBCONTRACTED TO ANOTHER.
3.2.4 HMO and all intermediary entities must include the following
standard language in each subcontract and ensure that this
language is included in all subcontracts down to the actual
provider of the services. The following standard language is
not the only language that will be considered acceptable by
TDH.
3.2.4.1 [Contractor) understands that services provided under this
contract are funded by state and federal funds under the Texas
Medical Assistance Program (Medicaid).
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[Contractor] is subject to all state and federal laws, rules
and regulations that apply to persons or entities receiving
state and federal funds. [Contractor] understands that any
violation by [Contractor] of a state or federal law relating
to the delivery of services under this contract, or any
violation of the TDH/HMO contract could result in liability
for contract money damages, and/or civil and criminal
penalties and sanctions under state and federal law.
3.2.4.2 [Contractor] understands and agrees that HMO has the sole
responsibility for payment of services rendered by the
[Contractor] under this contract. In the event of HMO
insolvency or cessation of operations, [Contractor's] sole
recourse is against HMO through the bankruptcy or receivership
estate of HMO.
3.2.4.3 [Contractor] understands and agrees that TDH is not liable or
responsible for payment for any services provided under this
contract.
3.2.4.4 [Contractor] agrees that any modification, addition, or
deletion of the provisions of this agreement will become
effective no earlier than 30 days after HMO notifies TDH of
the change. If TDH does not provide written approval within 30
days from receipt of notification from HMO, changes may be
considered provisionally approved.
3.2.4.5 This contract is subject to state and federal fraud and abuse
statutes. [Contractor] will be required to cooperate in the
investigation and prosecution of any suspected fraud or abuse,
and must provide any and all requested originals and copies of
records and information, free-of-charge on request, to any
state or federal agency with authority to investigate fraud
and abuse in the Medicaid program.
3.2.5 The Texas Medicaid Fraud Control Unit must be allowed to
conduct private interviews of HMO personnel, subcontractors
and their personnel, witnesses, and patients. Requests for
information are to be complied with, in the form and the
language requested. HMO employees and Contractors and
subcontractors and their employees and Contractors must
cooperate fully in making themselves available in person for
interviews, consultation, grand jury proceedings, pretrial
conference, hearings, trial and in any other process,
including investigations. Compliance with this Article is at
HMO's and subcontractors' own expense.
3.3 MEDICAL DIRECTOR
----------------
3.3.1 HMO must have the equivalent of a full-time Medical Director
licensed under the Texas State Board of Medical Examiners
(M.D. or D.O.). HMO must have a written job description
describing the Medical Director's authority, duties and
responsibilities as follows:
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3.3.1.1 Ensure that medical necessity decisions, including prior
authorization protocols, are rendered by qualified medical
personnel and are based on TDH's definition of medical
necessity, and is in compliance with the Utilization Review
Act and 21.58a of the Texas Insurance Code.
3.3.1.2 Oversight responsibility of network providers to ensure that
all care provided complies with the generally accepted health
standards of the community.
3.3.1.3 Oversight of HMO's quality improvement process, including
establishing and actively participating in HMO's quality
improvement committee, monitoring Member health status, HMO
utilization review policies and standards and patient outcome
measures.
3.3.1.4 Identify problems and develop and implement corrective actions
to quality improvement process.
3.3.1.5 Develop, implement and maintain responsibility for HMO's
medical policy.
3.3.1.6 Oversight responsibility for medically related complaints.
3.3.1.7 Participate and provide witnesses and testimony on behalf of
HMO in the TDH Fair Hearing process.
3.3.2 The Medical Director must exercise independent medical
judgement in all medical necessity decisions. HMO must ensure
that medical necessity decisions are not adversely influenced
by fiscal management decisions. TDH may conduct reviews of
medical necessity decisions by HMO Medical Director at any
time.
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS
-------------------------------------------------
3.4.1 HMO must receive written approval from TDH for all updated
written materials, produced or authorized by HMO, containing
information about the STAR Program prior to distribution to
Members, prospective Members, providers within HMO's network,
or potential providers who HMO intends to recruit as network
providers. This includes Member education materials.
3.4.2 Member materials must meet cultural and linguistic
requirements as stated in Article VIII. Unless otherwise
required, Member materials must be written at a 4th - 6th
grade reading comprehension level; and translated into the
language of any major population group, except when TDH
requires HMO to use statutory language (i.e., advance
directives, medical necessity, etc.).
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3.4.3 All materials regarding the STAR Program, including Member
education materials, must be submitted to TDH for approval
prior to distribution. TDH has 15 working days to review the
materials and recommend any suggestions or required changes.
If TDH has not responded to HMO by the fifteenth day, HMO may
print and distribute these materials. TDH reserves the right
to request HMO to modify plan materials that are deemed
approved and have been printed or distributed. These
modifications can be made at the next printing unless
substantial non-compliance exists. An exception to the 15
working day timeframe may be requested in writing by HMO for
written provider materials that require a quick turn-around
time (e.g., letters). These materials will be reviewed by TDH
within 5 working days.
3.4.4 HMO must forward approved English versions of their Member
Handbook, Member Provider Directory, newsletters, individual
Member letters, and any written information that applies to
Medicaid-specific services to DHS for DHS to translate into
Spanish. DHS must provide the written and approved translation
into Spanish to HMO no later than 15 working days after
receipt of the English version by DHS. HMO must incorporate
the approved translation into these materials. If DHS has not
responded to HMO by the fifteenth day, HMO may print and
distribute these materials. TDH reserves the right to require
revisions to materials if inaccuracies are discovered or if
changes are required by changes in policy or law. These
changes can be made at the next printing unless substantial
non-compliance exists. HMO has the option of using the DHS
translation unit or their own translators for health education
materials that do not contain Medicaid-specific information
and for other marketing materials such as billboards, radio
spots, and television and newspaper advertisements.
3.4.5 HMO must reproduce all written instructional, educational, and
procedural documents required under this contract and
distribute them to its providers and Members. HMO must
reproduce and distribute instructions and forms to all network
providers who have reporting and audit requirements under this
contract.
3.4.6 HMO must provide TDH with at least three paper copies and one
electronic copy of their Member Handbook, Provider Manual and
Member Provider Directory. If an electronic format is not
available, five paper copies are required.
3.4.7 Changes to the Required Critical Elements for the Member
Handbook, Provider Manual, and Provider Directory may be
handled as inserts until the next printing of these documents.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.1 HMO must keep all records required to be created and retained
under this contract. Records related to Members served in this
service area must be made available in
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HMO'S local office when requested by TDH. All records must be
retained for a period of five (5) years unless otherwise
specified in this contract. Original records must be kept in
the form they were created in the regular course of business
for a minimum of two (2) years following the end of the
contract period. Microfilm, digital or electronic records may
be substituted for the original records after the first two
(2) years, if the retention system is reliable and supported
by a retrieval system which allows reasonable access to the
records. All copies of original records must be made using
guidelines and procedures approved by TDH, if the original
documents will no longer be available or accessible.
3.5.2 Availability and Accessibility. All records, documents and
data required to be created under this contract are subject to
audit, inspection and production. If an audit, inspection or
production is requested by TDH, TDH's designee or TDH acting
on behalf of any agency with regulatory or statutory authority
over Medicaid Managed Care, the requested records must be made
available at the time and at the place the records are
requested. Copies of requested records must be produced or
provided free-of-charge to the requesting agency. Records
requested after the second year following the end of contract
term that have been stored or archived must be accessible and
made available within 10 calendar days from the date of a
request by TDH or the requesting agency or at a time and place
specified by the requesting entity.
3.5.3 Accounting Records. HMO must create and keep accurate and
complete accounting records in compliance with Generally
Accepted Accounting Principles (GAAP). Records must be created
and kept for all claims payments, refunds and adjustment
payments to providers, premium or capitation payments,
interest income and payments for administrative services or
functions. Separate records must be maintained for medical and
administrative fees, charges, and payments.
3.5.4 General Business Records. HMO must create and keep complete
and accurate general business records to reflect the
performance of duties and responsibilities, and compliance
with the provisions of this contract.
3.5.5 Medical Records. HMO must require, through contractual
provisions or provider manual, providers to create and keep
medical records in compliance with the medical records
standards contained in the Standards for Quality Improvement
Programs in Appendix A. All medical records must be kept for
at least five (5) years, except for records of rural health
clinics, which must be kept for a period of six (6) years from
the date of service.
3.5.6 Matters in Litigation. HMO must keep records related to
matters in litigation for five (5) years following the
termination or resolution of the litigation.
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3.5.7 On-line Retention of Claims History. HMO must keep automated
claims payment histories for a minimum of 18 months from date
of adjudication in an on-line inquiry system. HMO must also
keep sufficient history on-line to ensure all claim/encounter
service information is submitted to and accepted by TDH for
processing.
3.6 HMO REVIEW OF TDH MATERIALS
---------------------------
TDH will submit all studies or audits that relate or refer to
HMO for review and comment to HMO 10 working days prior to
releasing the report to the public or to Members.
3.7 HMO TELEPHONE ACCESS REQUIREMENTS
---------------------------------
HMO must ensure that HMO has adequately-staffed telephone
lines. Telephone personnel must receive customer service
telephone training. HMO must ensure that telephone staffing is
adequate to fulfill the standards of promptness and quality
listed below:
1. 80% of all telephone calls must be answered within
an average of 30 seconds;
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2. The lost (abandonment) rate must not exceed 10%;
3. HMO cannot impose maximum call duration limits but
must allow calls to be of sufficient length to ensure
adequate information is provided to the Member or
Provider.
ARTICLE IV - FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS
4.1 FISCAL SOLVENCY
---------------
4.1.1 HMO must be and remain in full compliance with all state and
federal solvency requirements for HMOs, including but not
limited to all reserve requirements, net worth standards,
debt-to-equity ratios, or other debt limitations.
4.1.2 If HMO becomes aware of any impending changes to its financial
or business structure which could adversely impact its
compliance with these requirements or its ability to pay its
debts as they come due, HMO must notify TDH immediately in
writing. If HMO becomes aware of a take-over or assignment
which would require the approval of TDI or TDH, HMO must
notify TDH immediately in writing.
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4.1.3 HMO must not have been placed under state conservatorship or
receivership or filed for protection under federal bankruptcy
laws. None of HMO's property, plant or equipment must have
been subject to foreclosure or repossession within the
preceding 10-year period. HMO must not have any debt declared
in default and accelerated to maturity within the preceding
10-year period. HMO represents that these statements are true
as of the contract effective date. HMO must inform TDH within
24 hours of a change in any of the preceding representations.
4.2 MINIMUM NET WORTH
-----------------
4.2.1 HMO has minimum net worth to the greater of (a) $1,500,000;
(b) an amount equal to the sum of twenty-five dollars ($25)
times the number of all enrollees including Medicaid Members;
or (c) an amount that complies with standards adopted by TDI.
Minimum net worth means the excess total admitted assets over
total liabilities, excluding liability for subordinated debt
issued in compliance with Article 1.39 of the Insurance Code.
4.2.2 The minimum equity must be maintained during the entire
contract period.
4.3 PERFORMANCE BOND
----------------
HMO has furnished TDH with a performance bond in the form
prescribed by TDH and approved by TDI, naming TDH as Obligee,
securing HMO's faithful performance of the terms and
conditions of this contract. The performance bond has been
issued in the amount of $100,000 for a two year period
(contract period). If the contract is renewed or extended
under Article XVIII, a separate bond will be required for each
additional term of the contract. The bond has been issued by a
surety licensed by TDI, and specifies cash payment as the sole
remedy. Performance Bond requirements under this Article must
comply with Texas Insurance Code ss. 11.1805, relating to
Performance and Fidelity Bonds. The bond must be delivered to
TDH at the same time the signed HMO contract is delivered to
TDH.
4.4 INSURANCE
---------
4.4.1 HMO must maintain, or cause to be maintained, general
liability insurance in the amounts of at least $1,000,000 per
occurrence and $5,000,000 in the aggregate.
4.4.2 HMO must maintain or require professional liability insurance
on each of the providers in its network in the amount of
$100,000 per occurrence and $300,000 in the aggregate, or the
limits required by the hospital at which the network provider
has admitting privileges.
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4.4.3 HMO must maintain an umbrella professional liability insurance
policy for the greater of $3,000,000 or an amount (rounded to
the next $100,000) which represents the number of STAR Members
enrolled in HMO in the first month of the contract year
multiplied by $150, not to exceed $10,000,000.
4.4.4 Any exceptions to the requirements of this Article must be
approved in writing by TDH prior to the effective date of this
contract. HMOs and providers who qualify as either state or
federal units of government are exempt from the insurance
requirements of this Article and are not required to obtain
exemptions from these provisions prior to the effective date
of this contract. State and federal units of government are
required to comply with and are subject to the provisions of
the Texas or Federal Tort Claims Act.
4.5 FRANCHISE TAX
-------------
HMO certifies that its payment of franchise taxes is current
or that it is not subject to the State of Texas franchise tax.
4.6 AUDIT
-----
4.6.1 TDH, TDI, or their designee have the right from time to time
to examine and audit books and records of HMO, or its
subcontractors, relating to: (1) HMO's capacity to bear the
risk of potential financial losses; (2) services performed or
determination of amounts payable under this contract; (3)
detection of fraud and abuse; and (4) other purposes TDH deems
to be necessary to perform its regulatory function and/or to
enforce the provisions of this contract.
4.6.2 TDH is required to conduct an audit of HMO at least once every
three years. HMO is responsible for paying the costs of an
audit conducted under this Article. The costs of the audit
paid by HMO are allowable costs under this contract.
4.7 PENDING OR THREATENED LITIGATION
--------------------------------
HMO must require disclosure from subcontractors and network
providers of all pending or potential litigation or
administrative actions against the subcontractor or network
provider and must disclose this information to TDH, in
writing, prior to the execution of this contract. HMO must
make reasonable investigation and inquiry that there is not
pending or potential litigation or administrative action
against the providers or subcontractors in HMO's provider
network. HMO must notify TDH of any litigation which is
initiated or threatened after the effective date of this
contract within seven days of receiving service or becoming
aware of the threatened litigation.
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4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN HMO
OPERATIONS
---------------------------------------------------------
4.8.1 HMO was awarded this contract based upon the responses and
representations contained in HMO's application submitted in
response to TDH's RFA. All responses and representations upon
which scoring was based were considered material to the
decision of whether to award the contract to HMO. RFA
responses are incorporated into this contract by reference.
The provisions of this contract control over any RFA response
if there is a conflict between the RFA and this contract, or
if changes in law or policy have changed the requirements of
HMO contracting with TDH to provide Medicaid Managed Care.
4.8.2 This contract was awarded in part based upon HMO's
representation of its current equity and financial ability to
bear the risks under this contract. TDH will consider any
misrepresentations of HMO's equity, HMO's ability to bear
financial risks of this contract or inflating the equity of
HMO, solely for the purpose of being awarded this contract, a
material misrepresentation and fraud under this contract.
4.8.3 Discovery of any material misrepresentation or fraud on the
part of HMO in HMO's application or in HMO's day-to-day
activities and operations may cause this contract to terminate
and may result in legal action being taken against HMO under
this contract, and state and federal civil and criminal laws.
4.9 THIRD PARTY RECOVERY
--------------------
4.9.1 Third Party Recovery. All Members are required to assign their
rights to any benefits to the State and agree to cooperate
with the State in identifying third parties who may be liable
for all or part of the costs for providing services to the
Member, as a condition for participation in the Medicaid
program. HMO is authorized to act as the State's agent in
enforcing the State's rights to third party recovery under
this contract.
4.9.2 Identification. HMO must develop and implement systems and
procedures to identify potential third parties who may be
liable for payment of all or part of the costs for providing
medical services to Members under this contract. Potential
third parties must include any of the sources identified in 42
C.F.R. 433.138, relating to identifying third parties, except
workers' compensation, uninsured and underinsured motorist
insurance, first and third party liability insurance and
tortfeasors. HMO must coordinate with TDH to obtain
information from other state and federal agencies and HMO must
cooperate with TDH in obtaining information from commercial
third party resources. HMO must require all providers to
comply with the provisions of 25 TAC ss. 28, relating to Third
Party Recovery in the Medicaid program.
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4.9.3 Exchange of Identified Resources. HMO must forward identified
resources of uninsured and underinsured motorist insurance,
first and third party liability insurance and tortfeasors
("excepted resources") to TDH for TDH to pursue collection and
recovery from these resources. TDH will forward information on
all third art resources identified by TDH to HMO. HMO must
coordinate with TDH to obtain information from other state and
federal agencies, including HCFA for Medicare and the Child
Support Enforcement Division of the Office of the Attorney
General for medical support. HMO must cooperate with TDH in
obtaining and exchanging information from commercial third
party resources.
4.9.4 Recovery. HMO must actively pursue and collect from third
party resources which have been identified, except when the
cost of pursuing recovery reasonably exceeds the amount which
may be recovered by HMO. HMO is not required to, but may
pursue recovery and collection from the excepted resources
listed in Article 4.9.3. HMO must report the identity of these
resources to TDH, even if HMO will pursue collection and
recovery from the excepted resources.
4.9.4.1 HMO must provide third party resource information to network
providers to whom individual Members have been assigned or who
provide services to Members. HMO must require providers to
seek recovery from potential third party resources prior to
seeking payment from HMO. If network providers are paid
capitation, HMO must either seek recovery from third party
resources or account to TDH for all amounts received by
network providers from third party resources.
4.9.4.2 HMO must prohibit network providers from interfering with or
placing liens upon the State's right or HMO's right, acting as
the State's agent, to recovery from third party resources. HMO
must prohibit network providers from seeking recovery in
excess of the Medicaid payable amount or otherwise violating
state and federal laws.
4.9.5 Retention. HMO may retain as income all amounts recovered from
third party sources as long as recoveries are obtained in
compliance with the contract and state and federal laws.
4.9.6 Accountability. HMO must report all third party recovery
efforts and amounts recovered as required in Article 12.1.12.
If HMO fails to pursue and recover from third parties no later
than 180 days after the date of service, TDH may pursue third
party recoveries and retain all amounts recovered without
accounting to HMO for the amounts recovered. Amounts recovered
by TDH will be added to expected third party recoveries to
reduce future capitation rates, except recoveries from those
excepted third party resources listed in Article 4.9.3.
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4.10 CLAIMS PROCESSING REQUIREMENTS
------------------------------
4.10.1 HMO and claims processing subcontractors must comply with
TDH's Texas Managed Care Claims Manual (Claims Manual), which
contains TDH's claims processing requirements. HMO must comply
with any changes to the Claims Manual with appropriate notice
of changes from TDH.
4.10.2 HMO must forward claims submitted to HMO in error to either:
1) the correct HMO if the correct HMO can be determined from
the claim or is otherwise known to HMO; 2) the State's claims
administrator; or 3) the provider who submitted the claim in
error, along with an explanation of why the claim is being
returned.
4.10.3 HMO must not pay any claim submitted by a provider who has
been excluded or suspended from the Medicare or Medicaid
programs for fraud and abuse when HMO has knowledge of the
exclusion or suspension.
4.10.4 All provider clean claims must be adjudicated (finalized as
paid or denied adjudicated) within 30 days from the date the
claim is received by HMO. HMO must pay providers interest on a
clean claim which is not adjudicated within 30 days from the
date the claim is received by HMO or becomes clean at a rate
of 1.5% per month (18% annual) for each month the clean claim
remains unadjudicated. HMO will be held to a minimum
performance level of 90% of all clean claims paid or denied
within 30 days of receipt and 99% of all clean claims paid or
denied within 90 days of receipt. Failure to meet these
performance levels is a default under this contract and could
lead to damages or sanctions as outlined in Article XVII. The
performance levels are subject to changes if required to
comply with federal and state laws or regulations.
4.10.4.1 All claims and appeals submitted to HMO and claims processing
subcontractors must be paid-adjudicated (clean claims),
denied-adjudicated (clean claims), or denied for additional
information (unclean claims) to providers within 30 days from
the date the claim is received by [HMO. Providers must be sent
a written notice for each claim that is denied for additional
information (unclean claims) identifying the claim, all
reasons why the claim is being denied, the date the claim was
received by HMO, all information required from the provider in
order for HMO to adjudicate the claim, and the date by which
the requested information must be received from the provider.
4.10.4.2 Claims that are suspended (pended internally) must be
subsequently paid-adjudicated, denied-adjudicated, or denied
for additional information (pended externally) within 30 days
from date of receipt. No claim can be suspended for a period
exceeding 30 days from date of receipt of the claim.
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4.10.4.3 HMO must identify each data field of each claim form that is
required from the provider in order for HMO to adjudicate the
claim, HMO must inform all network providers about the
required fields no later than 30 days prior to the effective
date of the contract or as a provision within HMO/provider
contract. Out-of-network providers must be informed of all
required fields if the claim is denied for additional
information. The required fields must include those required
by HMO and TDH.
4.10.5 HMO is subject to Article XVI, Default and Remedies, for
claims that are not processed on a timely basis as required by
this contract and the Claims Manual. Notwithstanding the
provisions of Articles 4.10.4, 4.10.4.1 and 4.10.4.2, HMO's
failure to adjudicate (paid, denied, or external pended) at
least ninety percent (90%) of all claims within thirty (30)
days of receipt and ninety-nine percent (99%) within ninety
(90) days of receipt for the contract year to date is a
default under Article XVI of this contract.
4.10.6 HMO must comply with the standards adopted by the U.S.
Department of Health and Human Services under the Health
Insurance Portability and Accountability Act of 1996
submitting and receiving claims information through electronic
data interchange (EDI) that allows for automated processing
and adjudication of claims within two or three years, as
applicable, from the date the rules promulgated under HIPAA
are adopted.
4.10.7 For claims requirements regarding retroactive PCP changes for
mandatory Members, see Article 7.8.12.2.
4.11 INDEMNIFICATION
---------------
4.11.1 HMO/TDH HMO must agree to indemnify TDH and its agents for any
and all claims, costs, damages and expenses, including court
costs and reasonable attorney's fees, which are related to or
arise out of:
4.11.1.1 Any failure, inability, or refusal of HMO or any of its
network providers or other subcontractors to provide covered
services;
4.11.1.2 Claims arising from HMO's, HMO's network provider's or other
subcontractor's negligent or intentional conduct in not
providing covered services; and
4.11.1.3 Failure, inability, or refusal of HMO to pay any of its
network providers or subcontractors for covered services.
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4.11.2 HMO/Provider: HMO is prohibited from requiring providers to
indemnify HMO for HMO's own acts or omissions which result in
damages or sanctions being assessed against HMO either under
this contract or under state or federal law.
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS
5.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS
----------------------------------------------
5.1.1 HMO must know, understand and comply with all state and
federal laws and regulations relating to the Texas Medicaid
Program which have not been waived by HCFA. HMO must comply
with all rules relating to the Medicaid managed care program
adopted by TDH, TDI, THHSC, TDMHMR and any other state agency
delegated authority to operate or administer Medicaid or
Medicaid managed care programs. To the extent there is an
inconsistency or conflict between or among state and federal
laws relating to the Texas Medicaid Program, the Medicaid
managed care program, or this contract, federal law shall
apply.
5.1.2 HMO must require, through contract provisions, that all
network providers or subcontractors comply with all state and
federal laws and regulations relating to the Texas Medicaid
Program and all rules relating to the Medicaid managed care
program adopted by TDH, TDI, THHSC, TDMHMR and any other state
agency delegated authority to operate Medicaid or Medicaid
Managed Care programs.
5.1.3 HMO must comply with the provisions of the Clean Air Act and
the Federal Water Pollution Control Act, as amended, found at
42 C.F.R. 7401, et seq. and 33 U.S.C. 1251, et seq.,
respectively.
5.2 PROGRAM INTEGRITY
-----------------
5.2.1 HMO has not been excluded, debarred, or suspended from
participation in any program under Title XVIII or Title XIX
under any of the provisions of Section 1128(a) or (b) of the
Social Security Act (42 USC ss. 1320 a-7), or Executive Order
12549. HMO must notify TDH within 3 days of the time it
receives notice that any action is being taken against HMO or
any person defined under the provisions of Section 1128(a) or
(b) or any subcontractor, which could result in exclusion,
debarment, or suspension of HMO or a subcontractor from the
Medicaid program, or any program listed in Executive Order
12549.
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5.2.2 HMO must comply with the provisions of, and file the
certification of compliance required by the Byrd Anti-Lobbying
Amendment, found at 31 U.S.C. 1352, relating to use of federal
funds for lobbying for or obtaining federal contracts.
5.3 FRAUD AND ABUSE COMPLIANCE PLAN
-------------------------------
5.3.1 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. HMO must cooperate and assist TDH and THHSC
and any other state or federal agency charged with the duty of
identifying, investigating, sanctioning or prosecuting
suspected fraud and abuse. HMO must provide originals and/or
copies of all records and information requested and allow
access to premises and provide records to TDH or its
authorized agent(s), THHSC, HCFA, the U.S. Department of
Health and Human Services, FBI, TDI, and the Texas Attorney
General's Medicaid Fraud Control Unit. All copies of records
must be provided free of charge.
5.3.2 Compliance Plan. HMO must submit to TDH for approval a written
fraud and abuse compliance plan which is based on the Model
Compliance Plan issued by the U.S. Department of Health and
Human Services, the Office of Inspector General (OIG), no
later than 30 days after the effective date of the contract.
HMO must designate an officer or director in its organization
who has the responsibility and authority for carrying out the
provisions of its compliance plan. HMO must submit any updates
or modifications in its compliance plan to TDH for approval at
least 30 days prior to the modifications going into effect.
HMO's fraud and abuse compliance plan must:
5.3.2.1 ensure that all officers, directors, managers and employees
know and understand the provisions of HMO'S fraud and abuse
compliance plan.
5.3.2.2 contain procedures designed to prevent and detect potential or
suspected abuse and fraud in the administration and delivery
of services under this contract.
5.3.2.3 contain provisions for the confidential reporting of plan
violations to the designated person in HMO.
5.3.2.4 contain provisions for the investigation and follow-up of any
compliance plan reports.
5.3.2.5 ensure that the identity of individuals reporting violations
of the plan is protected.
5.3.2.6 contain specific and detailed internal procedures for
officers, directors, managers and employees for detecting,
reporting, and investigating fraud and abuse compliance plan
violations.
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5.3.2.7 require any confirmed or suspected fraud and abuse under state
or federal law be reported to TDH, the Medicaid Program
Integrity section of the Office of Investigations and
Enforcement of the Texas Health and Human Services Commission,
and/or the Medicaid Fraud Control Unit of the Texas Attorney
General.
5.3.2.8 ensure that no individual who reports plan violations or
suspected fraud and abuse is retaliated against.
5.3.3 Training. HMO must designate executive and essential personnel
to attend mandatory training in fraud and abuse detection,
prevention and reporting. The training will be conducted by
the Office of Investigation and Enforcement, Health and Human
Services Commission, and will be provided free of charge. HMO
must schedule and complete training no later than 90 days
after the effective date of any updates or modification of the
written Model Compliance Plan.
5.3.3.1 If HMO'S personnel have attended OIE training prior to the
effective date of this contract, they are not required to
attend additional OIE training unless new training is required
due to changes in federal and/or state law or regulations. If
additional OIE training is required, TDH will notify HMO to
schedule this additional training.
5.3.3.2 If HMO updates or modifies its written fraud and abuse
compliance plan, HMO must train its executive and essential
personnel on these updates or modifications no later than 90
days after the effective date of the updates or modifications.
5.3.3.3 If HMO'S executive and essential personnel change or if HMO
employs additional executive and essential personnel, the new
or additional personnel must attend OIE training within 90
days of employment by HMO.
5.3.4 HMO's failure to report potential or suspected fraud or abuse
may result in sanctions, contract cancellation, or exclusion
from participation in the Medicaid program.
5.3.5 HMO must allow the Texas Medicaid Fraud Control Unit and
THHSC's Office of Investigations and Enforcement, to conduct
private interviews of HMO's employees, subcontractors and
their employees, witnesses, and patients. Requests for
information must be complied with in the form and the language
requested. HMO's employees and its subcontractors and their
employees must cooperate fully and be available in person for
interviews, consultation, grand jury proceedings, pre-trial
conference, hearings, trial and in any other process.
5.3.6 Subcontractors. HMO must submit the documentation described in
Articles 5.3.6.1 through 5.3.6.3, in compliance with Texas
Government Code ss.533.012, regarding any subcontractor
providing health care services under this contract except for
those
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providers who have re-enrolled as a provider in the Medicaid
program as required by Section 2.07, Chapter 1153, Acts of the
75th Legislature, Regular Session, 1997, or who modified a
contract in compliance with that section. HMO must submit
information in a format as specified by TDH. Documentation
must be submitted no later than 120 days after the effective
date of this contract. Subcontracts entered into after the
effective date of this contract must be submitted no later
than 90 days after the effective date of the subcontract. The
required documentation required under this provision is not
subject to disclosure under Chapter 552, Government Code.
5.3.6.1 a description of any financial or other business relationship
between HMO and its subcontractor;
5.3.6.2 a copy of each type of contract between HMO and its
subcontractor;
5.3.6.3 a description of the fraud control program used by any
subcontractor.
5.4 SAFEGUARDING INFORMATION
------------------------
5.4.1 All Member information, records and data collected or provided
to HMO by TDH or another State agency is protected from
disclosure by state and federal law and regulations. HMO may
only receive and disclose information which is directly
related to establishing eligibility, providing services and
conducting or assisting in the investigation and prosecution
of civil and criminal proceedings under state or federal law.
HMO must include a confidentiality provision in all
subcontracts with individuals.
5.4.2 HMO is responsible for informing Members and providers
regarding the provisions of 42 C.F.R. 431, Subpart F, relating
to Safeguarding Information on Applicants and Recipients, and
HMO must ensure that confidential information is protected
from disclosure except for authorized purposes.
5.4.3 HMO must assist network PCPs in developing and implementing
policies for protecting the confidentiality of AIDS and
HIV-related medical information and an anti-discrimination
policy for employees and Members with communicable diseases.
Also see Health and Safety Code, Chapter 85, Subchapter E,
relating to the Duties of State Agencies and State
Contractors.
5.4.4 HMO must require that subcontractors have mechanisms in place
to ensure Member's (including minor's) confidentiality for
family planning services.
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5.5 NON-DISCRIMINATION
------------------
HMO agrees to comply with and to include in all subcontracts a
provision that the subcontractor will comply with each of the
following requirements:
5.5.1 Title VI of the Civil Rights Act of 1964, Section 504 of the
Rehabilitation Act of 1973, the Americans with Disabilities
Act of 1990, and all requirements imposed by the regulations
implementing these acts and all amendments to the laws and
regulations. The regulations provide in part that no person in
the United States shall on the grounds of race, color,
national origin, sex, age, disability, political beliefs or
religion be excluded from participation in, or denied, any
aid, care, service or other benefits, or be subjected to any
discrimination under any program or activity receiving federal
funds.
5.5.2 Texas Health and Safety Code Section 85.113 (relating to
workplace and confidentiality guidelines regarding AIDS and
HIV).
5.5.3 The provisions of Executive Order 11246, as amended by 11375,
relating to Equal Employment Opportunity.
5.5.4 HMO shall not discriminate with respect to participation,
reimbursement, or indemnification as to any provider who is
acting within the scope of the provider's license or
certification under applicable State law, solely on the basis
of such license or certification. This requirement shall not
be construed to prohibit HMO from including providers only to
the extent necessary to meet the needs of HMO's Members or
from establishing any measure designed to maintain quality and
control costs consistent with HMO'S responsibilities.
5.6 HISTORICALLY UNDERUTILIZED BUSINESSES (HUBS)
--------------------------------------------
5.6.1 TDH is committed to providing procurement and contracting
opportunities to historically underutilized businesses (HUBs),
under the provisions of Texas Government Code, Title 10,
Subtitle D, Chapter 2161 and I TAC ss. 111.11(b) and 111.
13(c)(7). TDH requires its Contractors and subcontractors to
make a good faith effort to assist HUBs in receiving a portion
of the total contract value of this contract.
5.6.2 The HUB good faith effort goal for this contract is 18.1% of
total premiums paid. HMO agrees to make a good faith effort to
meet or exceed this goal. HMO acknowledges it made certain
good faith effort representations and commitments to TDH
during the HUB good faith effort determination process. HMO
agrees to use its best efforts to abide by these
representations and commitments during the contract period.
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5.6.3 HMO is required to submit HUB quarterly reports to TDH as
required in Article 12.11.
5.6.4 TDH will assist HMO in meeting the contracting and reporting
requirements of this Article.
5.7 BUY TEXAS
---------
HMO agrees to "Buy Texas" products and materials when they are
available at a comparable price and in a comparable period of
time, as required by Section 48 of Article IX of the General
Appropriations Act of 1995.
5.8 CHILD SUPPORT
-------------
5.8.1 The Texas Family Code ss.231.006 requires TDH to withhold
contract payments from any for-profit entity or individual who
is at least 30 days delinquent in child support obligations.
It is HMO's responsibility to determine and verify that no
owner, partner, or shareholder who has at least at 25%
ownership interest is delinquent in child support obligations.
HMO must attach a list of the names and Social Security
numbers of all shareholders, partners or owners who have at
least a 25% ownership interest in HMO.
5.8.2 Under Section 231.006 of the Family Code, the contractor
certifies that the contractor is not ineligible to receive the
specified grant, loan, or payment and acknowledges that this
contract may be terminated and payment may be withheld if this
certification is inaccurate. A child support obligor who is
more than 30 days delinquent in paying child support or a
business entity in which the obligor is a sole proprietor,
partner, shareholder, or owner with an ownership interest of
at least 25% is not eligible to receive the specified grant,
loan or payment.
5.8.3 If TDH is informed and verifies that a child support obligor
who is more than 30 days delinquent is a partner, shareholder,
or owner with at least a 25% ownership interest, it will
withhold any payments due under this contract until it has
received satisfactory evidence that the obligation has been
satisfied or that the obligor has entered into a written
repayment request.
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.1 This contract and all network provider and subcontractor
contracts are subject to public disclosure under the Public
Information Act (Texas Government Code, Chapter 552). TDH may
receive Public Information requests related to this contract,
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information submitted as part of the compliance of the
contract and HMO's application upon which this contract was
awarded. TDH agrees that it will promptly deliver a copy of
any request for Public Information to HMO.
5.9.2 TDH may, in its sole discretion, request a decision from the
Office of the Attorney General (AG opinion) regarding whether
the information requested is excepted from required public
disclosure. TDH may rely on HMO's written representations in
preparing any AG opinion request, in accordance with Texas
Government Code ss.552.305. TDH is not liable for failing to
request an AG opinion or for releasing information which is
not deemed confidential by law, if HMO fails to provide TDH
with specific reasons why the requested information is exempt
from the required public disclosure. TDH or the Office of the
Attorney General will notify all interested parties if an AG
opinion is requested.
5.9.3 If HMO believes that the requested information qualifies as a
trade secret or as commercial or financial information, HMO
must notify TDH--within three (3) working days of HMO's
receipt of the request--of the specific text, or portions of
text, which HMO claims is excepted from required public
disclosure, HMO is required to identify the specific
provisions of the Public Information Act which HMO believes
are applicable, and is required to include a detailed written
explanation of how the exceptions apply to the specific
information identified by HMO as confidential and excepted
from required public disclosure.
5.10 NOTICE AND APPEAL
-----------------
HMO must comply with the notice requirements contained in 25
TAC ss.36.21, and the maintaining benefits and services
contained in 25 TAC ss.36.22, whenever HMO intends to take an
action affecting the Member benefits and services under this
contract. Also see the Member appeal requirements contained in
Article 8.7 of this contract.
ARTICLE VI SCOPE OF SERVICES
6.1 SCOPE OF SERVICES
-----------------
HMO is paid capitation for all services included in the State
of Texas Title XIX State Plan and the 1915(b) waiver
application for the SDA currently filed and approved by HCFA,
except those services which are specifically excluded and
listed in Article 6.1.8 (non-capitated services).
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6.1.1 HMO must pay for or reimburse for all covered services
provided to mandatory-- enrolled Members for whom HMO is paid
capitation.
6.1.2 TDH must pay for or reimburse for all covered services
provided to SSI voluntary Members who enroll with HMO on a
voluntary basis. It is at HMO's discretion whether to provide
value-added services to voluntary Members.
6.1.3 HMO must provide covered services described in the 1999 Texas
Medicaid Provider Procedures Manual (Provider Procedures
Manual), subsequent editions of the Provider Procedures Manual
also in effect during the contract period, and all Texas
Medicaid Bulletins which update the 1999 Provider Procedures
Manual and subsequent editions of the Provider Procedures
Manual published during the contract period.
6.1.4 Covered services are subject to change due to changes in
federal law, changes in Texas Medicaid policy, and/or
responses to changes in Medicine, Clinical protocols, or
technology.
6.1.5 The STAR Program has obtained a waiver to the State Plan to
include three enhanced benefits to all voluntary and mandatory
STAR Members. Two of these enhanced benefits removed
restrictions which previously applied to Medicaid eligible
individuals 21 years and older: the three-prescriptions per
month limit; and, the 30-day spell of illness limit. One of
these expanded the covered benefits to add an annual adult
well check.
6.1.6 Value-added Services. Value-added services that are approved
--------------------
by TDH during the contracting process are included in the
Scope of Services under this contract. Value-added services
are listed in Appendix C.
6.1.6.1 The approval request must include:
6.1.6.1.1 A detailed description of the service to be offered;
6.1.6.1.2 Identification of the category or group of Members eligible to
receive the service if it is a type of service that is not
appropriate for all Members. (HMO has the
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discretion to determine if voluntary Members are eligible for
the value-added services);
6.1.6.1.3 Any limits or restrictions which apply to the service; and
6.1.6.1.4 A description of how a Member may obtain or access the
service.
6.1.6.2 Value-added services can only be added or removed by written
amendment of this contract, HMO cannot include a value-added
service in any material distributed to Members or prospective
Members until this contract has been amended to include that
value-added service or HMO has received written approval from
TDH pending finalization of the contract amendment.
6.1.6.2.1 If a value-added service is deleted by amendment, HMO must
notify each Member that the service is no longer available
through HMO, and HMO must revise all materials distributed to
prospective Members to reflect the change in covered services.
6.1.6.3 Value-added services must be offered to all mandatory HMO
Members, as indicated in Article 6.1.6.1.2, unless the
contract is amended or the contract terminates.
6.1.7 HMO may offer additional benefits that are outside the scope
of services of this contract to individual Members on a
case-by-case basis, based on medical necessity,
cost-effectiveness, and satisfaction and improved
health/behavioral health status of the Member/Member family.
6.1.8 Non-Capitated Services. The following Texas Medicaid program
----------------------
services have been excluded from the services included in the
calculation of HMO capitation rate:
THSteps Dental (including Orthodontia)
Early Childhood Intervention Case Management/Service
Coordination
MHMR Targeted Case Management
Mental Health Rehabilitation
Pregnant Women and Infants Case Management
THSteps Medical Case Management
Texas School Health and Related Services
Texas Commission for the Blind Case Management
Tuberculosis Services Provided by TDH-approved
providers (Directly Observed Therapy and
Contact Investigation)
Vendor Drugs (out-of-office drugs)
Medical Transportation
TDHS Hospice Services
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Refer to relevant chapters in the Provider Procedures Manual and the Texas Medicaid Bulletins for more information.
Although HMO is not responsible for paying or reimbursing for
these non-capitated services, HMO remains responsible for
providing appropriate referrals for Members to obtain or
access these services.
6.1.8.1 HMO is responsible for informing providers that all
non-capitated services must be submitted to TDH for payment or
reimbursement.
6.2 PRE-EXISTING CONDITIONS
-----------------------
HMO is responsible for providing all covered services to each
eligible Member beginning on the effective date of the
contract or the Member's date of enrollment under the contract
regardless of pre-existing conditions, prior diagnosis and/or
receipt of any prior health care services.
6.3 SPAN OF ELIGIBILITY
-------------------
The following outlines HMO'S responsibilities for payment of
hospital and freestanding psychiatric facility (facility)
admissions:
6.3.1 Inpatient Admission Prior to Enrollment in HMO. HMO is
responsible for payment of physician and non-hospital/facility
charges for the period for which HMO is paid a capitation
payment for that Member. HMO is not responsible for
hospital/facility charges for Members admitted prior to the
date of enrollment in HMO.
6.3.2 Inpatient Admission After Enrollment in HMO. HMO is
responsible for all hospital/facility charges until the Member
is discharged from the hospital/facility or until the Member
loses Medicaid eligibility.
6.3.2.1 If a Member regains Medicaid eligibility and the Member was
enrolled in HMO at the time the Member was admitted to the
hospital, HMO is responsible for hospital/facility charges as
follows:
6.3.2.1.1 Member Re-enrolls into HMO After Regaining Medicaid
Eligibility. HMO is responsible for charges for the period for
which HMO receives capitation payment for the Member or until
the Member is discharged or loses Medicaid eligibility.
6.3.2.1.2 Member Re-enrolls in Another Health Plan After Regaining
Medicaid Eligibility. HMO is responsible for hospital/facility
charges until the Member is discharged or
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loses Medicaid eligibility.
6.3.3 Plan Change. A Member cannot change from one health plan to
another health plan during an inpatient hospital stay.
6.3.4 Hospital/Facility Transfer. Discharge from one acute care
hospital/facility and readmission to another acute care
hospital/facility within 24 hours for continued treatment is
not a discharge under this contract.
6.3.5 HMO insolvency or receivership. HMO is responsible for payment
of all services provided to a person who was a Member on the
date of insolvency or receivership to the same extent they
would otherwise be responsible under this Article 6.3.
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.1 HMO must ensure that the care of newly enrolled Members is not
disrupted or interrupted. HMO must take special care to
provide continuity in the care of newly enrolled Members whose
health or behavioral health condition has been treated by
specialty care providers or whose health could be placed in
jeopardy if care is disrupted or interrupted.
6.4.2 Pregnant Members with 12 weeks or less remaining before the
expected delivery date must be allowed to remain under the
care of the Member's current OB/GYN through the Member's
postpartum checkup, even if the provider is out-of-network. If
Member wants to change her OB/GYN to one who is in the plan,
she must be allowed to do so if the provider to whom she
wishes to transfer agrees to accept her in the last trimester.
6.4.3 HMO must pay a Member's existing out-of-network providers for
covered services until the Member's records, clinical
information and care can be transferred to a network provider.
Payment must be made within the time period required for
network providers. HMO may pay any out-of-network provider a
reasonable and customary amount determined by the HMO. This
Article does not extend the obligation of HMO to reimburse the
Member's existing out-of-network providers of on-going care
for more than 90 days after Member enrolls in HMO or for more
than nine months in the case of a Member who at the time of
enrollment in HMO has been diagnosed with and receiving
treatment for a terminal illness. The obligation of HMO to
reimburse the Member's existing out-of-network provider for
services provided to a pregnant Member with 12 weeks or less
remaining before the expected delivery date extends through
delivery of the child, immediate postpartum care, and the
follow-up checkup within the first six weeks of delivery.
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6.4.4 HMO must provide or pay out-of-network providers who provide
covered services to Members who move out of the service area
through the end of the period for which capitation has been
paid for the Member.
6.5 EMERGENCY SERVICES
------------------
6.5.1 HMO must pay for the professional, facility, and ancillary
services that are medically necessary to perform the medical
screening examination and stabilization of HMO Member
presenting as an emergency medical condition or an emergency
behavioral health condition to the hospital emergency
department, 24 hours a day, 7 days a week, rendered by either
HMO's in-network or out-of-network providers. HMO may elect to
pay any emergency services provider an amount negotiated
between the emergency provider and HMO, or a reasonable and
customary amount determined by the HMO.
6.5.2 HMO must ensure that its network primary care providers (PCPs)
have after-hours telephone availability 24 hours a day, 7 days
a week throughout the service area.
6.5.3 HMO cannot require prior authorization as a condition for
payment for an emergency medical condition, an emergency
behavioral health condition, or labor and delivery.
6.5.4 Medical Screening Examination. A medical screening examination
may range from a relatively simple history, physical
examination, diagnosis, and treatment, to a complex
examination, diagnosis, and treatment that requires
substantial use of hospital emergency department and physician
services. HMO must pay for the emergency medical screening
examination required to determine whether an emergency
condition exists, as required by 42 U.S.C. 1395dd. HMOs must
reimburse for both the physician's services and the hospital's
emergency services, including the emergency room and its
ancillary services.
6.5.5 Stabilization Services. HMO must pay for emergency services
performed to stabilize the Member as documented by the
Emergency physician in the Member's medical record. HMOs must
reimburse for physician's services and hospital's emergency
services including the emergency room and its ancillary
services. With respect to an emergency medical condition, to
stabilize is to provide such medical care as to assure within
reasonable medical probability that no deterioration of the
condition is likely to result from, or occur during discharge,
transfer, or admission of the Member from the emergency room.
6.5.6 Post-stabilization Services. Post-stabilization services are
services subsequent to an emergency that a treating physician
views as medically necessary after an emergency medical
condition has been stabilized. They are not "emergency
services" and are
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subject to HMO's prior authorization process. HMO must be
available to authorize or deny post-stabilization services
within one hour after being contacted by the treating
physician.
6.5.7 HMO must provide access to the TDH-designated Level I and
Level II trauma centers within the State or hospitals meeting
the equivalent level of trauma care, HMOs may make
out-of-network reimbursement arrangements with the
TDH-designated Level I and Level II trauma centers to satisfy
this access requirement.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.1 HMO must provide or arrange to have provided to Members all
behavioral health care services included as covered services.
These services are described in detail in the Texas Medicaid
Provider Procedures Manual (Provider Procedures Manual) and
the Texas Medicaid Bulletins, which is the bi-monthly update
to the Provider Procedures Manual. Clinical information
regarding covered services are published by the Texas Medicaid
program in the Texas Medicaid Service Delivery Guide.
6.6.2 HMO must maintain a behavioral health provider network that
includes psychiatrists, psychologists and other behavioral
health providers. HMO must provide or arrange to have provided
behavioral health benefits described as covered services.
These services are indicated in the Provider Procedures Manual
and the Texas Medicaid Bulletins, which is the bi-monthly
update to the Provider Procedures Manual. Clinical information
regarding covered services are published by the Texas Medicaid
Program in the Texas Medicaid Service Delivery Guide. The
network must include providers with experience in serving
children and adolescents to ensure accessibility and
availability of qualified providers to all eligible children
and adolescents in the service area. The list of providers
including names, addresses and phone numbers must be available
to TDH upon request.
6.6.3 HMO must maintain a Member education process to help Members
know where and how to obtain behavioral health care services.
6.6.4 HMO must implement policies and procedures to ensure that
Members who require routine or regular laboratory and
ancillary medical tests or procedures to monitor behavioral
health conditions are provided the services by the provider
ordering the procedure or at a lab located at or near the
provider's office.
6.6.5 When assessing Members for behavioral health care services,
HMO and network behavioral health providers must use the
DSM-IV multi-axial classification and report axes I, II, III,
IV, and V to TDH. TDH may require use of other assessment
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instrument/outcome measures in addition to the DSM-IV.
Providers must document DSM-IV and assessment/outcome
information in the Member's medical record.
6.6.6 HMO must permit Members to self refer to any in-network
behavioral health care provider without a referral from the
Member's PCP. HMO must permit Members to participate in the
selection or assignment of the appropriate behavioral health
individual practitioner(s) who will serve them. HMO previously
submitted a written copy of its policies and procedures for
self-referral to TDH. Changes or amendments to those policies
and procedures must be submitted to TDH for approval at least
60 days prior to their effective date.
6.6.7 HMO must require, through contract provisions, that PCPs have
screening and evaluation procedures for detection and
treatment of, or referral for, any known or suspected
behavioral health problems and disorders. PCPs may provide any
clinically appropriate behavioral health care services within
the scope of their practice. This requirement must be included
in all Provider Manuals.
6.6.8 HMO must require that behavioral health providers refer
Members with known or suspected physical health problems or
disorders to their PCP for examination and treatment.
Behavioral health providers may only provide physical health
care services if they are licensed to do so. This requirement
must be included in all Provider Manuals.
6.6.9 HMO must require that behavioral health providers send initial
and quarterly (or more frequently if clinically indicated)
summary reports of Members' behavioral health status to PCP.
This requirement must be included in all Provider Manuals.
6.6.10 HMO must require, through contract provisions, that all
Members receiving inpatient psychiatric services are scheduled
for outpatient follow-up and/or continuing treatment prior to
discharge. The outpatient treatment must occur within 7 days
from the date of discharge. HMO must ensure that behavioral
health providers contact Members who have missed appointments
within 24 hours to reschedule appointments.
6.6.11 HMO must provide inpatient psychiatric services to Members
under the age of 2l who have been ordered to receive the
services by a court of competent jurisdiction under the
provisions of Chapters 573 and 574 of the Texas Health and
Safety Code, relating to court ordered commitments to
psychiatric facilities.
6.6.11.1 HMO cannot deny, reduce or controvert the medical necessity of
any court ordered inpatient psychiatric service for Members
under age 21. Any modification or termination of services must
be presented to the court with jurisdiction over the matter
for determination.
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6.6.11.2 A Member who has been ordered to receive treatment under the
provisions of Chapter 573 or 574 of the Texas Health and
Safety Code cannot appeal the commitment through HMO's
complaint or appeals process.
6.6.12 HMO must comply with 28 TAC ss.3.8001 et seq., regarding
utilization review of chemical dependency treatment.
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS
---------------------------------------
6.7.1 Counseling and Education. HMO must require, through contract
provisions, that Members requesting contraceptive services or
family planning services are also provided counseling and
education about family planning and family planning services
available to Members. HMO must develop outreach programs to
increase community support for family planning and encourage
Members to use available family planning services. HMO is
encouraged to include a representative cross-section of
Members and family planning providers who practice in the
community in developing, planning and implementing family
planning outreach programs.
6.7.2 Freedom of Choice. HMO must ensure that Members have the right
to choose any Medicaid participating family planning provider,
whether the provider chosen by the Member is in or outside HMO
provider network. HMO must provide Members access to
information about the providers of family planning services
available and the Member's right to choose any Medicaid family
planning provider. HMO must provide access to confidential
family planning services.
6.7.3 Provider Standards and Payment. HMO must require all
subcontractors who are family planning agencies to deliver
family planning services according to the TDH Family Planning
Service Delivery Standards. HMO must provide, at minimum, the
full scope of services available under the Texas Medicaid
program for family planning services. HMO will reimburse
family planning agencies and out-of-network family planning
providers the Medicaid fee-for service amounts for family
planning services, including medically necessary medications,
contraceptives, and supplies.
6.7.4 HMO must provide medically-approved methods of contraception
to Members. Contraceptive methods must be accompanied by
verbal and written instructions on their correct use. HMO must
establish mechanisms to ensure all medically approved methods
of contraception are made available to the Member, either
directly or by referral to a subcontractor. The following
initial Member education content may vary according to the
educator's assessment of the Member's current knowledge:
6.7.4.1 general benefits of family planning services and
contraception;
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6.7.4.2 information on male and female basic reproductive anatomy and
physiology;
6.7.4.3 information regarding particular benefits and potential side
effects and complications of all available contraceptive
methods;
6.7.4.4 information concerning all of the health care provider's
available services, the purpose and sequence of health care
provider procedures, and the routine schedule of return
visits;
6.7.4.5 information regarding medical emergencies and where to obtain
emergency care on a 24-hour basis;
6.7.4.6 breast self-examination rationales and instructions unless
provided during physical exam (for females); and
6.7.4.7 information on HIV/STD infection and prevention and safer sex
discussion.
6.7.5 HMO must require, through contractual provisions, that
subcontractors have mechanisms in place to ensure Member's
(including minor's) confidentiality for family planning
services.
6.7.6 HMO must develop, implement, monitor, and maintain standards,
policies and procedures for providing information regarding
family planning to providers and Members, specifically
regarding State and federal laws governing Member
confidentiality (including minors). Providers and family
planning agencies cannot require parental consent for minors
to receive family planning services.
6.7.7 HMO must report encounter data on family planning services in
accordance with Article 12.2.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.1 THSteps Services. HMO must develop effective methods to ensure
that children under the age of 21 receive THSteps services
when due and according to the recommendations established by
the American Academy of Pediatrics and the THSteps periodicity
schedule for children. HMO must arrange for THSteps services
to be provided to all eligible Members except when a Member
knowingly and voluntarily declines or refuses services after
the Member has been provided information upon which to make an
informed decision.
6.8.2 Member Education and Information. HMO must ensure that Members
are provided information and educational materials about the
services available through the
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THSteps program, and how and when they can obtain the
services. The information should tell the Member how they can
obtain dental benefits, transportation services through the
TDH Medical Transportation program, and advocacy assistance
from HMO.
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include
THSteps benefits, the periodicity schedule for THSteps
checkups and immunizations, and Comprehensive Care Program
(CCP) services available under the THSteps program to Members
under age 21 years. Providers must also be educated and
trained regarding the requirements imposed upon the department
and contracting HMOs under the Consent Decree entered in Frew
----
v. McKinney, et. al., Civil Action No. 3:93CV65, in the United
-----------
States District Court for the Eastern District of Texas, Paris
Division. Providers should be educated and trained to treat
each THSteps visit as an opportunity for a comprehensive
assessment of the Member.
6.8.4 Member Outreach. HMO must provide an outreach unit that works
with Members to ensure they receive prompt services and are
effectively informed about available THSteps services. Each
month HMO must retrieve from the Enrollment Broker BBS a list
of Members who are due and overdue THSteps services. Using
these lists and their own internally generated lists, HMOs
will contact Members and encourage Members who are
periodically due or overdue a THSteps service obtain the
service as soon as possible. HMO outreach staff must
coordinate with TDH THSteps outreach staff to ensure that
Members have access to the Medical Transportation Program, and
that any coordination with other agencies is maintained.
6.8.5 Initial Checkups Upon Enrollment. HMO must have mechanisms in
place to ensure that all newly enrolled Members receive a
THSteps checkup within 90 days from enrollment, if one is due
according to the American Academy of Pediatrics periodicity
schedule, or if there is uncertainty regarding whether one is
due. HMO should make THSteps checkups a priority to all newly
enrolled Members.
6.8.6 Accelerated Services to Migrant Populations. HMO must
cooperate and coordinate with the department, outreach
programs and THSteps regional program staff and agents to
ensure prompt delivery of services to children of migrant farm
workers and other migrant populations who may transition into
and out of HMOs program more rapidly and/or unpredictably than
the general population.
6.8.7 Newborn Checkups. HMO must have mechanisms in place to ensure
that all newborn Members have an initial newborn checkup
before discharge from the hospital and again within two weeks
from the time of birth. HMO must require providers to send
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all THSteps newborn screens to the TDH Bureau of Laboratories
or a TDH certified laboratory. Providers must include detailed
identifying information for all screened newborn Members and
the Member's mother to allow TDH to link the screens performed
at the hospital with screens performed at the two week
follow-up.
6.8.7.1 Laboratory Tests: All laboratory specimens collected as a
required component of a THSteps checkup (see Medicaid Provider
Procedures Manual for age-specific requirements) must be
submitted to the TDH Laboratory for analysis. HMO must educate
providers about THSteps program requirements for submitting
laboratory tests to the TDH Bureau of Laboratories.
6.8.8 Coordination and Cooperation. HMO must make an effort to
coordinate and cooperate with existing community and
school-based health and education programs that offer services
to school-aged children in a location that is both familiar
and convenient to the Members. HMO must make a good faith
effort to comply with Head Start's requirement that Members
participating in Head Start receive their THSteps checkup no
later than 45 days after enrolling into either program.
6.8.9 Immunizations. HMO must educate providers on the Immunization
Standard Requirements set forth in Chapter 161, Health and
Safety Code; the standards in the ACIP Immunization Schedule;
and the AAP Periodicity Schedule.
6.8.9.1 ImmTrac Compliance. HMO must educate providers about and
require providers to comply with the requirements of Chapter
161, Health and Safety Code, relating to the Texas
Immunization Registry (ImmTrac), to include parental consent
on the Vaccine Information Statement.
6.8.10 Claim Forms. HMO must require all THSteps providers to submit
claims for services paid (either on a capitated or fee-for
service basis) on the HCFA 1500 claim form and use the unique
procedure coding required by TDH.
6.8.11 Compliance with THSteps Performance Benchmark. TDH will
establish performance benchmarks against which HMO's full
compliance with the THSteps periodicity schedule will be
measured. The performance benchmarks will establish minimum
compliance measures which will increase over time. HMO must
meet all performance benchmarks required for THSteps services.
6.8.12 Validation of Encounter Data. Encounter data will be validated
by chart review of a random sample of THSteps eligible
enrollees against monthly encounter data reported by HMO.
Chart reviews will be conducted by TDH to validate that all
screens are performed when due and as reported, and that
reported data is accurate and timely. Substantial deviation
between reported and charted encounter data could
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result in HMO and/or network providers being investigated for
potential fraud and abuse without notice to HMO or the
provider.
6.9 PERINATAL SERVICES
------------------
6.9.1 HMO's perinatal health care services must ensure appropriate
care is provided to women and infants who are Members of HMO,
from the preconception period through the infant's first year
of life. HMO's perinatal health care system must comply with
the requirements of Health & Safety Code, Chapter 32 Maternal
and Infant Health Improvement Act and 25 TAC ss.37.233 et seq.
6.9.2 HMO shall have a perinatal health care system in place that,
at a minimum, provides the following services:
6.9.2.1 pregnancy planning and perinatal health promotion and
education for reproductive-age women;
6.9.2.2 perinatal risk assessment of nonpregnant women, pregnant and
postpartum women, and infants up to one year of age;
6.9.2.3 access to appropriate levels of care based on risk assessment,
including emergency care;
6.9.2.4 transfer and care of pregnant women, newborns, and infants to
tertiary care facilities when necessary;
6.9.2.5 availability and accessibility of obstetricians/gynecologists,
anesthesiologists, and neonatologists capable of dealing with
complicated perinatal problems;
6.9.2.6 availability and accessibility of appropriate outpatient and
inpatient facilities capable of dealing with complicated
perinatal problems; and
6.9.2.7 compiles, analyzes and reports process and outcome data of
Members to TDH.
6.9.3 HMO must have procedures in place to assign a pediatrician to
an unborn child prior to birth of the child.
6.9.4 HMO must provide inpatient care for its pregnant/delivering
Members and newborn Members in a health care facility, if
requested by the mother or is determined to be medically
necessary by the Member's PCP, for a minimum of:
6.9.4.1 48 hours following an uncomplicated vaginal delivery; and
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6.9.4.2 96 hours for an uncomplicated caesarian delivery.
6.9.5 HMO must establish mechanisms to ensure that medically
necessary inpatient care is provided to either the Member or
the newborn Member for complications following the birth of
the newborn using HMO's prior authorization procedures for a
medically necessary hospitalization.
6.9.6 HMO is responsible for all covered services provided to
newborn Members. The State will enroll newborn children of
STAR Members in accordance with Section 533.0075 of the Texas
Government Code when changes to the DHS eligibility system
that are necessary to implement the law have been made. TDH
will notify HMO of the implementation date of the changes
under Section 533.0075 of the Government Code. Section
533.0075 states that newborn children of STAR Members will be
enrolled in a STAR health plan on the date on which DHS has
completed the newborn's Medicaid eligibility determination,
including the assignment of a Medicaid eligibility number to
the newborn, or 60 days after the date of birth, whichever is
earlier.
6.10 EARLY CHILDHOOD INTERVENTION (ECI)
---------------------------------
6.10.1 ECI Services. HMO must provide all federally mandated services
contained at 34 C.F.R. 303.1 et seq., and 25 TAC ss.621.21 et
seq., relating to identification, referral and delivery of
health care services contained in the Member's Individual
Family Service Plan (IFSP). An IFSP is the written plan which
identifies a Member's disability or chronic or complex
condition(s) or developmental delay, and describes the course
of action developed to meet those needs, and identifies the
person or persons responsible for each action in the plan. The
plan is a mutual agreement of the Member's Primary Care
Physician (PCP), Case Manager, and the Member/family, and is
part of the Member's medical record.
6.10.2 ECI Providers. HMO must contract with qualified providers to
provide ECI services to Members under age 3 with developmental
delays. HMO may contract with local ECI programs or non-ECI
providers who meet qualifications for participation by the
Texas Interagency Council on Early Childhood Intervention to
provide ECI services.
6.10.3 Identification and Referral. HMO must ensure that network
providers are educated regarding the identification of Members
under age 3 who have or are at risk for having disabilities
and/or developmental delays. HMO must use written education
material developed or approved by the Texas Interagency
Council on Early Childhood Intervention. HMO must ensure that
all providers refer identified Members to ECI service
providers within two working days from the day the Member is
identified.
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Eligibility for ECI services is determined by the local ECI
program using the criteria contained in 25 TAC ss.621.21 et
seq.
6.10.4 Coordination. HMO must coordinate and cooperate with local ECI
programs which perform assessment in the development of the
Individual Family Service Plan (IFSP), including on-going case
management and other non-capitated services required by the
Member's IFSP. Cooperation includes conducting medical
diagnostic procedures and providing medical records required
to perform developmental assessments and develop the IFSP
within the time lines established at 34 C.F.R. 303.1 et seq.
ECI case management is not an HMO capitated service.
6.10.5 Intervention. HMO must require, through contract provisions,
that all medically necessary health and behavioral health care
services contained in the Member's IFSP are provided to the
Member in amount, duration and scope established by the IFSP.
Medical necessity for health and behavioral health care
services is determined by the interdisciplinary team as
approved by the Member's PCP. HMO cannot modify the plan of
care or alter the amount, duration and scope of services
required by the Member's IFSP. HMO cannot create unnecessary
barriers for the Member to obtain IFSP services, including
requiring prior authorization for the ECI assessment and
insufficient authorization periods for prior authorized
services.
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN INFANTS, AND
CHILDREN (WIC) - SPECIFIC REQUIREMENTS
--------------------------------------
6.11.1 HMO must coordinate with WIC to provide certain medical
information which is necessary to determine WIC eligibility,
such as height, weight, hematocrit or hemoglobin (see Article
7.16.3.2).
6.11.2 HMO must direct all eligible Members to the WIC program
(Medicaid recipients are automatically income-eligible for
WIC).
6.11.3 HMO must coordinate with existing WIC providers to ensure
Members have access to the Special Supplemental Nutrition
Program for Women, Infants and Children; or HMO must provide
these services.
6.11.4 HMO may use the nutrition education provided by WIC to
satisfy health education requirements described in this
contract.
6.12 TUBERCULOSIS (TB)
----------------
6.12.1 Education, Screening, Diagnosis and Treatment. HMO must
provide Members and providers with education on the
prevention, detection and effective treatment of
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tuberculosis (TB). HMO must establish mechanisms to ensure all
procedures required to screen at-risk Members and to form the
basis for a diagnosis and proper prophylaxis and management of
TB are available to all Members, except services referenced in
Article 6.1.8 as non-capitated services. HMO must develop
policies and procedures to ensure that Members who may be or
are at risk for exposure to TB are screened for TB. An at-risk
Member refers to a person who is susceptible to TB because of
the association with certain risk factors, behaviors, drug
resistance, or environmental conditions. HMO must consult with
the local TB control program to ensure that all services and
treatments provided by HMO are in compliance with the
guidelines recommended by the American Thoracic Society (ATS),
the Centers for Disease Control and Prevention (CDC), and TDH
policies and standards.
6.12.2 Reporting and Referral. HMO must implement policies and
procedures requiring providers to report all confirmed or
suspected cases of TB to the local TB control program within
one working day of identification of a suspected case, using
the forms and procedures for reporting TB adopted by TDH (25
TAC ss. 97). HMO must require that in-state labs report
mycobacteriology culture results positive for M. Tuberculosis
and M. Tuberculosis antibiotic susceptibility to TDH as
required for in-state labs by 25 TAC ss. 97.5(a). Referral to
state-operated hospitals specializing in the treatment of
tuberculosis should only be made for TB-related treatment.
6.12.3 Medical Records. HMO must provide access to Member medical
records to TDH and the local TB control program for all
confirmed and suspected TB cases upon request.
6.12.4 Coordination and Cooperation with the Local TB Control
Program. HMO must coordinate with the local TB control program
to ensure that all Members with confirmed or suspected TB have
a contact investigation and receive Directly Observed Therapy
(DOT). HMO must require, through contract provisions, that
providers report any Member who is non-compliant, drug
resistant, or who is or may be posing a public health threat
to TDH or the local TB control program. HMO must cooperate
with the local TB control program in enforcing the control
measures and quarantine procedures contained in Chapter 81 of
the Texas Health and Safety Code.
6.12.4.1 HMO must have a mechanism for coordinating a post-discharge
plan for follow-up DOT with the local TB program.
6.12.4.2 HMO must coordinate with the TDH South Texas Hospital and
Texas Center for Infectious Disease for voluntary and
court-ordered admission, discharge plans, treatment objectives
and projected length of stay for Members with multi-drug
resistant TB.
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6.12.4.3 HMO may contract with the local TB control programs to perform
any of the capitated services required in Article 6.12.
6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS
---------------------------------------------------------
6.13.1 HMO shall provide the following services to persons with
disabilities or chronic or complex conditions. These services
are in addition to the covered services described in detail in
the Texas Medicaid Provider Procedures Manual (Provider
Procedures Manual) and the Texas Medicaid Bulletins which is
the bi-monthly update to the Provider Procedures Manual.
Clinical information regarding covered services are published
by the Texas Medicaid program in the Texas Medicaid Service
Delivery Guide.
6.13.2 HMO must develop and maintain a system and procedures for
identifying Members who have disabilities or chronic or
complex medical and behavioral health conditions. Once
identified, HMO must have effective health delivery systems to
provide the covered services to meet the special preventive,
primary acute, and speciality health care needs appropriate
for treatment of the individual's condition. The guidelines
and standards established by the American Academy of
Pediatrics, the American College of Obstetrics/Gynecologists,
the U.S. Public Health Service, and other medical and
professional health organizations and associations' practice
guidelines whose standards are recognized by TDH must be used
in determining the medically necessary services and plan of
care for each individual.
6.13.3 HMO must require that the PCP for all persons with
disabilities or chronic or complex conditions develops a plan
of care to meet the needs of the Member. The plan of care must
be based on health needs, specialist(s) recommendations, and
periodic reassessment of the Member's developmental and
functional status and service delivery needs. HMO must require
providers to maintain record keeping systems to ensure that
each Member who has been identified with a disability or
chronic or complex condition has an initial plan of care in
the primary care provider's medical records, Member agrees to
that plan of care, and that the plan is updated as often as
the Member's needs change, but at least annually.
6.13.4 HMO must provide primary care and specialty care provider
network for persons with disabilities or chronic or complex
conditions. Specialty and subspecialty providers serving all
Members must be Board Certified/Board Eligible in their
specialty. HMO may request exceptions from TDH for approval of
traditional providers who are not board-certified or
board-eligible but who otherwise meet HMO's credentialing
requirements.
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6.13.5 HMO must have in its network PCPs and specialty care providers
that have documented experience in treating people with
disabilities or chronic or complex conditions, including
children. For services to children with disabilities or
chronic or complex conditions, HMO must have in its network
PCPs and specialty care providers that have demonstrated
experience with children with disabilities or chronic or
complex conditions in pediatric specialty centers such as
children's hospitals, medical schools, teaching hospitals and
tertiary center levels.
6.13.6 HMO must provide information, education and training programs
to Members, families, PCPs, specialty physicians, and
community agencies about the care and treatment available in
HMO's plan for Members with disabilities or chronic or complex
conditions.
6.13.7 HMO must coordinate care and establish linkages, as
appropriate for a particular Member, with existing
community-based entities and services, including but not
limited to: Maternal and Child Health, Chronically Ill and
Disabled Children's Services (CIDC), the Medically Dependent
Children Program (MDCP), Community Resource Coordination
Groups (CRCGs), Interagency Council on Early Childhood
Intervention (ECI), Home and Community-based Services (HCS)
Community Living Assistance and Support Services (CLASS),
Community Based Alternatives (CBA), In Home Family Support,
Primary Home Care, Day Activity and Health Services (DAHS),
Deaf/Blind Multiple Disabled waiver program and Medical
Transportation Program (MTP).
6.13.8 HMO must include TDH approved pediatric transplant centers,
TDH designated trauma centers, and TDH designated hemophilia
centers in its provider network (see Appendices E, F, and G
for a listing of these facilities).
6.13.9 HMO must ensure Members with disabilities or chronic or
complex conditions have access to treatment by a
multidisciplinary team when determined to be medically
necessary for effective treatment, or to avoid separate and
fragmented evaluations and service plans. The teams must
include both physician and non-physician providers determined
to be necessary by the Member's PCP for the comprehensive
treatment of the Member. The team must:
6.13.9.1 Participate in hospital discharge planning;
6.13.9.2 Participate in pre-admission hospital planning for
non-emergency hospitalizations;
6.13.9.3 Develop specialty care and support service recommendations to
be incorporated into the primary care provider's plan of care;
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6.13.9.4 Provide information to the Member and the Member's family
concerning the specialty care recommendations; and
6.13.9.5 Develop and implement training programs for primary care
providers, community agencies, ancillary care providers, and
families concerning the care and treatment of a Member with a
disability or chronic or complex conditions.
6.13.10 HMO must identify coordinators of medical care to assist
providers who serve Members with disabilities and chronic or
complex conditions and the Members and their families in
locating and accessing appropriate providers inside and
outside HMO's network.
6.13.11 HMO must assist, through information and referral, eligible
Members in accessing providers of non-capitated Medicaid
services listed in Article 6.1.8, as applicable.
6.13.12 HMO must ensure that Members who require routine or regular
laboratory and ancillary medical tests or procedures to
monitor disabilities or chronic or complex conditions are
allowed by HMO to receive the services from the provider in
the provider's office or at a contracted lab located at or
near the provider's office.
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS
--------------------------------------------------
6.14.1 Health Education Plan. HMO must develop and implement a Health
---------------------
Education plan. The health education plan must tell Members
how HMO system operates, how to obtain services, including
emergency care and out-of-plan services. The plan must
emphasize the value of screening and preventive care and must
contain disease-specific information and educational
materials.
6.14.2 Wellness Promotion Programs. HMO must conduct wellness
---------------------------
promotion programs to improve the health status of its
Members. HMO may cooperatively conduct Health Education
classes for all enrolled STAR Members with one or more HMOs
also contracting with TDH in the service area to provide
services to Medicaid recipients in all counties of the service
area. Providers and HMO staff must integrate health education,
wellness and prevention training into the care of each Member.
HMO must provide a range of health promotion and wellness
information and activities for Members in formats that meet
the needs of all Members. HMO must:
(1) develop, maintain and distribute health education
services standards, policies and procedures to
providers;
(2) monitor provider performance to ensure the standards
for health education services are complied with;
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(3) inform providers in writing about any non-compliance
with the plan standards, policies or procedures;
(4) establish systems and procedures that ensure that
provider's medical instruction and education on
preventive services provided to the Member are
documented in the Member's medical record; and
(5) establish mechanisms for promoting preventive care
services to Members who do not access care, e.g.
newsletters, reminder cards, and mail-outs.
6.14.3 Health Education Activities Report. HMO must submit, upon
----------------------------------
request, a Health Education Activities Schedule to TDH or its
designee listing the time and location of classes, health
fairs or other events conducted during the time period of the
request.
6.15 SEXUALLY TRANSMITTED DISEASES (STDS) AND HUMAN
IMMUNODEFICIENCY VIRUS (HIV)
----------------------------
HMO must provide STD services that include STD/HIV prevention,
screening, counseling, diagnosis, and treatment. HMO is
responsible for implementing procedures to ensure that Members
have prompt access to appropriate services for STDs, including
HIV.
6.15.1 HMO must allow Members access to STD services and HIV
diagnosis services without prior authorization or referral by
PCP. HMO must comply with Texas Family Code ss.32.003,
relating to consent to treatment by a child.
6.15.2 HMO must provide all covered services required to form the
basis for a diagnosis and treatment plan for STD/HIV by the
provider.
6.15.3 HMO must consult with TDH regional public health authority to
ensure that Members receiving clinical care of STDs, including
HIV, are managed according to a protocol which has been
approved by TDH (see Article 7.16.1 relating to cooperative
agreements with public health authorities).
6.15.4 HMO must make education available to providers and Members on
the prevention, detection and effective treatment of STDs,
including HIV.
6.15.5 HMO must require providers to report all confirmed cases of
STDs, including HIV, to the local or regional health authority
according to 25 Texas Administrative Code, Sections 97.131 -
97.134, using the required forms and procedures for reporting
STDs.
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6.15.6 HMO must coordinate with the TDH regional health authority to
ensure that Members with confirmed cases of syphilis,
chancroid, gonorrhea, chlamydia and HIV receive risk reduction
and partner elicitation/notification counseling. Coordination
must be included in the subcontract required by Article
7.16.1. HMO may contract with local or regional health
authorities to perform any of the covered services required in
Article 6.15.
6.15.7 HMO's PCPs may enter into contracts or agreements with
traditional HIV service providers in the service area to
provide services such as case management, psychosocial support
and other services. If the service provided is a covered
service under this contract, the contract or agreement must
include payment provisions.
6.15.8 The subcontract with the respective TDH regional offices and
city and county health departments, as described in Article
7.16.1, must include, but not be limited to, the following
topics:
6.15.8.1 Access for Case Investigation. Procedures must be established
to make Member records available to public health agencies
with authority to conduct disease investigation, receive
confidential Member information, and follow up.
6.15.8.2 Medical Records and Confidentiality. HMO must require that
providers have procedures in place to protect the
confidentiality of Members provided STD/HIV services. These
procedures must include, but are not limited to, the manner in
which medical records are to be safeguarded; how employees are
to protect medical information; and under what conditions
information can be shared. HMO must inform and require its
providers who provide STD/HIV services to comply with all
state laws relating to communicable disease reporting
requirements. HMO must implement policies and procedures to
monitor provider compliance with confidentiality requirements.
6.15.8.3 Partner Referral and Treatment. Members who are named as
contacts to an STD, including HIV, should be evaluated and
treated according to HMO's protocol. All protocols must be
approved by TDH. HMO's providers must coordinate referral of
non-Member partners to local and regional health department
STD staff.
6.15.8.4 Informed Consent and Counseling. HMO must have policies and
procedures in place regarding obtaining informed consent and
counseling Members. The subcontracts with providers who treat
HIV patients must include provisions requiring the provider to
refer Members with HIV infection to public health agencies for
in-depth prevention counseling, on-going partner elicitation
and notification services and other prevention support
services. The subcontracts must also include provisions that
require the
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provider to direct-counsel or refer an HIV-infected Member
about the need to inform and refer all sex and/or
needle-sharing partners that might have been exposed to the
infection for prevention counseling and antibody testing.
6.16 BLIND AND DISABLED MEMBERS
--------------------------
6.16.1 HMO must arrange for all covered health and health-related
services required under this contract for all voluntarily
enrolled Blind and Disabled Members. HMO is not required to
provide value-added services to Blind and Disabled Members.
6.16.2 HMO must perform the same administrative services and
functions as are performed for mandatory Members under this
contract. These administrative services and functions include,
but are not limited to:
6.16.2.1 Prior authorization of services;
6.16.2.2 All customer services functions offered Members in mandatory
participation categories, including the complaint process,
enrollment services, and hotline services;
6.16.2.3 Linguistic services, including providing Member materials in
alternative formats for the blind and disabled;
6.16.2.4 Health education;
6.16.2.5 Utilization management using TDH Claims Administrator
encounter data to provide appropriate interventions for
Members through administrative case management;
6.16.2.6 Quality assurance activities as needed and Focused Studies as
required by TDH; and
6.16.2.7 Coordination to link Blind and Disabled Members with
applicable community resources and targeted case management
programs (see Non-Capitated Services in Article 6.1.8).
6.16.3 HMO must require network providers to submit claims for health
and health-related services to TDH's Claims Administrator for
claims adjudication and payment.
6.16.4 HMO must provide services to Blind and Disabled Members within
HMO's network unless necessary services are unavailable within
network. HMO must also allow referrals to out-of-network
providers if necessary services are not available within HMO's
network. Records must be forwarded to Member's PCP following a
referral visit.
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ARTICLE VII PROVIDER NETWORK REQUIREMENTS
7.1 PROVIDER ACCESSIBILITY
----------------------
7.1.1 HMO must enter into written contracts with properly
credentialed health care service providers. The names of all
providers must be submitted to TDH as part of HMO
subcontracting process. HMO must have its own credentialing
process to review, approve and periodically recertify the
credentials of all participating providers in compliance with
28 TAC 11.1902, relating to credentialing of providers in
HMOs.
7.1.2 HMO must require tax I.D. numbers from all providers. HMO is
required to do backup withholding from all payments to
providers who fail to give tax I.D. numbers or who give
incorrect numbers.
7.1.3 Timeframes for Access Requirements. HMO must have sufficient
network providers and establish procedures to ensure Members
have access to routine, urgent, and emergency services;
telephone appointments; advice and Member service lines. These
services must be accessible to Members within the following
timeframes:
7.1.3.1 Urgent Care within 24 hours of request;
7.1.3.2 Routine care within 2 weeks of request;
7.1.3.3 Physical/Wellness Exams for adults must be provided within 8
to 10 weeks of the request;
7.1.3.4 HMO must establish policies and procedures to ensure that
THSteps Checkups be provided within 90 days of new enrollment,
except newborn Members should be seen within 2 weeks of
enrollment, and in all cases for all Members be consistent
with the American Academy of Pediatrics and THSteps
periodicity schedule which is based on the American Academy of
Pediatrics schedule and delineated in the Texas Medicaid
Provider Procedures Manual and the Medicaid bi-monthly
bulletins (see Article 6.1, Scope of Services). If the Member
does not request a checkup, HMO must establish a procedure for
contacting the Member to schedule the checkup.
7.1.4 HMO is prohibited from requiring a provider or provider group
to enter into an exclusive contracting arrangement with HMO as
a condition for participation in its provider network.
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7.2 PROVIDER CONTRACTS
------------------
7.2.1 All providers must have a written contract, either with an
intermediary entity or an HMO, to participate in the Medicaid
program (provider contract). HMO must make all contracts
available to TDH upon request, at the time and location
requested by TDH. All standard formats of provider contracts
must be submitted to TDH for approval no later than 60 days
after the effective date of this contract, unless previously
filed with TDH. HMO must submit 1 paper copy and 1 electronic
copy in a form specified by TDH. Any change to the standard
format must be submitted to TDH for approval no later than 30
days prior to the implementation of the new standard format.
All provider contracts are subject to the terms and conditions
of this contract and must contain the provisions of Article V,
Statutory and Regulatory Compliance, and the provisions
contained in Article 3.2.4.
7.2.1.1 TDH has 15 working days to review the materials and recommend
any suggestions or required changes. If TDH has not responded
to HMO by the fifteenth day, HMO may execute the contract. TDH
reserves the right to request HMO to modify any contract that
has been deemed approved.
7.2.2 Primary Care Provider (PCP) contracts and specialty care
contracts must contain provisions relating to the requirements
of the provider types found in this contract. For example, PCP
contracts must contain the requirements of Article 7.8
relating to Primary Care Providers.
7.2.3 Provider contracts that are requested by any agency with
authority to investigate and prosecute fraud and abuse must be
produced at the time and place required by TDH or the
requesting agency. Provider contracts requested in response to
a Public Information request must be produced within 48 hours
of the request. Requested contracts and all related records
must be provided free-of-charge to the requesting agency.
7.2.4 The form and substance of all provider contracts are subject
to approval by TDH. TDH retains the authority to reject or
require changes to any contract that do not comply with the
requirements or duties and responsibilities of this contract.
HMO REMAINS RESPONSIBLE FOR PERFORMING AND FOR ANY FAILURE TO
PERFORM ALL DUTIES, RESPONSIBILITIES AND SERVICES UNDER THIS
CONTRACT REGARDLESS OF WHETHER THE DUTY, RESPONSIBILITY OR
SERVICE IS CONTRACTED TO ANOTHER FOR ACTUAL PERFORMANCE.
7.2.5 TDH reserves the right and retains the authority to make
reasonable inquiry and conduct investigations into patterns of
provider and Member complaints against HMO or any intermediary
entity with whom HMO contracts to deliver health care services
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under this contract. TDH may impose appropriate sanctions and
contract remedies to ensure HMO compliance with the provisions
of this contract.
7.2.6 HMO must not restrict a provider's ability to provide opinions
or counsel to a Member with respect to benefits, treatment
options, and provider's change in network status.
7.2.7 To the extent feasible within HMO's existing claims processing
systems, HMO should have a single or central address to which
providers must submit claims. If a central processing center
is not possible within HMO's existing claims processing
system, HMO must provide each network provider a complete list
of all entities to whom the providers must submit claims for
processing and/or adjudication. The list must include the name
of the entity, the address to which claims must be sent,
explanation for determination of the correct claims payer
based on services rendered, and a phone number the provider
may call to make claims inquiries. HMO must notify providers
in writing of any changes in the claims filing list at least
30 days prior to effective date of change. If HMO is unable to
provide 30 days notice, providers must be given a 30-day
extension on their claims filing deadline to ensure claims are
routed to correct processing center.
7.2.8 HMO, all IPAs, and other intermediary entities must include
contract language which substantially complies with the
following standard contract provisions in each Medicaid
provider contract. This language must be included in each
contract with an actual provider of services, whether through
a direct contract or through intermediary provider contracts:
7.2.8.1 [Provider] is being contracted to deliver Medicaid managed
care under the TDH STAR program. HMO must provide copies of
the TDH/HMO Contract to the [Provider] upon request.
[Provider] understands that services provided under this
contract are funded by State and federal funds under the
Medicaid program. [Provider] is subject to all state and
federal laws, rules and regulations that apply to all persons
or entities receiving state and federal funds. [Provider]
understands that any violation by a provider of a State or
federal law relating to the delivery of services by the
provider under this HMO/Provider contract, or any violation of
the TDH/HMO contract could result in liability for money
damages, and/or civil or criminal penalties and sanctions
under state and/or federal law.
7.2.8.2 [Provider] understands and agrees that HMO has the sole
responsibility for payment of covered services rendered by the
provider under HMO/Provider contract. In the event of HMO
insolvency or cessation of operations, [Provider's] sole
recourse is against HMO through the bankruptcy,
conservatorship, or receivership estate of HMO.
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7.2.8.3 [Provider] understands and agrees TDH is not liable or
responsible for payment for any Medicaid covered services
provided to mandatory Members under HMO/Provider contract.
Federal and State laws provide severe penalties for any
provider who attempts to collect any payment from or bill a
Medicaid recipient for a covered service.
7.2.8.4 [Provider] agrees that any modification, addition, or deletion
of the provisions of this contract will become effective no
earlier than 30 days after HMO notifies TDH of the change in
writing. If TDH does not provide written approval within 30
days from receipt of notification from HMO, changes can be
considered provisionally approved and will become effective.
Modifications, additions or deletions which are required by
TDH or by changes in state or federal law are effective
immediately.
7.2.8.5 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. [Provider] must cooperate and assist TDH and
any state or federal agency that is charged with the duty of
identifying, investigating, sanctioning or prosecuting
suspected fraud and abuse. [Provider] must provide originals
and/or copies of any and all information, allow access to
premises and provide records to TDH or its authorized
agent(s), THHSC, HCFA, the U.S. Department of Health and Human
Services, FBI, TDI, and the Texas Attorney General's Medicaid
Fraud Control Unit, upon request, and free-of-charge.
[Provider] must report any suspected fraud or abuse including
any suspected fraud and abuse committed by HMO or a Medicaid
recipient to TDH for referral to THHSC.
7.2.8.6 [Provider] is required to submit proxy claims forms to HMO for
services provided to all STAR Members that are capitated by
HMO in accordance with the encounter data submissions
requirements established by HMO and TDH.
7.2.8.7 HMO is prohibited from imposing restrictions upon the
[Provider's] free communication with Members about a Member's
medical conditions, treatment options, HMO referral policies,
and other HMO policies, including financial incentives or
arrangements and all STAR managed care plans with whom
[Provider] contracts.
7.2.8.8 The Texas Medicaid Fraud Control Unit must be allowed to
conduct private interviews of [Providers] and the [Providers']
employees, contractors, and patients. Requests for information
must be complied with, in the form and language requested.
[Providers] and their employees and contractors must cooperate
fully in making themselves available in person for interviews,
consultation, grand jury proceedings, pre-trial conference,
hearings, trial and in any other process, including
investigations. Compliance with this Article is at HMO's and
[Provider's] own expense.
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7.2.8.9 HMO must include the method of payment and payment amounts in
all provider contracts.
7.2.8.10 All provider clean claims must be adjudicated within 30 days.
HMO must pay provider interest on all clean claims that are
not paid within 30 days at a rate of 1.5% per month (18%
annual) for each month the claim remains unadjudicated.
7.2.8.11 HMO must prohibit network providers from interfering with or
placing liens upon the state's right or HMO's right, acting as
the state's agent, to recovery from third party resources. HMO
must prohibit network providers from seeking recovery in
excess of the Medicaid payable amount or otherwise violating
state and federal laws.
7.2.9 HMO must follow the procedures outlined in article 20A.18A of
the Texas Insurance Code if terminating a contract with a
provider, including an STP. At least 30 days before the
effective date of the proposed termination of the provider's
contract, HMO must provide a written explanation to the
provider of the reasons for termination. HMO may immediately
terminate a provider contract if the provider presents
imminent harm to patient health, actions against a license or
practice, or fraud.
7.2.9.1 Within 60 days of the termination notice date, a provider may
request a review of HMO's proposed termination by an advisory
review panel, except in a case in which there is imminent harm
to patient health, an action against a private license, or
fraud. The advisory review panel must be composed of
physicians and providers, as those terms are defined in
article 20A.02(r) and (t), including at least one
representative in the provider's specialty or a similar
specialty, if available, appointed to serve on the standing
quality assurance committee or utilization review committee of
HMO. The decision of the advisory review panel must be
considered by HMO but is not binding on HMO. HMO must provide
to the affected provider, on request, a copy of the
recommendation of the advisory review panel and HMO's
determination.
7.2.9.2 A provider who is terminated is entitled to an expedited
review process by HMO on request by the provider. HMO must
provide notification of the provider's termination to HMO's
Members receiving care from the terminated provider at least
30 days before the effective date of the termination. If a
provider is terminated for reasons related to imminent harm to
patient health, HMO may notify its Members immediately.
7.2.10 HMO must notify TDH no later than 90 days prior to terminating
any subcontract affecting a major performance function of this
contract. If HMO seeks to terminate a provider's contract for
imminent harm to patient health, actions against a license or
practice, or fraud, contract termination may be immediate. TDH
will require assurances that any contract termination will not
result in an interruption of an essential service or major
contract function.
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7.2.11 HMO must include a complaint and appeals process which
complies with the requirements of Article 20A.12 of the Texas
Insurance Code relating to Complaint Systems in all provider
contracts. HMO's complaint and appeals process must be the
same for all providers.
7.3 PHYSICIAN INCENTIVE PLANS
-------------------------
7.3.1 HMO may operate a physician incentive plan only if: (1) no
specific payment may be made directly or indirectly under a
physician incentive plan to a physician or physician group as
an inducement to reduce or limit medically necessary services
furnished to a Member; and (2) the stop-loss protection,
enrollee surveys and disclosure requirements of this Article
are met.
7.3.2 HMO must disclose to TDH information required by federal
regulations found at 42 C.F.R, ss. 417.479. The information
must be disclosed in sufficient detail to determine whether
the incentive plan complies with the requirements at 42 C.F.R.
ss. 417.479. The disclosure must contain the following
information:
7.3.2.1 Whether services not furnished by a physician or physician
group (referral services) are covered by the incentive plan.
If only services furnished by the physician or physician group
are covered by the incentive plan, disclosure of other aspects
of the incentive plan are not required to be disclosed.
7.3.2.2 The type of incentive arrangement (e.g. withhold, bonus,
capitation).
7.3.2.3 The percent of the withhold or bonus, if the incentive plan
involves a withhold bonus.
7.3.2.4 Whether the physician or physician group has evidence of a
stop-loss protection, including the amount and type of
stop-loss protection.
7.3.2.5 The panel size and the method used for pooling patients, if
patients are pooled.
7.3.2.6 The results of Member and disenrollee surveys, if HMO is
required under 42 C.F.R. ss. 417.479 to conduct Member and
disenrollee surveys.
7.3.3 HMO must submit the information required in Articles 7.3.2.1 -
7.3.2.5 to TDH by the effective date of this contract and each
anniversary date of the contract.
7.3.4 HMO must submit the information required in Article 7.3.2.6
one year after the effective date of initial contract or
effective date of renewal contract, and annually each
subsequent year under the contract. HMOs who put physicians or
physician
|
1999 Renewal Contract Travis Service Area August 9, 1999
groups at substantial financial risk must conduct a survey of
all Members who have voluntarily disenrolled in the previous
year. A list of voluntary disenrollees may be obtained from
the Enrollment Broker.
7.3.5 HMO must provide Members with information regarding Physician
Incentive Plans upon request. The information must include the
following:
7.3.5.1 whether HMO uses a physician incentive plan that covers
referral services
7.3.5.2 the type of incentive arrangement (i.e., withhold, bonus,
capitation);
7.3.5.3 whether stop-loss protection is provided; and
7.3.5.4 results of enrollee and disenrollee surveys, if required under
42 C.F.R. ss. 417.479.
7.3.5.5 HMO must ensure that IPAs and ANHCs with whom HMO contracts
comply with the requirements above. HMO is required to meet
the requirements above for all levels of subcontracting
7.4 PROVIDER MANUAL AND PROVIDER TRAINING
-------------------------------------
7.4.1 HMO must prepare and issue a Provider Manual(s), including any
necessary specialty manuals (e.g. behavioral health) to the
providers in the HMO network and to newly contracted providers
in the HMO network within five (5) working days from inclusion
of the provider into the network. The Provider Manual must
contain sections relating to special requirements of the STAR
Program as required under this contract. See Appendix D,
Required Critical Elements, for specific details regarding
content requirements.
Provider Manual and any revisions must be approved by TDH
prior to publication and distribution to providers (see
Article 3.4.1 regarding the process for plan materials
review).
7.4.2 HMO must provide training to all network providers and their
staff regarding the requirements of the TDH/HMO contract and
special needs of STAR Members.
7.4.2.1 HMO training for all providers must be completed no later than
30 days after placing a newly contracted provider on active
status. HMO must provide on-going training to new and existing
providers as required by HMO or TDH to comply with this
contract.
7.4.2.2 HMO must include in all PCP training how to screen for and
identify behavioral health disorders, HMOs referral process to
behavioral health care services and clinical
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coordination requirements for behavioral health. HMO must
include in all training for behavioral health providers how to
identify physical health disorders, HMO's referral process to
primary care and clinical coordination requirements between
physical medicine and behavioral health providers. HMO must
include training on coordination and quality of care such as
behavioral health screening techniques for PCPs and new models
of behavioral health interventions.
7.4.3 HMO must provide primary care and behavioral health providers
with screening tools and instruments approved by TDH.
7.4.4 HMO must maintain and make available upon request enrollment
or attendance rosters dated and signed by each attendee or
other written evidence of training of each network provider
and their staff.
7.4.5 HMO must have its written policies and procedures for the
screening, assessment and referral processes between
behavioral health providers and physical medicine providers
available for TDH review prior to the effective date of the
contract.
7.5 MEMBER PANEL REPORTS
--------------------
HMO must furnish each PCP with a current list of enrolled
Members enrolled or assigned to that Provider no later than 5
days after HMO receives the Enrollment File from the
Enrollment Broker each month. If the 5th day falls on a
weekend or state holiday, the file must be provided by the
following working day.
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
7.6.1 HMO must develop implement and maintain a provider complaint
system which must be in compliance with all applicable state
and federal law or regulations. Modifications and amendments
to the complaint system must be submitted to TDH no later than
30 days prior to the implementation of the modification or
amendment.
7.6.2 HMO must include the provider complaint and appeal procedure
in all network provider contracts or in the provider manual.
7.6.3 HMO's complaint and appeal process cannot contain provisions
requiring a Member to submit a complaint or appeal to TDH for
resolution in lieu of the HMO's process.
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7.6.4 HMO must establish mechanisms to ensure that network providers
have access to a person who can assist providers in resolving
issues relating to claims payment, plan administration,
education and training, and complaint procedures.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following
qualifications:
--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center meets the
standards established by federal rules and procedures.
The FQHC must also be an eligible provider enrolled in
the Medicaid program.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as
an M.D. or a D.O. in the State of Texas either as a
primary care provider or in the area of specialization
under which they will provide medical services under
contract with HMO; who is a provider enrolled in the
Medicaid program; and who has a valid Drug Enforcement
Agency registration number and a Texas Controlled
Substance Certificate, if either is required in their
practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special
hospital by the State of Texas under Chapter 241 of
the Health and Safety Code and Private Psychiatric
Hospitals under Chapter 577 of the Health and Safety
Code (or is a provider which is a component part of a
State or local government entity which does not
require a license under the laws of the State of
Texas), which is enrolled as a provider in the Texas
Medicaid Program. HMO will require that all facilities
in the network used for acute inpatient specialty care
for people under age 21 with disabilities or chronic
or complex conditions will have a designated pediatric
unit; 24-hour laboratory and blood bank availability;
pediatric radiological capability; meet JCAHO
standards; and have discharge planning and social
service units.
--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the
Practitioner applicable licensing agency of the State of Texas
Provider who is enrolled in the Texas Medicaid Program or an
individual properly trained to provide behavioral
health support services who practices under the direct
supervision of an appropriately licensed professional.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under
Laboratory the Federal Clinical Laboratory Improvement Act(CLIA),
and enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for
designation as a rural health
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Clinic (RHC) clinic, and enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to
Department Health and Safety Code, Title 2, Local Public Health
Reorganization Act ss. 121.031ff.
--------------------------------------------------------------------------------
Local Mental Under Section 531.002(8) of the Health and Safety
Health Authority Code, the local component of the TXMHMR system
(LMHA) designated by TDMHMR to carry out the legislative
mandate for planning, policy development,
coordination, and resource development/allocation and
for supervising and ensuring the provision of mental
health care services to persons with mental illness in
one or more local service areas.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed
Facility Provider and credentialed to provide services, and enrolled in
the Texas Medicaid Program.
--------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide
Health Clinic on-site primary and preventive care to children and
(SBHC) adolescents.
--------------------------------------------------------------------------------
7.8 PRIMARY CARE PROVIDERS
----------------------
7.8.1 HMO must have a system for monitoring Member enrollment into
its plan to allow HMO to effectively plan for future needs and
recruit network providers as necessary to ensure adequate
access to primary care and specialty care. The Member
enrollment monitoring system must include the length of time
required for Members to access care within the network. The
monitoring system must also include monitoring after-hours
availability and accessibility of PCPs.
7.8.2 HMO must maintain a primary care provider network in
sufficient numbers and geographic distribution to serve a
minimum of forty-five percent (45%) of the mandatory STAR
eligibles in each county of the service area. HMO is required
to increase the capacity of the network as necessary to
accommodate enrollment growth beyond the forty-fifth
percentile (45%).
7.8.3 HMO must maintain a provider network that includes
pediatricians and physicians with pediatric experience in
sufficient numbers and geographic distribution to serve
eligible children and adolescents in the service area and
provide timely access to the full scope of benefits,
especially THSteps checkups and immunizations.
7.8.4 HMO must comply with the access requirements as established by
the Texas Department of Insurance for all HMOs doing business
in Texas, except as otherwise required by this contract.
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7.8.5 HMO must have physicians with board eligibility/certification
in pediatrics available for referral for Members under the age
of 21.
7.8.5.1 Individual PCPs may serve more than 2,000 Members. However, if
TDH determines that a PCP's Member enrollment exceeds the
PCP's ability to provide accessible, quality care, TDH may
prohibit the PCP from receiving further enrollments. TDH may
direct HMOs to assign or reassign Members to another PCP's
panel.
7.8.6 HMO must have PCPs available throughout the service area to
ensure that no Member must travel more than 30 miles to access
the PCP, unless an exception to this distance requirement is
made by TDH.
7.8.7 HMO's primary care provider network may include providers from
any of the following practice areas: General Practitioners;
Family Practitioners; Internists; Pediatricians;
Obstetricians/Gynecologists (OB/GYN); Pediatric and Family
Advanced Practice Nurses (APNs) and Certified Nurse Midwives
Women Health (CNMs) practicing under the supervision of a
physician; Physician Assistants (PAS) practicing under the
supervision of a physician specializing in Family Practice,
Internal Medicine, Pediatrics or Obstetrics/Gynecology who
also qualifies as a PCP under this contract; or Federally
Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs)
and similar community clinics; and specialists who are willing
to provide medical homes to selected Members with special
needs and conditions (see Article 7.9.4).
7.8.8 The PCP for a Member with disabilities or chronic or complex
conditions may be a specialist who agrees to provide PCP
services to the Member. The specialty provider must agree to
perform all PCP duties required in the contract and PCP duties
must be within the scope of the specialist's license. Any
interested person may initiate the request for a specialist to
serve as a PCP for a Member with disabilities or chronic or
complex conditions.
7.8.9 PCPs must either have admitting privileges at a hospital,
which is part of HMO network of providers, or make referral
arrangements with an HMO provider who has admitting privileges
to a network hospital.
7.8.10 HMO must require, through contract provisions, that PCPs are
accessible to Members 24 hours a day, 7 days a week. The
following are acceptable and unacceptable phone arrangements
for contacting PCPs after normal business hours.
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Acceptable:
(1) Office phone is answered after-hours by an answering
service which meets language requirements of the
major population groups and which can contact the PCP
or another designated medical practitioner. All calls
answered by an answering service must be returned
within 30 minutes.
(2) Office phone is answered after normal business hours
by a recording in the language of each of the major
population groups served directing the patient to
call another number to reach the PCP or another
provider designated by the PCP. Someone must be
available to answer the designated provider's phone.
Another recording is not acceptable.
(3) Office phone is transferred after office hours to
another location where someone will answer the phone
and be able to contact the PCP or another designated
medical practitioner, who can return the call within
30 minutes.
Unacceptable:
(1) Office phone is only answered during office hours.
(2) Office phone is answered after-hours by a recording
which tells patients to leave a message.
(3) Office phone is answered after-hours by a recording
which directs patients to go to an Emergency Room for
any services needed.
(4) Returning after-hours calls outside of 30 minutes.
7.8.11 HMO must require PCPs, through contract provisions or provider
manual, to provide primary care services and continuity of
care to Members who are enrolled with or assigned to the PCP.
Primary care services are all services required by a Member
for the prevention, detection, treatment and cure of illness,
trauma, disease or disorder, which are covered and/or required
services under this contract. All services must be provided in
compliance with generally accepted medical and behavioral
health standards for the community in which services are
rendered. HMO must require PCPs, through contract provisions
or provider manual, to provide children under the age of 21
services in accordance with the American Academy of Pediatric
recommendations and the THSteps periodicity schedule and
provide adults services in accordance with the U.S. Preventive
Services Task Force's publication "Put Prevention Into
Practice".
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7.8.11.1 HMO must require PCPs, through contract provisions or provider
manual, to assess the medical needs of Members for referral to
specialty care providers and provide referrals as needed. PCP
must coordinate care with specialty care providers after
referral.
7.8.11.2 HMO must require PCPs, through contract provisions or provider
manual, to make necessary arrangements with home and community
support services to integrate the Member's needs. This
integration may be delivered by coordinating the care of
Members with other programs, public health agencies and
community resources which provide medical, nutritional,
behavioral, educational and outreach services available to
Members.
7.8.11.3 HMO must require, through contract provisions or provider
manual, that the Member's PCP or HMO provider through whom PCP
has made arrangements, be the admitting or attending physician
for inpatient hospital care, except for emergency medical or
behavioral health conditions or when the admission is made by
a specialist to whom the Member has been referred by the PCP.
HMO must require, through contract provisions or provider
manual, that PCP assess the advisability and availability of
outpatient treatment alternatives to inpatient admissions. HMO
must require, through contract provisions or provider manual,
that PCP provide or arrange for pre-admission planning for
non-emergency inpatient admissions, and discharge planning for
Members. PCP must call the emergency room with relevant
information about the Member. PCP must provide or arrange for
follow-up care after emergency or inpatient care.
7.8.11.4 HMO must require PCPs for children under the age of 21 to
provide or arrange to have provided all services required
under Article 6.8 relating to Texas Health Steps, Article 6.9
relating to Perinatal Services, Article 6.10 relating to Early
Childhood Intervention, Article 6.11 relating to WIC, Article
6.13 relating to People With Disabilities or Chronic or
Complex Conditions, and Article 6.14 relating to Health
Education and Wellness and Prevention Plans. PCP must
cooperate and coordinate with HMO to provide Member and the
Member's family with knowledge of and access to available
services.
7.8.12 PCP Selection and Changes. All Medicaid recipients who are
eligible for participation in the STAR program have the right
to select their PCP and HMO.-- Medicaid recipients who are
mandatory STAR participants who do not select a PCP and/or HMO
during the time period allowed will be assigned to a PCP
and/or HMO using the TDH default process. Members may change
PCPs at any time, but these changes are limited to four (4)
times per year.
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7.8.12.1 Voluntary SSI Members. PCP changes cannot be performed
retroactively for voluntary SSI Members. If an SSI Member
requests a PCP change on or before the 15th of the month, the
change will be effective the first day of the next month. If
an SSI Member requests a PCP change after the 15th of the
month, the change will be effective the first day of the
second month that follows. Exceptions to this policy will be
allowed for reasons of medical necessity or other extenuating
circumstances.
7.8.12.2 Mandatory Members. Retroactive changes to a Member's PCP
should only be made if it is medically necessary or there are
other circumstances which necessitate a retroactive change.
HMO must pay claims for services provided by the original PCP.
If the original PCP is paid on a capitated basis and services
were provided during the period for which capitation was paid,
HMO cannot recoup the capitation.
7.9 OB/GYN PROVIDERS
----------------
HMO must allow a female Member to select an OB/GYN within its
provider network or within a limited provider network in
addition to a PCP, to provide health care services within the
scope of the professional specialty practice of a properly
credentialed OB/GYN. See Article 21 53D of the Texas Insurance
Code and 28 TAC Sections 11.506, 11.1600 and 11.1608. A Member
who selects an OB/GYN must be allowed direct access to the
health care services of the OB/GYN without a referral by the
woman's PCP or a prior authorization or precertification from
HMO. HMO must allow Members to change OB/GYNs up to four times
per year. Health care services must include, but not be
limited to:
7.9.1 One well-woman examination per year;
7.9.2 Care related to pregnancy;
7.9.3 Care for all active gynecological conditions; and
7.9.4 Diagnosis, treatment, and referral for any disease or
condition within the scope of the professional practice of a
properly credentialed obstetrician or gynecologist.
7.9.5 HMOs which allow its Members to directly access any OB/GYN
provider within its network, must ensure that the provisions
of Articles 7.9.1 through 7.9.4 continue to be met.
7.9.6 OB/GYN providers must comply with HMO's procedures contained
in HMO's provider manual or provider contract for OB/GYN
providers, including but not limited to prior authorization
procedures.
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7.10. SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, including pediatric
specialty providers, within the network in sufficient numbers
and areas of practice to meet the needs of all Members
requiring specialty care or services.
7.10.2 HMO must require, through contract provisions or provider
manual, that specialty providers send a record of consultation
and recommendations to a Member's PCP for inclusion in
Member's medical record and report encounters to the PCP
and/or HMO.
7.10.3 HMO must ensure availability and accessibility to appropriate
specialists.
7.10.4 HMO must ensure that no Member is required to travel in excess
of 75 miles to secure initial contact with referral
specialists; special hospitals, psychiatric hospitals;
diagnostic and therapeutic services; and single service health
care physicians, dentists or providers. Exceptions to this
requirement may be allowed when an HMO has established,
through utilization data provided to TDH, that a normal
pattern for securing health care services within an area
exists or HMO is providing care of a higher skill level or
specialty than the level which is available within the service
area such as, but not limited to, treatment of cancer, burns,
and cardiac diseases.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services
through its network specialists, subspecialists and specialty
care facilities (e.g., children's hospitals, and tertiary care
hospitals).
7.11.2 HMO must include requirements for pre-admission and discharge
planning in its contracts with network hospitals. Discharge
plans for a Member must be provided by HMO or the hospital to
the Member/family, the PCP and specialty care physicians.
7.11.3 HMO must have appropriate multidisciplinary teams for people
with disabilities or chronic or complex medical conditions.
These teams must include the PCP and any individuals or
providers involved in the day-to-day or on-going care of the
Member.
7.11.4 HMO must include in its provider network a TDH-designated
perinatal care facility, as established by ss. 32.042, Texas
Health and Safety Code, once the designated system is
finalized and perinatal care facilities have been approved for
the service area (see Article 6.9.1).
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7.12 BEHAVIORAL HEALTH-LOCAL MENTAL HEALTH AUTHORITY (LMHA)
------------------------------------------------------
7.12.1 Assessment to determine eligibility for rehabilitative and
targeted MHMR case management services is a function of the
LMHA. HMO must provide all covered services described in
detail in the Texas Medicaid Provider Procedures Manual
(Provider Procedures Manual) and the Texas Medicaid Bulletins
which is the bimonthly update to the Provider Procedures
Manual. Clinical information regarding covered services are
published by the Texas Medicaid program in the Texas Medicaid
Service Delivery Guide. Covered services must be provided to
Members with SPMI and SED, when medically necessary, whether
or not they are also receiving targeted case management or
rehabilitation services through the LMHA.
7.12.2 HMO will coordinate with the LMHA and state psychiatric
facility regarding admission and discharge planning, treatment
objectives and projected length of stay for Members committed
by a court of law to the state psychiatric facility.
7.12.3 HMO must enter into written agreements with all LMHAs in the
service area which describes the process(es) which HMO and
LMHA will use to coordinate services for STAR Members with
SPMI or SED. The agreement will contain the following
provisions:
7.12.3.1 Describe the behavioral health covered services indicated in
detail in the Provider Procedures Manual and the Texas
Medicaid Bulletins which is the bi-monthly update to the
Provider Procedures Manual. Clinical information regarding
covered services are published by the Texas Medicaid program
in the Texas Medicaid Service Delivery Guide. Also include the
amount, duration, and scope of basic and value-added services,
and HMO's responsibility to provide these services;
7.12.3.2 Describe criteria protocols, procedures and instrumentation
for referral of STAR Members from and to HMO and LMHA;
7.12.3.3 Describe processes and procedures for referring Members with
SPMI or SED to LMHA for assessment and determination of
eligibility for rehabilitation or targeted case management
services;
7.12.3.4 Describe how the LMHA and HMO will coordinate providing
behavioral health care services to Members with SPMI or SED;
7.12.3.5 Establish clinical consultation procedures between HMO and
LMHA including consultation to effect referrals and on-going
consultation regarding the Member's progress;
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7.12.3.6 Establish procedures to authorize release and exchange of
clinical treatment records;
7.12.3.7 Establish procedures for coordination of assessment,
intake/triage, utilization review/utilization management and
care for persons with SPMI or SED;
7.12.3.8 Establish procedures for coordination of inpatient psychiatric
services (including court ordered commitment of Members under
21) in state psychiatric facilities within the LMHA's
catchment area;
7.12.3.9 Establish procedures for coordination of emergency and urgent
services to Members; and
7.12.3.10 Establish procedures for coordination of care and transition
of care for new HMO Members who are receiving treatment
through the LMHA.
7.12.4 HMO must offer licensed practitioners of the healing arts, who
are part of the Member's treatment team for rehabilitation
services, the opportunity to participate in HMO's network. The
practitioner must agree to accept the standard provider
reimbursement rate, meet the credentialing requirements,
comply with all the terms and conditions of the standard
provider contract of HMO.
7.12.5 Members receiving rehabilitation services must be allowed to
choose the licensed practitioners of the healing arts who are
currently a part of the Member's treatment team for
rehabilitation services. If the Member chooses to receive
these services from licensed practitioners of the healing arts
who are part of the Member's rehabilitation services treatment
team, HMO must reimburse the LMHA at current Medicaid
fee-for-service amounts.
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPS)
----------------------------------------
HMO must seek participation in its provider network from:
7.13.1 Each health care provider in the service area who has
traditionally provided care to Medicaid recipients;
7.13.2 Each hospital in the service area that has been designated as
a disproportionate share hospital under Medicaid; and
7.13.3 Each specialized pediatric laboratory in the service area,
including those laboratories located in children's hospitals.
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7.14 RURAL HEALTH PROVIDERS
----------------------
7.14.1 In rural areas of the service area, HMO must seek the
participation in its provider network of rural hospitals,
physicians, home and community support service agencies, and
other rural health care providers who:
7.14.1.1 are the only providers located in the service area; and
7.14.1.2 are Significant Traditional Providers.
7.14.2 In order to contract with HMO, rural health providers must:
7.14.2.1 agree to accept the prevailing provider contract rate of HMO
based on provider type; and
7.14.2.2 have the credentials required by HMO, provided that lack of
board certification or accreditation by JCAHO may not be the
only grounds for exclusion from the provider network.
7.14.3 HMO must reimburse rural hospitals with 100 or fewer licensed
beds in counties with fewer than 50,000 persons for acute care
services at a rate calculated using the higher of the
prospective payment system rate or the cost reimbursed
methodology authorized under the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA). Hospitals reimbursed under
TEFRA cost principles shall be paid without the imposition of
the TEFRA cap.
7.14.4 HMO must reimburse physicians who practice in rural counties
with fewer than 50,000 persons at a rate using the current
Medicaid fee schedule, including negotiated fee-for-service.
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS) AND RURAL HEALTH
CLINICS (RHCS)
--------------
7.15.1 HMO must make reasonable efforts to include FQHCs and RHCs
(Freestanding and hospital-based) in its provider network.
7.15.2 FQHCs or RHCs will receive a cost settlement from TDH and must
agree to accept initial payments from HMO in an amount that is
equal to or greater than HMO's payment terms for other
providers providing the same or similar services.
7.15.2.1 HMO must submit monthly FQHC and RHC encounter and payment
reports to all contracted FQHCs and RHCs, and QHCs and RHCs
with whom there have been
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encounters, not later than 21 days from the end of the month
for which the report is submitted. The format will be
developed by TDH. The FQHC and RHC must validate the encounter
and payment information contained in the report(s). HMO and
the FQHC/RHC must both sign the report(s) after each party
agrees that it accurately reflects encounters and payments for
the month reported. HMO must submit the signed FQHC and RHC
encounter and payment reports to TDH not later than 45 days
from the end of the month for which the report is submitted.
7.15.2.2 For FQHCs, TDH will determine the amount of the interim
settlement based on the difference between: an amount equal to
the number of Medicaid allowable encounters multiplied by the
rate per encounter from the latest settled FQHC fiscal year
cost report, and the amount paid by HMO to the FQHC for the
quarter. For RHCs, TDH will determine the amount of the
interim settlement based on the difference between a
reasonable cost amount methodology provided by TDH and the
amount paid by HMO to the RHC for the quarter. TDH will pay
the FQHC or the RHC the amount of the interim settlement, if
any, as determined by TDH or collect and retain the quarterly
recoupment amount, if any.
7.15.2.3 TDH will cost settle with each FQHC and RHC annually, based on
the FQHC or the RHC fiscal year cost report and the
methodology described in Article 7.15.2.2. TDH will make
additional payments or recoup payments from the FQHC or the
RHC based on reasonable costs less prior interim payment
settlements.
7.15.2.4 Cost settlements for RHCs, and HMO's obligation to provide RHC
reporting described in Article 7.15, are retroactive to
October 1, 1997.
7.16 COORDINATION WITH PUBLIC HEALTH
-------------------------------
7.16.1 Reimbursed Arrangements. HMO must make a good faith effort to
enter into a subcontract for the covered health care services
as specified below with TDH Public Health Regions, city and/or
county health departments or districts in each county of the
service area that will be providing these services to the
Members (Public Health Entities), who will be paid for
services by HMO, including any or all of the following
services or any covered service which the public health
department and HMO have agreed to provide:
7.16.1.1 Sexually Transmitted Diseases (STDs) Services (see Article
6.15);
7.16.1.2 Confidential HIV Testing (see Article 6.15);
7.16.1.3 Immunizations;
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7.16.1.4 Tuberculosis (TB) Care (see Article 6.12);
7.16.1.5 Family Planning Services (see Article 6.7);
7.16.1.6 THSteps checkups (see Article 6.8); and
7.16.1.7 Prenatal services (see Article 6.9).
7.16.2 HMO must make a good faith effort to enter into subcontracts
with public health entities in the service area. The
subcontracts must be available for review by TDH or its
designated agent(s) on the same basis as all other
subcontracts. If any changes are made to the contract, it must
be resubmitted to TDH. If an HMO is unable to enter into a
contract with public health entities, HMO must document
current and past efforts to TDH. Documentation must be
submitted no later than 120 days after the execution of this
contract. Public health subcontracts must include the
following areas:
7.16.2.1 The general relationship between HMO and the Public Health
entity. The subcontracts must specify the scope and
responsibilities of both parties, the methodology and
agreements regarding billing and reimbursements, reporting
responsibilities, Member and provider educational
responsibilities, and the methodology and agreements regarding
sharing of confidential medical record information between the
public health entity and the PCP.
7.16.2.2 Public Health Entity responsibilities:
(1) Public health providers must inform Members that
confidential health care information will be provided
to the PCP.
(2) Public health providers must refer Members back to
PCP for any follow-up diagnostic, treatment, or
referral services.
(3) Public health providers must educate Members about
the importance of having a PCP and accessing PCP
services during office hours rather than seeking care
from Emergency Departments, Public Health Clinics, or
other Primary Care Providers or Specialists.
(4) Public health entities must identify a staff person
to act as liaison to HMO to coordinate Member needs,
Member referral, Member and provider education and
the transfer of confidential medical record
information.
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7.16.2.3 HMO Responsibilities:
(1) HMO must identify care coordinators who will be
available to assist public health providers and PCPs
in getting efficient referrals of Members to the
public health providers, specialists, and
health-related service providers either within or
outside HMO's network.
(2) HMO must inform Members that confidential healthcare
information will be provided to the PCP.
(3) HMO must educate Members on how to better utilize
their PCPs, public health providers, emergency
departments, specialists, and health-related service
providers.
7.16.2.4 Existing contracts must include the provisions in Articles
7.16.2.1 through 7.16.2.3.
7.16.3 Non-Reimbursed Arrangements with Public Health Entities.
-------------------------------------------------------
7.16.3.1 Coordination with Public Health Entities. HMOs must make a
good faith effort to enter into a Memorandum of Understanding
(MOU) with Public Health Entities in the service area
regarding the provision of services for essential public
health care services. These MOUs must be entered into in each
service area and are subject to TDH approval. If any changes
are made to the MOU, it must be resubmitted to TDH. If an HMO
is unable to enter into an MOU with a public health entity,
HMO must document current and past efforts to TDH.
Documentation must be submitted no later than 120 days after
the execution of this contract. MOUs must contain the roles
and responsibilities of HMO and the public health department
for the following services:
(1) Public health reporting requirements regarding
communicable diseases and/or diseases which are
preventable by immunization as defined by state law;
(2) Notification of and referral to the local Public
Health Entity, as defined by state law, of
communicable disease outbreaks involving Members;
(3) Referral to the local Public Health Entity for TB
contact investigation and evaluation and preventive
treatment of persons whom the Member has come into
contact;
(4) Referral to the local Public Health Entity for
STD/HIV contact investigation and evaluation and
preventive treatment of persons whom the Member has
come into contact; and,
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(5) Referral for WIC services and information sharing;
(6) Coordination and follow-up of suspected or confirmed
cases of childhood lead exposure.
7.16.3.2 Coordination with Other TDH Programs. HMOs must make a good
faith effort to enter into a Memorandum of Understanding (MOU)
with other TDH programs regarding the provision of services
for essential public health care services. These MOUs must be
entered into in each service area and are subject to TDH
approval. If any changes are made to the MOU, it must be
resubmitted to TDH. If an HMO is unable to enter into an MOU
with other TDH programs, HMO must document current and past
efforts to TDH. Documentation must be submitted no later than
120 days after the execution of this contract. MOUs must
delineate the roles and responsibilities of HMO and the TDH
programs for the following services:
(1) Use of the TDH laboratory for THSteps newborn
screens; lead testing; and hemoglobin/hematocrit
tests;
(2) Availability of vaccines through the Vaccines for
Children Program;
(3) Reporting of immunizations provided to the statewide
ImmTrac Registry including parental consent to share
data;
|
(4) Referral for WIC services and information sharing;
(5) Pregnant, Women and Infant (PWI) Targeted Case Management;
(6) THSteps outreach, informing and Medical Case Management;
(7) Participation in the community-based coalitions with the Medicaid-funded case management programs in MHMR, ECI, TCB, and TDH (PWI, CIDC and THSteps Medical Case Management);
(8) Referral to the TDH Medical Transportation Program;
(9) Cooperation with activities required of public health authorities to conduct the annual population and community based needs assessment; and
(10) Coordination and follow-up of suspected or confirmed cases of childhood lead exposure.
1999 Renewal Contract Travis Service Area August 9, 1999
7.16.4 All public health contracts must contain provider network
requirements in Article VII, as applicable.
7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND
REGULATORY SERVICES
-------------------
7.17.1 HMO must cooperate and coordinate with the Texas Department of
Protective and Regulatory Services (TDPRS) for the care of a
child who is receiving services from or has been placed in the
conservatorship of TDPRS.
7.17.2 HMO must comply with all provisions of a Court Order or TDPRS
Service Plan with respect to a child in the conservatorship of
TDPRS (Order) entered by a Court of Continuing Jurisdiction
placing a child under the protective custody of TDPRS or a
Service Plan voluntarily entered into by the parents or person
having legal custody of a minor and TDPRS, which relates to
the health and behavioral health care services required to be
provided to the Member.
7.17.3 HMO cannot deny, reduce, or controvert the medical necessity
of any health or behavioral health care services included in
an Order entered by a court. HMO may participate in the
preparation of the medical and behavioral care plan prior to
TDPRS submitting the health care plan to the Court. Any
modification or termination of court ordered services must be
presented and approved by the court with jurisdiction over the
matter.
7.17.4 A Member or the parent or guardian whose rights are subject to
an Order or Service Plan cannot appeal the necessity of the
services ordered through HMO's complaint or appeal processes,
or to TDH for a Fair Hearing.
7.17.5 HMO must include information in its provider training and
manuals regarding:
7.17.5.1 providing medical records;
7.17.5.2 scheduling medical and behavioral health appointments within
14 days unless requested earlier by TDPRS; and
7.17.5.3 recognition of abuse and neglect and appropriate referral to
TDPRS.
7.17.6 HMO must continue to provide all covered services to a Member
receiving services from or in the protective custody of TDPRS
until the Member has been disenrolled from HMO as a result of
loss of eligibility in Medicaid managed care or placement into
foster care.
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7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)
--------------------------------------------------------------
7.18.1 All HMO contracts with any of the entities described in Texas
Insurance Code Article 20A.02(ee) and a group of providers who
are licensed to provide the same health care services or an
entity that is wholly-owned or controlled by one or more
hospitals and physicians including a physician-hospital
organization (delegated network contracts) must:
7.18.1.1 contain the mandatory contract provisions for all
subcontractors in Article 3.2 of this contract;
7.18.1.2 comply with the requirements, duties and responsibilities of
this contract;
7.18.1.3 not create a barrier for full participation to significant
traditional providers;
7.18.1.4 not interfere with TDH's oversight and audit responsibilities
including collection and validation of encounter data; or
7.18.1.5 be consistent with the federal requirement for simplicity in
the administration of the Medicaid program.
7.18.2 In addition to the mandatory provisions for all subcontracts
under Articles 3.2. and 7.2, all HMO/delegated network
contracts must include the following mandatory standard
provisions:
7.18.2.1 HMO is required to include subcontract provisions in its
delegated network contracts which require the UM protocol used
by a delegated network to produce substantially similar
outcomes, as approved by TDH, as the UM protocol employed by
the contracting HMO. The responsibilities of an HMO in
delegating UM functions to a delegated network will be
governed by Article 16.3.11 of this contract.
7.18.2.2 Delegated networks that are delegated claims payment
responsibilities by HMO must also have the responsibility to
submit encounter, utilization, quality, and financial data to
HMO. HMO remains responsible for integrating all delegated
network data reports into HMO's reports required under this
contract. If HMO is not able to collect and report all
delegated network data for HMO reports required by this
contract, HMO must not delegate claims processing to the
delegated network.
7.18.2.3 The delegated network must comply with the same records
retention and production requirements, including Open Records
requirements as the HMO under this contract.
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7.18.2.4 The delegated network is subject to the same marketing
restrictions and requirements as the HMO under this contract.
7.18.2.5 HMO is responsible for ensuring that delegated network
contracts comply with the requirements and provisions of the
TDH/HMO contract. TDH will impose appropriate sanctions and
remedies upon HMO for any default under the TDH/HMO contract
which is caused directly or indirectly by the acts or
omissions of the delegated network.
7.18.3 HMO cannot enter into contracts with delegated networks to
provide services under this contract which require the
delegated network to enter into exclusive contracts with HMO
as a condition for participation with HMO.
7.18.3.1 Article 17.18.3 does not apply to providers who are employees
or participants in limited provider networks.
7.18.4 All delegated networks that limit Member access to those
providers contracted with the delegated network (closed or
limited panel networks) with whom HMO contracts must either
independently meet the access provisions of 28 Texas
Administrative Code ss. 11.1607, relating to access
requirements for those Members enrolled or assigned to the
delegated network, or HMO must provide for access through
other network providers outside the closed panel delegated
network.
7.18.5 HMO cannot delegate to a delegated network the enrollment,
re-enrollment, assignment or reassignment of a Member.
7.18.6 In addition to the above provision HMO and approved Non-Profit
Health Corporations must comply with all of the requirements
contained in 28 TAC ss.11.1604, relating to Requirements of
Certain Contracts between Primary HMOs and ANHCs and Primary
HMOs and Provider HMOs.
7.18.7 HMO REMAINS RESPONSIBLE FOR PERFORMING ALL DUTIES,
RESPONSIBILITIES AND SERVICES UNDER THIS CONTRACT
REGARDLESS OF WHETHER THE DUTY, RESPONSIBILITY OR SERVICE IS
CONTRACTED OR DELEGATED TO ANOTHER. HMO MUST PROVIDE A COPY
OF THE CONTRACT PROVISIONS THAT SET OUT HMO'S DUTIES,
RESPONSIBILITIES, AND SERVICES TO ANY PROVIDER NETWORK OR
GROUP WITH WHOM HMO CONTRACTS TO PROVIDE HEALTH CARE SERVICES
ON A RISK SHARING OR CAPITATED BASIS OR TO PROVIDE HEALTH
CARE SERVICES.
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ARTICLE VIII MEMBER SERVICES REQUIREMENTS
8.1 MEMBER EDUCATION
----------------
HMO must provide the Member education requirements as
contained in Article VI at 6.5, 6.6, 6.7, 6.8, 6.9, 6.10,
6.11, 6.12, 6.13, and 6.14, and this Article of the contract.
8.2 MEMBER HANDBOOK
---------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no
later than five (5) days after HMO receives the Enrollment
File. If the 5th day falls on a weekend or state holiday, the
Member Handbook must be mailed by the following working day.
The Member Handbook must be written at a 4th - 6th grade
reading comprehension level. The Member Handbook must contain
all critical elements specified by TDH. See Appendix D,
Required Critical Elements, for specific details regarding
content requirements. HMO must submit a Member Handbook to TDH
for approval prior to the effective date of the contract
unless previously approved (see Article 3.4.1 regarding the
process for plan materials review).
8.2.2 Member Handbook Updates. HMO must provide updates to the
Handbook to all Members as changes are made to the Required
Critical Elements in Appendix D. HMO must make the Member
Handbook available in the languages of the major population
groups and the visually impaired served by HMO.
8.2.3 THE MEMBER HANDBOOK AND ANY REVISIONS OR CHANGES MUST BE
APPROVED BY TDH PRIOR TO PUBLICATION AND DISTRIBUTION TO
MEMBERS (see Article 3.4.1 regarding the process for plan
materials review).
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal and state law require HMOs and providers to maintain
written policies and procedures for informing and providing
written information to all adult Members 18 years of age and
older about their rights under state and federal law, in
advance of their receiving care (Social Security Act ss.
l902(a)(57) and ss. 1903(m)(l)(A)). The written policies and
procedures must contain procedures for providing written
information regarding the Member's right to refuse, withhold
or withdraw medical treatment advance directives. HMO's
policies and procedures must comply with provisions contained
in 42 CFR ss. 434.28 and 42 CFR ss. 489, SubPart I, relating
to advance directives for all hospitals, critical access
hospitals, skilled nursing facilities,
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home health agencies, providers of home health care, providers
of personal care services and hospices, as well as the
following state laws and rules:
8.3.1.1 a Member's right to self-determination in making health care
decisions; and
8.3.1.2 the Advance Directives Act, Chapter 166, Texas Health and
Safety Code, which includes:
8.3.1.2.1 a Member's right to execute an advance written directive to
physicians and family or surrogates, or to make a non-written
directive to administer, withhold or withdraw life-sustaining
treatment in the event of a terminal or irreversible
condition;
8.3.1.2.2 a Member's right to make written and non-written
Out-of-Hospital Do-Not-Resuscitate Orders; and
8.3.1.2.3 a Member's right to execute a Medical Power of Attorney to
appoint an agent to make health care decisions on the Member's
behalf if the Member becomes incompetent.
8.3.2 HMO must maintain written policies for implementing a Member's
advance directive. Those policies must include a clear and
precise statement of limitations if HMO or a participating
provider cannot or will not implement a Member's advance
directive.
8.3.2.1 A statement of limitation on implementing a Member's advance
directive should include at least the following information:
8.3.2.1.1 a clarification of any differences between HMO's conscience
objections and those which may be raised by the Member's PCP
or other providers;
8.3.2.1.2 identification of the state legal authority permitting HMO's
conscience objections to carrying out an advance directive;
and
8.3.2.1.3 a description of the range of medical conditions or procedures
affected by the conscience objection.
8.3.3 HMO cannot require a Member to execute or issue an advance
directive as a condition for receiving health care services.
8.3.4 HMO cannot discriminate against a Member based on whether or
not the Member has executed or issued an advance directive.
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8.3.5 HMO's policies and procedures must require HMO and
subcontractor to comply with the requirements of state and
federal law relating to advance directives. HMO must provide
education and training to employees, Members and the community
on issues concerning advance directives.
8.3.6 All materials provided to Members regarding advance directives
must be written at a 7th - 8th grade reading comprehension
level, except where a provision is required by state or
federal law and the provision cannot be reduced or modified to
a 7th - 8th grade reading level because it is a reference to
the law or is required to be included "as written" in the
state or federal law. HMO must submit to TDH any revisions to
existing approved advance directive materials.
8.3.7 HMO must notify Members of any changes in state or federal
laws relating to advance directives within 90 days from the
effective date of the change, unless the law or regulation
contains a specific time requirement for notification.
8.4 MEMBER ID CARDS
---------------
8.4.1 A Medicaid Identification Form (Form 3087) is issued monthly
by the TDHS. The form includes the "STAR" Program logo and the
name and toll free number of the Member's health plan. A
Member may have a temporary Medicaid Identification (Form
1027-A) which will include a STAR indicator.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from receiving the Enrollment File from
the Enrollment Broker. If the 5th day falls on a weekend or
state holiday, the ID Card must be issued by the following
working day. The ID Card must include, at a minimum, the
following: Member's name; Member's Medicaid number; either the
issue date of the card or effective date of the PCP
assignment; PCP's name, address, and telephone number; name of
HMO; name of IPA to which the Member's PCP belongs, if
applicable; the 24-hour, seven (7) day a week toll-free
telephone number operated by HMO; the toll-free number for
behavioral health care services; and directions for what to do
in an emergency. The ID Card must be reissued if the Member
reports a lost card, there is a Member name change, if Member
requests a new PCP, or for any other reason which results in a
change to the information disclosed on the ID Card.
8.5 MEMBER HOTLINE
--------------
HMO must maintain a toll-free Member telephone hotline 24
hours a day, seven days a week for Members to obtain
assistance in accessing services under this contract.
Telephone availability must be demonstrated through an
abandonment rate of less than 10%.
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8.6 MEMBER COMPLAINT PROCESS
------------------------
8.6.1 HMO must develop, implement and maintain a Member complaint
system that complies with the requirements of Article 20A.12
of the Texas Insurance Code, relating to the Complaint System,
except where otherwise provided in this contract and in
applicable federal law. The complaint and appeals procedure
must be the same for all Members and must comply with Texas
Insurance Code, Article 20A.12 or applicable federal law.
Modifications and amendments must be submitted to TDH at least
30 days prior to the implementation of the modification or
amendment.
8.6.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving of Member
complaints. The procedures must be reviewed and approved in
writing by TDH. Any changes or modifications to the procedures
must be submitted to TDH for approval thirty (30) days prior
to the effective date of the amendment.
8.6.3 HMO must designate an officer of HMO who has primary
responsibility for ensuring that complaints are resolved in
compliance with written policy and within the time required.
An "officer" of HMO means a president, vice president,
secretary, treasurer, or chairperson of the board for a
corporation, the sole proprietor, the managing general partner
of a partnership, or a person having similar executive
authority in the organization.
8.6.4 HMO must have a routine process to detect patterns of
complaints and disenrollments and involve management and
supervisory staff to develop policy and procedural
improvements to address the complaints. HMO must cooperate
with TDH and TDH's Enrollment Broker in Member complaints
relating to enrollment and disenrollment.
8.6.5 HMO's complaint procedures must be provided to Members in
writing and in alternative communication formats. A written
description of HMO's complaint procedures must be in
appropriate languages and easy for Members to understand. HMO
must include a written description in the Member Handbook. HMO
must maintain at least one local and one toll-free telephone
number for making complaints.
8.6.6 HMO's process must require that every complaint received in
person, by telephone or in writing, is recorded in a written
record and is logged with the following details: date;
identification of the individual filing the complaint;
identification of the individual recording the complaint;
nature of the complaint; disposition of the complaint;
corrective action required; and date resolved.
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8.6.7 HMO's process must include a requirement that the Governing
Body of HMO reviews the written records (logs) for complaints
and appeals.
8.6.8 HMO is prohibited from discriminating against a Member because
that Member is making or has made a complaint.
8.6.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be
referred to TDH within five (5) business days after the Member
makes a disenrollment request.
8.6.10 HMO must develop, implement and maintain an appeal of adverse
determination procedure that complies with the requirements of
Article 21.58A of the Texas Insurance Code, relating to the
utilization review, except where otherwise provided in this
contract and in applicable federal law. The appeal of an
adverse determination procedure must be the same for all
Members and must comply with Texas Insurance Code Article
21.58A or applicable federal law. Modifications and amendments
must be submitted to TDH no less than 30 days prior to the
implementation of the modification or amendment. When an
enrollee, a person acting on behalf of an enrollee, or an
enrollee's provider of record expresses orally or in writing
any dissatisfaction or disagreement with an adverse
determination, HMO or UR agent must regard the expression of
dissatisfaction as a request to appeal an adverse
determination.
8.6.11 If a complaint or appeal of an adverse determination relates
to the denial, delay, reduction, termination or suspension of
covered services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must
inform Members they have the right to access the TDH Fair
Hearing process at any time in lieu of the internal complaint
system provided by HMO. HMO is required to comply with the
requirements contained in 1 TAC Chapter 357, relating to
notice and Fair Hearings in the Medicaid program, whenever an
action is taken to deny, delay, reduce, terminate or suspend a
covered service.
8.6.12 If Members utilize HMO's internal complaint or appeal of
adverse determination system and the complaint relates to the
denial, delay, reduction, termination or suspension of covered
services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must
inform the Member that they continue to have a right to appeal
the decision through the TDH Fair Hearing process.
8.6.13 The provisions of Article 2l.58A, Texas Insurance Code,
relating to a Member's right to appeal an adverse
determination made by HMO or a utilization review agent by an
independent review organization, do not apply to a Medicaid
recipient. Federal fair
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hearing requirements (Social Security Act ss. 1902a(3),
codified at 42 C.F.R. 431.200 et. seq.) require the agency to
make a final decision after a fair hearing, which conflicts
with the State requirement that the IRO make a final decision.
Therefore, the State requirement is pre-empted by the federal
requirement.
8.6.14 HMO will cooperate with the Enrollment Broker and TDH to
resolve all Member complaints. Such cooperation may include,
but is not limited to, participation by HMO or Enrollment
Broker and/or TDH internal complaint committees.
8.6.15 HMO must have policies and procedures in place outlining the
role of HMO's Medical Director in the Member Complaint System
and appeal of an adverse determination. The Medical Director
must have a significant role in monitoring, investigating and
hearing complaints.
8.6.16 HMO must provide Member Advocates to assist Members in
understanding and using HMO's complaint system and appeal of
an adverse determination.
8.6.17 HMO's Member Advocates must assist Members in writing or
filing a complaint or appeal of an adverse determination and
monitoring the complaint or appeal through the Contractor's
complaint or appeal of an adverse determination process until
the issue is resolved.
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS
----------------------------------------
8.7.1 HMO must send Members the notice required by 1 Texas
Administrative Code ss. 357.5, whenever HMO takes an action to
deny, delay, reduce or terminate covered services to a Member.
The notice must be mailed to the Member no less than 10 days
before HMO intends to take an action. If an emergency exists,
or if the time within which the service must be provided makes
giving 10 days notice impractical or impossible, notice must
be provided by the most expedient means reasonably calculated
to provide actual notice to the Member, including by phone,
direct contact with the Member, or through the provider's
office.
8.7.2 The notice must contain the following information:
8.7.2.1 Member's right to immediately access TDH's Fair Hearing
process;
8.7.2.2 a statement of the action HMO will take;
8.7.2.3 the date the action will be taken;
8.7.2.4 an explanation of the reasons HMO will take the action;
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8.7.2.5 a reference to the state and/or federal regulations which
support HMO's action;
8.7.2.6 an address where written requests may be sent and a toll-free
number Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair
Hearing;
8.7.2.7 a procedure by which Member may appeal HMO's action through
either HMO's complaint process or TDH's Fair Hearings process;
8.7.2.8 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative,
legal counsel or another spokesperson;
8.7.2.9 an explanation of whether, and under what circumstances,
services may be continued if a complaint is filed or a Fair
Hearing requested;
8.7.2.10 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within
90 days of the date on the notice or the right to request a
hearing is waived;
8.7.2.11 a statement explaining that HMO must make its decision within
30 days from the date the complaint is received by HMO; and
8.7.2.12 a statement explaining that a final decision must be made by
TDH within 90 days from the date a Fair Hearing is requested.
8.8 MEMBER ADVOCATES
----------------
8.8.1 HMO must provide Member Advocates to assist Members. Member
Advocates must be physically located within the service area.
Member Advocates must inform Members of their rights and
responsibilities, the complaint process, the health education
and the services available to them, including preventive
services.
8.8.2 Member Advocates must assist Members in writing complaints and
are responsible for monitoring the complaint through HMO's
complaint process until the Member's issues are resolved or a
TDH Fair Hearing requested (see Articles 8.6.15, 8.6.16, and
8.6.17).
8.8.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care
provided or the way care is delivered. Member Advocates are
also responsible for helping or referring Members to
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community resources available to meet Member needs that are
not available from HMO as Medicaid covered services.
8.8.4 Member Advocates must provide outreach to Members and
participate in TDH-sponsored enrollment activities.
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.9.1 Cultural Competency Plan. HMO must have a comprehensive
written Cultural Competency Plan describing how HMO will
ensure culturally competent services, and provide linguistic
and disability-related access. The Plan must describe how the
individuals and systems within HMO will effectively provide
services to people of all cultures, races, ethnic backgrounds
and religions as well as those with disabilities in a manner
that recognizes, values, affirms, and respects the worth of
the individuals and protects and preserves the dignity of
each. HMO must submit a written plan to TDH prior to the
effective date of this contract unless previously submitted.
Modifications and amendments to the written plan must be
submitted to TDH no later than 30 days prior to implementation
of the modification or amendment. The Plan must also be made
available to HMO's network of providers.
8.9.2 The Cultural Competency Plan must include the following:
8.9.2.1 HMO's written policies and procedures for ensuring effective
communication through the provision of linguistic services
following Title VI of the Civil Rights Act guidelines and the
provision of auxiliary aids and services, in compliance with
the Americans with Disabilities Act, Title III, Department of
Justice Regulation 36.303. HMO must disseminate these policies
and procedures to ensure that both Staff and subcontractors
are aware of their responsibilities under this provision of
the contract.
8.9.2.2 A description of how HMO will educate and train its staff and
subcontractors on culturally competent service delivery, and
the provision of linguistic and/or disability-related access
as related to the characteristics of its Members;
8.9.2.3 A description of how HMO will implement the plan in its
organization, identifying a person in the organization who
will serve as the contact with TDH on the Cultural Competency
Plan;
8.9.2.4 A description of how HMO will develop standards and
performance requirements for the delivery of culturally
competent care and linguistic access, and monitor adherence
with those standards and requirements;
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8.9.2.5 A description of how HMO will provide outreach and health
education to Members, including racial and ethnic minorities,
non-English speakers or limited-English speakers, and those
with disabilities; and
8.9.2.6 A description of how HMO will help Members access culturally
and linguistically appropriate community health or social
service resources;
8.9.3 Linguistic, Interpreter Services, and Provision of Auxiliary
Aids and Services. HMO must provide experienced, professional
interpreters when technical, medical, or treatment information
is to be discussed. See Title VI of the Civil Rights Act of
1964, 42 U.S.C. ss.ss. 2000d, et seq. HMO must ensure the
provision of auxiliary aids and services necessary for
effective communication, as per the Americans with
Disabilities Act, Title III, Department of Justice Regulations
36.303.
8.9.3.1 HMO must adhere to and provide to Members the Member Bill of
Rights and Responsibilities as adopted by the Texas Health and
Human Services Commission and contained at 1 Texas
Administrative Code (TAC) ss.ss. 353.202-353.203. The Member
Bill of Rights and Responsibilities assures Members the right
"to have interpreters if needed, during appointments with
their providers and when talking to their health plan.
Interpreters include people who can speak in their native
language, assist with a disability, or help them understand
the information."
8.9.3.2 HMO must have in place policies and procedures that outline
how Members can access face-to-face interpreter services in a
provider's office if necessary to ensure the availability of
effective communication regarding treatment, medical history
or health education for a Member. HMOs must inform its
providers on how to obtain an updated list of participating,
qualified interpreters.
8.9.3.3 A competent interpreter is defined as someone who is:
8.9.3.4 proficient in both English and the other language;
8.9.3.5 has had orientation or training in the ethics of interpreting;
and
8.9.3.6 has the ability to interpret accurately and impartially.
8.9.3.7 HMO must provide 24-hour access to interpreter services for
Members to access emergency medical services within HMO's
network.
8.9.3.8 Family Members, especially minor children, should not be used
as interpreters in assessments, therapy or other medical
situations in which impartiality and confidentiality are
critical, unless specifically requested by the Member.
However, a
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family member or friend may be used as an interpreter if they
can be relied upon to provide a complete and accurate
translation of the information being provided to the Member;
provided that the Member is advised that a free interpreter is
available; and the Member expresses a preference to rely on
the family member or friend.
8.9.4 All Member orientation presentations education classes and
materials must be presented in the languages of the major
population groups making up 10% or more of the Medicaid
population in the service area, as specified by TDH. HMO must
provide auxiliary aids and services, as needed, including
materials in alternative formats (i.e., large print, tape or
Braille), and interpreters or real-time captioning to
accommodate the needs of persons with disabilities that affect
communication.
8.9.5 HMO must provide or arrange access to TDD to Members who are
deaf or hearing impaired.
8.10 On the date of the new Member's enrollment, TDH will provide
HMOs with the Member's Medicaid certification date.
ARTICLE IX MARKETING AND PROHIBITED PRACTICES
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION
-----------------------------------------
HMOs may present their marketing materials to eligible
Medicaid recipients through any method or media determined to
be acceptable by TDH. The media may include but are not
limited to: written materials, such as brochures, posters, or
fliers which can be mailed directly to the Member or left at
Texas Department of Human Services eligibility offices;
TDH-sponsored community enrollment events; and paid or public
service announcements on radio. All marketing materials must
be approved by TDH prior to distribution (see Article 3.4).
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
HMO must require that all HMO staff having direct contact with
Members as part of their job duties and their supervisors
satisfactorily complete TDH's marketing orientation and
training program prior to engaging in marketing activities on
behalf of HMO. TDH will notify HMO of scheduled orientations.
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9.3 PROHIBITED MARKETING PRACTICES
------------------------------
9.3.1 HMO and its agents, subcontractors and providers are
prohibited from engaging in the following marketing practices:
9.3.1.1 conducting any direct-contact marketing to prospective Members
except through TDH-sponsored enrollment events;
9.3.1.2 making any written or oral statement containing material
misrepresentations of fact or law relating to HMO's plan or
the STAR program;
9.3.1.3 making false, misleading or inaccurate statements relating to
services or benefits of HMO or the STAR program;
9.3.1.4 offering prospective Members anything of material or financial
value as an incentive to enroll with a particular PCP or HMO;
and
9.3.1.5 discriminating against an eligible Member because of race,
creed, age, color, sex, religion, national origin, ancestry,
marital status, sexual orientation, physical or mental
handicap, health status, or requirements for health care
services.
9.3.2 HMO may offer nominal gifts with a retail value of no more
than $10 and/or free health screens to potential Members, as
long as these gifts and free health screenings are offered
whether or not the potential Member enrolls in their HMO. Free
health screenings cannot be used to discourage less healthy
potential Members from joining HMO. All gifts must be approved
by TDH prior to distribution to Members. The results of free
screenings must be shared with the Member's PCP if the Member
enrolls with HMO providing the screen.
9.3.3 Marketing representatives may not conduct or participate in
marketing activities for more than one HMO.
9.4 NETWORK PROVIDER DIRECTORY
--------------------------
9.4.1 The provider directory and any revisions must be approved by
TDH prior to publication and distribution to prospective
Members (see Article 3.4.1 regarding the process for plan
materials review). The directory must contain all critical
elements specified by TDH. See Appendix D, Required Critical
Elements, for specific details regarding content requirements.
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9.4.2 If HMO contracts with limited provider networks, the provider
directory must comply with the requirements of 28 TAC
11.1600(b)(11), relating to the disclosure and notice of
limited provider networks.
9.4.3 Updates to the provider directory must be provided to the
Enrollment Broker at the beginning of each State fiscal year
quarter. This includes the months of September, December,
March and June. HMO is responsible for submitting draft
updates to TDH only if changes other than PCP information are
incorporated. HMO is responsible for sending three final paper
copies and one electronic copy of the updated provider
directory to TDH each quarter. If an electronic format is not
available, five paper copies must be sent. TDH will forward
two updated provider directories, along with its approval
notice, to the Enrollment Broker to facilitate the
distribution of the directories.
ARTICLE X MIS SYSTEM REQUIREMENTS
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.1 HMO must maintain an MIS that will provide support for all
functions of HMO's processes and procedures related to the
flow and use of data within HMO. The MIS must enable HMO to
meet the requirements of this contract. The MIS must have the
capacity and capability of capturing and utilizing various
data elements to develop information for HMO administration.
10.1.2 HMO must maintain a claim retrieval service processing system
that can identify date of receipt, action taken on all
provider claims or encounters (i.e., paid, denied, other), and
when any action was taken in real time.
10.1.3 HMO must have a system that can be adapted to the change in
Business Practices/Policies within a short period of time.
10.1.4 HMO is required to submit and receive data as specified in
this contract and HMO Encounter Data Submissions Manual. HMO
must provide complete encounter data of all capitated services
within the scope of services of the contract between HMO and
TDH. Encounter data must follow the format, data elements and
method of transmission specified in the contract and HMO
Encounter Data Submissions Manual. HMO must submit encounter
data, including adjustments to encounter data. The Encounter
transmission will include all encounter data and encounter
data adjustments processed by HMO for the previous month. Data
quality validation will incorporate assessment standards
developed jointly by HMO and TDH. Original records will be
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made available for inspection by TDH for validation purposes.
Data which do not meet quality standards must be corrected and
returned within a time period specified by TDH.
10.1.5 HMO must use the procedure codes, diagnosis codes, and other
codes used for reporting encounters and fee-for-service claims
in the most recent edition of the Medicaid Provider Procedures
Manual or as otherwise directed by TDH. Any exceptions will be
considered on a code-by-code basis after TDH receives written
notice from HMO requesting an exception. HMO must also use the
provider numbers as directed by TDH for both encounter and
fee-for-service claims submissions.
10.1.6 HMO must have hardware, software, network and communications
system with the capability and capacity to handle and operate
all MIS subsystems.
10.1.7 HMO must notify TDH of any changes to HMO's MIS department
dedicated to or supporting this contract by Phase I of Renewal
Review. Any updates to the organizational chart and the
description of responsibilities must be provided to TDH at
least 30 days prior to the effective date of the change.
Official points of contact must be provided to TDH on an
on-going basis. An Internet E-mail address must be provided
for each point of contact.
10.1.8 HMO must operate and maintain a MIS that meets or exceeds the
requirements outlined in the Model MIS Guidelines that follow:
10.1.8.1 The Contractor's system must be able to meet all eight MIS
Model Guidelines as listed below. The eight subsystems are
used in the Model MIS Requirements to identify specific
functions or features required by HMO's MIS. These subsystems
focus on the individual systems functions or capabilities to
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support the following operational and administrative areas:
(1) Enrollment/Eligibility Subsystem
(2) Provider Subsystem
(3) Encounter/Claims Processing Subsystem
(4) Financial Subsystem
(5) Utilization/Quality Improvement Subsystem
(6) Reporting Subsystem
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(7) Interface Subsystem
(8) TPR Subsystem
HMO MIS system must include functions and/or features which
must apply across all subsystems as follows:
(1) Ability to update and edit data.
(2) Maintain a history of changes and adjustments and
audit trails for current and retroactive data. Audit
trails will capture date, time, and reasons for the
change, as well as who made the change.
(3) Allow input mechanisms through manual and electronic
transmissions.
(4) Have procedures and processes for accumulating,
archiving, and restoring data in the event of a
system or subsystem failure.
(5) Maintain automated or manual linkages between and
among all MIS subsystems and interfaces.
(6) Ability to relate Member and provider data with
utilization, service, accounting data, and reporting
functions.
(7) Ability to relate and extract data elements into
summary and reporting formats attached as Appendices
to contract.
(8) Must have written process and procedures manuals
which document and describe all manual and automated
system procedures and processes for all the above
functions and features, and the various subsystem
components.
(9) Maintain and cross-reference all Member-related
information with the most current Medicaid number.
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM
--------------------------------
The Enrollment/Eligibility Subsystem is the central processing
point for the entire MIS. It must be constructed and
programmed to secure all functions which require Membership
data. It must have functions and/or features which support
requirements as follows:
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(1) Identify other health coverage available or third
party liability (TPL), including type of coverage and
effective dates.
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(2) Maintain historical data (files) as required by TDH.
(3) Maintain data on enrollments/disenrollments and complaint activities. The data must include reason or type of disenrollment, complaint, and resolution--by incident.
(4) Receive, translate, edit and update files in accordance with TDH requirements prior to inclusion in HMO's MIS. Updates will be received from TDH's agent and processed within two working days after receipt.
(5) Provide error reports and a reconciliation process between new data and data existing in MIS.
(6) Identify enrollee changes in primary care provider and the reason(s) for those changes and effective dates.
(7) Monitor PCP capacity and limitations prior to connecting the enrollee to PCP in the system, and provide a kick-out report when capacity and limitations are exceeded.
(8) Verify enrollee eligibility for medical services rendered or for other enrollee inquiries.
(9) Generate and track referrals,
e.g., Hospitals/Specialists.
(10) Search records by a variety of fields (e.g., name, unique identification numbers, date of birth, SSN, etc.) for eligibility verification.
(10) Send PCP assignment updates to TDH in the format as specified by TDH.
10.4 PROVIDER SUBSYSTEM
------------------
The provider subsystem must accept, process, store and
retrieve current and historical data on providers, including
services, payment methodology, license information, service
capacity, and facility linkages.
Functions and Features:
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(1) Identify specialty(s), admission privileges, enrollee
linkage, capacity, facility linkages, emergency
arrangements or contact, and other limitations,
affiliations, or restrictions.
(2) Maintain provider history files to include audit
trails and effective dates of information.
(3) Maintain provider fee schedules/remuneration
agreements to permit accurate payment for services
based on the financial agreement in effect on the
date of service.
(4) Support HMO credentialing, recredentialing, and
credential tracking processes; incorporates or links
information to provider record.
(5) Support monitoring activity for physician to enrollee
ratios (actual to maximum) and total provider
enrollment to physician and HMO capacity.
(6) Flag and identify providers with restrictive
conditions (e g., limits to capacity, type of
patient, age restrictions, and other services if
approved out-of-network).
(7) Support national provider number format (UPIN, NPIN,
CLIA, etc., as required by TDH).
(8) Provide provider network files 90 days prior to
implementation and updates monthly. Format will be
provided by TDH to contracted entities.
(9) Support the national CLIA certification numbers for
clinical laboratories.
(10) Exclude providers from participation that have been
identified by TDH as ineligible or excluded. Files
must be updated to reflect period and reason for
exclusion.
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM
-------------------------------------
The encounter/claims processing subsystem must collect,
process, and store data on all health care services delivered
for which HMO is responsible. The functions of these
subsystems are claims/encounter processing and capturing
health service utilization data. The subsystem must capture
all health care services, including medical supplies, using
standard codes (e.g. CPT-4, HCPCS, ICD9-CM, UB92 Revenue
Codes), rendered by health-care providers to an eligible
enrollee regardless
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of payment arrangement (e.g. capitation or fee-for-service).
It approves, prepares for payment, or may reject or deny
claims submitted. This subsystem may integrate manual and
automated systems to validate and adjudicate claims and
encounters. HMO must use encounter data validation
methodologies prescribed by TDH.
Functions and Features:
(1) Accommodate multiple input methods: electronic
submission, tape, claim document, and media.
(2) Support entry and capture of a minimum of all
required data elements specified in the Encounter
Data Submission Manual.
(3) Edit and audit to ensure allowed services are
provided by eligible providers for Members.
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(4) Interface with Member and provider subsystems.
(5) Capture and report TPL potential, reimbursement or denial.
(6) Edit for utilization and service criteria, medical policy, fee schedules, multiple contracts, contract periods and conditions.
(7) Submit data to TDH through electronic transmission using specified formats.
(8) Support multiple fee schedule benefit packages and capitation rates for all contract periods for individual providers, groups, services, etc. A claim encounter must be initially adjudicated and all adjustments must use the fee applicable to the date of service.
(9) Provide timely, accurate, and complete data for monitoring claims processing performance.
(10) Provide timely, accurate, and complete data for reporting medical service utilization.
(11) Maintain and apply prepayment edits to verify accuracy and validity of claims data for proper adjudication.
(12) Maintain and apply edits and audits to verify timely, accurate, and complete encounter data reporting.
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(13) Submit reimbursement to non-contracted providers for emergency care rendered to enrollees in a timely and accurate fashion.
(14) Validate approval and denials of precertification and prior authorization requests during adjudication of claims/encounters.
(15) Track and report the exact date a service was performed. Use of date ranges must have State approval.
(16) Receive and capture claim and encounter data from TDH.
(17) Receive and capture value-added services codes.
(18) Capability of identifying adjustments and linking
them to the original claims/encounters.
10.6 FINANCIAL SUBSYSTEM
-------------------
The financial subsystem must provide the necessary data for
100% of all accounting functions including cost accounting,
inventory, fixed assets, payroll, general ledger, accounts
receivable, accounts payable, financial statement
presentation, and any additional data required by TDH. The
financial subsystem must provide management with information
that can demonstrate that the proposed or existing HMO is
meeting, exceeding, or falling short of fiscal goals. The
information must also provide management with the necessary
data to spot the early signs of fiscal distress, far enough in
advance to allow management to take corrective action where
appropriate.
Functions and Features:
(1) Provide information on HMO's economic resources,
assets, and liabilities and present accurate
historical data and projections based on historical
performance and current assets and liabilities.
(2) Produce financial statements in conformity with
Generally Accepted Accounting Principles (GAAP) and
in the format prescribed by TDH.
(3) Provide information on potential third party payers;
information specific to the Member; claims made
against third party payers; collection amounts and
dates; denials, and reasons for denials.
(4) Track and report savings by category as a result of
cost avoidance activities.
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(5) Track payments per Member made to network providers
compared to utilization of the provider's services.
(6) Generate Remittance and Status Reports.
(7) Make claim and capitation payments to providers or
groups.
(8) Reduce/increase accounts payable/receivable based on
adjustments to claims or recoveries from third party
resources.
10.7 UTILIIZATION/QUALITY IMPROVEMENT SUBSYSTEM
------------------------------------------
The quality management/quality improvement/utilization review
subsystem combines data from other subsystems, and/or external
systems, to produce reports for analysis which focus on the
review and assessment of quality of care given, detection of
over and under utilization, and the development of user
defined reporting criteria and standards. This system profiles
utilization of providers and enrollees and compares them
against experience and norms for comparable individuals. This
system also supports the quality assessment function.
The subsystem tracks utilization control function(s) and
monitoring inpatient admissions, emergency room use,
ancillary, and out-of-area services. It provides provider
profiles, occurrence reporting, and monitoring and evaluation
studies. The subsystem may integrate HMO's manual and
automated processes or incorporate other software reporting
and/or analysis programs.
The subsystem incorporates and summarizes information from
enrollee surveys, provider and enrollee complaints, and appeal
processes.
Functions and Features:
(1) Supports provider credentialing and recredentialing
activities.
(2) Supports HMO processes to monitor and identify
deviations in patterns of treatment from established
standards or norms. Provides feedback information for
monitoring progress toward goals, identifying optimal
practices, and promoting continuous improvement.
(3) Supports development of cost and utilization data by
provider and service.
(4) Provides aggregate performance and outcome measures
using standardized quality indicators similar to
HEDIS or as specified by TDH.
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(5) Supports quality-of-care Focused Studies.
(6) Supports the management of referral/utilization
control processes and procedures, including prior
authorization and precertifications and denials of
services.
(7) Monitors primary care provider referral patterns.
(8) Supports functions of reviewing access, use and
coordination of services (i.e. actions of Peer Review
and alert/flag for review and/or follow-up;
laboratory, x-ray and other ancillary service
utilization per visit).
(9) Stores and reports patient satisfaction data through
use of enrollee surveys.
(10) Provides fraud and abuse detection, monitoring and
reporting.
(11) Meets minimum report/data collection/analysis
functions of Article XI and Appendix A - Standards
For Quality Improvement Programs.
(12) Monitors and tracks provider and enrollee complaints
and appeals from receipt to disposition or resolution
by provider.
10.8 REPORT SUBSYSTEM
----------------
The reporting subsystem supports reporting requirements of all
HMO operations to HMO management and TDH. It allows HMO to
develop various reports to enable HMO management and TDH to
make decisions regarding HMO activity.
Functions and Capabilities:
(1) Produces standard, TDH-required reports and ad hoc
reports from the data available in all MIS
subsystems. All reports will be submitted as a paper
copy or electronically in a format approved by TDH.
(2) Have system flexibility to permit the development of
reports at irregular periods as needed.
(3) Generate reports that provide unduplicated counts of
enrollees, providers, payments and units of service
unless otherwise specified.
(4) Generate an alphabetic Member listing.
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(5) Generate a numeric Member listing.
(6) Generate a Member eligibility listing by PCP (panel
report).
(7) Report on PCP change by reason code.
(8) Report on TPL (COB) information to TDH.
(9) Report on provider capacity and assignment from date
of service to date received.
(10) Generate or produce an aged outstanding liability
report.
(11) Produce a Member ID Card.
(12) Produce Member/provider mailing labels.
10.9 DATA INTERFACE SUBSYSTEM
------------------------
10.9.1 The interface subsystem supports incoming and outgoing data
from and to other organizations. It allows HMO to maintain
enrollee, benefit package, eligibility,
disenrollment/enrollment status, and medical services received
outside of capitated services and associated cost. All
interfaces must follow the specifications frequencies and
formats listed in the Interface Manual.
10.9.2 HMO must obtain access to the TexMedNet BBS. Some file
transfers and E-mail will be handled through this mechanism.
10.9.3 Provider Network File. The provider file shall supply Network
Provider data between an HMO and TDH. This process shall
accomplish the following:
(1) Provide identifying information for all managed care
providers (e.g. name, address, etc.).
(2) Maintain history on provider
enrollment/disenrollment.
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(3) Identify PCP capacity.
(4) Identify any restrictions (e.g., age, sex, etc.).
(5) Identify number and types of specialty providers available to Members.
1999 Renewal Contract Travis Service Area August 9, 1999
10.9.4 Eligibility/Enrollment Interface. The enrollment interface
must provide eligibility data between TDH and HMOs.
(1) Provides benefit package data to HMOs in accordance
with capitated services.
(2) Provides PCP assignments.
(3) Provides Member eligibility status data.
(4) Provides Member demographics data.
(5) Provides HMOs with cross-reference data to identify
duplicate Members.
10.9.5 Encounter/Claim Data Interface. The encounter/claim interface
must transfer paid fee-for-service claims data to HMOs and
capitated services/encounters from HMO, including adjustments.
This file will include all service types, such as inpatient,
outpatient, and medical services. TDH's agent will process
claims for non-capitated services.
10.9.6 Capitation Interface. The capitation interface must transfer
premium and Member information to HMO. This interface's basic
purpose is to balance HMO's Members and premium amount.
10.9.7 TPR Interface. TDH will provide a data file that contains
information on enrollees that have other insurance. Because
Medicaid is the payer of last resort, all services and
encounters should be billed to the other insurance companies
for recovery. TDH will also provide an insurance company data
file which contains the name and address of each insurance
company.
10.9.8 TDH will provide a diagnosis file which will give the code and
description of each diagnosis permitted by TDH.
10.9.9 TDH will provide a procedure file which contains the
procedures which must be used on all claims and encounters.
This file contains HCPCS, revenue, and ICD9-CM surgical
procedure codes.
10.9.10 TDH will provide a provider file that contains the Medicaid
provider numbers, and the provider's names and addresses. The
provider number authorized by TDH must be submitted on all
claims, encounters, and network provider submissions.
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10.10 TPR SUBSYSTEM
-------------
HMO's third party recovery system must have the following
capabilities and capacities:
(1) Identify, store, and use other health coverage
available to eligible Members or third party
liability (TPL) including type of coverage and
effective dates.
(2) Provide changes in information to TDH as specified by
TDH.
(3) Receive TPL data from TDH to be used in claim and
encounter processing.
10.11 YEAR 2000 (Y2K) COMPLIANCE
--------------------------
10.11.1 HMO must take all appropriate measures to make all software
which will record, store, and process and present calendar
dates falling on or after January 1, 2000, perform in the same
manner and with the same functionality, data integrity and
performance, as dates falling on or before December 31, 1999,
at no added cost to TDH. HMO must take all appropriate
measures to ensure that the software will not lose, alter or
destroy records containing dates falling on or after January
1, 2000. HMO will ensure that all software will interface and
operate with all TDH, or its agent's, data systems which
exchange data, including but not limited to historical and
archived data. In addition, HMO guarantees that the year 2000
leap year calculations will be accommodated and will not
result in software, firmware or hardware failures.
10.11.2 TDH and all subcontracted entities are required by state and
federal law to meet Y2K compliance standards. Failure of TDH
or a TDH contractor other than an HMO to meet Y2K compliance
standards which results in an HMO's failure to meet the Y2K
requirements of this contract is a defense of an HMO against a
declaration by TDH of default by an HMO under this contract.
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM
11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM
----------------------------------------
HMO must develop, maintain, and operate a Quality Improvement
Program (QIP) system which complies with federal regulations
relating to Quality Assurance systems, found at 42 C.F.R.
ss. 434.34. The system must meet the Standards for Quality
Improvement Programs contained in Appendix A.
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11.2 WRITTEN QIP PLAN
-----------------
HMO must have on file with TDH an approved plan describing its
Quality Improvement Plan (QIP), including how HMO will
accomplish the activities pertaining to each Standard (I-XVI)
in Appendix A. Modifications and amendments must be submitted
to TDH no later than 60 days prior to the implementation of
the modification or amendment.
11.3 QIP SUBCONTRACTING
------------------
If HMO subcontracts any of the essential functions or
reporting requirements of QIP to another entity, HMO must
maintain a file of the subcontractors. The file must be
available for review by TDH or its designee upon request. HMO
must notify TDH no later than 90 days prior to terminating any
subcontract affecting a major performance function of this
contract (see Article 3.2.1.2).
11.4 ACCREDITATION
-------------
If HMO is accredited by an external accrediting agency,
documentation of accreditation must be provided to TDH. HMO
must provide TDH with their accreditation status upon request.
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP
--------------------------------------
HMO must integrate behavioral health into its QIP system and
include a systematic and on-going process for monitoring,
evaluating, and improving the quality and appropriateness of
behavioral health care services provided to Members. HMO's QIP
must enable HMO to collect data, monitor and evaluate for
improvements to physical health outcomes resulting from
behavioral health integration into the overall care of the
Member.
11.6 QIP REPORTING REQUIREMENTS
--------------------------
HMO must meet all of the QIP Reporting Requirements contained
in Article XII.
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ARTICLE XII REPORTING REQUIREMENTS
12.1 FINANCIAL REPORTS
-----------------
12.1.1 Monthly MCFS Report. HMO must submit the Managed Care
Financial-Statistical Report (MCFS) included in Appendix I.
The report must be submitted to TDH no later than 30 days
after the end of each state fiscal year quarter (i.e., Dec.
30, March 30, June 30, Sept. 30) and must include complete
financial and statistical information for each month. The MCFS
Report must be submitted for each claims processing
subcontractor in accordance with this Article. HMO must
incorporate financial and statistical data received by its
delegated networks (IPAs, ANHCs, Limited Provider Networks) in
its MCFS Report.
12.1.2 For any given month in which an HMO has a net loss of $200,000
or more for the contract period to date, HMO must submit an
MCFS Report for that month by the 30th day after the end of
the reporting month. The MCFS Report must be completed in
accordance with the Instructions for Completion of the Managed
Care Financial-Statistical Report developed by TDH.
12.1.3 An HMO must submit monthly reports for each of the first 6
months following the Implementation Date. If the cumulative
net loss for the contract period to date after the 6th month
is less than $200,000, HMO may submit quarterly reports in
accordance with the above provisions unless the condition in
Article 12.1.2 exists, in which case monthly reports must be
submitted.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
------------------
Financial-Statistical Reports. The first final report must
reflect expenses incurred through the 90th day after the end
of the contract year. The first final report must be filed on
or before the 120th day after the end of the contract year.
The second final report must reflect data completed through
the 334th day after the end of the contract year and must be
filed on or before the 365th day following the end of the
contract year.
12.1.5 Administrative expenses reported in the monthly and Final MCFS
Reports must be reported in accordance with Appendix L, Cost
Principles for Administrative Expenses. Indirect
administrative expenses must be based on an allocation
methodology for Medicaid managed care activities and services
that is developed or approved by TDH.
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12.1.6 Affiliate Report. HMO must submit an Affiliate Report to TDH
----------------
if this information has changed since the last report was
submitted. The report must contain the following information:
12.1.6.1 A listing of all Affiliates; and
12.1.6.2 A schedule of all transactions with Affiliates which, under
the provisions of this Contract, will be allowable as expenses
in either Line 4 or Line 5 of Part 1 of the MCFS Report for
services provided to HMO by the Affiliates for the prior
approval of TDH. Include financial terms, a detailed
description of the services to be provided, and an estimated
amount which will be incurred by HMO for such services during
the Contract period.
12.1.7 Annual Audited Financial Report. On or before June 30th of
-------------------------------
each year, HMO must submit to TDH a copy of the annual audited
financial report filed with TDI.
12.1.8 Form HCFA-1513. HMO must file an updated Form HCFA-1513
--------------
regarding control, ownership, or affiliation of HMO 30 days
prior to the end of the contract year. An updated Form HCFA
1513 must also be filed no later than 30 days after any change
in control, ownership, or affiliation of HMO. Forms may be
obtained from TDH.
12.1.9 Section 1318 Financial Disclosure Report. HMO must file an
----------------------------------------
updated HCFA Public Health Service (PHS) "Section 1318
Financial Disclosure Report" no later than 30 days after the
end of the contract year and no later than 30 days after
entering into, renewing, or terminating a relationship with an
affiliated party. These forms may be obtained from TDH.
12.1.10 TDI Examination Report. HMO must furnish a copy of any TDI
----------------------
Examination Report no later than 10 days after receipt of the
final report from TDI.
12.1.11 IBNR Plan. HMO must furnish a written IBNR Plan to manage
---------
incurred-but-not-reported (IBNR) expenses, and a description
of the method of insuring against insolvency, including
information on all existing or proposed insurance policies.
The Plan must include the methodology for estimating IBNR. The
plan and description must be submitted to TDH no later than 60
days after the effective date of this contract, unless
previously submitted to TDH. Changes to the IBNR plan and
description must be submitted to TDH no later than 30 days
before changes to the plan are implemented by HMO.
12.1.12 Third Party Recovery (TPR) Reports. HMO must file quarterly
----------------------------------
Third Party Recovery (TPR) Reports in accordance with the
format developed by TDH. TPR reports must
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include total dollars recovered from third party payers for
services to HMO's Members for each month and the total dollars
recovered through coordination of benefits, subrogation, and
worker's compensation.
12.1.13 Each report required under this Article must be mailed to:
Bureau of Managed Care; Texas Dept. of Health; 1100 West 49th
Street; Austin, TX 78756-3168 (Exception: The MCFS Report may
be submitted to TDH via E-mail). HMO must also mail a copy of
the reports, except for items in Article 12.1.7 and Article
12.1.10 to Texas Department of Insurance, Mail Code 106-3A,
HMO Division, Attention: HMO Division Director, P.O. Box
149104, Austin, TX 78714-9104.
12.2 STATISTICAL REPORTS
-------------------
12.2.1 HMO must electronically file the following monthly reports:
(1) encounter; (2) encounter detail; (3) institutional; (4)
institutional detail; and (5) claims detail for
cost-reimbursed services filed, if any, with HMO. Encounter
data must include the data elements, follow the format, and
use the transmission method specified by TDH in the Encounter
Data Submission Manual. Encounters must be submitted by HMO to
TDH no later than 45 days after the date of adjudication
(finalization) of the claims.
12.2.2 Monthly reports must include current month encounter data and
encounter data adjustments to the previous month's data.
12.2.3 Data quality standards will be developed jointly by HMO and
TDH. Encounter data must meet or exceed data quality
standards. Data that does not meet quality standards must be
corrected and returned within the period specified by TDH.
Original records must be made available to validate all
encounter data.
12.2.4 HMO must require providers to submit claims and encounter data
to HMO no later than 95 days after the date services are
provided.
12.2.5 HMO must use the procedure codes, diagnosis codes and other
codes contained in the most recent edition of the Texas
Medicaid Provider Procedures Manual and as otherwise provided
by TDH. Exceptions or additional codes must be submitted for
approval before HMO uses the codes.
12.2.6 HMO must use its TDH-specified identification numbers on all
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encounter data submissions. Please refer to the TDH Encounter Data Submission Manual for further specifications.
12.2.7 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission
of encounter data to TDH.
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12.2.8 All Claims Summary Report. HMO must submit the "All Claims
-------------------------
Summary Report" identified in the Texas Managed Care Claims
Manual as a contract year-to-date report. The report must be
submitted quarterly by the last day of the month following the
reporting period. The reports must be submitted to TDH in a
format specified by TDH.
12.2.9 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO
------------------------------------------------------
must file preliminary and final Medicaid Disproportionate
Share Hospital (DSH) reports, required by TDH to identify and
reimburse hospitals that qualify for Medicaid DSH funds. The
preliminary and final DSH reports must include the data
elements and be submitted in the form and format specified by
TDH. The preliminary DSH reports are due on or before June 1
of the year following the state fiscal year for which data is
being reported. The final DSH reports are due on or before
August 15 of the year following the state fiscal year for
which data is being reported.
12.3 ARBITRATION/LITIGATION CLAIMS REPORT
------------------------------------
HMO must submit an Arbitration/Litigation Claims Report in a
format provided by TDH (see Appendix M) identifying all
provider or HMO requests for arbitration or matters in
litigation. The report must be submitted within 30 days from
the date the matter is referred to arbitration or suit is
filed, or whenever there is a change of status in a matter
referred to arbitration or litigation.
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS
-------------------------------------
HMO must submit a Summary Report of Provider Complaints. HMO
must also report complaints submitted to its subcontracted
risk groups (e.g., IPAs). The complaint report must be
submitted in two paper copies and one electronic copy on or
before the 45 days following the end of the state fiscal
quarter using a form specified by TDH.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.1 Provider Network Report. HMO must submit to the Enrollment
-----------------------
Broker an electronic file summarizing changes in HMO's
provider network including PCPs, specialists, ancillary
providers and hospitals. The file must indicate if the PCPs
and specialists participate in a closed network and the name
of the delegated network. The electronic file must be
submitted in the format specified by TDH and can be submitted
as often as daily but must be submitted at least weekly.
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12.5.2 Provider Termination Report. HMO must submit a monthly report
---------------------------
which identifies any providers who cease to participate in
HMO's provider network, either voluntarily or involuntarily.
The report must be submitted to TDH in the format specified by
TDH. HMO will submit the report no later than thirty (30) days
after the end of the reporting month. The information must
include the provider's name, Medicaid number, the reason for
the provider's termination, and whether the termination was
voluntary or involuntary.
12.6 MEMBER COMPLAINTS
----------------
HMO must submit a quarterly summary report of Member
complaints. HMO must also report complaints submitted to its
subcontracted risk groups (e.g., IPAs). The complaint report
format must be submitted to TDH as two paper copies and one
electronic copy on or before 45 days following the end of the
state fiscal quarter using a form specified by TDH.
12.7 FRAUDULENT PRACTICES
--------------------
HMO must report all fraud and abuse enforcement actions or
investigations taken against HMO and/or any of its
subcontractors or providers by any state or federal agency for
fraud or abuse under Title XVIII or Title XIX of the Social
Security Act or any State law or regulation and any basis upon
which an action for fraud or abuse may be brought by a State
or federal agency as soon as such information comes to the
attention of HMO.
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH
--------------------------------------------------
Behavioral health (BH) utilization management reports are
required on a semi-annual basis with submission of data files
that are, at a minimum, due to TDH or its designee, on a
quarterly basis no later than 150 days following the end of
the period. Refer to Appendix H for the standardized reporting
format for each report and detailed instructions, for
obtaining the specific data required in the report and for
data file submission specifications. The BH utilization report
and data file submission instructions may periodically be
updated by TDH to facilitate clear communication to the health
plan.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are
required on a semi-annual basis with submission of data files
that are, at a minimum, due to TDH or its designee on a
quarterly basis no later than 150 days following the end of
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the period. Refer to Appendix J for the standardized reporting format for each report and detailed
1999 Renewal Contract Travis Service Area August 9, 1999
instructions for obtaining specific data required in the
report and for data file submission specifications. The PH
Utilization Management Report and data file submission
instructions may periodically be updated by TDH to facilitate
clear communication to the health plan.
12.10 QUALITY IMPROVEMENT REPORTS
---------------------------
12.10.1 HMO must conduct health Focused Studies in well child and
pregnancy, and a study chosen by HMO that may be performed in
the areas of behavioral health care, asthma, or other chronic
conditions. Well child and pregnancy studies shall be
conducted and data collected using criteria and methods
developed by TDH. The following format shall be utilized:
(1) Executive Summary.
(2) Definition of the population and health areas of
concern.
(3) Clinical guidelines/standards, quality indicators,
and audit tools.
(4) Sources of information and data collection
methodology.
(5) Data analysis and information/results.
(6) Corrective actions if any, implementation, and
follow-up plans including monitoring, assessment of
effectiveness, and methods for provider feedback.
12.10.2 Annual Focused Studies. Focused Studies on well child,
----------------------
pregnancy, and a study chosen by the plan, must be submitted
to TDH according to due dates established by TDH.
12.10.3 Annual QIP Summary Report. An annual QIP summary report must
-------------------------
be conducted yearly based on the state fiscal year. The annual
QIP summary report must be submitted by March 31 of each year.
This report must provide summary information on HMO's QIP
system and include the following:
(1) Executive summary of QIP - include results of all QI
reports and interventions.
(2) Activities pertaining to each standard (I through
XVI) in Appendix A. Report must list each standard.
(3) Methodologies for collecting, assessing data and
measuring outcomes.
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(4) Tracking and monitoring quality of care.
(5) Role of health professionals in QIP review.
(6) Methodology for collection data and providing
feedback to provider and staff.
(7) Outcomes and/or action plan.
12.10.4 Provider Medical Record Audit and Report. HMO is required to
----------------------------------------
conform to commonly accepted medical record standards such as
those used by, NCQA, JCAHO, or those used for credentialing
review such as the Texas Environment of Care Assessment
Program (TECAP), and have documentation on file at HMO for
review by TDH or its designee during an on-site review.
12.11 HUB REPORTS
-----------
HMO must submit quarterly reports documenting HMO's HUB
program efforts and accomplishments. The report must include a
narrative description of HMO's program efforts and a financial
report reflecting payments made to HUB. HMO must use the
format included in Appendix B for HUB quarterly reports. For
HUB Certified Entities: HMO must include the General Service
Commission (GSC) Vendor Number and the ethnicity/gender under
which a contracting entity is registered with GSC. For HUB
Qualified (but not certified) Entities: HMO must include the
ethnicity/gender of the major owner(s) (51%) of the entity.
Any entities for which HMO cannot provide this information,
cannot be included in the HUB report. For both types of
entities, an entity will not be included in the HUB report if
HMO does not list ethnicity/gender information.
12.12 THSTEPS REPORTS
---------------
Minimum reporting requirements. HMO must submit, at a minimum,
80% of all THSteps checkups on HCFA 1500 claim forms as part
of the encounter file submission to the TDH Claims
Administrator no later than thirty (30) days after the date of
final adjudication (finalization) of the claims. Failure to
comply with these minimum reporting requirements will result
in Article XVIII sanctions and money damages.
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ARTICLE XIII PAYMENT PROVISIONS
13.1 CAPITATION AMOUNTS
------------------
13.1.1 TDH will pay HMO monthly premiums calculated by multiplying
the number of Member months by Member risk group times the
monthly capitation amount by Member risk group. HMO and
network providers are prohibited from billing or collecting
any amount from a Member for health care services covered by
this contract, in which case the Member must be informed of
such costs prior to providing non-covered services.
13.1.2 Delivery Supplemental Payment (DSP). TDH has submitted the
delivery supplemental payment methodology to HCFA for
approval. The monthly capitation amounts established for each
risk group in the Travis Service Area using the DSP
methodology will apply only if the methodology is approved by
HCFA, and the methodology is implemented for all HMO's in all
existing service areas by contract. The monthly capitation
amounts for September 1, 1999, through August 31, 2000 and the
DSP amount are listed below and will supersede the standard
Methodology of Article 13.1.3 upon approval by HCFA.
--------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
--------------------------------------------------------------
TANF Adults $107.58
--------------------------------------------------------------
TANF Children > 12 Months $57.03
of Age
--------------------------------------------------------------
Expansion Children > 12 $73.44
Months of Age
--------------------------------------------------------------
Newborns (<12 Months of $390.55
Age)
--------------------------------------------------------------
TANF Children < 12 Months $390.55
of Age
--------------------------------------------------------------
Expansion Children < 12 $390.55
Months of Age
--------------------------------------------------------------
Federal Mandate Children $41.89
--------------------------------------------------------------
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--------------------------------------------------------------
CHIP Phase I $71.71
--------------------------------------------------------------
Pregnant Women $164.78
--------------------------------------------------------------
Disabled/Blind Administration $14.00
--------------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy
supplemental payment for each delivery shall be paid to HMO as
provided below in the following amount: $2,817.00.
13.1.2.1 HMO will receive a DSP for each live or still birth. The
one-time payment is made regardless of whether there is a
single or multiple births at time of delivery. A delivery is
the birth of a liveborn infant, regardless of the duration of
the pregnancy, or a stillborn (fetal death) infant of 20 weeks
or more gestation. A delivery does not include a spontaneous
or induced abortion, regardless of the duration of the
pregnancy.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women,
TANF Adults, TANF Children >12 months, Expansion Children >12
months, Federal Mandate Children >12 months, or CHIP risk
group, HMO will be paid the monthly capitation amount
identified in Article 13.1.2 for each month of classification,
plus the DSP amount identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes
the data elements specified by TDH. TDH will consult with
contracted HMOs prior to revising the report data elements and
requirements. The reports must be submitted to TDH in the
format and time specified by TDH. The report must include only
unduplicated deliveries. The report must include only
deliveries for which HMO has made a payment for the delivery,
to either a hospital or other provider. No DSP will be made
for deliveries which are not reported by HMO to TDH within 90
days from the receipt of claim, or within 30 days from the
date of discharge from the hospital for the stay related to
the delivery, whichever is later.
13.1.2.4 HMO must maintain complete claims and adjudication disposition
documentation, including paid and denied amounts for each
delivery. HMO must submit the documentation to TDH within five
(5) days from the date of TDH request for documents.
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13.1.2.5 The DSP will be made by TDH to HMO within twenty (20) state
working days after receiving an accurate report from HMO.
13.1.2.6 All infants of age equal to or less than twelve months
(Newborns) in the TANF Children, Expansion Children, and
Newborns risk groups will be capitated at the Newborns
classification capitation amount in Article 13.1.2.
13.1.3 Standard Methodology. If the DSP methodology is not approved
by HCFA, the monthly capitation amounts established for each
risk group in the Travis Service Area using the Methodology
set forth in Article 13.1.1, without the DSP, are as follows:
--------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1,1999 - August 31,
2000
--------------------------------------------------------------
TANF Adults $138.32
--------------------------------------------------------------
TANF Children $75.09
--------------------------------------------------------------
Expansion Children $90.48
--------------------------------------------------------------
Newborns $455.14
--------------------------------------------------------------
Federal Mandate Children $42.25
--------------------------------------------------------------
CHIP Phase I $77.26
--------------------------------------------------------------
Pregnant Women $546.69
--------------------------------------------------------------
Disabled/Blind Administration $14.00
--------------------------------------------------------------
13.1.4 TDH will re-examine the capitation rates paid to HMO under
this contract during the first year of the contract period and
will provide HMO with capitation rates for the second year of
the contract period no later than 30 days before the date of
the one-year anniversary of the contract's effective date.
Capitation rates for state fiscal year 2001 will be
re-examined based on the most recent available traditional
Medicaid cost data for the contracted risk groups in the
service area, trended forward and discounted.
13.1.4.1 Once HMO has received their capitation rates established by
TDH for the second year of this contract, HMO may terminate
this contract as provided in Article 18.1.6 of this contract.
HMO may also terminate this contract as provided in Article
18.1.6 if HCFA does not approve the Delivery Supplemental
Payment Methodology described
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in Article 13.1.2.
13.1.5 The monthly premium payment to HMO is based on monthly
enrollments adjusted to reflect money damages set out in
Article 18.8 and adjustments to premiums in Article 13.4
13.1.6 The monthly premium payments will be made to HMO no later than
the 10th working day of the month for which premiums are paid.
HMO must accept payment for premiums by direct deposit into an
HMO account.
13.1.7 Payment of monthly capitation amounts is subject to
availability of appropriations. If appropriations are not
available to pay the full monthly capitation amounts, TDH will
equitably adjust capitation amounts for all participating
HMOs, and reduce scope of service requirements as appropriate.
13.1.8 HMO renewal rates reflect program increases appropriated by
the 76th legislature for physician (to include THSteps
providers) and outpatient facility services. HMO must report
to TDH any change in rates for participating physicians (to
include THSteps providers) and outpatient facilities resulting
from this increase. The report must be submitted to TDH at the
end of the first quarter of the FY2000 and FY2001 contract
years according to the deliverables matrix schedule set for
HMO.
13.2 EXPERIENCE REBATE TO STATE
13.2.1 For fiscal year 2000, HMO must pay to TDH the State's portion
of an experience rebate calculated in accordance with the
tiered rebate method listed below based on the excess of
allowable HMO STAR revenues over allowable HMO STAR expenses
as measured by any positive amount on Line 7 of "Part 1:
Financial Summary, All Coverage Groups Combined" of the annual
Managed Care Financial-Statistical Report set forth in
Appendix I, as reviewed and confirmed by TDH. TDH reserves the
right to have an independent audit performed to verify the
information provided by HMO.
--------------------------------------------------------------------------------
Graduated Rebate Method
--------------------------------------------------------------------------------
Excess as a Percentage HMO Share of State Share of
of Revenues Experience Rebate Experience Rebate
--------------------------------------------------------------------------------
0% - 3% 100% of excess between 0% of excess between
0% and 3%-of revenues 0% and 3% of revenues
--------------------------------------------------------------------------------
Over 3% - 7% 75% of excess >3% and 25% of excess >3%
<7% of revenues and <7% of revenues
- -
--------------------------------------------------------------------------------
Over 7% - 10% 50% of excess >7% and 50% of excess >7%
<10% of revenues and <10% of revenues
- -
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Over 10% - 15% 25% of excess >10% 75% of excess >10%
and <15% of revenues and <15% of revenues
- -
--------------------------------------------------------------------------------
Over 15% 0% of excess of 15% of 100% of excess over
revenues 15% of revenues
--------------------------------------------------------------------------------
13.2.2 Carry Forward of Prior Contract Period Losses: Losses incurred
for one contract period can only be carried forward to the
next contract period.
13.2.2.1 Carry Forward of Loss from one Service Delivery Area to
Another: If HMO operates in multiple Service Delivery Areas
(SDAs), losses in one SDA cannot be used to offset net income
before taxes in another SDA.
13.2.3 Experience rebate will be based on a pre-tax basis.
13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates:
HMO may subtract from an experience rebate owed to the State,
expenses for population-based health initiatives that have
been approved by TDH. A population-based initiative (PBI) is a
project or program designed to improve some aspect of quality
of care, quality of life, or health care knowledge for the
community as a whole. Value-added service does not constitute
a PBI. Contractually required services and activities do not
constitute a PBI.
13.2.5 There will be two settlements for payment(s) of the state
share of the experience rebate. The first settlement shall
equal 100 percent of the state share of the experience rebate
as derived from Line 7 of Part 1 (Net Income Before Taxes) of
the annual Managed Care Financial Statistical (MCFS) Report
and shall be paid on the same day the first annual MCFS Report
is submitted to TDH. The second settlement shall be an
adjustment to the first settlement and shall be paid to TDH on
the same day that the second annual MCFS Report is submitted
to TDH if the adjustment is a payment from HMO to TDH. TDH or
its agent may audit or review the MCFS reports. If TDH
determines that corrections to the MCFS reports are required,
based on a TDH audit/review or other documentation acceptable
to TDH, to determine an adjustment to the amount of the second
settlement, then final adjustment shall be made within two
years from the date that HMO submits the second annual MCFS
report. HMO must pay the first and second settlements on the
due dates for the first and second MCFS reports respectively
as identified in Article 12.1.5. TDH may adjust the experience
rebate if TDH determines HMO has paid affiliates amounts for
goods or services that are higher than the fair market value
of the goods and services in the service area. Fair market
value may be based on the amount HMO pays a non-affiliate(s)
or the amount another HMO pays for the same or similar service
in the service area. TDH has final authority in auditing and
determining the amount of the experience rebate.
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13.3 PERFORMANCE OBJECTIVES
----------------------
13.3.1 Preventive Health Performance Objectives are contained in this
contract at Appendix K. These reports are submitted annually
and must be submitted no later than 150 days after the end of
the State fiscal year.
13.4 ADJUSTMENTS TO PREMIUM
----------------------
13.4.1 TDH may recoup premiums paid to HMO in error. Error may be
either human or machine error on the part of TDH or an agent
or contractor of TDH. TDH may recoup premiums paid to HMO if a
Member is enrolled into HMO in error, and HMO provided no
covered services to Member for the period of time for which
premium was paid. If services were provided to Member as a
result of the error, recoupment will not be made.
13.4.2 TDH may recoup premium paid to HMO if a Member for whom
premium is paid moves outside the United States, and HMO has
not provided covered services to the Member for the period of
time for which premium has been paid. TDH will not recoup
premium if HMO has provided covered services to the Member
during the period of time for which premium has been paid.
13.4.3 TDH may recoup premium paid to HMO if a Member for whom
premium is paid dies before the first day of the month for
which premium is paid.
13.4.4 TDH may recoup or adjust premium paid to HMO for a Member if
the Member's eligibility status or program type is changed,
corrected as a result of error, or is retroactively adjusted.
13.4.5 Recoupment or adjustment of premium under Articles 13.4.1
through 13.4.4 may be appealed using the TDH dispute
resolution process.
13.4.6 TDH may adjust premiums for all Members within an eligibility
status or program type if adjustment is required by reductions
in appropriations and/or if a benefit or category of benefits
is excluded or included as a covered service. Adjustment must
be made by amendment as required by Article 15.2. Adjustment
to premium under this subsection may not be appealed using the
TDH dispute resolution process.
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT
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14.1 ELIGIBILITY DETERMINATION
-------------------------
14.1.1 TDH will identify Medicaid recipients who are eligible for
participation in the STAR program using the eligibility status
described below.
14.1.2 Individuals in the following categories who reside in any part
of the Service Area must enroll in one of the health plans
providing services in the Service Areas:
14.1.2.1 TANF ADULTS - Individuals age 21 and over who are eligible for
the TANF program. This category may also include some pregnant
women.
14.1.2.2 TANF CHILDREN - Individuals under age 21 who are eligible for
the TANF program. This category may also include some pregnant
women and some children less than one year of age.
14.1.2.3 PREGNANT WOMEN receiving Medical Assistance Only (MAO) -
Pregnant women whose families' income is below 185% of the
Federal Poverty Level (FPL).
14.1.2.4 NEWBORN (MAO) - Children under age one born to
Medicaid-eligible mothers.
14.1.2.5 EXPANSION CHILDREN (MAO) - Children under age 18, ineligible
for TANF because of the applied income of their stepparents or
grandparents.
14.1.2.6 EXPANSION CHILDREN (MAO) - Children under age 1 whose
families' income is below 185% FPL.
14.1.2.7 EXPANSION CHILDREN MAO - Children age 1- 5 whose families'
income is at or below 133% of FPL.
14.1.2.8 FEDERAL MANDATE CHILDREN (MAO) - Children under age 19 born
before October 10, 1983, whose families' income is below the
TANF income limit.
14.1.2.9 CHIP PHASE I - Children's Health Insurance Program Phase I
(Federal Mandate Acceleration) Children under age nineteen
(19) born before October 1, 1983, with family income below
100% Federal Poverty Income Level.
14.1.3 The following individuals are eligible for the STAR Program
and are not required to enroll in a health plan but have the
option to enroll in a plan. HMO will be required to accept
enrollment of those Medicaid recipients from this group who
elect to enroll in HMO.
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14.1.3.1 DISABLED AND BLIND INDIVIDUALS WITHOUT MEDICARE - Recipients
with Supplemental Security Income (SSI) benefits who are not
eligible for Medicare may elect to participate in the STAR
program on a voluntary basis.
14.1.3.2 Certain blind or disabled individuals who lose SSI eligibility
because of Title II income and who are not eligible for
Medicare.
14.1.4 During the period after which the Medicaid eligibility
determination has been made but prior to enrollment in HMO,
Members will be enrolled under the traditional Medicaid
program. All Medicaid-eligible recipients will remain in the
fee-for-service Medicaid program until enrolled in or assigned
to an HMO.
14.2 ENROLLMENT
----------
14.2.1 TDH has the right and responsibility to enroll and disenroll
eligible individuals into the STAR program. TDH will conduct
continuous open enrollment for Medicaid recipients and HMO
must accept all persons who chose to enroll as Members in HMO
or who are assigned as Members in HMO by TDH, without regard
to the Member's health status or any other factor.
14.2.2 All enrollments are subject to the accessibility and
availability limitations and restrictions contained in the
ss. 1915(b) waiver obtained by TDH. TDH has the authority to
limit enrollment into HMO if the number and distance
limitations are exceeded.
14.2.3 TDH makes no guarantees or representations to HMO regarding
the number of eligible Medicaid recipients who will ultimately
be enrolled as STAR Members of HMO.
14.2.4 HMO must cooperate and participate in all TDH sponsored and
announced enrollment activities. HMO must have a
representative at all TDH enrollment activities unless an
exception is given by TDH. The representative must comply with
HMO's cultural and linguistic competency plan (see Cultural
and Linguistic requirements in Article 8.9). HMO must provide
marketing materials, HMO pamphlets, Member Handbooks, a list
of network providers, HMO's linguistic and cultural
capabilities and other information requested or required by
TDH or its Enrollment Broker to assist potential Members in
making informed choices.
14.2.5 TDH will provide HMO with at least 10 days written notice of
all TDH planned activities. Failure to participate in, or send
a representative to a TDH sponsored enrollment activity is a
default of the terms of the contract. Default may be excused
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if HMO can show that TDH failed to provide the required
notice, or if HMO's absence is excused by TDH.
14.3 DISENROLLMENT
-------------
14.3.1 HMO has a limited right to request a Member be disenrolled
from HMO without the Member's consent. TDH must approve any
HMO request for disenrollment of a Member for cause.
Disenrollment of a Member may be permitted under the following
circumstances:
14.3.1.1 Member misuses or loans Member's HMO membership card to
another person to obtain services.
14.3.1.2 Member is disruptive, unruly, threatening or uncooperative to
the extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain
new Members, and Member's behavior is not caused by a physical
or behavioral health condition.
14.3.1.3 Member steadfastly refuses to comply with managed care
restrictions (e.g., repeatedly using emergency room in
combination with refusing to allow HMO to treat the underlying
medical condition).
14.3.2 HMO must take reasonable measures to correct Member behavior
prior to requesting disenrollment. Reasonable measures may
include providing education and counseling regarding the
offensive acts or behaviors.
14.3.3 HMO must notify the Member of HMO's decision to disenroll the
Member if all reasonable measures have failed to remedy the
problem.
14.3.4 If the Member disagrees with the decision to disenroll the
Member from HMO, HMO must notify the Member of the
availability of the complaint procedure and TDH's Fair Hearing
process.
14.3.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN
THE MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH
ARE MEDICALLY NECESSARY FOR TREATMENT OF A MEMBER'S CONDITION.
14.4 AUTOMATIC RE-ENROLLMENT
-----------------------
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14.4.1 Members who are disenrolled because they are temporarily
ineligible for Medicaid will be automatically re-enrolled into
the same health plan. Temporary loss of eligibility is defined
as a period of 6 months or less.
14.4.2 HMO must inform its Members of the automatic re-enrollment
procedure. Automatic re-enrollment must be included in the
Member Handbook (see Article 8.2.1).
14.5 ENROLLMENT REPORTS
------------------
14.5.1 TDH will provide HMO enrollment reports listing all STAR
Members who have enrolled in or were assigned to HMO during
the initial enrollment period.
14.5.2 TDH will provide monthly HMO Enrollment Reports to HMO on or
before the first of the month.
14:5.3 TDH will provide Member verification to HMO and network
providers through telephone verification or TexMedNet.
ARTICLE XV GENERAL PROVISIONS
15.1 INDEPENDENT CONTRACTOR
----------------------
HMO, its agents, employees, network providers, and
subcontractors are independent contractors and do not perform
services under this contract as employees or agents of TDH.
HMO is given express, limited authority to exercise the
State's right of recovery as provided in Article 4.9.
15.2 AMENDMENT
---------
15.2.1 This contract must be amended by TDH if amendment is required
to comply with changes in state or federal laws, rules, or
regulations.
15.2.2 TDH and HMO may amend this contract if reductions in funding
or appropriations make full performance by either party
impracticable or impossible, and amendment could provide a
reasonable alternative to termination. If HMO does not agree
to the amendment, contract may be terminated under Article
XVIII.
15.2.3 This contract must be amended if either party discovers a
material omission of a negotiated or required term, which is
essential to the successful performance or maintaining
compliance with the terms of the contract. The party
discovering the
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omission must notify the other party of the omission in
writing as soon as possible after discovery. If there is a
disagreement regarding whether the omission was intended to be
a term of the contract, the parties must submit the dispute to
dispute resolution under Article 15.9.
15.2.4 This contract may be amended by mutual agreement at any time.
15.2.5 All amendments to this contract must be in writing and signed
by both parties.
15.2.6 No agreement shall be used to amend this contract unless it is
made a part of this contract by specific reference, and is
numbered sequentially by order of its adoption.
15.3 LAW, JURISDICTION AND VENUE
---------------------------
Venue and jurisdiction shall be in the state and federal
district courts of Travis County, Texas. The laws of the State
of Texas shall be applied in all matters of state law.
15.4 NON-WAIVER
----------
Failure to enforce any provision or breach shall not be taken
by either party as a waiver of the right to enforce the
provision or breach in the future.
15.5 SEVERABILITY
------------
Any part of this contract which is found to be unenforceable,
invalid, void, or illegal shall be severed from the contract.
The remainder of the contract shall be effective.
15.6 ASSIGNMENT
----------
This contract was awarded to HMO based on HMO's qualifications
to perform personal and professional services. HMO cannot
assign this contract without the written consent of TDI and
TDH. This provision does not prevent HMO from subcontracting
duties and responsibilities to qualified subcontractors. If
TDI and TDH consent to an assignment of this contract, a
transition period of 90 days will run from the date the
assignment is approved by TDI and TDH so that Members'
services are not interrupted and, if necessary, the notice
provided for in Article 15.7 can be sent to Members. The
assigning HMO must also submit a transition plan, as set out
in Article 18.2.1, subject to TDH's approval.
15.7 MAJOR CHANGE IN CONTRACTING
---------------------------
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TDH may send notice to Members when a major change affecting
HMO occurs. A "major change" includes, but is not limited to,
a substantial change of subcontractors and assignment of this
contract. The notice letter to Members may permit the Members
to re-select their plan and PCP. TDH will bear the cost of
preparing and sending the notice letter in the event of an
approved assignment of the contract. For any other major
change in contracting, HMO will prepare the notice letter and
submit it to TDH for review and approval. After TDH has
approved the letter for distribution to Members, HMO will bear
the cost of sending the notice letter.
15.8 NON-EXCLUSIVE
-------------
This contract is a non-exclusive agreement. Either party may
contract with other entities for similar services in the same
service area.
15.9 DISPUTE RESOLUTION
------------------
The dispute resolution process adopted by TDH in accordance
with Chapter 2260, Texas Government Code, will be used to
attempt to resolve all disputes arising under this contract.
All disputes arising under this contract shall be resolved
through TDH's dispute resolution procedures, except where a
remedy is provided for through TDH `s administrative rules or
processes. All administrative remedies must be exhausted prior
to other methods of dispute resolution. TDH will assist HMO in
resolution of a conflict of law or interpretation of law
between or among state agencies with authority to regulate and
enforce this contract.
15.10 DOCUMENTS CONSTITUTING CONTRACT
-------------------------------
This contract includes this document and all amendments and
appendices to this document, the Request for Application, the
Application submitted in response to the Request for
Application, the Texas Medicaid Provider Procedures Manual and
Texas Medicaid Bulletins addressed to HMOs, contract
interpretation memoranda issued by TDH for this contract, and
the federal waiver granting TDH authority to contract with
HMO. If any conflict in provisions between these documents
occurs, the terms of this contract and any amendments shall
prevail. The documents listed above constitute the entire
contract between the parties.
15.11 FORCE MAJEURE
-------------
TDH and HMO are excused from performing the duties and
obligations under this contract for any period that they are
prevented from performing their services as a result of a
catastrophic occurrence, or natural disaster, clearly beyond
the control of either party, including but not limited to an
act of war, but excluding labor disputes.
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15.12 NOTICES
-------
Notice may be given by any means which provides for
verification of receipt. All notices to TDH shall be addressed
to Bureau Chief, Texas Department of Health, Bureau of Managed
Care, 1100 W. 49th Street, Austin, TX 78756-3168, with a copy
to the Contract Administrator. Notices to HMO shall be
addressed to President/CEO, Michael A. Seltzer, Vice
President, West Region, 8431 Fredericksburg Road, San Antonio,
Texas 78229; AND Medicaid Director, Cheryl Dietz, 8303 Mopac,
Suite 450-C, Austin, Texas 78759.
15.13 SURVIVAL
--------
The provisions of this contract which relate to the
obligations of HMO to maintain records and reports shall
survive the expiration or earlier termination of this contract
for a period not to exceed six (6) years unless another period
may be required by record retention policies of the State of
Texas or HCFA.
ARTICLE XVI DEFAULT AND REMEDIES
16.1 DEFAULT BY TDH
--------------
16.1.1 FAILURE TO MAKE CAPITATION PAYMENTS
-----------------------------------
Failure by TDH to make capitation payments when due is a
default under this contract.
16.1.2 FAILURE TO PERFORM DUTIES AND RESPONSIBILITIES
----------------------------------------------
Failure by TDH to perform a material duty or responsibility as
set out in this contract is a default under this contract.
16.2 REMEDIES AVAILABLE TO HMO FOR TDH'S DEFAULT
-------------------------------------------
HMO may terminate this contract as set out in Article 18.1.5
of this contract if TDH commits either of the events of
default set out in Article 16.1.
16.3 DEFAULT BY HMO
--------------
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16.3.1 FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION
---------------------------------------------
Failure of HMO to perform an administrative function is a
default under this contract. Administrative functions are any
requirements under this contract that are not direct delivery
of health care services, including claims payment; encounter
data submission; filing any report when due; cooperating in
good faith with TDH, an entity acting on behalf of TDH, or an
agency authorized by statute or law to require the cooperation
of HMO in carrying out an administrative, investigative, or
prosecutorial function of the Medicaid program; providing or
producing records upon request; or entering into contracts or
implementing procedures necessary to carry out contract
obligations.
16.3.1.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to perform an administrative function under
this contract, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess liquidated money damages as set out in
Article 18.4; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.2 ADVERSE ACTION AGAINST HMO BY TDI
---------------------------------
Termination or suspension of HMO's TDI Certificate of
Authority or any adverse action taken by TDI that TDH
determines will affect the ability of HMO to provide health
care services to Members is a default under this contract.
16.3.2.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For an adverse action against HMO by TDI, TDH may:
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Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.3 INSOLVENCY
----------
Failure of HMO to comply with state and federal solvency
standards or in capacity of HMO to meet its financial
obligations as they come due is a default under this contract.
16.3.3.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's insolvency, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.4 FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS
---------------------------------------------------
Failure of HMO to comply with the federal requirements for
Medicaid, including, but not limited to, federal law regarding
misrepresentation, fraud, or abuse; and, by incorporation,
Medicare standards, requirements, or prohibitions, is a
default under this contract.
The following events are defaults under this contract pursuant
to 42 U.S.C. 1396b(m)(5), 1396u-2(e)(1)(A):
16.3.4.1 HMO's substantial failure to provide medically necessary items
and services that are required under this contract to be
provided to Members;
16.3.4.2 HMO's imposition of premiums or charges on Members in excess
of the premiums or charge permitted by federal law;
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16.3.4.3 HMO's acting to discriminate among Members on the basis of
their health status or requirements for health care services,
including expulsion or refusal to enroll an individual, except
as permitted by federal law, or engaging in any practice that
would reasonably be expected to have the effect of denying or
discouraging enrollment with HMO by eligible individuals whose
medical condition or history indicates a need for substantial
future medical services;
16.3.4.4 HMO's misrepresentation or falsification of information that
is furnished to HCFA, TDH, a Member, a potential Member, or a
health care provider;
16.3.4.5 HMO's failure to comply with the physician incentive
requirements under 42 U.S.C. '1396b(m)(2)(A)(x); or
16.3.4.6 HMO's distribution, either directly or through any agent or
independent contractor, of marketing materials that contain
false or misleading information, excluding materials prior
approved by TDH.
16.3.5 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
If HMO repeatedly fails to meet the requirements of Articles
16.3.4.1 through and including 16.3.4.6, TDH must, regardless
of what other sanctions are provided, appoint temporary
management and permit Members to disenroll without cause.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to comply with federal laws and regulations,
TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Appoint temporary management as set out in
Article 18.5; Initiate disenrollment of a Member of Members
without cause as set out in Article 18.6; Suspend or default
all enrollment of individuals; Suspend payment to HMO;
Recommend to HCFA that sanctions be taken against HMO as set
out in Article 18.7; Assess civil monetary penalties as set
out in Article 18.8; and/or Require forfeiture of all or part
of the TDI performance bond as set out in Article 18.9.
16.3.6 FAILURE TO COMPLY WITH APPLICABLE STATE LAW
-------------------------------------------
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HMO's failure to comply with Texas law applicable to Medicaid,
including, but not limited to, Article 32.039 of the Texas
Human Resources Code and state law regarding
misrepresentation, fraud, or abuse, is a default under this
contract.
16.3.6.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to comply with applicable state law, TDH
may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess administrative penalties as set out in
Article 32.039, Government Code, with the opportunity for
notice and appeal as required by Article 32.039; and/or
Require forfeiture of all or part of the TDI performance bond
as set out in Article 18.9.
16.3.7 MISREPRESENTATION OR FRAUD UNDER ARTICLE 4.8
--------------------------------------------
HMO's misrepresentation or fraud under Article 4.8 of this
contract is a default under this contract.
16.3.7.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's misrepresentation or fraud under Article 4.8, TDH
may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.8 EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID
----------------------------------------------------
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16.3.8.1 Exclusion of HMO or any of the managing employees or persons
with an ownership interest whose disclosure is required by
'1124(a) of the Social Security Act (the Act) from the
Medicaid or Medicare program under the provisions of '1128(a)
and/or (b) of the Act is a default under this contract.
16.3.8.2 Exclusion of any provider or subcontractor or any of the
managing employees or persons with an ownership interest of
the provider or subcontractor whose disclosure is required by
'1124(a) of the Social Security Act (the Act) from the
Medicaid or Medicare program under the provisions of '1128(a)
and/or (b) of the Act is a default under this contract if the
exclusion will materially affect HMO's performance under this
contract.
16.3.8.3 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's exclusion from Medicare or Medicaid, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.9 FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS AND
SUBCONTRACTORS
--------------
HMO's failure to make timely and appropriate payments to
network providers and subcontractors is a default under this
contract. Withholding or recouping capitation payments as
allowed or required under other articles of this contract is
not a default under this contract.
16.3.9.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
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For HMO's failure to make timely and appropriate payments to
network providers and subcontractors, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess liquidated money damages as set out in
Article 18.4; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.10 FAILURE TO TIMELY ADJUDICATE CLAIMS
-----------------------------------
Failure of HMO to adjudicate (paid, denied, or external
pended) at least ninety (90%) of all claims within thirty (30)
days of receipt and ninety-nine percent (99%) of all claims
within ninety days of receipt for the contract year is a
default under this contract.
16.3.10.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consequently.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to timely adjudicate claims, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.11 FAILURE TO DEMONSTRATE THE ABILITY TO PERFORM CONTRACT
FUNCTIONS
--------
Failure to pass any of the mandatory system or delivery
functions of the Readiness Review required in Article I of
this contract is a default under the contract.
16.3.11.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
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For HMO's failure to demonstrate the ability to perform
contract functions, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.12 FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF CONTRACTORS
OR NETWORK PROVIDERS
--------------------
16.3.12.1 Failure of HMO to audit, monitor, supervise, or enforce
functions delegated by contract to another entity that results
in a default under this contract or constitutes a violation of
state or federal laws, rules, or regulations is a default
under this contract.
16.3.12.2 Failure of HMO to properly credential its providers, conduct
reasonable utilization review, or conduct quality monitoring
is a default under this contract.
16.3.12.3 Failure of HMO to require providers and contractors to provide
timely and accurate encounter, financial, statistical, and
utilization data is a default under this contract.
16.3.12.4 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDK
in exercising all or part of any remaining remedies.
For HMO's failure to monitor and/or supervise activities of
contractors or network providers, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.13 PLACING THE HEALTH AND SAFETY OF MEMBERS IN JEOPARDY
----------------------------------------------------
HMO's placing the health and safety of the Members in jeopardy
is a default under this contract.
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16.3.13.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's placing the health and safety of Members in
jeopardy, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the
TDI performance bond as set out in Article 18.9.
16.3.14 FAILURE TO MEET ESTABLISHED BENCHMARK
-------------------------------------
Failure of HMO to meet any benchmark established by TDH under
this contract is a default under this contract.
16.3.14.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to TDH by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit TDH
in exercising all or part of any remaining remedies.
For HMO's failure to meet any benchmark established by TDH
under this contract, TDH may:
Remove the THSteps component from the capitation paid to HMO
if the benchmark(s) missed is for THSteps; Terminate the
contract if the applicable conditions set out in Article
18.1.1 are met; Suspend new enrollment as set out in Article
18.3; Assess liquidated money damages as set out in Article
18.4; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT
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17.1 TDH will provide HMO with written notice of default (Notice of
Default) under this contract. The Notice of Default may be
given by any means that provides verification of receipt. The
Notice of Default must contain the following information:
17.1.1 A clear and concise statement of the circumstances or
conditions that constitute a default under this contract;
17.1.2 The contract provision(s) under which default is being
declared;
17.1.3 A clear and concise statement of how and/or whether the
default may be cured;
17.1.4 A clear and concise statement of the time period during which
HMO may cure the default if HMO is allowed to cure;
17.1.5 The remedy or remedies TDH is electing to pursue and when the
remedy or remedies will take effect;
17.1.6 If TDH is electing to impose money damages and/or civil
monetary penalties, the amount that TDH intends to withhold or
impose and the factual basis on which TDH is imposing the
chosen remedy or remedies;
17.1.7 Whether any part of money damages or civil monetary penalties,
if TDH elects to pursue one or both of those remedies, may be
passed through to an individual or entity who is or may be
responsible for the act or omission for which default is
declared;
17.1.8 Whether failure to cure the default within the given time
period if any, will result in TDH pursuing an additional
remedy or remedies, including, but not limited to, additional
damages or sanctions, referral for investigation or action by
another agency, and/or termination of the contract.
|
ARTICLE XVIII EXPLANATION OF REMEDIES
18.1 TERMINATION
-----------
18.1.1 TERMINATION BY TDH
------------------
TDH may terminate this contract if:
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18.1.1.1 HMO substantially fails or refuses to provide medically
necessary services and items that are required under this
contract to be provided to Members after notice and
opportunity to cure;
18.1.1.2 HMO substantially fails or refuses to perform administrative
functions under this contract after notice and opportunity to
cure;
18.1.1.3 HMO materially defaults under any of the provisions of Article
XVI;
18.1.1.4 Federal or state funds for the Medicaid program are no longer
available; or
18.1.1.5 TDH has a reasonable belief that HMO has placed the health or
welfare of Members in jeopardy.
18.1.2 TDH must give HMO 90 days written notice of intent to
terminate this contract if termination is the result of HMO's
substantial failure or refusal to perform administrative
functions or a material default under any of the provisions of
Article XVI. TDH must give HMO reasonable notice under the
circumstances if termination is the result of federal or state
funds for the Medicaid program no longer being available. TDH
must give the notice required under TDH's formal hearing
procedures set out in Section 1.2.1 in Title 25 of the Texas
Administrative Code if termination is the result of HMO's
substantial failure or refusal to provide medically necessary
services and items that are required under the contract to be
provided to Members or TDH's reasonable belief that HMO has
placed the health or welfare of Members in jeopardy.
18.1.2.1 Notice may be given by any means that gives verification of
receipt.
18.1.2.2 Unless termination is the result of HMO's substantial failure
or refusal to provide medically necessary services and items
that are required under this contract to be provided to
Members or is the result of TDH's reasonable belief that HMO
has placed the health or welfare of Members in jeopardy, the
termination date is 90 days following the date that HMO
receives the notice of intent to terminate. For HMO's
substantial failure or refusal to provide services and items,
HMO is entitled to request a pre-termination hearing under
TDH's formal hearing procedures set out in Section 1.2.1 of
Title 25, Texas Administrative Code.
18.1.3 TDH may, for termination for HMO's substantial failure or
refusal to provide medically necessary services and items,
notify HMO's Members of any hearing requested by HMO and
permit Members to disenroll immediately without cause.
Additionally, if TDH terminates for this reason, TDH may
enroll HMO's Members
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with another HMO or permit HMO's Members to receive
Medicaid-covered services other than from an HMO.
18.1.4 HMO must continue to perform services under the transition
plan described in Article 18.2.1 until the last day of the
month following 90 days from the date of receipt of notice if
the termination is for any reason other than TDH's reasonable
belief that HMO is placing the health and safety of the
Members in jeopardy. If termination is due to this reason, TDH
may prohibit HMO's further performance of services under the
contract.
18.1.5 If TDH terminates this contract, HMO may appeal the
termination under ss. 32.034, Texas Human Resources Code.
18.1.6 TERMINATION BY HMO
------------------
HMO may terminate this contract if TDH fails to pay HMO as
required under Article XIII of this contract or otherwise
materially defaults in its duties and responsibilities under
this contract, or by giving notice no later than 30 days after
receiving the capitation rates for the second contract year.
Retaining premium, recoupment, sanctions, or penalties that
are allowed under this contract or that result from HMO's
failure to perform or HMO's default under the terms of this
contract is not cause for termination.
18.1.6.1 HMO may terminate this contract without cause, except HMO
cannot terminate this contract without cause for the 90 days
immediately following the effective date of the contract.
18.1.7 HMO must give TDH 90 days written notice of intent to
terminate this contract, either for cause or without cause.
Notice may be given by any means that gives verification of
receipt. The termination date will be calculated as the last
day of the month following 90 days from the date the notice of
intent to terminate is received by TDH.
18.1.8 TDH must be given 30 days from the date TDH receives HMO's
written notice of intent to terminate for failure to pay HMO
to pay all amounts due. If TDH pays all amounts then due
within this 30-day period, HMO cannot terminate the contract
under this article for that reason.
18.1.9 TERMINATION BY MUTUAL CONSENT
-----------------------------
This contract may be terminated at any time by mutual consent
of both HMO and TDH.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
----------------------------------------------
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When termination of the contract occurs, TDH and HMO must meet
the following obligations:
18.2.1 TDH and HMO must prepare a transition plan, which is
acceptable to and approved by TDH, to ensure that Members are
reassigned to other plans without interruption of services.
That transition plan will be implemented during the 90-day
period between receipt of notice and the termination date
unless termination is the result of TDH's reasonable belief
that HMO is placing the health or welfare of Members in
jeopardy.
18.2.2 If the contract is terminated by TDH for any reason other than
federal or state funds for the Medicaid program no longer
being available or if HMO terminates the contract based on
lower capitation rates for the second contract year as set out
in Article 13.1.4.1:
18.2.2.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.2.2 HMO is responsible for all expenses related to giving notice
to Members; and
18.2.2.3 HMO is responsible for all expenses incurred by TDH in
implementing the transition plan.
18.2.3 If the contract is terminated by HMO for any reason other than
based on lower capitation rates for the second contract year
as set out in Article 13.1.4.1:
18.2.3.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.3.2 TDH is responsible for all expenses related to giving notice
to Members; and.
18.2.3.3 TDH is responsible for all expenses it incurs in implementing
the transition plan.
18.2.4 If the contract is terminated by mutual consent:
18.2.4.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services
18.2.4.2 HMO is responsible for all expenses related to giving notice
to Members; and
18.2.4.3 TDH is responsible for all expenses it incurs in implementing
the transition plan.
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18.3 SUSPENSION OF NEW ENROLLMENT
----------------------------
18.3.1 TDH must give HMO 30 days notice of intent to suspend new
enrollment in the Notice of Default other than for default for
fraud and abuse or imminent danger to the health or safety of
Members. The suspension date will be calculated as 30 days
following the date that HMO receives the Notice of Default.
18.3.2 TDH may immediately suspend new enrollment into HMO for a
default declared as a result of fraud and abuse or imminent
danger to the health and safety of Members.
18.3.3 The suspension of new enrollment may be for any duration, up
to the termination date of the contract. TDH will base the
duration of the suspension upon the type and severity of the
default and HMO's ability, if any, to cure the default.
18.4 LIQUIDATED MONEY DAMAGES
------------------------
18.4.1 The measure of damages in the event that HMO fails to perform
its obligations under this contract may be difficult or
impossible to calculate or quantify. Therefore, should HMO
fail to perform in accordance with the terms and conditions of
this contract, TDH may require HMO to pay sums as specified
below as liquidated damages. The liquidated damages set out in
this Article are not intended to be in the nature of a penalty
but are intended to be reasonable estimates of TDH's financial
loss and damage resulting from HMO's non-performance.
18.4.2 If TDH imposes money damages, TDH may collect those damages by
reducing the amount of any monthly premium payments otherwise
due to HMO by the amount of the damages. Money damages that
are withheld from monthly premium payments are forfeited and
will not be subsequently paid to HMO upon compliance or cure
of default unless a determination is made after appeal that
the damages should not have been imposed.
18.4.3 Failure to file or filing incomplete or inaccurate annual,
semi-annual or quarterly reports may result in money damages
of not more than $11,000.00 for every month from the month the
report is due until submitted in the form and format required
by TDH. These money damages apply separately to each report.
18.4.4 Failure to produce or provide records and information
requested by TDH, an entity acting on behalf of TDH, or an
agency authorized by statute or law to require production of
records at the time and place the records were required or
requested may result in money damages of not more than
$5,000.00 per day for each day the records are not produced as
required by the requesting entity or agency if the
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requesting entity or agency is conducting an investigation or
audit relating to fraud or abuse, and not more than $1,000.00
per day for each day records are not produced if the
requesting entity or agency is conducting routine audits or
monitoring activities.
18.4.5 Failure to file or filing incomplete or inaccurate encounter
data may result in money damages of not more than $25,000 for
each month HMO fails to submit encounter data in the form and
format required by TDH. TDH will use the encounter data
validation methodology established by TDH to determine the
number of encounter data and the number of months for which
damages will be assessed.
18.4.6 Failing or refusing to cooperate with TDH, an entity acting on
behalf of TDH, or an agency authorized by statute or law to
require the cooperation of HMO in carrying out an
administrative, investigative, or prosecutorial function of
the Medicaid program may result in money damages of not more
than $8,000.00 per day for each day HMO fails to cooperate.
18.4.7 Failure to enter into a required or mandatory contract or
failure to contract for or arrange to have all services
required under this contract provided may result in money
damages of not more than $1,000.00 per day that HMO either
fails to negotiate in good faith to enter into the required
contract or fails to arrange to have required services
delivered.
18.4.8 Failure to meet the benchmark for benchmarked services under
this contract may result in money damages of not more than
$25,000 for each month that HMO fails to meet the established
benchmark.
18.4.9 TDH may also impose money damages for a default under Article
16.3.9, Failure to Make Payments to Network Providers and
subcontractors, of this contract. These money damages are in
addition to the interest HMO is required to pay to providers
under the provisions of Articles 4.10.4 and 7.2.7.10 of this
contract.
18.4.9.1 If TDH determines that HMO has failed to pay a provider for a
claim or claims for which the provider should have been paid,
TDH may impose money damages of $2 per day for each day the
claim is not paid from the date the claim should have been
paid (calculated as 30 days from the date a clean claim was
received by HMO) until the claim is paid by HMO.
18.4.9.2 If TDH determines that HMO has failed to pay a capitation
amount to a provider who has contracted with HMO to provide
services on a capitated basis, TDH may impose money damages of
$10 per day, per Member for whom the capitation is not paid,
from the date on which the payment was due until the
capitation amount is paid.
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18.5 APPOINTMENT OF TEMPORARY MANAGEMENT
-----------------------------------
18.5.1 TDH may appoint temporary management to oversee the operation
of HMO upon a finding that there is continued egregious
behavior by HMO or there is a substantial risk to the health
of the Members.
18.5.2 TDH may appoint temporary management to assure the health of
HMO's Members if there is a need for temporary management
while:
18.5.2.1 there is an orderly termination or reorganization of HMO; or
18.5.2.2 are made to remedy violations found under Article 16.3.4.
18.5.3 Temporary management will not be terminated until TDH has
determined that HMO has the capability to ensure that the
violations that triggered appointment of temporary management
will not recur.
18.5.4 TDH is not required to appoint temporary management before
terminating this contract.
18.5.5 No pre-termination hearing is required before appointing
temporary management.
18.5.6 As with any other remedy provided under this contract, TDH
will provide notice of default as is set out in Article XVII
to HMO. Additionally, as with any other remedy provided under
this contract, under Article 18.1 of this contract, HMO may
dispute the imposition of this remedy and seek review of the
proposed remedy.
18.6 TDH-INITIATED DISENROLLMENT OF A MEMBER OR MEMBERS WITHOUT
----------------------------------------------------------
CAUSE
-----
TDH must give HMO 30 days notice of intent to initiate
disenrollment of a Member of Members in the Notice of Default.
The TDH-initiated disenrollment date will be calculated as 30
days following the date that HMO receives the Notice of
Default.
18.7 RECOMMENDATION TO HCFA THAT SANCTIONS BE TAKEN AGAINST HMO
----------------------------------------------------------
18.7.1 If HCFA determines that HMO has violated federal law or
regulations and that federal payments will be withheld, TDH
will deny and withhold payments for new enrollees of HMO.
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18.7.2 HMO must be given notice and opportunity to appeal a decision
of TDH and HCFA pursuant to 42 CFR '434.67.
18.8 CIVIL MONETARY PENALTIES
------------------------
18.8.1 For a default under Article 16.3.4.1, TDH may assess not more
than $25,000 for each default;
18.8.2 For a default under Article 16.3.4.2, TDH may assess double
the excess amount charged in violation of the federal
requirements for each default. The excess amount shall be
deducted from the penalty and returned to the Member
concerned.
18.8.3 For a default under Article 16.3.4.3, TDH may assess not more
than $100,000 for each default, including $15,000 for each
individual not enrolled as a result of the practice described
in Article 16.3.4.3.
18.8.4 For a default under Article 16.3.4.4, TDH may assess not more
than $100,000 for each default if the material was provided to
HCFA or TDH and not more than $25,000 for each default if the
material was provided to a Member, a potential Member, or a
health care provider.
18.8.5 For a default under Article 16.3.4.5, TDH may assess not more
than $25,000 for each default.
18.8.6 For a default under Article 16.3.4.6, TDH may assess not more
than S25,000 for each default.
18.8.7 HMO may be subject to civil money penalties under the
provisions of 42 CFR 1003 in addition to or in place of
withholding payments for a default under Article 16.3.4.
18.9 FORFEITURE OF ALL OR A PART OF THE TDI PERFORMANCE BOND
-------------------------------------------------------
TDH may require forfeiture of all or a portion of the face
amount of the TDI performance bond if TDH determines that an
event of default has occurred. Partial payment of the face
amount shall reduce the total bond amount available pro rata.
18.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED
------------------------------------------
18.10.1 HMO may dispute the imposition of any sanction under this
contract. HMO notifies TDH of its dispute by filing a written
response to the Notice of Default, clearly stating the reason
HMO disputes the proposed sanction. With the written response,
HMO must submit to TDH any documentation that supports HMO's
position. HMO must
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file the review within 15 days from HMO's receipt of the
Notice of Default. Filing a dispute in a written response to
the Notice of Default suspends imposition of the proposed
sanction.
18.10.2 HMO and TDH must attempt to informally resolve the dispute. If
HMO and TDH are unable to informally resolve the dispute, HMO
must notify the Bureau Chief of Managed Care that HMO and TDH
cannot agree. The Bureau Chief will refer the dispute to the
Associate Commissioner for Health Care Financing who will
appoint a committee to review the dispute under TDH's dispute
resolution procedures. The decision of the dispute resolution
committee will be TDH's final administrative decision.
ARTICLE XIX TERM
19.1 The effective date of this contract is September 1, 1999. This
contract will terminate on August 31, 2001, unless terminated
earlier as provided for elsewhere in this contract.
19.2 This contract may be renewed for an additional one-year period
by written amendment to the contract executed by the parties
prior to the termination date of the present contract. TDH
will notify HMO no later than 90 days before the end of the
contract period of its intent not to renew the contract.
19.3 If either party does not intend to renew the contract beyond
its contract period, the party intending not to renew must
submit a written notice of its intent not to renew to the
other party no later than 90 days before the termination date
set out in Article 19.1.
19.4 If either party does not intend to renew the contract beyond
its contract period and sends the notice required in Article
19.3, a transition period of 90 days will run from the date
the notice of intent not to renew is received by the other
party. By signing this contract, the parties agree that the
terms of this contract shall automatically continue during any
transition period.
19.5 The party that does not intend to renew the contract beyond
its contract period and sends the notice required by Article
19.3 is responsible for sending notices to all Members on how
the Member can continue to receive covered services. The
expense of sending the notices will be paid by the
non-renewing party. If TDH does not intend to renew and sends
the required notice, TDH is responsible for any costs it
incurs in ensuring that Members are reassigned to other plans
without interruption of services. If HMO does not intend to
renew and sends the required notice, HMO is responsible
1999 Renewal Contract
Travis Service Area
August 9, 1999
141
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for any costs TDH incurs in ensuring that Members are
reassigned to other plans without interruption of services. If
both parties do not intend to renew the contract beyond its
contract period, TDH will send the notices to Members and the
parties will share equally in the cost of sending the notices
and of implementing the transition plan.
19.6 Non-renewal of this contract is not a contract termination for
purposes of appeal rights under the Human Resources
Code ss. 32.034.
SIGNED 1st day of September, 1999.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans Of Texas, Inc.
BY: /s/ WILLIAM R. ARCHER, III BY: /s/ MICHAEL A. SELTZER
------------------------------- ---------------------------------
William R. Archer III, M.D. Printed Name: Michael A. Seltzer
Commissioner of Health Title: Vice President, West Region
Humana Health Plan of Texas, Inc.
Approved as to Form:
|
Office of General Counsel
AMENDMENT NO. 1
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 1 is entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Travis Service Area, dated September 1, 1999. The effective date of this Amendment is September 1, 1999. All other contract provisions remain in full force and effect.
The Parties agree to amend the Contract as follows:
1. Article XIII is amended by deleting existing 13.1.2, 13.1.2.2, and 13.1.2.3 and replacing them with the new Article 13.1.2, 13.1.2.2, and 13.1.2.3 as follows:
13.1.2 Delivery Supplemental Payment (DSP). TDH has
submitted the delivery supplemental payment
methodology to HCFA for approval. The monthly
capitation amounts for September 1, 1999, through
August 31, 2000, and the DSP amount are listed below.
These amounts are effective September 1, 1999. The
monthly capitation amounts established for each risk
group in the Travis Service Area using the Standard
methodology (listed in Article 13.1.3) will apply if
the DSP methodology is not approved by HCFA.
Travis SDA
1
|
--------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
--------------------------------------------------------------
TANF Adults $107.58
--------------------------------------------------------------
TANF Children > 12 $ 57.03
Months of Age
--------------------------------------------------------------
Expansion Children > 12 $ 73.44
Months of Age
--------------------------------------------------------------
Newborns <12 Months of $390.55
-
Age
--------------------------------------------------------------
TANF Children <12 $390.55
-
Months of Age
--------------------------------------------------------------
Expansion Children <12 $390.55
-
Months of Age
--------------------------------------------------------------
Federal Mandate Children $ 41.89
--------------------------------------------------------------
CHIP Phase I $ 71.71
--------------------------------------------------------------
Pregnant Women $164.78
--------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
--------------------------------------------------------------
|
Delivery Supplemental Payment: A one-time per pregnancy supplemental payment for each delivery shall be paid to HMO as provided below in the following amount: $2,817.00.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women,
TANF Adults, TANF Children >12 months, Expansion Children >12
months, Federal Mandate Children, or CHIP risk group, HMO will
be paid the monthly capitation amount identified in Article
13.1.2 for each month of classification, plus the DSP amount
identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes
the data elements specified by TDH. TDH will consult with
contracted HMOs prior to revising the report data elements and
requirements. The reports must be submitted to TDH in the
format and time specified by TDH. The report must include only
unduplicated deliveries. The report must include only
deliveries for which HMO has made a payment for the delivery,
to either a hospital or other provider. No DSP will be made
for deliveries which are not reported by HMO to TDH within 210
days after the date of delivery, or within 30 days from the
date of discharge from the hospital for the stay related to
the delivery, whichever is later.
Travis SDA
2
|
--------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
--------------------------------------------------------------
TANF Adults $107.58
--------------------------------------------------------------
TANF Children > 12 $ 57.03
Months of Age
--------------------------------------------------------------
Expansion Children > 12 $ 73.44
Months of Age
--------------------------------------------------------------
Newborns <12 Months of $390.55
-
Age
--------------------------------------------------------------
TANF Children <12 $390.55
-
Months of Age
--------------------------------------------------------------
Expansion Children <12 $390.55
-
Months of Age
--------------------------------------------------------------
Federal Mandate Children $ 41.89
--------------------------------------------------------------
CHIP Phase I $ 71.71
--------------------------------------------------------------
Pregnant Women $164.78
--------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
--------------------------------------------------------------
|
Delivery Supplemental Payment: A one-time per pregnancy supplemental payment for each delivery shall be paid to HMO as provided below in the following amount: $2,817.00.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women,
TANF Adults, TANF Children >12 months, Expansion Children >12
months, Federal Mandate Children, or CHIP risk group, HMO will
be paid the monthly capitation amount identified in Article
13.1.2 for each month of classification, plus the DSP amount
identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes
the data elements specified by TDH. TDH will consult with
contracted HMOs prior to revising the report data elements and
requirements. The reports must be submitted to TDH in the
format and time specified by TDH. The report must include only
unduplicated deliveries. The report must include only
deliveries for which HMO has made a payment for the delivery,
to either a hospital or other provider. No DSP will be made
for deliveries which are not reported by HMO to TDH within 210
days after the date of delivery, or within 30 days from the
date of discharge from the hospital for the stay related to
the delivery, whichever is later.
Travis SDA
2
|
2. Article XIII is amended by deleting existing 13.2.5 and
replacing it with the new Article 13.2.5 as follows: (delete
the stricken language and add the bold and italicized)
13.2.5 There will be two settlements for payment(s) of the
state share of the experience rebate. The first
settlement shall equal 100 percent of the state share
of the experience rebate as derive from Line 7 of
Part 1 (Net Income Before Taxes) of the [Deletion]
Final Managed Care Financial Statistical (MCFS)
Report and shall be paid on the same day the first
[Deletion] Final MCFS Report is submitted to TDH. The
second settlement shall be an adjustment to the first
settlement and shall be paid to TDH on the same day
that the second [Deletion] Final MCFS Report is
submitted to TDH if the adjustment is a payment from
HMO to TDH. TDH or its agent may audit or review the
MCFS reports. If TDH determines that corrections to
the MCFS reports are required, based on a TDH
audit/review or other documentation acceptable to
TDH, to determine an adjustment to the amount of the
second settlement, then final adjustment shall be
made within two years from the date that HMO submits
the second [Deletion] Final MCFS report. HMO must pay
the first and second settlements on the due dates for
the first and second Final MCFS reports respectively
as identified in Article 12.1.5. TDH may adjust the
experience rebate if TDH determines HMO has paid
affiliates amounts for goods or services that are
higher than the fair market value of the goods and
services in the service area. Fair market value may
be based on the amount HMO pays a non-affiliate(s) or
the amount another HMO pays for the same or similar
service in the service area and will be determined on
a case-by-case basis. TDH has final authority in
auditing and determining the amount of the experience
rebate.
|
AGREED AND SIGNED by an authorized representative of the parties on December 9, 1999.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ William R. Archer, III, M.D. By: /s/ Michael A. Seltzer
-------------------------------- --------------------------------
William R. Archer, III., M.D. Michael A. Seltzer
Commissioner of Health V.P., Western Region
Approved as to Form:
---------------------------
Office of General Counsel
Travis SDA
3
|
AMENDMENT NO. 2
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 2 is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Travis Service Area, dated September 1, 1999. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect.
1. Article II is amended by adding the bold and italicized language
DEFINITIONS
Call coverage means arrangements made by a facility or an attending physician with an appropriate level of health care provider who agrees to be available on an as-needed basis to provide medically appropriate services for routine/high risk/or emergency medical conditions or emergency Behavioral Health condition that present without being scheduled at the facility or when the attending physician is unavailable.
[deletion] Enrollment report/enrollment file means the daily or monthly list of Medicaid recipients who are enrolled with an HMO as Members on the day or for the month the report is issued.
2. Article VI is amended by adding the bold and italicized language and deleting the stricken language.
6.9 PERINATAL SERVICES
------------------
6.9.2 HMO [Deletion] must have a perinatal health care system in
place that, at a minimum, provides the following services:
6.9.3 HMO must have a process to expedite scheduling a prenatal
appointment for an obstetrical exam for a TP40 Member no later
than two weeks after receiving the daily enrollment file
verifying enrollment of the Member into the HMO.
6.9.4 HMO must have procedures in place to contact and assist a
pregnant/delivering Member in selecting a PCP for her baby
either before the birth or as soon as the
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baby is born. [Deletion]
6.9.4.5 HMO must provide inpatient care and professional services
related to labor and delivery for its pregnant/delivering
Members and neonatal care for its newborn Members (see Article
14.3.1) at the time of delivery and for up to 48 hours
following an uncomplicated vaginal delivery and 96 hours
following an uncomplicated Caesarian delivery.
[Deletion]
6.9.5.1 HMO must reimburse in-network providers, out-of-network
providers, and specialty physicians who are providing call
coverage, routine, and/or specialty consultation services for
the period of time covered in Article 6.9.5.
6.9.5.1.1 HMO must adjudicate provider claims for services provided to a
newborn Member in accordance with TDH's claims processing
requirements using the proxy ID number or State-issued
Medicaid ID number (see Article 4.10). HMO cannot deny claims
based on provider non-use of State-issued Medicaid ID number
for a newborn: Member. HMO must accept provider claims for
newborn services based on mother's name and/or Medicaid ID
number with accommodations for multiple births, as specified
by the HMO.
6.9.5.2 HMO cannot require prior authorization or PCP assignment to
adjudicate newborn claims for the period of time covered by
6.9.5
[Deletion]
6.9.6 [deletion] HMO may require prior authorization requests for
hospital or professional services provided beyond the time
limits in Article 6.9.5 and may
|
utilized the determination of medical necessity beyond routine
care. HMO must respond to these prior authorization within the
requirements of 28 TAC ss. 19.1710-19.1712 and Article 21.58a
of the Texas Insurance Code.
6.9.6.1 HMO must notify providers involved in the care of
pregnant/delivering women and newborns (including
out-of-network providers and hospitals) regarding the HMO's
prior authorization requirements.
6.9.6.2 HMO cannot require a prior authorization for services provided
to a pregnant/delivering Member or newborn Member for a
medical condition which requires emergency services,
regardless of when the emergency condition arises (see Article
6.5.6).
3. Article VIII is amended by adding the bold and italicized language and
deleting the stricken language.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from the date the HMO receives the
monthly Enrollment File from the Enrollment Broker. If the 5th
day falls on a weekend or state holiday, the ID Card must be
issued by the following working day. The ID Card must include,
at a minimum, the following: Member's name; Member's Medicaid
number; either the issue date of the card or effective date of
the PCP assignment; PCP's name, address, and telephone number;
name of HMO; name of IPA to which the Member's PCP belongs, if
applicable; the 24-hour, seven (7) day a week toll-free
telephone number operated by HMO; the toll-free number for
behavioral health care services; and directions for what to do
in an emergency. The ID Card must be reissued if the Member
reports a lost card, there is a Member name change, if Member
requests a new PCP, or for any other reason which results in a
change to the information disclosed on the ID Card.
4. Article XII is amended by adding the bold and italicized language and
deleting the stricken language.
12.2 STATISTICAL REPORTS
-------------------
12.2.4 HMO cannot submit newborn encounters to TDH until the
State-issued Medicaid ID number is received for a newborn. HMO
must match the proxy ID number issued by the HMO with the
State-issued Medicaid ID number prior to submission of
encounters to TDH and submit the encounter in accordance to
the HMO Encounter Data Submission Manual. The encounter must
include the State-issued Medicaid ID number. Exceptions to the
45-day deadline [Deletion] for submission of encounter data in
paragraph 12.2.1 will be granted in cases in which the
Medicaid ID number is not available for a newborn Member.
|
12.2.5 HMO must require providers to submit claims and encounter data
to HMO no later than 95 days after the date services are
provided.
12.2.6 HMO must use the procedure codes, diagnosis codes and other
codes contained in the most recent edition of the Texas
Medicaid Provider Procedures Manual and as otherwise provided
by TDH. Exceptions or additional codes must be submitted for
approval before HMO uses the codes.
12.2.7 HMO must use its TDH-specified identification numbers on all
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encounter data submissions. Please refer to the TDH Encounter Data Submission Manual for further specifications.
12.2.8 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission
of encounter data to TDH.
12.2.9 All Claims Summary Report. HMO must submit the "All Claims
-------------------------
Summary Report" identified in the Texas Managed Care Claims
Manual as a contract year-to-date report. The report must be
submitted quarterly by the last day of the month following the
reporting period. The report; must be submitted to TDH in a
format specified by TDH.
12.2.10 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO
------------------------------------------------------
must file preliminary and final Medicaid Disproportionate
Share Hospital (DSH) reports, required by TDH to identify and
reimburse hospitals that qualify for Medicaid DSH funds. The
preliminary and final DSH reports must include the data
elements and be submitted in the form and format specified by
TDH. The preliminary DSH reports are due on or before June 1
of the year following the state fiscal year for which data is
being reported. The final DSH reports are due on or before
August 15 of the year following the state fiscal year for
which data is being reported.
5. Article XIII is amended by adding the bold and italicized language.
13.5 NEWBORN AND PREGNANT WOMEN PAYMENT PROVISIONS
---------------------------------------------
13.5.1 Newborns born to Medicaid eligible mothers who are enrolled in
HMO are enrolled into HMO for 90 days following the date of
birth.
13.5.1.1 The mother of the newborn Member may change her newborn to
another HMO during the first 90 days following the date of
birth, but may only do so through TDH Customer Services.
13.5.2 MAXIMUS will provide HMO with a daily enrollment file which
will list all newborns who have received State-issued Medicaid
ID numbers. This file will
|
include the Medicaid eligible mother's Medicaid ID number to
allow the HMO to link the newborn State-issued Medicaid ID
numbers with the proxy ID number. TDH will guarantee
capitation payments to HMO for all newborns who appear on the
MAXIM US daily enrollment file as HMO Members for each month
the newborn is enrolled in the HMO.
13.5.3 All non-TP45 newborns who are born to mothers whose enrollment
in HMO is effective on or before the date of the birth of the
newborn will be retroactively enrolled into the HMO through a
manual process by DHS Data Control.
13.5.4 Newborns who do not appear on the MAXIMUS daily enrollment
file before the end of the sixth month following the date of
birth will not be retroactively enrolled into the HMO. TDH
will manually reconcile payment to the HMO for services
provided from the date of birth for TP45 and all other
eligibility categories of newborns. Payment will cover
services rendered from the effective date of the proxy ID
number when first issued by the HMO regardless of plan
assignment at the time the State-issued Medicaid ID member is
received.
13.5.5 MAXIMUS will provide HMO with a daily enrollment file which
will list all TP40 Members who have received State-issued
Medicaid ID members. TDH will guarantee capitation payments to
HMO for all TP40 Members who appear on the MAXIMUS daily
enrollment file as HMO Members for each mouth the TP40 Member
enrollment is effective.
6. Article XIV is amended by adding the bold and italicized language.
14.3 NEWBORN ENROLLMENT
------------------
The HMO is responsible for newborns who are born to mothers
whose enrollment in HMO is effective on or before the date of
birth as follows:
14.3.1 Newborns are presumed Medicaid eligible and enrolled in the
mother's HMO for at least 90 days from the date of birth.
14.3.1.1 A mother of a newborn Member may change plans for her newborn
during the first 90 days by contacting TDH Customer Services.
TDH will notify HMO of newborn plan changes made by a mother
when the change is made by TDH Customer Services.
14.3.2 HMO must establish and implement written policies and
procedures to require professional and facility providers to
notify HMOs of a birth of a newborn to a Member at the time of
delivery.
14.3.2.1 HMO must create a proxy ID member in the HMO's
Enrollment/Eligibility and
|
date of birth of the newborn.
14.3.2.2 HMO must match the proxy ID number and the State-issued
Medicaid ID number once the State-issued Medicaid ID number is
received.
14.3.2.3 HMO must submit a Form 7484A to DHS Data Control requesting
DHS Data Control to research DHS's files for a Medicaid ID
number if HMO has not received a State-issued Medicaid ID
number for a newborn within 30 days from the date of birth. If
DHS finds that no Medicaid ID number has been issued to the
newborn, DHS Data Control will issue the Medicaid ID number
using the information provided on the Form 7484A.
14.3.3 Newborns certified Medicaid eligible after the end of the
sixth month following the date of birth will not be
retroactively enrolled to an HMO, but will be enrolled in
Medicaid fee-for-service. TDH will manually reconcile payment
to the HMO for services provided from the date of birth for
all Medicaid eligible newborns as described in Article 13.5.4.
14.4 DISENROLLMENT
-------------
14.4.1 HMO has a limited right to request a Member be disenrolled
from HMO without the Member's consent. TDH must approve any
HMO request for disenrollment of a Member for cause.
Disenrollment of a Member may be permitted under the following
circumstances:
14.4.1.1 Member misuses or loans Member's HMO membership card to
another person to obtain services.
14.4.1.2 Member is disruptive, unruly, threatening or uncooperative to
the extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain
new Members, and Member's behavior is not caused by a physical
or behavioral health condition.
14.4.1.3 Member steadfastly refuses to comply with managed care
restrictions (e.g., repeatedly using emergency room in
combination with refusing to allow HMO to treat the underlying
medical condition).
14.4.2.1 HMO must take reasonable measures to correct Member behavior
prior to requesting disenrollment. Reasonable measures may
include providing education and counseling regarding the
offensive acts or behaviors.
|
14.4.3 HMO must notify the Member of HMO's decision to disenroll the
Member if all reasonable measures have failed to remedy the
problem.
14.4.4 If the Member disagrees with the decision to disenroll the
Member from HMO, HMO must notify the Member of the
availability of the complaint procedure and TDH's Fair Hearing
process.
14.4.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN
THE MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH
ARE MEDICALLY NECESSARY FOR TREATMENT OF A MEMBER'S CONDITION.
14.5 AUTOMATIC RE-ENROLLMENT
-----------------------
14.5.1 Members who are disenrolled because they are temporarily
ineligible for Medicaid will be automatically re-enrolled into
the same health plan. Temporary loss of eligibility is defined
as a period of 6 months or less.
14.5.2 HMO must inform its Members of the automatic re-enrollment
procedure. Automatic re-enrollment must be included in the
Member Handbook (see Article 8.2.1).
14.6 ENROLLMENT REPORTS
------------------
14.6.1 TDH will provide HMO enrollment reports listing all STAR
members who have enrolled in or were assigned to HMO during
the initial enrollment period.
14.6.2 TDH will provide monthly HMO Enrollment Reports to HMO on or
before the first of the month.
14.6.3 TDH will provide Member verification to HMO and network
providers through telephone verification or TexMedNet.
|
AGREED AND SIGNED by an authorized representative of the parties on April 10, 2001.
TEXAS DEPARTMENT OF HEALTH PCA Health Plan of Texas, Inc. By: /s/ C.E. Bell, M.D. By: /s/ Michael A. Seltzer ----------------------------- -------------------------------- Charles E. Bell, M.D. Michael Seltzer Executive Deputy Commissioner of Health Vice President, West Region |
Approved as to Form:
/s/ Mary Ann Slavin ------------------- Office of General Counsel |
TDH DOC. NO. 4810323494* 01A-01D
AMENDMENT NO. 3
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 3 is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Travis Service Area, dated September 1, 1999. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect.
1. Article III is amended by adding the new bold and italicized language and deleting the stricken language as follows:
3.7 HMO TELEPHONE ACCESS REQUIREMENTS
---------------------------------
3.7.1 For all HMO telephone access (including Behavioral Health
Telephone services), HMO must ensure [Deletion]
adequately-staffed telephone lines. Telephone personnel must
receive customer service telephone training. HMO must ensure
that telephone staffing is adequate to fulfill the standards
of promptness and quality listed below:
1. 80% of all telephone calls must be answered within an
average of 30 seconds;
2. The lost (abandonment) rate must not exceed 10%;
3. HMO cannot impose maximum call duration limits but
must allow calls to be of sufficient length to ensure
adequate information is provided to the Member or
Provider.
4. Telephone services must meet cultural competency
requirements (see Article 8.9) and provide
"linguistic access" to all members as defined in
Article II. This would include the provision of
interpretive services required for effective
communication for Members and providers.
3.7.2 Member Helpline: The HMO must furnish a toll-free phone line
which members may call 24 hours a day, 7 days a week. An
answering service or other similar mechanism, which allows
callers to obtain information from a live person, may be used
for after-hours and weekend coverage.
3.7.2.1 HMO must provide coverage for the following services at least
during HMO's regular business hours (a minimum of 9 hours a
day, between 8 a.m. and 6 p.m.), [Deletion] Monday through
|
Friday:
1. Member ID information
2. To change PCP
3. Benefit explanations
4. PCP verification
5. Access issues (including referrals to specialists)
6. Problems Accessing PCP
7. Member eligibility
8. Complaints
9. Service area issues (including when member is
temporarily out-of-service area)
10. Other services covered by member services.
3.7.2.2 HMO must provide TDH with policies and procedures indicating
how the HMO will meet the needs of members who are unable to
contact HMO during regular business hours.
3.7.3 HMO must ensure that PCPs are available 24 hours a day, 7 days
a week (see Article 7.8). This includes PCP telephone
coverage (see 28 TAC 11.2001 (a)1A).
3.7.4 Behavioral Health Hotline Services. HMO must have emergency
and crisis Behavioral Health hotline services available 24
hours a day, 7 days a week, toll-free throughout the service
area. Crisis hotline staff must include or have access to
qualified behavioral health professionals to assess behavioral
health emergencies. Emergency and crisis behavioral health
services may be arranged through mobile crisis teams. It is
not acceptable for all emergency intake line to be answered by
an answering machine. Hotline services must meet the
requirements described in Article 3.7.1
2. Article V is amended by adding the new bold and italicized language and
deleting the stricken language as follows:
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.3. Notwithstanding 5.9.2. If HMO believes that the requested
information qualifies as a trade secret or as commercial or
financial information, HMO must notify TDH--within three (3)
working days after TDH gives notice that a request has been
made for public information [Deletion] -- and request TDH to
submit the request for public information to the Attorney
General for an Open Records Opinion. The HMO will be
responsible for presenting all exceptions to public disclosure
to the Attorney General if an opinion is requested. [Deletion]
|
3. Article VI is amended by adding the new bold and italicized language as
follows:
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.5 HMO must provide assistance to providers requiring PCP
verification 24 hours a day, 7 days a week.
6.4.5.1 HMO must provide TDH with policies and procedures indicating
how the HMO will provide PCP verification as indicated in
article 6.4.5. HMOs providing PCP verification via a
telephone must meet the requirements of 3.7.1.
4. Article VII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
7.6.3 HMO's complaint and appeal process cannot contain provisions
requiring a provider to submit a complaint or appeal to TDH
for resolution in lieu of the HMO's process.
7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND
-------------------------------------------------------
ANHCs)
-----
7.18.2.1 HMO is required to include subcontract provisions in its
delegated network contracts which require the UM protocol used
by a delegated network to produce substantially similar
outcomes, as approved by TDH, as the UM protocol employed by
the contracting HMO. The responsibilities of an HMO in
delegating UM functions to a delegated network will be
governed by Article [Deletion] 16.3.12 of this contract.
5. Article VIII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal and state law require HMOs and providers to maintain
written policies and procedures for informing and providing
written information to all adult Members 18 years of age and
older about their rights under state and federal law, in
advance of their receiving care (Social Security
Act ss. 1902(a)(57) andss.1903(m)(1)(A)). The written policies
and procedures must contain procedures for providing written
information regarding advance directives and the Member's
right to refuse, withhold or withdraw medical treatment and
mental health treatment. [Deletion] HMO's policies and
procedures must comply with provisions contained in 42 CFR
ss. 434.28 and 42 CFR ss. 489, SubPart I, relating to advance
directives for all hospitals,
|
critical access hospitals, skilled nursing facilities, home
health agencies, providers of home health care, providers of
personal care services and hospices, as well as the following
state laws and rules:
8.3.1.2.3 a Member's right to execute a Medical Power of Attorney to
appoint an agent to make health care decisions on the Member's
behalf if the Member becomes incompetent; and
8.3.1.3 the declaration for Mental Health Treatment, Chapter 137,
Texas Civil Practice and Remedies Code, which includes: a
Member's right to execute a declaration for mental health
treatment in a document making a declaration of preferences or
instructions regarding mental health treatment.
8.3.2 HMO must maintain written policies for implementing a Member's
advance directive. Those policies must include a clear and
precise statement of limitation if HMO or a participating
provider cannot or will not implement a Member's advance
directive.
8.3.2.1.3 a description of the medical and mental health conditions or
procedures affected by the conscience objection.
[Deletion]
8.5 MEMBER COMPLAINT PROCESS
------------------------
8.5.1 HMO must develop, implement and maintain a Member complaint
system that complies with the requirements of Article 20A.12
of the Texas Insurance Code, relating to the Complaint System,
except where otherwise provided in this contract and in
applicable federal law. The complaint and appeals procedure
must be the same for all Members and must comply with Texas
Insurance Code, Article 20A.12 or applicable federal law.
Modifications and amendments must be submitted to TDH at least
30 days prior to the implementation of the modification or
amendment.
8.5.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving of Member
complaints. The procedures must be reviewed and approved in
writing by TDH. Any changes or modifications to the procedures
must be submitted to TDH for approval thirty (30) days prior
to the effective date of the amendment.
8.5.3 HMO must designate an officer of HMO who has primary
responsibility for ensuring that complaints are resolved in
compliance with written policy and within the time required.
An "officer" of HMO means a president, vice president,
secretary,
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treasurer, or chairperson of the board for a corporation, the
sole proprietor, the managing general partner of a
partnership, or a person having similar executive authority in
the organization.
8.5.4 HMO must have a routine process to detect patterns of
complaints and disenrollments and involve management and
supervisory staff to develop policy and procedural
improvements to address the complaints. HMO must cooperate
with TDH and TDH's Enrollment Broker in Member complaints
relating to enrollment and disenrollment.
8.5.5 HMO's complaint procedures must be provided to Members in
writing and in alternative communication formats. A written
description of HMO's complaint procedures must be in
appropriate languages and easy for Members to understand. HMO
must include a written description in the Member Handbook. HMO
must maintain at least one local and one toll-free telephone
number for making complaints.
8.5.6 HMO's process must require that every complaint received in
person, by telephone or in writing, is recorded in a written
record and is logged with the following details: date;
identification of the individual filing the complaint;
identification of the individual recording the complaint;
nature of the complaint; disposition of the complaint;
corrective action required; and date resolved.
8.5.7 HMO's process must include a requirement that the Governing
Body of HMO reviews the written records (logs) for complaints
and appeals.
8.5.8 HMO is prohibited from discriminating against a Member because
that Member is making or has made a complaint.
8.5.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be
referred to TDH within five (5) business days after the Member
makes a disenrollment request.
8.5.10 HMO must develop, implement and maintain an appeal of adverse
determination procedure that complies with the requirements of
Article 21.58A of the Texas Insurance Code, relating to the
utilization review, except where otherwise provided in this
contract and in applicable federal law. The appeal of an
adverse determination procedure must be the same for all
Members and must comply with Texas Insurance Code, Article 21
.58A or applicable federal law. Modifications and amendments
must be submitted to TDH no less than 30 days prior to the
implementation of the modification or amendment. When an
enrollee, a person acting on behalf of an enrollee, or an
enrollee's provider of record expresses orally or in writing
any dissatisfaction or disagreement with an adverse
determination, HMO or UR agent must regard the expression of
dissatisfaction as a request to appeal an adverse
determination.
|
8.5.11 If a complaint or appeal of an adverse determination relates
to the denial, delay. reduction, termination or suspension of
covered services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must
inform Members they have the right to access the TDH Fair
Hearing process at any time in lieu of the internal complaint
system provided by HMO. HMO is required to comply with the
requirements contained in 1 TAC Chapter 357, relating to
notice and Fair Hearings in the Medicaid program, whenever an
action is taken to deny, delay, reduce, terminate or suspend a
covered service.
8.5.12 If Members utilize HMO's internal complaint or appeal of
adverse determination system and the complaint relates to the
denial, delay. reduction, termination or suspension of covered
services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must
inform the Member that they continue to have a right to appeal
the decision through the TDH Fair Hearing process.
8.5.13 The provisions of Article 21.58A, Texas Insurance Code,
relating to a Member's right to appeal an adverse
determination made by HMO or a utilization review agent by an
independent review organization, do not apply to a Medicaid
recipient. Federal fair hearing requirements (Social Security
Act ss. 1902a(3), codified at 42 C.F.R. 431.200 et. seq.)
require the agency to make a final decision after a fair
hearing, which conflicts with the State requirement that the
IRO make a final decision. Therefore, the State requirement is
pre-empted by the federal requirement.
8.5.14 HMO will cooperate with the Enrollment Broker and TDH to
resolve all Member complaints. Such cooperation may include,
but is not limited to, participation by HMO or Enrollment
Broker and/or TDH internal complaint committees.
8.5.15 HMO must have policies and procedures in place outlining the
role of HMO's Medical Director in the Member Complaint System
and appeal of an adverse determination. The Medical Director
must have a significant role in monitoring, investigating and
hearing complaints.
8.5.16 HMO must provide Member Advocates to assist Members in
understanding and using HMO's complaint system and appeal of
an adverse determination.
8.5.17 HMO's Member Advocates must assist Members in writing or
filing a complaint or appeal of an adverse determination and
monitoring the complaint or appeal through the Contractor's
complaint or appeal of an adverse determination process until
the issue is resolved.
8.6 MEMBER NOTICE, APPEALS AND FAIR HEARINGS
----------------------------------------
8.6.1 HMO must send Members the notice required by 1 Texas
Administrative Code ss. 357.5, whenever HMO takes an action to
deny, delay, reduce or terminate covered
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services to a Member. The notice must be mailed to the Member
no less than 10 days before HMO intends to take an action. If
an emergency exists, or if the time within which the service
must be provided makes giving 10 days notice impractical or
impossible, notice must be provided by the most expedient
means reasonably calculated to provide actual notice to the
Member, including by phone, direct contact with the Member, or
through the provider's office.
8.6.2 The notice must contain the following information:
8.6.2.1 Member's right to immediately access TDH's Fair Hearing
process:
8.6.2.2 a statement of the action HMO will take;
8.6.2.3 the date the action will be taken;
8.6.2.4 an explanation of the reasons HMO will take the action;
8.6.2.5 a reference to the state and/or federal regulations which
support HMO's action;
8.6.2.6 an address where written requests may be sent and a toll-free
number Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair
Hearing;
8.6.2.7 a procedure by which Member may appeal HMO's action through
either HMO's complaint process or TDH's Fair Hearings process;
8.6.2.8 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative,
legal counsel or another spokesperson;
8.6.2.9 an explanation of whether, and under what circumstances,
services may be continued if a complaint is filed or a Fair
Hearing requested;
8.6.2.10 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within
90 days of the date on the notice or the right to request a
hearing is waived;
8.6.2.11 a statement explaining that HMO must make its decision within
30 days from the date the complaint is received by HMO; and
8.6.2.12 a statement explaining that a final decision must be made by
TDH within 90 days from the date a Fair Hearing is requested.
8.7 MEMBER ADVOCATES
----------------
8.7.1 HMO must provide Member Advocates to assist Members. Member
Advocates must
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be physically located within the service area. Member
Advocates must inform Members of their rights and
responsibilities, the complaint process. the health education
and the services available to them, including preventive
services.
8.7.2 Member Advocates must assist Members in writing complaints and
are responsible for monitoring the complaint through HMO's
complaint process until the Member's issues are resolved or a
TDH Fair Hearing requested (see Articles 8.6.15, 8.6.16. and
8.6.17).
8.7.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care
provided or the way care is delivered. Member Advocates are
also responsible for helping or referring Members to community
resources available to meet Member needs that are not
available from HMO as Medicaid covered services.
8.7.4 Member Advocates must provide outreach to Members and
participate in TDH-sponsored enrollment activities.
8.8 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.8.1 Cultural Competency Plan. HMO must have a comprehensive
written Cultural Competency Plan describing how HMO will
ensure culturally competent services, and provide linguistic
and disability-related access. The Plan must describe how the
individuals and systems within HMO will effectively provide
services to people of all cultures, races, ethnic backgrounds,
and religions as well as those with disabilities in a manner
that recognizes, values, affirms, and respects the worth of
the individuals and protects and preserves the dignity of
each. HMO must submit a written plan to TDH prior to the
effective date of this contract unless previously submitted.
Modifications and amendments to the written plan must be
submitted to TDH no later than 30 days prior to implementation
of the modification or amendment. The Plan must also be made
available to HMO's network of providers.
8.8.2 The Cultural Competency Plan must include the following:
8.8.2.1 HMO's written policies and procedures for ensuring effective
communication through the provision of linguistic services
following Title VI of the Civil Rights Act guidelines and the
provision of auxiliary aids and services, in compliance with
the Americans with Disabilities Act, Title III, Department of
Justice Regulation 36.303. HMO must disseminate these policies
and procedures to ensure that both Staff and subcontractors
are aware of their responsibilities under this provision of
the contract.
8.8.2.2 A description of how HMO will educate and train its staff and
subcontractors on culturally competent service delivery, and
the provision of linguistic and/or disability-related access
as related to the characteristics of its Members;
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8.8.2.3 A description of how HMO will implement the plan in its
organization, identifying a person in the organization who
will serve as the contact with TDH on the Cultural Competency
Plan;
8.8.2.4 A description of how HMO will develop standards and
performance requirements for the delivery of culturally
competent care and linguistic access. and monitor adherence
with those standards and requirements;
8.8.2.5 A description of how HMO will provide outreach and health
education to Members, including racial and ethnic minorities,
non-English speakers or limited-English speakers, and those
with disabilities, and
8.8.2.6 A description of how HMO will help Members access culturally
and linguistically appropriate community health or social
service resources;
8.8.3 Linguistic, Interpreter Services, and Provision of Auxiliary
Aids and Services. HMO must provide experienced, professional
interpreters when technical, medical, or treatment information
is to be discussed. See Title VI of the Civil Rights Act of
1964, 42 U.S.C. ss. ss. 2000d, et. seq. HMO must ensure the
provision of auxiliary aids and services necessary for
effective communication, as per the Americans with
Disabilities Act. Title III, Department of Justice Regulations
36.303.
8.8.3.1 HMO must adhere to and provide to Members the Member Bill of
Rights and Responsibilities as adopted by the Texas Health and
Human Services Commission and contained at 1 Texas
Administrative Code (TAC) ss. ss. 353.202-353.203. The Member
Bill of Rights and Responsibilities assures Members the right
"to have interpreters, if needed, during appointments with
their providers and when talking to their health plan.
Interpreters include people who can speak in their native
language, assist with a disability, or help them understand
the information."
8.8.3.2 HMO must have in place policies and procedures that outline
how Members can access face-to-face interpreter services in a
provider's office if necessary to ensure the availability of
effective communication regarding treatment, medical history
or health education for a Member. HMOs must inform its
providers on how to obtain an updated list of participating,
qualified interpreters.
8.8.3.3 A competent interpreter is defined as someone who is:
8.8.3.4 proficient in both English and the other language;
8.8.3.5 has had orientation or training in the ethics of interpreting;
and
8.8.3.6 has the ability to interpret accurately and impartially.
8.8.3.7 HMO must provide 24-hour access to interpreter services for
Members to access
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emergency medical services within HMO's network.
8.8.3.8 Family Members, especially minor children, should not be used
as interpreters in assessments, therapy or other medical
situations in which impartiality and confidentiality are
critical, unless specifically requested by the Member.
However, a family member or friend may be used as an
interpreter if they can be relied upon to provide a complete
and accurate translation of the information being provided to
the Member; provided that the Member is advised that a free
interpreter is available; and the Member expresses a
preference to rely on the family member or friend.
8.8.4 All Member orientation presentations education classes and
materials must be presented in the languages of the major
population groups making up 10% or more of the Medicaid
population in the service area, as specified by TDH. HMO must
provide auxiliary aids and services, as needed, including
materials in alternative formats (i.e., large print, tape or
Braille), and interpreters or real-time captioning to
accommodate the needs of persons with disabilities that affect
communication.
8.8.5 HMO must provide or arrange access to TDD to Members who are
deaf or hearing impaired.
8.9 CERTIFICATION DATE
------------------
8.9.1 On the date of the new Member's enrollment, TDH will provide
HMOs with the Member's Medicaid certification date.
6. Article XII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
12.1 FINANCIAL REPORTS
-----------------
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
------------------
Financial-Statistical Reports. The first final report must
reflect expenses incurred through the 90th day after the end
of the contract. The first final report must be filed on or
before the 120th day after the end of the contract. The second
final report must reflect data completed through the 334th day
after the end of the contract year and must be filed on or
before the 365th day following the end of the contract.
12.2.9 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO
------------------------------------------------------
must file preliminary and final Medicaid Disproportionate
Share Hospital (DSH) reports, required by TDH to identify and
reimburse hospitals that qualify for Medicaid DSH funds. The
preliminary and final DSH reports must include the data
elements and be submitted in the form and format specified by
TDH. The preliminary DSH reports are due on or before June 1
of the year following the state fiscal year for which data is
being reported. The final DSH reports are due [Deletion] no
later
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than July 15 of the year following the state fiscal year for
which data is being reported.
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH
--------------------------------------------------
Behavioral health (BH) utilization management reports are
required on a semi-annual basis. [Deletion] Refer to Appendix
H for the standardized reporting format for each report and
detailed instructions for obtaining the specific data required
in the report. [Deletion]
12.8.1 In addition, files are due to the TDH External Quality Review
Organization five (5) working days following the end of each
State Quarter. See Appendix H for Submission instructions. The
BH utilization report and data file submission instructions
may periodically updated by TDH to facilitate clear
communication to the health plans.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are
required on a semi-annual basis. [Deletion] Refer to Appendix
J for the standardized reporting format for each report and
detailed instructions for obtaining specific data required in
the report. [Deletion]
12.9.1 In addition, data files are due to the TDH External Quality
Review Organization five (5) working days following the end of
each State Quarter. See Appendix J for submission
instructions. The PH utilization report and data file
submission instruction may periodically be updated by TDH to
facilitate clear communication to the health plan.
7. Article XIII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
13.1 CAPITATION AMOUNTS
------------------
13.1.1 TDH will pay HMO monthly premiums calculated by multiplying
the number of Member months by Member risk group times the
monthly capitation amount by Member risk group. For additional
information regarding the actuarial basis and
|
methodology used to compute the capitation rates, please
reference the waiver under the document titled "Actuarial
Methodology for Determination of Maximum Monthly Capitation
Amounts". HMO and network providers are prohibited from
billing or collecting any amount from a Member for health care
services covered by this contract, in which case the Member
must be informed of such costs prior to providing non-covered
services.
13.2 EXPERIENCE REBATE TO STATE
--------------------------
13.2.1 For the contract period, [Deletion] HMO must pay to TDH an
experience rebate calculated in accordance with the tiered
rebate method listed below based on the excess of allowable
HMO STAR revenues over allowable HMO STAR expenses as
measured by any positive amount on Line 7 of "Part 1:
Financial Summary, All Coverage Groups Combined" of the
annual Managed Care Financial-Statistical Report set forth in
Appendix I, as reviewed and confirmed by TDH. TDH reserves the
right to have an independent audit performed to verify the
information provided by HMO.
13.2.5 There will be two settlements for payment(s) [Deletion] of the
experience rebate allocated to the state in the table 13.2.1
under the column entitled "State Share of Experience Rebate".
The first settlement shall equal 100 percent [Deletion] of the
experience rebate as derived from Line 7 of Part 1 (Net Income
Before Taxes) of the first final [Deletion] Managed Care
Financial Statistical (MCFS) Report and shall be paid on the
same day the first final [Deletion] MCFS Report is submitted
to TDH. The second settlement shall be an adjustment to the
first settlement and shall be paid to TDH on the same day that
the second final [Deletion] MCFS Report is submitted to TDH if
the adjustment is a payment from HMO to TDH. TDH or its agent
may audit or review the MCFS reports. If TDH determines that
corrections to the MCFS reports are required, based on a TDH
audit/review or other documentation acceptable to TDH, to
determine an adjustment to the amount of the second
settlement, then final adjustment shall be made within two
years from the date that HMO submits the second final
[Deletion] MCFS report. HMO must pay the first and second
settlements on the due dates for the first and second final
MCFS reports respectively as identified in Article [Deletion]
12.1.4. TDH may adjust the experience rebate if TDH determines
MO has paid affiliates amounts for goods or services that are
higher than the fair market value of the goods and services in
the service area. Fair market value may be based on the amount
HMO pays a non-affiliate(s) or the amount another HMO pays for
the same or similar service in the service area. TDH has final
authority in auditing and determining the amount of the
experience rebate.
8. The Appendices are amended by deleting Appendix H, "Utilization
Management Report -Behavioral Health" and replacing it with new
Appendix H, "Utilization Management Report -Behavioral Health", as
attached.
9. The Appendices are amended by deleting Appendix J, "Utilization
Management Report -Physical Health" and replacing it with new Appendix
J, "Utilization Management Report -
|
Physical Health", as attached.
10. The Appendices are amended by deleting Appendix K, "Preventative Health Performance Objectives" and replacing it with new Appendix K, "Preventative Health Performance Objectives", as attached.
AGREED AND SIGNED by an authorized representative of the parties on February 5, 2001.
TEXAS DEPARTMENT OF HEALTH PCA Health Plan; of Texas, Inc.
By: /s/ C.E. Bell, M.D. By /s/ Michael A. Seltzer ---------------------------------- --------------------------------- Charles E. Bell, M.D. Michael Seltzer Executive Deputy Commissioner Vice President, West Region |
Approved as to Form:
/s/ Mary Ann Slavin ------------------------- Office of General Counsel |
TDH DOC# 4810323494* 2001A-O1C
AMENDMENT NO. 4
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 4 is entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Travis Service Area, dated September 1, 1999. The effective date of this Amendment is [Deletion] September 7, 2000. All other contract provisions remain in full force and effect.
The Parties agree to amend the Contract to read as follows:
1. Article XIII is amended by the bold and italicized language and deleting the stricken language.
13.1.2 Delivery Supplemental Payment (DSP). [Deletion] The monthly
capitation amounts and the DSP amount are listed below.
[Deletion]
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-----------------------------------------------------------------------
Risk Group Monthly Capitation Amounts [Deletion]
September 1, 2000 - August 31, 2001
-----------------------------------------------------------------------
TANF Adults $107.58
-----------------------------------------------------------------------
TANF Children (less than) 12 [Deletion] $57.06
Months of Age
-----------------------------------------------------------------------
Expansion Children (less than) 12 [Deletion] $73.48
Months of Age
-----------------------------------------------------------------------
Newborns 12 Months of [Deletion] $390.73
Age
-----------------------------------------------------------------------
TANF Children 12 [Deletion] $390.73
Months of Age
-----------------------------------------------------------------------
Expansion Children 12 [Deletion] $390.73
Months of Age
-----------------------------------------------------------------------
Federal Mandate Children [Deletion] $41.93
-----------------------------------------------------------------------
CHIP Phase I [Deletion] $71.75
-----------------------------------------------------------------------
Pregnant Women $164.78
-----------------------------------------------------------------------
Disabled/Blind $14.00
Administration
-----------------------------------------------------------------------
|
Delivery Supplemental Payment: A one-time per pregnancy supplemental payment for each delivery shall be paid to HMO as provided below in the following amount: $2817.00.
[Deletion]
[Deletion]
13.1.3 TDH will re-examine the capitation rates paid to HMO under
this contract during the first year of the contract period and
will provide HMO with capitation rates for the second year of
the contract period no later than 30 days before the date of
the one-year anniversary of the contract's effective date.
Capitation rates for state fiscal year 2001 will be
re-examined based on the most traditional Medicaid cost data
for the contracted risk groups in the service area, trended
forward and discounted.
13.1.3.1 Once HMO has received their capitation rates established by
TDH for the second year of this contract, HMO may terminate
this contract as provided in Article 18.1.6 of this contract.
13.1.4 The monthly premium payment to HMO is based on monthly
enrollments adjusted to reflect money damages set out in
Article 18.8 and adjustments to premiums in Article 13.5.
13.1.5 The monthly premium payments will be made to HMO no later than
the 10th working day of the month for which premiums are paid.
HMO must accept payment for premiums by direct deposit into an
HMO account.
|
13.1.6 Payment of monthly capitation amounts is subject to
availability of appropriations. If appropriations are not
available to pay the full monthly capitation amounts, TDH will
equitably adjust capitation amounts for all participating
HMOs, and reduce scope of service requirements as appropriate.
13.1.7 HMO renewal rates reflect program increases appropriated by
the 76th legislature for physician (to include THSteps
providers) and outpatient facility services. HMO must report
to TDH any change in rates for participating physicians (to
include THSteps providers) and outpatient facilities resulting
from this increase. The report must be submitted to TDH at the
end of the first quarter of the FY2000 and FY2001 contract
years according to the deliverables matrix schedule set for
HMO.
|
AGREED AND SIGNED by an authorized representative of the parties on September 7, 2000.
TEXAS DEPARTMENT OF HEALTH PCA HEALTH PLANS OF TEXAS, INC.
By: /s/ William R. Archer By: /s/ Michael Seltzer --------------------------------- --------------------------------- William R. Archer, III, M.D. Michael Seltzer Commissioner of Health Vice President, West Region |
Approved as to Form:
/s/ Illegible ------------------------ Office of General Counsel |
AMENDMENT NO. 5
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 5 is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the 1999 Contract for Services between the Texas Department of Health and HMO in the Travis Service Area. The effective date of this Amendment is the date TDH signs this Amendment. All other contract provisions remain in full force and effect.
1. Article II & IV is amended by adding the new bold and italicized language and deleting the stricken language as follows:
Clean claim means a claim submitted by a physician or provider
for medical care or health care services rendered to an
enrollee, with documentation reasonably necessary for the HMO
or subcontracted claims processor to process the claim, as set
forth in 28 TAC ss. 21.2802(4) and to the extent that it is
not in conflict with the provisions of this contract.
[Deletion]
4.10 CLAIMS PROCESSING REQUIREMENTS
------------------------------
4.10.1 HMO and claims processing subcontractors must comply with 28
TAC ss.ss. 21.2801 through 21.2816 "Submission of Clean
Claims", to the extent they are not in conflict with
provisions of this contract.
4.10.2 HMO must use a TDH approved or identified claim format that
contains all data fields for final adjudication of the claim.
The required data fields must be complete and accurate. The
TDH required data fields are identified in TDH's "HMO
Encounter Data Claims Submission Manual."
Page 1 of 3
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4.10.3 HMO and claims processing subcontractors must comply with
TDH's Texas Medicaid Managed Care Claims Manual (Claims
Manual), which contains TDH's claims processing requirements.
HMO must comply with any changes to the Claims Manual with
appropriate notice of changes from TDH.
4.10.4 HMO must forward claims submitted to HMO in error to either:
1) the correct HMO, if the correct HMO can be determined from
the claim or is otherwise known to HMO; 2) the State's claims
administrator; or 3) the provider who submitted the claim in
error, along with an explanation of why the claim is being
returned.
4.10.5 HMO must not pay any claim submitted by a provider who has
been excluded or suspended from the Medicare or Medicaid
programs for fraud and abuse when HMO has knowledge of the
exclusion or suspension.
4.10.6 All provider clean claims must be adjudicated (finalized as
paid or denied adjudicated) within 30 days from the date the
claim is received by HMO. HMO must pay providers interest on a
clean claim which is not adjudicated within 30 days from the
date the claim is received by HMO or becomes clean at a rate
of 1.5% per month (18% annual) for each month the clean claim
remains unadjudicated. HMO will be held to a minimum
performance level of 90% of all clean claims paid or denied
within 30 days of receipt and 99% of all clean claims paid or
denied within 90 days of receipt. Failure to meet these
performance levels is a default: under this contract and could
lead to damages or sanctions as outlined in Article XVI. The
performance levels are subject to changes if required to
comply with federal and state laws or regulations.
4.10.6.1 All claims and appeals submitted to HMO and claims processing
subcontractors must be paid-adjudicated (clean claims),
denied-adjudicated (clean claims), or denied for additional
information (unclean claims) to providers within 30 days from
the date the claim is received by HMO. Providers must be sent
a written notice for each claim that is denied for additional
information (unclean claims) identifying the claim, all
reasons why the claim is being denied, the date the claim was
received by HMO, all information required from the provider in
order for HMO to adjudicate the claim, and the date by which
the requested information must be received from the provider.
4.10.6.2 Claims that are suspended (pended internally) must be
subsequently paid-adjudicated, denied-adjudicated, or denied
for additional information (pended externally) within 30 days
from date of receipt. No claim can be suspended for a period
exceeding 30 days from date of receipt of the claim.
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Page 2 of 3 12/21/00
4.10.6.3 HMO must identify each data field of each claim form that s
required from the provider in order for HMO to adjudicate the
claim. HMO must inform all network providers about the
required fields no later than 30 days prior to the effective
date of the contract or as a provision within HMO/provider
contract. Out-of-network providers must be informed of all
required fields if the claim is denied for additional
information. The required fields must include those required
HMO and TDH.
4.10.7 HMO is subject to Article XVI, Default and Remedies, for
claims that are not processed on a timely basis as required by
this contract and the Claims Manual. Notwithstanding the
provisions of Articles 4.10.4, 4.10.4.1 and 4.10.4.2, HMO's
failure to adjudicate (paid, denied, or external pended) at
least ninety percent (90%) of all claims within thirty (30)
days of receipt and ninety-nine percent (99%) within ninety
(90) days of receipt for the contract year to date is a
default under Article XVI of this contract.
4.10.8 HMO must comply with the standards adopted by the U.S.
Department of Health and Human Services under the Health
Insurance Portability and A accountability Act of 1996
submitting and receiving claims information through electronic
data interchange (EDI) that allows for automated processing
and adjudication of claims within two or three years, as
applicable, from the date the rules promulgated under HIPAA
are adopted.
4.10.9 For claims requirements regarding retroactive PCP changes for
mandatory Members, see Article 7.8.12.2.
|
AGREED AND SIGNED by an authorized representative of the parties on April 10, 2001.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ C.E. BELL, M.D. By: /s/ MICHAEL SELTZER
---------------------------------- ---------------------------------
Charles B. Bell, M.D. Michael Seltzer
Executive Deputy Commissioner of Health Vice President, West Region
Approved as to Form:
/s/ MARY ANN SLAVIN
-------------------------
Office of General Counsel TDH DOC. NO.
4810323494-1A-01E
12/27/00
|
AMENDMENT NO.6
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
The 1999 Contract for Services entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO) in the Travis Service Area is hereby amended to reflect the merger of PCA Health Plans of Texas, Inc. into Humana Health Plan of Texas, Inc. The Texas Department of Insurance has approved the merger and all requisite documents have been filed. Copies of the Agreement and Plan of Merger, Articles of Merger, and Official Order of the Commissioner of Insurance are attached.
This Amendment No. 6 hereby substitutes Humana Health Plan of Texas, Inc. in the place of PCA Health Plans of Texas, Inc. into the 1999 Contract for Services referenced above. Humana Health Plan of Texas, Inc. agrees to abide by the Application submitted in response to the Texas Department of Health's Request for Application and all of the terms and conditions set forth in the 1999 Contract for Services and all of its duly executed Amendments.
AGREED TO:
TEXAS DEPARTMENT OF HEALTH HUMANA HEALTH PLAN OF TEXAS, INC.
By: /s/ C.E. BELL, M.D. By: /s/ MICHAEL A. SELTZER
------------------------------- ---------------------------------
Charles E. Bell, M.D. Michael A Seltzer
Deputy Commissioner of Health CEO, South Texas Market
Date: 05/16/01 Date:
------------------------------ -------------------------------
Approved as to Form:
/s/ MARY ANN SLAVIN
-------------------------
Office of General Counsel
|
No. 00-0377
OFFICIAL ORDER
of the
COMMISSIONER OF INSURANCE
of the
STATE OF TEXAS
AUSTIN, TEXAS
Date: March 31, 2000
Subject Considered:
MERGER OF
PCA HEALTH PLANS OF TEXAS, INC.
Austin, Texas
TDI No. 28-05818
AND
HUMANA HMO TEXAS, INC.
San Antonio, Texas
28-94466
INTO
HUMANA HEALTH PLAN OF TEXAS, INC.
San Antonio, Texas
TDI No. 28-93827
CONSENT ORDER
DOCKET NO. C-00-0296
General remarks and official action taken:
On this day, came for consideration by the Commission of Insurance pursuant to TEX, INS. CODE ANN. art. 20A and art. 21.25, the Plan and Agreement of Merger by and between PCA HEALTH PLANS OF TEXAS, INC., Austin, Texas, hereinafter referred to as "PCA HEALTH" and HUMANA HMO TEXAS, INC., San Antonio, Texas, hereinafter referred to as "HUMANA HMO", and collectively hereinafter referred to as "NON-SURVIVORS" whereby NON-SURVIVORS would be merged with and into A HEALTH PLAN OF TEXAS, INC., San Antonio, Texas, hereinafter referred to as "HUMANA HEALTH" with HUMANA HEALTH being the survivor.
Staff for the Texas Department of Insurance and the duly authorized
representative for NON-SURVIVORS and HUMANA HEALTH have consented to the entry
of this order and have requested the Commissioner of Insurance informally
dispose of this matter pursuant to the provisions of TEX. INS. CODE
ANN.ss. 36.104 (former article 1.33(e)), TEX. GOV'T CODE ANN.ss. 2001.056, and
28 TEX. ADMIN. CODE ss. 1.47.
NON-SURVIVORS and HUMANA HEALTH acknowledge the existence of their rights including but not limited to, the issuance and service of
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
notice of hearing, a public hearing, a proposal for decision, rehearing by the Commissioner of Insurance, and judicial review of this administrative action, as provided for in TEX. INS. CODE ANN.ss.ss. 36.201-36.205 (former article 1.04) and TEX. GOV'T CODE ANN.ss.ss. 2001.051, 2001.052, 2001.145 and 2001.146, and have expressly waived each and every such right.
Based upon the information provided to the Texas Department of Insurance pursuant to TEX. ADMIN. CODE, art. 11.301(4) (D) and art.ss. 11.1202, the Commissioner of Insurance makes the following findings of fact:
1. NON-SURVIVORS and HUMANA HEALTH have represented to the Commissioner of Insurance that they desire to waive all procedural requirements for the entry of an order, including but not limited to, notice of hearing, a public hearing, a proposal for decision, rehearing by the Commissioner of Insurance, and judicial review of the order as provided in TEX. INS. CODE ANN.ss.ss. 36.201-36.205 (former article 1.04), and TEX. GOV'T CODE ANN.ss.ss. 2001.051, 2001.052, 2001.145 and 2001.146.
2. PCA HEALTH is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the: provisions of Chapter 20A of the Texas Insurance Code.
3. HUMANA HMO is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the provisions of Chapter 20A of the Texas Insurance Code.
4. HUMANA HEALTH is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the provisions of Chapter 20A of the Texas Insurance Code.
5. NON-SURVIVORS and HUMANA HEALTH are authorized to do a similar line of
business, which is a prerequisite for merger approval under TEX. INS.
CODE ANN. art. 20A.04 and 28 TEX. ADMIN. CODE ss. 11.301(4)(D).
6. Documentation has been presented to the Texas Department of Insurance evidencing the fact that the Plan and Agreement of Merger has been approved by the Board of Directors and
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
shareholders of both NON-SURVIVORS and HUMANA HEALTH in accordance with the requirements of TEX. INS. CODE ANN. art. 21.25.
7. As a result of the mergers, all of the issued and outstanding shares of stock of NON-SURVIVORS shall be canceled.
8. HUMANA HEALTH shall be the surviving corporation of the merger transactions.
9. As a result of the mergers, HUMANA HEALTH will assume and carry out all the liability and responsibility and or insurance or reinsurance agreements now entered into by NON-SURVIVORS and any other obligations outstanding against such companies the time of merger on the same terms and under the same conditions as provided in such policies, contracts, insurance or reinsurance agreements.
10. As December 31, 1999 on a pro forma basis, HEALTH would have had a consolidated net worth of $34,613,862.
11. Pursuant to Article 1, of the Agreement and Plan of Merger, the effective date of the merger is the close of business on March 31, 2000.
12. No evidence has been presented that the Plan a d Agreement of Merger between NON-SURVIVORS and HUMANA HEALTH is contrary to law, is not in the best interest of the policyholders affected by the merger, or would substantially reduce the security of and service to be rendered to policyholders of NON-SURVIVORS in Texas or elsewhere.
13. No evidence has been presented that immediately upon consummation of the transactions contemplated in the Plan d Agreement of Merger, HUMANA HEALTH would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which NON-SURVIVORS are presently licensed.
14. No evidence has been presented that the effect of such acquisition of control as a result of the mergers would be
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
substantially to lessen competition in insurance in this state or tend to create a monopoly therein
15. No evidence was presented that the financial condition of HUMANA HEALTH is such as might jeopardize the financial stability or prejudice the interests of its policyholders.
16. No evidence was presented that HUMANA HEALTH has any plans or proposals to liquidate the surviving corporation, cause it to declare dividends or make other distributions, sell any of its assets, consolidate or merge it with any person, make any material change in its business or corporate structure or management, or cause the health maintenance organization to enter into material agreements, arrangements, or transactions of any kind with any party that are unfair, prejudicial hazardous, or unreasonable to the policyholders of HUMANA HEALTH, the surviving corporation, and not in the public interest.
17. No evidence was presented that the competence, integrity, trustworthiness, and experience of those persons who would control the operations of HUMANA HEALTH are such that it would not be in the interests of the policyholders of NON-SURVIVORS and HUMANA HEALTH and the public to permit the merger.
Based upon the foregoing findings of fact the Commissioner of Insurance makes the following conclusions of law:
1. The Commissioner of Insurance has jurisdiction over this matter pursuant to TEX. INS. CODE ANN. art. 20A and art. 21.25.
2. The proposed mergers of NON-SURVIVORS and HUMANA HEALTH is properly supported by the required documents and meets all requirements of law for its approval.
3. The Commissioner of Insurance has no substantial evidence upon which to predicate denial of the mergers.
IT IS, THEREFORE, THE ORDER of the Commissioner of Insurance that the mergers whereby PCA HEALTH PLANS OF TEXAS, INC., Austin, Texas, and
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
HUMANA HMO TEXAS, INC., San Antonio, Texas, are to be merged with and into HUMANA HEALTH PLAN OF TEXAS, INC., San Antonio, Texas, with HUMANA HEALTH PLAN OF TEXAS, INC. being the survivor, all as specified in the Plan and Agreement of Merger, be, and the same is hereby, approved.
IT IS FURTHER ORDERED that Certificate of Authority No. 9152, dated February 26, 1990, issued to PCA HEALTH PLANS OF TEXAS, INC. and Certificate of Authority No. 11004, dated February 28, 1996, issued to HUMANA HMO TEXAS, INC., San Antonio, Texas, be canceled, and that the mergers be effective as of the close of business on March 31, 2000.
JOSE MONTEMAYOR
COMMISSIONER OF INSURANCE
BY: /s/ BETTY PATTERSON
-------------------------------------
Betty Patterson
Senior Associate Commissioner
Financial Program
Order No. 94-0576
|
Recommended by:
/s/ LORETTA CALDERON ---------------------------- Loretta Calderon Insurance Specialist Company Licensing & Registration |
Reviewed by:
/s/ STEVE HARPER ---------------------------- Steve Harper, Analyst Financial Analysis & Examination |
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
Accepted by:
PCA HEALTH PLANS OF TEXAS, INC.
/s/ KATHLEEN PELLEGRINO -------------------------------------- Title: Vice President (Printed Name): Kathleen Pellegrino |
Accepted by:
HUMANA HMO TEXAS, INC.
/s/ KATHLEEN PELLEGRINO -------------------------------------- Title: Vice President (Printed Name): Kathleen Pellegrino |
Accepted by:
HUMANA HEALTH PLAN OF TEXAS, INC.
/s/ WALTER E. NEELY -------------------------------------- Title: Vice President (Printed Name): Walter E. Neely |
ARTICLES OF MERGER
OF
HUMANA HMO TEXAS, INC.
a TEXAS Health Maintenance Organization
&
PCA HEALTH PLANS OF TEXAS, INC.
a TEXAS Health Maintenance Organization
INTO
HUMANA HEALTH PLAN OF TEXAS, INC.
a TEXAS Health Maintenance Organization
Pursuant to provisions of the Texas Business Corporation Act, Articles 5.01B, 5.03A. 5.04A, 507, and 5.16, and the Texas Insurance Code, Article 21.25, the domestic corporations herein named do hereby adopt the following Articles of Merger:
1. The Agreement and Plan of Merger ("Plan") as set forth in Exhibit A, attached hereto, and made a part hereof, for merging HUMANA HMO TEXAS, INC., a Texas health maintenance organization, and PCA HEALTH PLANS OF TEXAS, INC., a Texas health maintenance organization (collectively the "Non-Survivors"). into HUMANA HEALTH PLAN OF TEXAS. INC., a Texas health maintenance organization (the "Survivor"), was approved by Unanimous Written Consent of the Board of Directors of the Non-Survivors dated December 27, 1999 and approved by Unanimous Written Consent of the Board of Directors of the Survivor dated December 27, 1999.
2. HUMANA HEALTH PLAN OF TEXAS, INC. shall be the surviving corporation of said merger.
3. Survivor shall be responsible for the payment of all fees and franchise taxes of the Non-Survivors as required by law, and Survivor will be obligated to pay such fees and franchise taxes if not timely paid.
4. The Articles of Incorporation of the Survivor, as filed with the Texas Secretary of State and incorporated herein by reference, shall be the Articles of Incorporation of the surviving corporation. No changes or amendments shall be made to the Articles of Incorporation because of the merger.
5. The Plan was approved by unanimous written consent of the of each of the undersigned corporations, and:
(i) the designation, number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the Plan as to each corporation were:
Number of Number of Votes
Name of Corporation Designation Outstanding Shares Entitled to be Cast
------------------- ----------- ------------------ -------------------
PCA HEALTH PLANS Common 100,000 100,000
OF TEXAS, INC.
Preferred 30,000 Series A 30,000 Series A
30,000 Series B 30,000 Series B
HUMANA HMO Common 1,000 1,000
TEXAS, INC.
HUMANA HEALTH Common 1,000 1,000
|
PLAN OF TEXAS, INC.
(ii) the total number of undisputed votes represented by the unanimous written consent of the sole shareholder, cast for the Plan separately by each voting group was:
Total Number of
Undisputed Votes Cast
Name of Corporation Voting Group For the Plan
------------------- ------------ ------------
PCA HEALTH PLANS OF Common 100,000
TEXAS, INC.
Preferred 30,000 Series A
30,000 Series B
HUMANA HMO TEXAS Common 1,000
|
INC.
HUMANA HEALTH PLAN
OF TEXAS, INC. Common 1,000
and the action being unanimous, the number of votes cast for the Plan by each voting group was sufficient for approval by that group.
6. An executed copy of the Plan, subject to approval by the Texas Department of Insurance and the Texas Secretary of State, shall be kept on file at the principal executive office of the Survivor at 500 West Main Street, Louisville, KY 40202, with a duplicate copy at the administrative address of the Survivor at 8431 Fredericksburg Road, San Antonio, TX 78229.
7. The effective time and date of the merger in the State of Texas be at the close of business on March 31,2000.
Dated as of this 30th day of December, 1999.
HUMAN HMO TEXAS, INC.
By: /s/ WALTER E. NEELY
--------------------------------
Walter E. Neely
Vice President
|
PCA HEALTH PLANS OF TEXAS, INC.
By: /s/ WALTER E. NEELY -------------------------------- Walter E. Neely Vice President |
HUMANA HEALTH PLAN OF TEXAS, INC.
By: /s/ KATHLEEN PELLEGRINO
--------------------------------
Kathleen Pellegrino
Vice President
|
Exhibit A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Plan of Merger"), dated as of December 30, 1999. by and among HUMANA HMO TEXAS, INC., and PCA HEALTH PLANS OF TEXAS, INC., (collectively the "Non-Survivors"), both Texas health maintenance organizations, into HUMANA HEALTH PLAN OF TEXAS, INC., (the "Surviving Corporation"), a Texas health maintenance organization and a wholly-owned subsidiary of Humana Inc. ("HUMANA"), a Delaware corporation.
WITNESSETH:
The respective Board of Directors of the Surviving Corporation and the Non-Survivors deem it advisable to merger the Non-Survivors into the Surviving Corporation ("Merger") pursuant to this Plan of Merger to be executed by the Surviving Corporation and the Non-Survivors.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:
GENERAL PROVISION
1.1 Execution of Articles of Merger. Subject to the provisions of this Plan of Merger, and subject to the approval by the Texas Department of Insurance and the Secretary of State of Texas, Articles of Merger required to effectuate the terms of this Plan of Merger (collectively the "Merger Documents") shall be executed, acknowledged, and thereafter delivered to the offices of the Texas Department of insurance and the Secretary of State of Texas, the domestic state of the Non-Survivors and the Surviving Corporation, for filing and recording in accordance with applicable law, with an effective date and time of the close of business on March 31, 2000 (the "Effective Time of Merger").
The plan of merger is as follows:
(b) There are no rights to acquire shares, obligations, or other securities of the Surviving Corporation or any of the Non-Survivors, in whole or in part, for cash or other property.
Texas and attached as Exhibit 1 shall be the Articles of incorporation of the Surviving Corporation. No change or amendments shall be made to the Articles of Incorporation because of the Merger.
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan of Merger to be executed on its behalf and attested by its duly authorized officers, all as of the day and year first written above.
HUMANA HEALTH PLAN OF TEXAS, INC.
ATTEST:
By: /s/ JOAN O. LENAHAN By: /s/ KATHLEEN PELLEGRINO
------------------------------------ --------------------------------
Joan O. Lenahan Kathleen Pellegrino
Secretary Vice President
HUMANA HMO TEXAS, INC.
ATTEST:
By: /s/ JOAN O. LENAHAN By: /s/ WALTER E. NEELY
------------------------------------ --------------------------------
Joan O. Lenahan Walter E. Neely
Secretary Vice President
PCA HEALTH PLANS OF TEXAS, INC.
ATTEST:
By: /s/ JOAN O. LENAHAN By: /s/ WALTER E. NEELY
------------------------------------ --------------------------------
Joan O. Lenahan Walter E. Neely
Secretary Vice President
|
029945 Orig # TDH Document No. 7427705425* 2001-01E
AMENDMENT NO. 7
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 7 is entered into between the Texas Department of Health (TDH) and Superior Health Plan, Inc. (HMO) in Travis Service Area, to amend the 1999 Contract for Services between the Texas Department of Health and HMO. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect. The Parties agree to amend the Contract as follows:
Article XII is amended to read as follows:
12.8.1 In addition, data files are due to TDH or its designee no
later than the fifth working day following the end of each
month. See Utilization Data Transfer Encounter Submission
Manual for submission instructions. The RH utilization report
and data file submission instructions may periodically be
updated by TDH to facilitate clear communication to the health
plans.
12.9.1 In addition, data files are due to TDH or its designee no
later than the fifth working day following the end of each
month. See Utilization Data Transfer Encounter Submission
Manual for submission instructions. The PH utilization report
and data file submission instructions may periodically be
updated by TDH to facilitate clear communication to the health
plan.
|
AGREED AND SIGNED by an authorized representative of the parties on Aug. 2, 2001.
Texas Department of Health Superior Health Plan, Inc.
By: /s/ CHARLES E. BELL M.D. By: /s/ MICHAEL D. MCKINNEY, M.D.
--------------------------------------- --------------------------------
Charles E. Bell M.D. Michael D. McKinney, M.D.
Executive Deputy Commissioner of Health President
Approved as to Form:
/s/ MARY ANN SLAVIN
------------------------------
Office of General Counsel
|
AMENDMENT NO. 8
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
September 1, 1999 the Texas Department of Health (TDH) and Humana Health Plan of Texas, Inc. entered into a Contract for Services for the provision of comprehensive health care services to qualified and Medicaid eligible recipients in the Travis Service Area through a managed care delivery system. This Contract for Services was subsequently renewed in 1999 for a period of two years. Section 15.6 of the above referenced contract allows assignment of the contract with the written consent of the Texas Department of Insurance (TDI) and TDH.
Human Health Plan of Texas, Inc. entered into a Management and Risk Transfer Agreement and an Asset Sale and Purchase Agreement with Superior HealthPlan, Inc. for the assignment and assumption of the Contract for Services. With the written consent of both TDI and TDH, effective June 1, 2001, Humana Health Plan of Texas, Inc. assigned and Superior HealthPlan, Inc. assumed the contract referenced herein in its entirety.
The purpose of this Amendment No. 8 is to substitute Superior HealthPlan, Inc. for Humana Health Plan of Texas, Inc. as the party to this contract as a result of the assignment and assumption. For adequate consideration received Superior HealthPlan, Inc. agrees to abide by the Application submitted by Humana Health Plan of Texas, Inc. in response to the Texas Department of Health's Request for Application and all of the terms and conditions set forth in the 1999 Contract for Services, its subsequent renewal(s), and all of its duly executed Amendments.
AGREED AND SIGNED by an authorized representative of the parties on 8/17/01.
TEXAS DEPARTMENT OF HEALTH SUPERIOR HEALTHPLAN, INC.
By: /s/ CHARLES E. BELL, M.D. By: /s/ MICHAEL D. MCKINNEY, M.D.
------------------------------ --------------------------------
Charles B. Bell, M.D. Michael D. McKinney, M.D.
Deputy Commissioner of Health President
MICHAEL D. MCKINNEY
------------------------------------
Approved as to Form: Printed Name
/s/ S.D. ALEXANDER 8/16/01 PRESIDENT
--------------------------------- ------------------------------------
Office of General Counsel Title of Signator
|
AMENDMENT NO. 9
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
HEALTH AND HUMAN SERVICES COMMISSION AND HMO
This Amendment No. 9 is entered into between the Health and Human Services Commission (HHSC) and Superior Health Plan, Inc. (HMO), to amend the Contract for Services between the Health and Human Services Commission and HMO in the Travis Service Area. The effective date of this amendment is September 1, 2001. The Parties agree to amend the Contract as follows:
1. HHSC and HMO acknowledge the transfer of responsibility and
the assignment of the original Contract for Services from TDH
to HHSC on September 1, 2001. Where the original Contract for
Services and any Amendment to the original Contract for
Services assigns a right, duty, or responsibility to TDH, that
right, duty, or responsibility may be exercised by HHSC or its
designee.
2. Articles II, III, VI, VII. VIII. IX, X, XII, XIII, XV, XVI,
XVIII and XIX are amended to read as follows:
2.0 DEFINITIONS:
-----------
Chemical Dependency Treatment Facility means a facility
licensed by the Texas Commission on Alcohol and Drug Abuse
(TCADA) under Sec. 464.002 of the Health and Safety Code to
provide chemical dependency treatment.
Chemical Dependency Treatment means treatment provided for a
chemical dependency condition by a Chemical Dependency
Treatment Facility, Chemical Dependency Counselor or Hospital.
Chemical Dependency Condition means a condition which meets at
least three of the diagnostic criteria for psychoactive
substance dependence in the American Psychiatric Association's
Diagnostic and Statistical Manual of Mental Disorders (DSM
IV).
Chemical Dependency Counselor means an individual licensed by
TCADA under Sec. 504 of the Occupations Code to provide
chemical dependency treatment or a master's level therapist
(LMSW-ACP, LMFT or LPC) or a master's level therapist
(LMSW-ACP, LMFT or LPC) with a minimum of two years of post
licensure experience in chemical dependency treatment.
Contract Extension Amendment
7/18/01
1
|
Experience rebate means the portion of the HMO's net income
before taxes (financial Statistical Report, Part 1, Line 7)
that is returned to the state in accordance with Article
13.2.1.
Joint Interface Plan (JIP) means a document used to
communicate basic system interface information of the Texas
Medicaid Administrative System (TMAS) among and across State
TMAS Contractors and Partners so that all entities are aware
of the interfaces that affect their business. This information
includes: file structure, data elements, frequency, media,
type of file, receiver and sender of the file, and file I.D.
The JIP must include each of the HMO's interfaces required to
conduct State TMAS business. The JIP must address the
coordination with each of the Contractor's interface partners
to ensure the development and maintenance of the interface;
and the timely transfer of required data elements between
contractors and partners.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.8 The use of Medicaid funds for abortion is prohibited unless
the pregnancy is the result of a rape, incest, or continuation
of the pregnancy endangers the life of the woman. A physician
must certify in writing that based on his/her professional
judgment, the life of the mother would be endangered if the
fetus were carried to term. HMO must maintain a copy of the
certification for at least three years.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.13 Chemical dependency treatment must conform to the standards
set forth in the Texas Administrative Code, Title 28, Part 1,
Chapter 3, Subchapter HH.
6.8 TEXAS HEALTH STEPS (EPSDT)
-------------------------
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include
THSteps benefits, the periodicity schedule for THSteps
checkups and immunizations, the required elements of a THSteps
medical screen, providing or arranging for all required lab
screening tests (including lead screening), and Comprehensive
Care Program (CCP) services available under the THSteps
program to Members under age 21 years. Providers must also be
educated and trained regarding the requirements imposed upon
the department and contracting HMOs under the Consent Decree
entered in Frew vs. McKinney, et al., Civil Action No.
-----------------
3:93CV65, in the United States District Court for the Eastern
District of Texas, Paris Division. Providers should be
educated and trained to treat each THSteps visit as an
opportunity for a comprehensive assessment of the Member.
Contract Extension Amendment
7/18/01
2
|
HMO must report provider education and training regarding
THSteps in accordance with Article 7.4.4.
7.2 PROVIDER CONTRACTS
------------------
7.2.5 HHSC reserves the right and retains the authority to make
reasonable inquiry and conduct investigations into provider
and Member complaints against HMO or any intermediary entity
with whom HMO contracts to deliver health care services under
this contract. HHSC may impose appropriate sanctions and
contract remedies to ensure HMO compliance with the provisions
of this contract.
7.5 MEMBER PANEL REPORTS
--------------------
7.5 HMO must furnish each PCP with a current list of enrolled
Members enrolled or assigned to that Provider no later than 5
working days after HMO receives the Enrollment File from the
Enrollment Broker each month.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following
qualifications:
--------------------------------------------------------------------------------
FQHC A Federal Qualified Health Center meets the standards
established by federal rules and procedures. The FQHC must
also be an eligible provider enrolled in the Medicaid.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an MD or
a DO in the State of Texas either as a primary care provider
or in the area of specialization under which they will provide
medical services under contract with HMO; who is a provider
enrolled in the Medicaid; who has a valid Drug Enforcement
Agency registration number, and a Texas Controlled Substance
Certificate, if either is required in their practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by
the State of Texas under Chapter 241 of the Health and Safety
Code which is enrolled as a provider in the Texas Medicaid
Program. HMO will require that all facilities in the network
used for acute impatient specialty care for people under age
21 with disabilities or chronic or complex conditions will
have a designated pediatric unit; 24 hour laboratory and blood
bank availability; pediatric radiological capability; meet
JCAHO standards; and have discharge planning and social
service units.
--------------------------------------------------------------------------------
Contract Extension Amendment
7/18/01
3
|
--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the State of Texas who is enrolled in the
Provider Texas Medicaid Program.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the
Laboratory Federal Clinical Laboratory Improvement Act (CLIA), and is
enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for designation
Clinic (RHC) as a rural health clinic and is enrolled in the Texas Medicaid
Program.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization Act
ss. 121.031ff.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility credentialed to provide services and is enrolled in the Texas
Provider Medicaid Program.
--------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide on site
Health Clinic primary and preventive care to children and adolescents.
(SBHC)
--------------------------------------------------------------------------------
Chemical A facility licensed by the Texas Commission on Alcohol and
Dependency Drug Abuse (TCADA) under Sec. 464.002 of the Health and Safety
Treatment Code to provide chemical dependency treatment.
Facility
--------------------------------------------------------------------------------
Chemical An individual licensed by TCADA under Sec. 504 of the
Dependency Occupations Code to provide chemical dependency treatment or a
Counselor master's level therapist (LMSW-ACP, LMFT or LPC) with a
minimum of two years of post-licensure experience in chemical
dependency treatment.
--------------------------------------------------------------------------------
7.10 SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, actively serving within
that specialty, including pediatric specialty providers and
chemical dependency specialty providers, within the network in
sufficient numbers and areas of practice to meet the needs of
all Members requiring specialty care services.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services
through its network specialists, sub-specialists and specialty
care facilities (e.g., children's hospitals, licensed chemical
dependency treatment facilities and tertiary care hospitals).
Contract Extension Amendment
7/18/01
4
|
8.2 MEMBER HANDBOOK
----------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no
later than 5 working days after HMO receives the Enrollment
File. The Member Handbook must be written at a 4th - 6th grade
reading comprehension level. The Member Handbook must contain
all critical elements specified by TDH. See Appendix D,
Required Critical Elements, for specific details regarding
content requirements. HMO must submit a Member Handbook to TDH
for approval prior to the effective date of the contract
unless previously approved (see Article 3.4.1 regarding the
process for plan materials review).
8.4 MEMBER ID CARDS
---------------
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within 5 working days from the date the HMO receives the
monthly Enrollment File from the Enrollment Broker. The ID
Card must include, at a minimum, the following: Member's name;
Member's Medicaid number; either the issue date of the card or
effective date of the PCP assignment; PCP's name, address, and
telephone number; name of HMO; name of IPA to which the
Member's PCP belongs, if applicable; the 24-hour, seven (7)
day a week toll-free telephone number operated by HMO; the
toll-free number for behavioral health care services; and
directions for what to do in an emergency. The ID Card must be
reissued if the Member reports a lost card, there is a Member
name change, if Member requests a new PCP, or for any other
reason which results in a change to the information disclosed
on the ID Card.
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
9.2.1 HMO must require that all HMO staff having direct marketing
contact with Members as part of their job duties and their
supervisors satisfactorily complete HHSC's marketing
orientation and training program, conducted by HHSC or health
plan staff trained by HHSC, prior to engaging in marketing
activities on behalf of HMO. HHSC will notify HMO of scheduled
orientations.
9.2.2 Marketing Policies and Procedures. HMO must adhere to the
Marketing Policies and Procedures as set forth by the Health
and Human Services Commission.
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.3 HMO must have a system that can be adapted to the change in
Business Practices/Policies within the timeframe negotiated
between HHSC and the HMO.
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10.1.3.1 HMO must notify and advise BIR of major systems changes and
implementations. HMO is required to provide an implementation
plan and schedule of proposed system change at the time of
this notification.
10.1.3.2 BIR conducts a Systems Readiness test to validate the
contractor's ability to meet the MMIS requirements. This is
done through systems demonstration and performance of specific
MMIS and subsystem functions. The System Readiness test may
include a desk review and/or an onsite review and is conducted
for the following events:
o A new plan is brought into the program
o An existing plan begins business in a new SDA
o An existing plan changes location
o An existing plan changes their processing system
10.1.3.3 Desk Review. HMO must complete and pass systems desk review
prior to onsite systems testing conducted by HHSC.
10.1.3.4 Onsite Review. HMO is required to provide a detailed and
comprehensive Disaster and Recovery Plan, and complete and
pass an onsite Systems Facility Review during the State's
onsite systems testing.
10.1.3.5 HMO is required to provide a Corrective Action Plan in
response to HHSC Systems Readiness Testing Deficiencies no
later than 10 working days notification of deficiencies by
HHSC.
10.1.3.6 HMO is required to provide representation to attend and
participate in the HHSC Systems Workgroup as a part of the
weekly Systems Scan Call.
10.1.9 HMO must submit a joint interface plan (JIP) in a format
specified by HHSC. The JIP will include required information
on all contractor interfaces that support the Medicaid
Information Systems. The submission of the JIP will be in
coordination with other TMAS contractors and is due no later
than 10 working days after the end of each state fiscal year
calendar.
10.3 ENROLLMENT ELIGIBILITY SUBSYSTEM
--------------------------------
(11) Send PCP assignment updates to HHSC or its designee, in the
format specified by HHSC or its designee. Updates can be sent
as often as daily but must be sent at least weekly.
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12.1 FINANCIAL REPORTS
-----------------
12.1.1 MCFS Report. HMO must submit the Managed Care Financial
-----------
Statistical Report (MCFS) included in Appendix I. The report
must be submitted to HHSC no later than 30 days after the end
of each state fiscal year quarter (i.e., Dec. 30, March 30,
June 30, Sept. 30) and must include complete and updated
financial and statistical information for each month of the
state fiscal year-to-date reporting period. The MCFS Report
must be submitted for each claims processing subcontractor in
accordance with this Article. HMO must incorporate financial
and statistical data received by its delegated networks (IPAs,
ANHCs, Limited Provider Networks) in its MCFS Report.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
------------------
Financial-Statistical Reports after the end of the second year
of the contract for the first two-year portion of the contract
and again after the third year of the contract for the third
year (second portion) of the contract. The first final report
must reflect expenses incurred through the 90th day after the
end of the first two-year portion of the contract and again
after the end of the third year of the contract for the third
year (second portion) of the contract. The first final report
must be filed on or before the 120th day after the end of each
portion of the contract. The second final report must reflect
data completed through the 334th day after the end of the
second year of the contract for the first two year portion of
the contract and again after the end of the third year of the
contract for the third year (second portion) of the contract
and must be filed on or before the 365th day following the end
of each portion of the contract year.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.3 PCP Error Report. HMO must submit to the Enrollment Broker an
----------------
electronic file summarizing changes in PCP assignments. The
file must be submitted in a format specified by HHSC and can
be submitted as often as daily but must be submitted at least
weekly. When HMO receives a PCP assignment Error Report /File,
HMO must send corrections to HHSC or its designee within five
working days.
12.13 EXPEDITED PRENATAL OUTREACH REPORT
----------------------------------
12.13 HMO must submit the Expedited Prenatal Outreach Report for
each monthly reporting period in accordance with a format
developed by HHSC in consultation with the HMOs. The report
must include elements that demonstrate the level of effort,
and the outcomes of the HMO in outreaching to pregnant women
for the purpose of scheduling and/or completing the initial
obstetrical examination prior to 14 days after the receipt of
the daily enrollment file by the HMO. Each monthly report is
due by the last day of the month following each monthly
reporting period.
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13.1 CAPITATION AMOUNTS
------------------
13.1.2 Delivery Supplemental Payment (DSP). The monthly capatation
amounts and the DSP amount are listed below.
--------------------------------------------------------------
Risk Group Monthly Capatation Amounts
--------------------------------------------------------------
TANF Adults $164.33
--------------------------------------------------------------
TANF Children > 12 $74.79
Months of Age
--------------------------------------------------------------
Expansion Children > 12 $60.67
Months of Age
--------------------------------------------------------------
Newborns < 12 Months of Age $356.29
-
--------------------------------------------------------------
TANF Children < 12 $356.29
-
Months of Age
--------------------------------------------------------------
Expansion Children < 12 $356.29
-
Months of Age
--------------------------------------------------------------
Federal Mandate Children $59.01
--------------------------------------------------------------
CHIP Phase I $71.50
--------------------------------------------------------------
Pregnant Women $267.89
--------------------------------------------------------------
Disabled/Blind $14.00
Administration
--------------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy
supplemental payment for each delivery shall be paid to HMO as
provided below in the following amount: $2,817.00.
13.1.3.1 Once HMO has received its capitation rates established by HHSC
for the second or third year of this contract, HMO may
terminate this contract as provided in Article 18.1.6.
13.1.7 HMO renewal rates reflect program increases appropriated by
the 76th and 77th legislature for physician (to include
THSteps providers) and outpatient facility services. HMO must
report to HHSC any change in rates for participating
physicians (to include THSteps providers) and outpatient
facilities resulting from this increase. The report must be
submitted to HHSC at the end of the first quarter of the
FY2000, FY2001 and FY2002 contract years according to the
deliverables matrix schedule set for HMO.
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13.2 EXPERIENCE REBATE TO THE STATE
------------------------------
13.2.1 For the contract period, HMO must pay to TDH an experience
rebate calculated in accordance with the tiered rebate method
listed below based on the excess of allowable HMO STAR
revenues over allowable HMO STAR expenses as measured by any
positive amount on Line 7 of "Part 1: Financial Summary, All
Coverage Groups Combined" of the annual Managed Care
Financial-Statistical Report, set forth in Appendix I, as
reviewed and confirmed by TDH. TDH reserves the right to have
an independent audit performed to verify the information
provided by HMO.
Graduated Rebate Method
-----------------------------------------------------------------------
Net income before HMO Share State Share
taxes as a Percentage
of Revenues
-----------------------------------------------------------------------
0% - 3% 100% 0%
-----------------------------------------------------------------------
Over 3% - 7% 75% 25%
-----------------------------------------------------------------------
Over 7% - 10% 50% 50%
-----------------------------------------------------------------------
Over 10% - 15% 25% 75%
-----------------------------------------------------------------------
Over 15% 0% 100%
-----------------------------------------------------------------------
13.2.2.1 The experience rebate for the HMO shall be calculated by
applying the experience rebate formula in Article 13.2.1 to
the sum of the net income before taxes (Financial Statistical
Report, Part 1, Line 7) for all STAR Medicaid service areas
contracted between the State and HMO.
13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates:
HMO may subtract from an experience rebate owed to the State,
expenses for population-based health initiatives that have
been approved by HHSC. A population-based initiative (PBI) is
a project or program designed to improve some aspect of
quality of care, quality of life, or health care knowledge for
the Medicaid population that may also benefit the community as
a whole. Value-added service does not constitute a PBI.
Contractually required services and activities do not
constitute a PBI.
13.2.5 There will be two settlements for payment(s) of the experience
rebate for FY 2000-2001 and two settlements for payment(s) for
the experience rebate for FY 2002. The first settlement for
the specified time period shall equal 100 percent
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of the experience rebate as derived from Line 7 of Part 1 (Net
Income Before Taxes) of the first final Managed Care Financial
Statistical (MCFS) Report and shall be paid on the same day
the first final MCFS Report is submitted to HHSC for the
specified time period. The second settlement shall be an
adjustment to the first settlement and shall be paid to HHSC
on the same day that the second final MCFS Report is submitted
to HHSC for that specified time period if the adjustment is
the payment from HMO to HHSC. If the adjustment is a payment
from HHSC to HMO, HHSC shall pay such adjustment to HMO within
thirty (30) days of receipt of the second final MCFS Report.
HHSC or its agent may audit or review the MCFS report. If HHSC
determines that corrections to the MCFS reports are required,
based on a HHSC audit/review of other documentation acceptable
to HHSC, to determine an adjustment to the amount of the
second settlement, then final adjustment shall be made within
two years from the date that HMO submits the second final MCFS
report. HMO must pay the first and second settlements on the
due dates for the first and second final MCFS reports
respectively as identified in Article 12.1.4. HHSC may adjust
the experience rebate if HHSC determines HMO has paid
affiliates amounts for goods or services that are higher than
the fair market value of the goods and services in the
services area. Fair market value may be based on the amount
HMO pays a non-affiliate(s) or the amount another HMO pays for
same or similar service in the service area. HHSC has final
authority in auditing and determining the amount of the
experience rebate.
13.3 PERFORMANCE OBJECTIVES/INCENTIVES
---------------------------------
13.3.1 Preventive Health Performance Objectives. Preventive Health
----------------------------------------
Performance Objectives are contained in this contract at
Appendix K. HMO must accomplish the performance objectives or
a designated percentage in order to be eligible for payment of
financial incentives. Performance objectives are subject to
change. HHSC will consult with HMO prior to revising
performance objectives.
13.3.2 HMO will receive credit for accomplishing a performance
objective upon receipt of accurate encounter data required
under Article 10.5 and 12.2 of this contract and/or a Detailed
Data Element Report from HMO with report format as determined
by HHSC and aggregate data report by HMO in accordance with a
report format as determined by HHSC (Performance Objective
Report). Accuracy and completeness of the Detailed Data
Element Report and the Aggregate Data Performance Objective
Report will be determined by HHSC through an HHSC audit of the
HMO claims processing system. If HHSC determines that the
Detailed Data Element Report and Performance Objectives Report
are sufficiently supported by the results of the HHSC audit,
the payment of financial incentives will be made to HMO.
Conversely, if the audit results do not support the reports as
determined by HHSC, HMO will not receive payment
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of the financial incentive. HHSC may conduct provider chart
reviews to validate the accuracy of the claims data related to
HMO accomplishment of performance objectives. If the results
of the chart review do not support the HMO claims system data
or the HMO Detailed Data Element Report and the Performance
Objectives Report, HHSC may recoup payment made to the HMO for
performance objectives incentives.
13.3.3 HMO will also receive credit for performance objectives
performed by other organizations if a network primary care
provider or the HMO retains documentation from the performing
organization which satisfies the requirements contained in
Appendix K of this contract.
13.3.4 HMO will receive performance objective bonuses for
accomplishing the following percentages of performance
objectives:
-----------------------------------------------------------------
Percent of Each Performance Percent of Performance Objective
Objective Accomplished Allocations Paid to HMO
-----------------------------------------------------------------
60% to 65% 20%
-----------------------------------------------------------------
65% to 70% 30%
-----------------------------------------------------------------
70% to 75% 40%
-----------------------------------------------------------------
75% to 80% 50%
-----------------------------------------------------------------
80% to 85% 60%
-----------------------------------------------------------------
85% to 90% 70%
-----------------------------------------------------------------
90% to 95% 80%
-----------------------------------------------------------------
95% to 100% 90%
-----------------------------------------------------------------
100% 100%
-----------------------------------------------------------------
13.3.5 HMO must submit the Detailed Data Element Report and the
Performance Objectives Report regardless of whether or not the
HMO intends to claim payment of performance objective bonuses.
13.3.6 Payment of performance objective bonus is contingent upon
availability of appropriations. If appropriations are not
available to pay performance objective bonuses as set out
below, HHSC will equitably distribute all available funds to
each HMO that has accomplished performance objectives.
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13.3.7 In addition to the capitation amounts set forth in Article
13.1.2. a performance premium of two dollars ($2.00) per
Member month will be allocated by HHSC for the accomplishment
of performance objectives.
13.3.8 The HMO must submit the Performance Objectives Report and the
Detailed Data Element Report as referenced in Article 13.3.2,
within 150 days from the end of each State fiscal year.
Performance premiums will be paid to HMO within 120 days after
The State receives and validates the data contained in each
required Performance Objectives Report.
13.3.9 The performance objective allocation for HMO shall be assigned
to each performance objective, described in Appendix K, in
accordance with the following percentages:
--------------------------------------------------------------
EPSDT SCREENS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------
1. < 12 months 12%
--------------------------------------------------------------
2. 12 to 24 months 12%
--------------------------------------------------------------
3. 25 months - 20 years 20%
--------------------------------------------------------------
IMMUNIZATIONS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------
4. < 12 months 7%
--------------------------------------------------------------
5. 12 to 24 months 5%
--------------------------------------------------------------
ADULT ANNUAL VISITS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------
6. Adult Annual Visits 3%
--------------------------------------------------------------
PREGNANCY VISITS Percent of Performance Objective
Incentive Fund
--------------------------------------------------------------
7. Initial prenatal exam 15%
--------------------------------------------------------------
8. Visits by Gestational Age 14%
--------------------------------------------------------------
9. Postpartum visit 12%
--------------------------------------------------------------
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13.3.10 Compass 21 Encounter Data Conversion Performance Incentive. A
----------------------------------------------------------
Compass 21 encounter data conversion performance incentive
payment will be paid by the State to each HMO that achieves
the identified conversion performance standard for at least
one month in the first quarter of SFY 2002 as demonstration of
successful conversion to the C21 system. The encounter
conversion performance standard is as follows:
--------------------------------------------------------------
Performance Objective Encounter Data Conversion
Performance Incentive
--------------------------------------------------------------
Percentage of encounters submitted 65%
that are successfully accepted into
C21
--------------------------------------------------------------
13.3.10.1 The amount of the incentive will be based on the total amount
identified by the state for the encounter data conversion
performance incentive pool ("Pool"). The pool will be equally
distributed between all the HMOs that achieve the performance
objective within the first quarter of SFY 2002. HMOs with
multiple contracts with HHSC are eligible to receive only one
allocation from the Pool. Required HMO performance for the
identified objectives will be verified by HHSC for accuracy
and completeness. The incentive will be paid only after HHSC
has verified that HMO performance has met the required
performance standard. Payments will be made in the second
quarter of the fiscal year.
13.5.4 NEWBORN AND PREGNANT WOMAN PAYMENT PROVISIONS
---------------------------------------------
13.5.4 Newborns who appear on the MAXIMUS daily enrollment file but
do not appear on the MAXIMUS monthly enrollment or adjustment
File before the end of the sixth month following the date of
birth will not be retroactively enrolled into the HMO. HHSC
will manually reconcile payment to the HMO for services
provided from the date of birth for TP45 and all other
eligibility categories of newborns. Payment will cover
services rendered from the effective date of the proxy ID
number when first issued by the HMO regardless of plan
assignment at the time the State-issued Medicaid ID number is
received.
15.6 ASSIGNMENT
----------
15.6 This contract was awarded to HMO based on HMO's qualifications
to perform personal and professional services. HMO cannot
assign this contract without the written consent of HHSC. This
provision does not prevent HMO from
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subcontracting duties and responsibilities to qualified
subcontractors. If HHSC consents to an assignment of this
contract, a transition period of 90 days will run from the
date the assignment is approved by HHSC so that Members'
services are not interrupted and, if necessary, the notice
provided for in Article 15.7 can be sent to Members. The
assigning HMO must also submit a transition plan, as set out
in Article 18.2.1, subject to HHSC 's approval.
16.3 DEFAULT BY HMO
--------------
16.3.14.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to HHSC by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit HHSC
in exercising all or part of any remaining remedies.
For HMO's failure to meet any benchmark established by HHSC
under this contract, or for failure to meet improvement
targets, as identified by HHSC, HHSC may:
o Remove all or part of the THSteps component from the
capitation paid to HMO
o Terminate the contract if the applicable conditions
set out in Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article
18.4; and/or
o Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.15 FAILURE TO PERFORM A MATERIAL DUTY OR RESPONSIBILITY
----------------------------------------------------
Failure of HMO to perform a material duty or responsibility as
set out in this Contract is a default under this contract and
HHSC may impose one or more of the remedies contained within
its provisions and all other remedies available to HHSC by law
or in equity.
16.3.15.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other
remedies available to HHSC by law or in equity, are joint and
several, and may be exercised concurrently or consecutively.
Exercise of any remedy in whole or in part does not limit HHSC
in exercising all or part of any remaining remedies.
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For HMO's failure to perform an administrative function under
this contract, HHSC may:
o Terminate the contract if the applicable conditions
set out in Article 18. 1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article
18.4; and/or
o Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
18.1.6 TERMINATION BY HMO
------------------
18.1.6 HMO may terminate this contract if HHSC fails to pay HMO as
required under Article XIII of this contract or otherwise
materially defaults in its duties and responsibilities under
this contract, or by giving notice no later than 30 days after
receiving the capitation rates for the second or third
contract years. Retaining premium, recoupment, sanctions, or
penalties that are allowed under this contract or that result
from HMO's failure to perform or HMO's default under the terms
of this contract is not cause for termination.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
----------------------------------------------
18.2.2 If the contract is terminated by HHSC for any reason other
than federal or state funds for the Medicaid program no longer
being available or if HMO terminates the contract based on
lower capitation rates for the second or third contract years
as set out in Article 13.1.3.1:
18.2.3 If the contract is terminated by HMO for any reason other than
based on lower capitation rates for the second or third
contract years as set out in Article 13.1.3.1:
Article XIX TERM
----
19.1 The effective date of this contract is August 30, 1999. This
contract will terminate on August 31, 2002, unless terminated
earlier as provided for elsewhere in the contract.
3. The Appendices are amended by replacing page 10 of Appendix A
"Standards for Quality Improvement Programs" to incorporate a
change in Item F, number 1 on recredentialing.
4. The Appendices are amended by deleting Appendix D, "'Required
Critical Elements," and replacing it with new Appendix D,
"Required Critical Elements", as attached.
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AGREED AND SIGNED by an authorized representative of the parties on 2001.
Health and Human Services Commission Superior Health Plan, Inc.
By: /s/ DON A. GILBERT By: /s/ MICHAEL D. MCKINNEY, M.D.
-------------------------------- --------------------------------
Don A. Gilbert Michael D. McKinney, M.D.
President & CEO
|
Approved as to Form:
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EXHIBIT 10.6
1999
CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
PCA Health
1999 Renewal Contract
Bexar Service Area
August 9, 1999
TABLE OF CONTENTS
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT .......................................1
ARTICLE II DEFINITIONS .............................................................2
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE REQUIREMENTS ....................14
3.1 ORGANIZATION AND ADMINISTRATION.............................................14
3.2 NON-PROVIDER SUBCONTRACTS ..................................................15
3.3 MEDICAL DIRECTOR ...........................................................17
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS ..........................18
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION .................................19
3.6 HMO REVIEW OF TDH MATERIALS ................................................20
3.7 HMO TELEPHONE ACCESS REQUIREMENTS ..........................................21
ARTICLE IV FISCAL; FINANCIAL; CLAIMS AND INSURANCE REQUIREMENTS....................21
4.1 FISCAL SOLVENCY ........................................................... 21
4.2 MINIMUM NET WORTH ..........................................................22
4.3 PERFORMANCE BOND ...........................................................22
4.4 INSURANCE ..................................................................22
4.5 FRANCHISE TAX ..............................................................23
4.6 AUDIT.......................................................................23
4.7 PENDING OR THREATENED LITIGATION ...........................................23
4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN HMO
OPERATIONS .................................................................23
4.9 THIRD PARTY RECOVERY .......................................................24
4.10 CLAIMS PROCESSING REQUIREMENTS .............................................25
4.11 INDEMNIFICATION.............................................................27
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS..........................28
5.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS .............................28
5.2 PROGRAM INTEGRITY ..........................................................28
5.3 FRAUD AND ABUSE COMPLIANCE PLAN ............................................28
5.4 SAFEGUARDING INFORMATION ...................................................31
5.5 NON-DISCRIMINATION .........................................................31
5.6 HISTORICALLY UNDERUTILIZED BUSINESSES (HUBs) ...............................32
5.7 BUY TEXAS ..................................................................33
5.8 CHILD SUPPORT ..............................................................33
5.9 REQUEST FOR PUBLIC INFORMATION .............................................33
5.10 NOTICE AND APPEAL ..........................................................34
1999 Renewal Contract
Bexar Service Area
August 9, 1999
ii
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ARTICLE VI SCOPE OF SERVICES........................................................34
6.1 SCOPE OF SERVICES ..........................................................34
6.2 PRE-EXISTING CONDITIONS ....................................................37
6.3 SPAN OF ELIGIBILITY ........................................................37
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS ............................38
6.5 EMERGENCY SERVICES .........................................................39
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS.....................40
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS ....................................42
6.8 TEXAS HEALTH STEPS (EPSDT) .................................................43
6.9 PERINATAL SERVICES .........................................................46
6.10 EARLY CHILDHOOD INTERVENTION (ECI) .........................................47
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN,
INFANTS, AND CHILDREN (WIC) - SPECIFIC REQUIREMENTS ........................48
6.12 TUBERCULOSIS (TB) ..........................................................49
6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS...................50
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS .........................52
6.15 SEXUALLY TRANSMITTED DISEASES (STDs) AND HUMAN
IMMUNODEFICIENCY VIRUS
(HIV) ......................................................................53
6.16 BLIND AND DISABLED MEMBERS .................................................55
ARTICLE VII PROVIDER NETWORK REQUIREMENTS ..........................................56
7.1 PROVIDER ACCESSIBILITY .....................................................56
7.2 PROVIDER CONTRACTS .........................................................57
7.3 PHYSICIAN INCENTIVE PLANS ..................................................61
7.4 PROVIDER MANUAL AND PROVIDER TRAINING ......................................63
7.5 MEMBER PANEL REPORTS .......................................................64
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURE ....................................64
7.7 PROVIDER QUALIFICATIONS - GENERAL ..........................................64
7.8 PRIMARY CARE PROVIDERS .....................................................66
7.9 OB/GYN PROVIDERS ...........................................................70
7.10 SPECIALTY CARE PROVIDERS ...................................................70
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES ............................71
7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA)....................71
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPs) ...................................73
7.14 RURAL HEALTH PROVIDERS .....................................................73
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FQHC) AND RURAL HEALTH
CLINICS (RHC) ..............................................................74
7.16 COORDINATION WITH PUBLIC HEALTH ............................................75
7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY
SERVICES ...................................................................79
1999 Renewal Contract
Bexar Service Area
August 9, 1999
iii
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7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)..............80
ARTICLE VIII MEMBER SERVICES REQUIREMENTS ..........................................82
8.1 MEMBER EDUCATION ...........................................................82
8.2 MEMBER HANDBOOK ............................................................82
8.3 ADVANCE DIRECTIVES .........................................................82
8.4 MEMBER ID CARDS ............................................................84
8.5 MEMBER HOTLINE .............................................................85
8.6 MEMBER COMPLAINT PROCESS ...................................................85
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS ...................................87
8.8 MEMBER ADVOCATES ...........................................................89
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES ....................................89
ARTICLE IX MARKETING AND PROHIBITED PRACTICES ......................................91
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION ..................................91
9.2 MARKETING ORIENTATION AND TRAINING .........................................92
9.3 PROHIBITED MARKETING PRACTICES .............................................92
9.4 NETWORK PROVIDER DIRECTORY .................................................93
ARTICLE X MIS SYSTEM REQUIREMENTS ..................................................93
10.1 MODEL MIS REQUIREMENTS .....................................................93
10.2 SYSTEM-WIDE FUNCTIONS ......................................................95
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM ...........................................96
10.4 PROVIDER SUBSYSTEM .........................................................97
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM ......................................98
10.6 FINANCIAL SUBSYSTEM ........................................................99
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM .................................100
10.8 REPORT SUBSYSTEM ..........................................................102
10.9 DATA INTERFACE SUBSYSTEM ..................................................103
10.10 TPR SUBSYSTEM .............................................................104
10.11 YEAR 2000 (Y2K) COMPLIANCE ................................................105
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM.......................105
11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM ..................................105
11.2 WRITTEN QIP PLAN ..........................................................105
11.3 QIP SUBCONTRACTING ........................................................105
11.4 ACCREDITATION .............................................................106
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP ....................................106
11.6 QIP REPORTING REQUIREMENTS ................................................106
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ARTICLE XII REPORTING REQUIREMENTS ................................................106
12.1 FINANCIAL REPORTS .........................................................106
12.2 STATISTICAL REPORTS .......................................................108
12.3 ARBITRATION/LITIGATION CLAIMS REPORT ......................................110
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS .....................................110
12.5 PROVIDER NETWORK REPORTS ..................................................110
12.6 MEMBER COMPLAINTS .........................................................110
12.7 FRAUDULENT PRACTICES ......................................................111
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH ........................111
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH ..........................111
12.10 QUALITY IMPROVEMENT REPORTS ...............................................111
12.11 HUB REPORTS ...............................................................113
12.12 THSTEPS REPORTS ...........................................................113
ARTICLE XIII PAYMENT PROVISIONS ...................................................113
13.1 CAPITATION AMOUNTS ........................................................113
13.2 EXPERIENCE REBATE TO STATE ................................................117
13.3 PERFORMANCE OBJECTIVES ....................................................118
13.4 ADJUSTMENTS TO PREMIUM.....................................................119
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT ............................119
14.1 ELIGIBILITY DETERMINATION .................................................119
14.2 ENROLLMENT ................................................................121
14.3 DISENROLLMENT .............................................................122
14.4 AUTOMATIC RE-ENROLLMENT ...................................................122
14.5 ENROLLMENT REPORTS ........................................................123
ARTICLE XV GENERAL PROVISIONS .....................................................123
15.1 INDEPENDENT CONTRACTOR ....................................................123
15.2 AMENDMENT .................................................................123
15.3 LAW, JURISDICTION AND VENUE ...............................................124
15.4 NON-WAIVER ................................................................124
15.5 SEVERABILITY ..............................................................124
15.6 ASSIGNMENT ................................................................124
15.7 MAJOR CHANGE IN CONTRACTING ...............................................125
15.8 NON-EXCLUSIVE .............................................................125
15.9 DISPUTE RESOLUTION ........................................................125
15.10 DOCUMENTS CONSTITUTING CONTRACT ...........................................125
15.11 FORCE MAJEURE .............................................................125
15.12 NOTICES ...................................................................126
15.13 SURVIVAL ..................................................................126
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ARTICLE XVI DEFAULT AND REMEDIES ..................................................126
16.1 DEFAULT BY TDH ...............................................................126
16.2 REMEDIES AVAILABLE TO HMO FOR TDH's DEFAULT ..................................126
16.3 DEFAULT BY HMO ...............................................................127
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT.................................135
ARTICLE XVIII EXPLANATION OF REMEDIES..............................................136
18.1 TERMINATION ...............................................................136
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION ............................138
18.3 SUSPENSION OF NEW ENROLLMENT...............................................139
18.4 LIQUIDATED MONEY DAMAGES ..................................................139
18.5 APPOINTMENT OF TEMPORARY MANAGEMENT .......................................141
18.6 TDH-INITITIATED DISENROLLMENT OF A MEMBER OR MEMBERS WITHOUT
CAUSE .....................................................................142
18.7 RECOMMENDATION TO HCFA THAT SANCTIONS BE TAKEN AGAINST HMO ................142
18.8 CIVIL MONETARY PENALTIES ..................................................142
18.9 FORFEITURE OF ALL OR PART OF THE TDI PERFORMANCE BOND .....................143
18.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED ................................143
ARTICLE XIX TERM ..................................................................143
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APPENDICES
APPENDIX A
Standards For Quality Improvement Programs
APPENDIX B
HUB Progress Assessment Reports
APPENDIX C
Value-added Services
APPENDIX D
Required Critical Elements
APPENDIX E
Transplant Facilities
APPENDIX F
Trauma Facilities
APPENDIX G
Hemophilia Treatment Centers And Programs
APPENDIX H
Utilization Management Report - Behavioral Health
APPENDIX I
Managed Care Financial- Statistical Report
APPENDIX J
Utilization Management Report - Physical Health
APPENDIX K
Preventive Health Performance Objectives
APPENDIX L
Cost Principles For Administrative Expenses
APPENDIX M
Arbitration/Litigation Report
1999
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CONTRACT FOR SERVICES
Between
THE TEXAS DEPARTMENT OF HEALTH
And
HMO
This contract is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO). The purpose of this contract is to set forth the terms and conditions for HMO's participation as a managed care organization in the TDH STAR Program (STAR or STAR Program). Under the terms of this contract HMO will provide comprehensive health care services to qualified and Medicaid-eligible recipients through a managed care delivery system. This is a risk-based contract. HMO was selected to provide services under this contract under Health and Safety Code, Title 2, ss. 12.011 and ss. 12.021, and Texas Government Code ss.533.001 et seq. HMO's selection for this contract was based upon HMO's Application submitted in response to TDH's Request for Application (RFA) in the service area. Representations and responses contained in HMO's Application are incorporated into and are enforceable provisions of this contract, except where changed by this contract.
ARTICLE I PARTIES AND AUTHORITY TO CONTRACT
1.1 The Texas Legislature has designated the Texas Health and Human
Services Commission (THHSC) as the single State agency to
administer the Medicaid program in the State of Texas. THHSC has
delegated the authority to operate the Medicaid managed care
delivery system for acute care services to TDH. TDH has authority
to contract with HMO to carry out the duties and functions of the
Medicaid managed care program under Health and Safety Code, Title
2, ss.12.011 and ss.12.021 and Texas Government Code ss.533.001
et seq.
1.2 HMO is a corporation with authority to conduct business in the
State of Texas and has a certificate of authority from the Texas
Department of Insurance (TDI) to operate as a Health Maintenance
Organization (HMO) under Chapter 20A of the Insurance Code. HMO
is in compliance with all TDI rules and laws that apply to HMOs.
HMO has been authorized to enter into this contract by its Board
of Directors or other governing body. HMO is an authorized vendor
with TDH and has received a Vendor Identification number from the
Texas Comptroller of Public Accounts.
1.3 This contract is subject to the approval and on-going monitoring
of the federal Health Care Financing Administration (HCFA).
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1.4 Renewal Review. TDH is required by Human Resources Code
ss.32.034(a) and Government Code 533.007 to conduct renewal
review of HMO's performance and compliance with this contract as
a condition for retention and renewal.
1.4.1 Renewal Review may include a review of HMO's past performance and
compliance with the requirements of this contract and on-site
inspection of any or all of HMO's systems or processes.
1.4.2 TDH will provide HMO with at least 30 days written notice prior
to conducting an HMO renewal review. A report of the results of
the renewal review findings will be provided to HMO within 10
weeks from the completion of the renewal review. The renewal
review report will include any deficiencies which must be
corrected and the timeline within which the deficiencies must be
corrected.
1.4.3 TDH reserves the right to conduct on-site inspections of any or
all of HMO's systems and processes as often as necessary to
ensure compliance with contract requirements. TDH may conduct at
least one complete on-site inspection of all systems and
processes every three years. TDH will provide six weeks advance
notice to HMO of the three year on-site inspection, unless TDH
enters into an MOU with the Texas Department of Insurance to
accept the TDI report in lieu of a TDH on-site inspection. TDH
will notify HMO prior to conducting an onsite visit related to a
regularly scheduled review specifically described in this
contract. Even in the case of a regularly scheduled visit, TDH
reserves the right to conduct an onsite review without advance
notice if TDH believes there may be potentially serious or
life-threatening deficiencies.
1.5 AUTHORITY OF HMO TO ACT ON BEHALF OF TDH. HMO is given express,
limited authority to exercise the State's right of recovery as
provided in Article 4.9, and to enforce provisions of this
contract which require providers or subcontractors to produce
records, reports, encounter data, public health data, and other
documents to comply with this contract and which TDH has
authority to require under State or federal laws.
ARTICLE II DEFINITIONS
|
Terms used throughout this Contract have the following meaning, unless the context clearly indicates otherwise:
Abuse means provider practices that are inconsistent with sound fiscal, business, or medical practices and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are
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not medically necessary or that fail to meet professionally recognized standards for health care. It also includes Member practices that result in unnecessary cost to the Medicaid program.
Action means a denial, termination, suspension, or reduction of covered services or the failure of HMO to act upon request for covered services within a reasonable time or a denial of a request for prior authorization for covered services affecting a Member. This term does not include reaching the end of prior authorized services.
Adjudicate means to deny or pay a clean claim.
Adverse determination means a determination by a utilization review agent that the health care services furnished, or proposed to be furnished to a patient, are not medically necessary or not appropriate.
Affiliate means any individual or entity owning or holding more than a five percent (5%) interest in HMO; in which HMO owns or holds more than a five percent (5%) interest; any parent entity; or subsidiary entity of HMO, regardless of the organizational structure of the entity.
Allowable expenses means all expenses related to the Contract for Services between TDH and HMO that are incurred during the term of the contract that are not reimbursable or recovered from another source.
Allowable revenue means all Medicaid managed care revenue received by HMO for the contract period, including retroactive adjustments made by TDH.
Appeal of adverse determination means the formal process by which a utilization review agent offers a mechanism to address adverse determinations as defined in Article 21.58A, Texas Insurance Code.
Auxiliary aids and services includes qualified interpreters or other effective methods of making aurally delivered materials understood by persons with hearing impairments; and, taped texts, large print, Braille, or other effective methods to ensure visually delivered materials are available to individuals with visual impairments. Auxiliary aids and services also includes effective methods to ensure that materials (delivered both aurally and visually) are available to those with cognitive or other disabilities affecting communication.
Behavioral health care services means covered services for the treatment of mental or emotional disorders and treatment of chemical dependency disorders.
Benchmark means a target or standard based on historical data or an objective/goal.
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Capitation means a method of payment in which HMO or a health care provider receives a fixed amount of money each month for each enrolled Member, regardless of the amount of covered services used by the enrolled Member.
CHIP means Children's Health Insurance Program established by Title XXI of the Social Security Act to assist state efforts to initiate and expand child health assistance to uninsured, low-income children.
Chronic or complex condition means a physical, behavioral, or developmental condition which may have no known cure and/or is progressive and/or can be debilitating or fatal if left untreated or undertreated.
Clean claim means a TDH approved or identified claim format that contains all data fields required by HMO and TDH for final adjudication of the claim. The required data fields must be complete and accurate. Clean claim also includes HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Unclean Claim). The TDH required data fields are identified in TDH's AHMO Encounter Data Claims Submission Manual.@
CLIA means the federal legislation commonly known as the Clinical Laboratories Improvement Act of 1988 as found at Section 353 of the federal Public Health Services Act, and regulations adopted to implement the Act.
Community Management Team (CMT) means interagency groups responsible for developing and implementing the Texas Children's Mental Health Plan (TCMHP) at the local level. A CMT consists of local representatives from TXMHMR, the Mental Health Association of Texas, Texas Commission on Alcohol and Drug Abuse, Texas Department of Protective and Regulatory Services, Texas Department of Human Services, Texas Department of Health, Juvenile Probation Commission, Texas Youth Commission, Texas Rehabilitation Commission, Texas Education Agency, Council on Early Childhood Intervention and a parent representative. This organizational structure is also replicated in the State Management Team that sets overall policy direction for the TCMHP.
Community Resource Coordination Groups (CRCGs) means a statewide system of local interagency groups, including both public and private providers, which coordinate services for "multi-need" children and youth. CRCGs develop individual service plans for children and adolescents whose needs can be met only through interagency cooperation. CRCGs address complex needs in a model that promotes local decision-making and ensures that children receive the integrated combination of social, medical and other services needed to address their individual problems.
Complainant means a Member or a treating provider or other individual designated to act on behalf of the Member who files the complaint.
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Complaint means any dissatisfaction, expressed by a complainant orally or in writing to HMO, with any aspect of HMO's operation, including, but not limited to, dissatisfaction with plan administration; procedures related to review or appeal of an adverse determination, as that term is defined by Texas Insurance Code Article 20A. 12, with the exception of the Independent Review Organization requirements; the denial, reduction, or termination of a service for reasons not related to medical necessity; the way a service is provided; or disenrollment decisions, expressed by a complainant. The term does not include misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the Member. The term also does not include a provider's or enrollee's oral/written dissatisfaction or disagreement with an adverse determination or a request for a Fair Hearing to TDH.
Comprehensive Care Program: See definition for Texas Health Steps.
Continuity of care means care provided to a Member by the same primary care provider or specialty provider to the greatest degree possible, so that the delivery of care to the Member remains stable, and services are consistent and unduplicated.
Contract means this contract between TDH and HMO and documents included by reference and any of its written amendments, corrections or modifications.
Contract administrator means an entity contracting with TDH to carry out specific administrative functions under the State's Medicaid managed care program.
Contract anniversary date means September 1 of each year after the first year of this contract, regardless of the date of execution or effective date of the contract.
Contract period means the period of time starting with effective date of the contract and ending on the termination date of the contract.
Court-ordered commitment means a commitment of a STAR Member to a psychiatric facility for treatment that is ordered by a court of law pursuant to the Texas Health and Safety Code, Title VII Subtitle C.
Covered services means health care services HMO must arrange to provide to Members, including all services required by this contract and state and federal law, and all value-added services described by HMO in its response to the Request For Application (RFA) for this contract.
Cultural competency means the ability of individuals and systems to provide services effectively to people of various cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity.
Day means calendar day unless specified otherwise.
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Denied claim means a clean claim or a portion of a clean claim for which a determination is made that the claim cannot be paid.
Disability means a physical or mental impairment that substantially limits one or more of the major life activities of an individual.
Disability-related access means that facilities are readily accessible to and usable by individuals with disabilities, and that auxiliary aids and services are provided to ensure effective communication, in compliance with Title III of the Americans with Disabilities Act.
DSM-IV means the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, which is the American Psychiatric Association's official classification of behavioral health disorders.
ECI means Early Childhood Intervention which is a federally mandated program for infants and children under the age of three with or at risk for development delays and/or disabilities. The federal ECI regulations are found at 34 C.F.R. 303.1 et seq. The State ECI rules are found at 25 TAC 621.21 et seq.
Effective date means the date on which TDH signs the contract following signature of the contract by HMO.
Emergency behavioral health condition means any condition, without regard to the nature or cause of the condition, which in the opinion of a prudent layperson possessing an average knowledge of health and medicine requires immediate intervention and/or medical attention without which Members would present an immediate danger to themselves or others or which renders Members incapable of controlling, knowing or understanding the consequences of their actions.
Emergency services means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish such services under this contract and are needed to evaluate or stabilize an emergency medical condition and/or an emergency behavioral health condition.
Emergency Medical Condition means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical care could result in:
(a) placing the patient's health in serious jeopardy;
(b) serious impairment to bodily functions;
(c) serious dysfunction of any bodily organ or part;
(d) serious disfigurement; or
(e) in the case of a pregnant woman, serious jeopardy to the health of the fetus.
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Encounter means a covered service or group of services delivered by a provider to a Member during a visit between the Member and provider. This also includes value-added services.
Encounter data means data elements from fee-for-service claims or capitated services proxy claims that are submitted to TDH by HMO in accordance with TDH's AHMO Encounter Data Claims Submission Manual@.
Enrollment Broker means an entity contracting with TDH to carry out specific functions related to Member services (i.e., enrollment/disenrollment, complaints, etc.) under TDH's Medicaid managed care program.
Enrollment report means the list of Medicaid recipients who are enrolled with an HMO as Members for the month the report was issued.
EPSDT means the federally mandated Early and Periodic Screening, Diagnosis and Treatment program contained at 42 USC 1396d(r) (see definition for Texas Health Steps). The name has been changed to Texas Health Steps (THSteps) in the State of Texas.
Experience Rebate means excess of allowable HMO STAR revenues over allowable HMO STAR expenses.
Fair Hearing means the process adopted and implemented by the Texas Department of Health, 25 TAC Chapter 1, in compliance with federal regulations and state rules relating to Medicaid Fair Hearings found at 42 CFR Part 431, Subpart E, and 1 TAC, Chapter 357.
FQHC means a Federally Qualified Health Center that has been certified by HCFA to meet the requirements of '1861(aa)(3) of the Social Security Act as a federally qualified health center and is enrolled as a provider in the Texas Medicaid program.
Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state law.
HCFA means the federal Health Care Financing Administration.
Health care services means medically necessary physical medicine, behavioral health care and health-related services which an enrolled population might reasonably require in order to be maintained in good health, including, as a minimum, emergency care and inpatient and outpatient services.
Implementation Date means the first date that Medicaid managed care services are delivered to Members in a service area.
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Inpatient stay means at least a 24-hour stay in a facility licensed to provide hospital care.
JCAHO means Joint Commission on Accreditation of Health Care Organizations.
Linguistic access means translation and interpreter services, for written and spoken language to ensure effective communication. Linguistic access includes sign language interpretation, and the provision of other auxiliary aids and services to persons with disabilities.
Local Health Department means a local health department established pursuant to Health and Safety Code, Title 2, Local Public Health Reorganization Act '121.031.
Local Mental Health Authority (LMHA) means an entity to which the TXMHMR board delegates its authority and responsibility within a specified region for planning, policy development, coordination, and resource development and allocation and for supervising and ensuring the provision of mental health care services to persons with mental illness in one or more local service areas.
Major life activities means functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
Major population group means any population which represents at least 10% of the Medicaid population in any of the counties in the service area served by the Contractor.
Medical home means a primary or specialty care provider who has accepted the responsibility for providing accessible, continuous, comprehensive and coordinated care to Members participating in TDH's Medicaid managed care program.
Medically necessary behavioral health care services means those behavioral health care services which:
(a) are reasonable and necessary for the diagnosis or treatment of a mental health or chemical dependency disorder or to improve or to maintain or to prevent deterioration of functioning resulting from such a disorder;
(b) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care;
(c) are furnished in the most appropriate and least restrictive setting in which services can be safely provided;
(d) are the most appropriate level or supply of service which can safely be provided; and
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(e) could not be omitted without adversely affecting the Member's mental and/or physical health or the quality of care rendered.
Medically necessary health care services means health care services, other than behavioral health care services which are:
(a) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, and/or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a Member, or endanger life;
(b) provided at appropriate facilities and at the appropriate levels of care for the treatment of a Member's health conditions;
(c) consistent with health care practice guidelines and standards that are endorsed by professionally recognized health care organizations or governmental agencies;
(d) consistent with the diagnoses of the conditions; and
(e) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency.
Member means a person who: is entitled to benefits under Title XIX of the Social Security Act and the Texas Medical Assistance Program (Medicaid), is in a Medicaid eligibility category included in the STAR Program, and is enrolled in the STAR Program.
Member month means one Member enrolled with an HMO during any given month. The total Member months for each month of a year comprise the annual Member months.
Mental health priority population means those individuals served by TXMHMR who meet the definition of the priority population. The priority population for mental health care services is defined as:
Children and adolescents under the age of 18 who have a diagnosis of mental illness who exhibit severe emotional or social disabilities which are life-threatening or require prolonged intervention.
Adults who have severe and persistent mental illnesses such as schizophrenia, major depression, manic depressive disorder, or other severely disabling mental disorders which require crisis resolution or ongoing and long-term support and treatment.
MIS means management information system.
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Non-provider subcontracts means contracts between HMO and a third party which performs a function, excluding delivery of health care services, that HMO is required to perform under its contract with TDH.
Pended claim means a claim for payment which requires additional information before the claim can be adjudicated as a clean claim.
Performance premium means an amount which may be paid to a managed care organization as a bonus for accomplishing a portion or all of the performance objectives contained in this contract.
Premium means the amount paid by TDH to a managed care organization on a monthly basis and is determined by multiplying the Member months times the capitation amount for each enrolled Member.
Primary care physician or primary care provider (PCP) means a physician or provider who has agreed with HMO to provide a medical home to Members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care (also see Medical home).
Provider means an individual or entity and its employees and subcontractors that directly provide health care services to HMO's Members under TDH's Medicaid managed care program.
Provider contract means an agreement entered into by a direct provider of health care services and HMO or an intermediary entity.
Proxy Claim Form means a form submitted by providers to document services delivered to Medicaid Members under a capitated arrangement. It is not a claim for payment.
Public information means information that is collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business by a governmental body or for a governmental body and the governmental body owns the information or has a right of access.
Real Time Captioning (also known as CART, Communication Access Real-Time Translation) means a process by which a trained individual uses a shorthand machine, a computer, and real-time translation software to type and simultaneously translate spoken language into text on a computer screen. Real Time Captioning is provided for individuals who are deaf, have hearing impairments, or have unintelligible speech; and it is usually used to interpret spoken English into text English but may be used to translate other spoken languages into text.
Renewal Review means a review process conducted by TDH or its agent(s) to assess HMO's capacity and capability to perform the duties and responsibilities required under the Contract. This process is required by Texas Government Code '533.007.
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RFA means Request For Application issued by TDH for the initial procurement in the service area and all RFA addenda, corrections or modifications.
Risk means the potential for loss as a result of expenses and costs of HMO exceeding payments made by TDH under this contract.
Rural Health Clinic (RHC) means an entity that meets all of the requirements for designation as a rural health clinic under '1861(aa)(1) of the Social Security Act and approved for participation in the Texas Medicaid Program.
SED means severe emotional disturbance as determined by a local mental health authority.
Service area means the counties included in a site selected for the STAR Program, within which a participating HMO must provide services.
SPMI means severe and persistent mental illness as determined by the Local Mental Health Authority.
Significant traditional provider (STP) means all hospitals receiving disproportionate share hospital funds (DSH) in FY >95 and all other providers in a county that, when listed by provider type in descending order by the number of recipient encounters, provided the top 80 percent of recipient encounters for each provider type in FY >95.
Special hospital means an establishment that:
(a) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated, and discharged and who require services more intensive than room, board, personal services, and general nursing care;
(b) has clinical laboratory facilities, diagnostic x-ray facilities, treatment facilities, or other definitive medical treatment;
(c) has a medical staff in regular attendance; and
(d) maintains records of the clinical work performed for each patient.
STAR Program is the name of the State of Texas Medicaid managed care program. ASTAR stands for the State of Texas Access Reform.
State fiscal year means the 12-month period beginning on September 1 and ending on August 31 of the next year.
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Subcontract means any written agreement between HMO and other party to fulfill the requirements of this contract. All subcontracts are required to be in writing.
Subcontractor means any individual or entity which has entered into a subcontract with HMO.
TAC means Texas Administrative Code.
TANF means Temporary Assistance to Needy Families.
TCADA means Texas Commission on Alcohol and Drug Abuse, the State agency responsible for licensing chemical dependency treatment facilities. TCADA also contracts with providers to deliver chemical dependency treatment services.
Texas Children's Mental Health Plan (TCMHP) means the interagency, State-funded initiative that plans, coordinates, provides and evaluates service systems for children and adolescents with behavioral health needs. The Plan is operated at a state and local level by Community Management Teams representing the major child-serving state agencies.
TDD means telecommunication device for the deaf. It is interchangeable with the term Teletype machine or TTY.
TDH means the Texas Department of Health or its designees.
TDHS means the Texas Department of Human Services.
TDI means the Texas Department of Insurance.
TDMHMR means the Texas Department of Mental Health and Mental Retardation, which is the State agency responsible for developing mental health policy for public and private sector providers.
Temporary Assistance to Needy Families (TANF) means the federally funded program that provides assistance to single-parent families with children who meet the categorical requirements for aid. This program was formerly known as Aid to Families with Dependent Children (AFDC) program.
Texas Health Steps (THSteps) is the name adopted by the State of Texas for the federally mandated Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. It includes the State's Comprehensive Care Program extension to EPSDT, which adds benefits to the federal EPSDT requirements contained in 42 United States Code '1396d(r), and defined and codified at 42 C.F.R. '440.40 and "441.56-62. TDH's rules are contained in 25 TAC, Chapter 33 (relating to Early and Periodic Screening, Diagnosis and Treatment).
Texas Medicaid Provider Procedures Manual means the policy and procedures manual published by or on behalf of TDH which contains policies and procedures required of all health care providers who
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participate in the Texas Medicaid program. The manual is published annually and is updated bi-monthly by the Medicaid Bulletin.
Texas Medicaid Service Delivery Guide means an attachment to the Texas Medicaid Provider Procedures Manual.
THHSC means the Texas Health and Human Services Commission.
Third Party Liability (TPL) means the legal responsibility of another individual or entity to pay for all or part of the services provided to Members under this contract (see 25 TAC, Subchapter 28, relating to Third Party Resources).
Third Party Recovery (TPR) means the recovery of payments made on behalf of a Member by TDH or HMO from an individual or entity with the legal responsibility to pay for the services.
TXMHMR means Texas Mental Health and Mental Retardation system which includes the state agency, TDMHMR, and the Local Mental Health and Mental Retardation Authorities.
Unclean claim means a claim that does not contain accurate and complete data in all claim fields that are required by HMO and TDH and other HMO-published requirements for adjudication, such as medical records, as appropriate (see definition of Clean Claim).
Urgent behavioral health situations means conditions which require attention and assessment within 24 hours but which do not place the Member in immediate danger to themselves or others and the Member is able to cooperate with treatment.
Urgent condition means a health condition, including an urgent behavioral health situation, which is not an emergency but is severe or painful enough to cause a prudent layperson, possessing the average knowledge of medicine, to believe that his or her condition requires medical treatment evaluation or treatment within 24 hours by the Member's PCP or PCP designee to prevent serious deterioration of the Member's condition or health.
Value-added services means a service that the state has approved to be included in this contract for which HMO does not receive capitation.
ARTICLE III PLAN ADMINISTRATIVE AND HUMAN RESOURCE
REQUIREMENTS
3.1 ORGANIZATION AND ADMINISTRATION
-------------------------------
3.1.1 HMO must maintain the organizational and administrative capacity
and capabilities to carry out all duties and responsibilities
under this contract.
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3.1.2 HMO must maintain assigned staff with the capacity and capability
to provide all services to all Members under this contract.
3.1.3 HMO must maintain an administrative office in the service area
(local office). The local office must comply with the American
with Disabilities Act (ADA) requirements for public buildings.
Member Advocates for the service area must be located in this
office (see Article 8.8).
3.1.4 HMO must provide training and development programs to all
assigned staff to ensure they know and understand the service
requirements under this contract including the reporting
requirements, the policies and procedures, cultural and
linguistic requirements and the scope of services to be provided.
3.1.5 HMO must notify TDH no later than 30 days after the effective
date of this contract of any changes in its organizational chart
as previously submitted to TDH.
3.1.5.1 HMO must notify TDH within fifteen (15) working days of any
change in key managers or behavioral health subcontractors. This
information must be updated whenever there is a significant
change in organizational structure or personnel.
3.1.6 Participation in Regional Advisory Committee. HMO must
participate on a Regional Advisory Committee established in the
service area in compliance with the Texas Government
Code,ss.ss.533.021-533.029. The Regional Advisory Committee in
each managed care service area must include representatives from
at least the following entities: hospitals; managed care
organizations; primary care providers; state agencies; consumer
advocates; Medicaid recipients; rural providers; long-term care
providers; specialty care providers, including pediatric
providers; and political subdivisions with a constitutional or
statutory obligation to provide health care to indigent patients.
THHSC and TDH will determine the composition of each Regional
Advisory Committee.
3.1.6.1 The Regional Advisory Committee is required to meet at least
quarterly for the first year after appointment of the committee
and at least annually in subsequent years. The actual frequency
may vary depending on the needs and requirements of the
committee.
3.2 NON-PROVIDER SUBCONTRACTS
-------------------------
3.2.1 HMO must enter into written contracts with all subcontractors and
maintain copies of the subcontracts in HMO's administrative
office. HMO must submit two copies of all non-provider
subcontracts to TDH for approval no later than 60 days after the
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effective date of this contract, unless the subcontract has
already been submitted to and approved by TDH. Subcontracts
entered into after the effective date of this contract must be
submitted no later than 30 days prior to the date of execution of
the subcontract. HMO must also make non-provider subcontracts
available to TDH upon request, at the time and location requested
by TDH.
3.2.1.1 TDH has 15 working days to review the subcontract and recommend
any suggestions or required changes. If TDH has not responded to
HMO by the fifteenth day, HMO may execute the subcontract. TDH
reserves the right to request HMO to modify any subcontract that
has been deemed approved.
3.2.1.2 HMO must notify TDH no later than 90 days prior to terminating
any subcontract affecting a major performance function of this
contract. All major subcontractor terminations or substitutions
require TDH approval (see Article 15.7). TDH may require HMO to
provide a transition plan describing how the subcontracted
function will continue to be provided. All subcontracts are
subject to the terms and conditions of this contract and must
contain the provisions of Article V, Statutory and Regulatory
Compliance, and the provisions contained in Article 3.2.4.
3.2.2 Subcontracts which are requested by any agency with authority to
investigate and prosecute fraud and abuse must be produced at the
time and in the manner requested by the requesting Agency.
Subcontracts requested in response to a Public Information
request must be produced within 3 working days from TDH's
notification to HMO of the request. All requested records must be
provided free-of-charge.
3.2.3 The form and substance of all subcontracts including subsequent
amendments are subject to approval by TDH. TDH retains the
authority to reject or require changes to any provisions of the
subcontract that do not comply with the requirements or duties
and responsibilities of this contract or create significant
barriers for TDH in carrying out its duty to monitor compliance
with the contract. HMO REMAINS RESPONSIBLE FOR PERFORMING ALL
DUTIES, RESPONSIBILITIES AND SERVICES UNDER THIS CONTRACT
REGARDLESS OF WHETHER THE DUTY, RESPONSIBILITY OR SERVICE IS
SUBCONTRACTED TO ANOTHER.
3.2.4 HMO and all intermediary entities must include the following
standard language in each subcontract and ensure that this
language is included in all subcontracts down to the actual
provider of the services. The following standard language is not
the only language that will be considered acceptable by TDH.
3.2.4.1 [Contractor] understands that services provided under this
contract are funded by state and federal funds under the Texas
Medical Assistance Program (Medicaid).
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[Contractor] is subject to all state and federal laws, rules and
regulations that apply to persons or entities receiving state and
federal funds. [Contractor] understands that any violation by
[Contractor] of a state or federal law relating to the delivery
of services under this contract, or any violation of the TDH/HMO
contract could result in liability for contract money damages,
and/or civil and criminal penalties and sanctions under state and
federal law.
3.2.4.2 [Contractor] understands and agrees that HMO has the sole
responsibility for payment of services rendered by the
[Contractor] under this contract. In the event of HMO insolvency
or cessation of operations, [Contractor's] sole recourse is
against HMO through the bankruptcy or receivership estate of HMO.
3.2.4.3 [Contractor] understands and agrees that TDH is not liable or
responsible for payment for any services provided under this
contract.
3.2.4.4 [Contractor] agrees that any modification, addition, or deletion
of the provisions of this agreement will become effective no
earlier than 30 days after HMO notifies TDH of the change. If TDH
does not provide written approval within 30 days from receipt of
notification from HMO, changes may be considered provisionally
approved.
3.2.4.5 This contract is subject to state and federal fraud and abuse
statutes. [Contractor] will be required to cooperate in the
investigation and prosecution of any suspected fraud or abuse,
and must provide any and all requested originals and copies of
records and information, free-of-charge on request, to any state
or federal agency with authority to investigate fraud and abuse
in the Medicaid program.
3.2.5 The Texas Medicaid Fraud Control Unit must be allowed to conduct
private interviews of HMO personnel, subcontractors and their
personnel, witnesses, and patients. Requests for information are
to be complied with, in the form and the language requested. HMO
employees and Contractors and subcontractors and their employees
and Contractors must cooperate fully in making themselves
available in person for interviews, consultation, grand jury
proceedings, pretrial conference, hearings, trial and in any
other process, including investigations. Compliance with this
Article is at HMO's and subcontractors' own expense.
3.3 MEDICAL DIRECTOR
----------------
3.3.1 HMO must have the equivalent of a full-time Medical Director
licensed under the Texas State Board of Medical Examiners (M.D.
or D.O.). HMO must have a written job description describing the
Medical Director's authority, duties and responsibilities as
follows:
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3.3.1.1 Ensure that medical necessity decisions, including prior
authorization protocols, are rendered by qualified medical
personnel and are based on TDH's definition of medical necessity,
and is in compliance with the Utilization Review Act and 21.58a
of the Texas Insurance Code.
3.3.1.2 Oversight responsibility of network providers to ensure that all
care provided complies with the generally accepted health
standards of the community.
3.3.1.3 Oversight of HMO's quality improvement process, including
establishing and actively participating in HMO's quality
improvement committee, monitoring Member health status, HMO
utilization review policies and standards and patient outcome
measures.
3.3.1.4 Identify problems and develop and implement corrective actions to
quality improvement process.
3.3.1.5 Develop, implement and maintain responsibility for HMO's medical
policy.
3.3.1.6 Oversight responsibility for medically related complaints.
3.3.1.7 Participate and provide witnesses and testimony on behalf of HMO
in the TDH Fair Hearing process.
3.3.2 The Medical Director must exercise independent medical judgment
in all medical necessity decisions. HMO must ensure that medical
necessity decisions are not adversely influenced by fiscal
management decisions. TDH may conduct reviews of medical
necessity decisions by HMO Medical Director at any time.
3.4 PLAN MATERIALS AND DISTRIBUTION OF PLAN MATERIALS
-------------------------------------------------
3.4.1 HMO must receive written approval from TDH for all updated
written materials, produced or authorized by HMO, containing
information about the STAR Program prior to distribution to
Members, prospective Members, providers within HMO's network, or
potential providers who HMO intends to recruit as network
providers. This includes Member education materials.
3.4.2 Member materials must meet cultural and linguistic requirements
as stated in Article VIII. Unless otherwise required, Member
materials must be written at a 4th - 6th grade reading
comprehension level; and translated into the language of any
major population group, except when TDH requires HMO to use
statutory language (i.e., advance directives, medical necessity,
etc.).
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3.4.3 All materials regarding the STAR Program, including Member
education materials, must be submitted to TDH for approval prior
to distribution. TDH has 15 working days to review the materials
and recommend any suggestions or required changes. If TDH has not
responded to HMO by the fifteenth day, HMO may print and
distribute these materials. TDH reserves the right to request HMO
to modify plan materials that are deemed approved and have been
printed or distributed. These modifications can be made at the
next printing unless substantial non-compliance exists. An
exception to the 15 working day timeframe may be requested in
writing by HMO for written provider materials that require a
quick turn-around time (e.g., letters). These materials will be
reviewed by TDH within 5 working days.
3.4.4 HMO must forward approved English versions of their Member
Handbook, Member Provider Directory, newsletters, individual
Member letters, and any written information that applies to
Medicaid-specific services to DHS for DHS to translate into
Spanish. DHS must provide the written and approved translation
into Spanish to HMO no later than 15 working days after receipt
of the English version by DHS. HMO must incorporate the approved
translation into these materials. If DHS has not responded to HMO
by the fifteenth day, HMO may print and distribute these
materials. TDH reserves the right to require revisions to
materials if inaccuracies are discovered or if changes are
required by changes in policy or law. These changes can be made
at the next printing unless substantial non-compliance exists.
HMO has the option of using the DHS translation unit or their own
translators for health education materials that do not contain
Medicaid-specific information and for other marketing materials
such as billboards, radio spots, and television and newspaper
advertisements.
3.4.5 HMO must reproduce all written instructional, educational, and
procedural documents required under this contract and distribute
them to its providers and Members. HMO must reproduce and
distribute instructions and forms to all network providers who
have reporting and audit requirements under this contract.
3.4.6 HMO must provide TDH with at least three paper copies and one
electronic copy of their Member Handbook, Provider Manual and
Member Provider Directory. If an electronic format is not
available, five paper copies are required.
3.4.7 Changes to the Required Critical Elements for the Member
Handbook, Provider Manual, and Provider Directory may be handled
as inserts until the next printing of these documents.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.1 HMO must keep all records required to be created and retained
under this contract. Records related to Members served in this
service area must be made available in
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HMO's local office when requested by TDH. All records must be
retained for a period of five (5) years unless otherwise
specified in this contract. Original records must be kept in the
form they were created in the regular course of business for a
minimum of two (2) years following the end of the contract
period. Microfilm, digital or electronic records may be
substituted for the original records after the first two (2)
years, if the retention system is reliable and supported by a
retrieval system which allows reasonable access to the records.
All copies of original records must be made using guidelines and
procedures approved by TDH, if the original documents will no
longer be available or accessible.
3.5.2 Availability and Accessibility. All records, documents and data
required to be created under this contract are subject to audit,
inspection and production. If an audit, inspection or production
is requested by TDH, TDH's designee or TDH acting on behalf of
any agency with regulatory or statutory authority over Medicaid
Managed Care, the requested records must be made available at the
time and at the place the records are requested. Copies of
requested records must be produced or provided free-of-charge to
the requesting agency. Records requested after the second year
following the end of contract term that have been stored or
archived must be accessible and made available within 10 calendar
days from the date of a request by TDH or the requesting agency
or at a time and place specified by the requesting entity.
3.5.3 Accounting Records. HMO must create and keep accurate and
complete accounting records in compliance with Generally Accepted
Accounting Principles (GAAP). Records must be created and kept
for all claims payments, refunds and adjustment payments to
providers, premium or capitation payments, interest income and
payments for administrative services or functions. Separate
records must be maintained for medical and administrative fees,
charges, and payments.
3.5.4 General Business Records. HMO must create and keep complete and
accurate general business records to reflect the performance of
duties and responsibilities, and compliance with the provisions
of this contract.
3.5.5 Medical Records. HMO must require, through contractual provisions
or provider manual, providers to create and keep medical records
in compliance with the medical records standards contained in the
Standards for Quality Improvement Programs in Appendix A. All
medical records must be kept for at least five (5) years, except
for records of rural health clinics, which must be kept for a
period of six (6) years from the date of service.
3.5.6 Matters in Litigation. HMO must keep records related to matters
in litigation for five (5) years following the termination or
resolution of the litigation.
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3.5.7 On-line Retention of Claims History. HMO must keep automated
claims payment histories for a minimum of 18 months from date of
adjudication in an on-line inquiry system. HMO must also keep
sufficient history on-line to ensure all claim/encounter service
information is submitted to and accepted by TDH for processing.
3.6 HMO REVIEW OF TDH MATERIALS
---------------------------
TDH will submit all studies or audits that relate or refer to HMO
for review and comment to HMO 10 working days prior to releasing
the report to the public or to Members.
3.7 HMO TELEPHONE ACCESS REQUIREMENTS
---------------------------------
HMO must ensure that HMO has adequately-staffed telephone lines.
Telephone personnel must receive customer service telephone
training. HMO must ensure that telephone staffing is adequate to
fulfill the standards of promptness and quality listed below:
1. 80% of all telephone calls must be answered within an
average of 30 seconds;
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2. The lost (abandonment) rate must not exceed 10%;
3. HMO cannot impose maximum call duration limits but must
allow calls to be of sufficient length to ensure adequate
information is provided to the Member or Provider.
ARTICLE IV FISCAL, FINANCIAL, CLAIMS AND INSURANCE REQUIREMENTS
4.1 FISCAL SOLVENCY
---------------
4.1.1 HMO must be and remain in full compliance with all state and
federal solvency requirements for HMOs, including but not limited
to all reserve requirements, net worth standards, debt-to-equity
ratios, or other debt limitations.
4.1.2 If HMO becomes aware of any impending changes to its financial or
business structure which could adversely impact its compliance
with these requirements or its ability to pay its debts as they
come due, HMO must notify TDH immediately in writing. If HMO
becomes aware of a take-over or assignment which would require
the approval of TDI or TDH, HMO must notify TDH immediately in
writing.
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4.1.3 HMO must not have been placed under state conservatorship or
receivership or filed for protection under federal bankruptcy
laws. None of HMO's property, plant or equipment must have been
subject to foreclosure or repossession within the preceding
10-year period. HMO must not have any debt declared in default
and accelerated to maturity within the preceding 10-year period.
HMO represents that these statements are true as of the contract
effective date. HMO must inform TDH within 24 hours of a change
in any of the preceding representations.
4.2 MINIMUM NET WORTH
-----------------
4.2.1 HMO has minimum net worth to the greater of (a) $1,500,000; (b)
an amount equal to the sum of twenty-five dollars ($25) times the
number of all enrollees including Medicaid Members; or (c) an
amount that complies with standards adopted by TDI. Minimum net
worth means the excess total admitted assets over total
liabilities, excluding liability for subordinated debt issued in
compliance with Article 1.39 of the Insurance Code.
4.2.2 The minimum equity must be maintained during the entire contract
period.
4.3 PERFORMANCE BOND
----------------
HMO has furnished TDH with a performance bond in the form
prescribed by TDH and approved by TDI, naming TDH as Obligee,
securing HMO's faithful performance of the terms and conditions
of this contract. The performance bond has been issued in the
amount of $100,000 for a two year period (contract period). If
the contract is renewed or extended under Article XVIII, a
separate bond will be required for each additional term of the
contract. The bond has been issued by a surety licensed by TDI,
and specifies cash payment as the sole remedy. Performance Bond
requirements under this Article must comply with Texas Insurance
Code ss. 11.1805, relating to Performance and Fidelity Bonds.
The bond must be delivered to TDH at the same time the signed HMO
contract is delivered to TDH.
4.4 INSURANCE
---------
4.4.1 HMO must maintain, or cause to be maintained, general liability
insurance in the amounts of at least $1,000,000 per occurrence
and $5,000,000 in the aggregate.
4.4.2 HMO must maintain or require professional liability insurance on
each of the providers in its network in the amount of $100,000
per occurrence and $300,000 in the aggregate, or the limits
required by the hospital at which the network provider has
admitting privileges.
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4.4.3 HMO must maintain an umbrella professional liability insurance
policy for the greater of $3,000,000 or an amount (rounded to the
next $100,000) which represents the number of STAR Members
enrolled in HMO in the first month of the contract year
multiplied by $150, not to exceed $10,000,000.
4.4.4 Any exceptions to the requirements of this Article must be
approved in writing by TDH prior to the effective date of this
contract. HMOs and providers who qualify as either state or
federal units of government are exempt from the insurance
requirements of this Article and are not required to obtain
exemptions from these provisions prior to the effective date of
this contract. State and federal units of government are required
to comply with and are subject to the provisions of the Texas or
Federal Tort Claims Act.
4.5 FRANCHISE TAX
-------------
HMO certifies that its payment of franchise taxes is current or
that it is not subject to the State of Texas franchise tax.
4.6 AUDIT
-----
4.6.1 TDH, TDI, or their designee have the right from time to time to
examine and audit books and records of HMO, or its
subcontractors, relating to: (1) HMO's capacity to bear the risk
of potential financial losses; (2) services performed or
determination of amounts payable under this contract; (3)
detection of fraud and abuse; and (4) other purposes TDH deems to
be necessary to perform its regulatory function and/or to enforce
the provisions of this contract.
4.6.2 TDH is required to conduct an audit of HMO at least once every
three years. HMO is responsible for paying the costs of an audit
conducted under this Article. The costs of the audit paid by HMO
are allowable costs under this contract.
4.7 PENDING OR THREATENED LITIGATION
--------------------------------
HMO must require disclosure from subcontractors and network
providers of all pending or potential litigation or
administrative actions against the subcontractor or network
provider and must disclose this information to TDH, in writing,
prior to the execution of this contract. HMO must make reasonable
investigation and inquiry that there is not pending or potential
litigation or administrative action against the providers or
subcontractors in HMO's provider network. HMO must notify TDH of
any litigation which is initiated or threatened after the
effective date of this contract within seven days of receiving
service or becoming aware of the threatened litigation.
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4.8 MISREPRESENTATION AND FRAUD IN RESPONSE TO RFA AND IN HMO
OPERATIONS
----------------------------------------------------------
4.8.1 HMO was awarded this contract based upon the responses and
representations contained in HMO's application submitted in
response to TDH's RFA. All responses and representations upon
which scoring was based were considered material to the decision
of whether to award the contract to HMO. RFA responses are
incorporated into this contract by reference. The provisions of
this contract control over any RFA response if there is a
conflict between the RFA and this contract, or if changes in law
or policy have changed the requirements of HMO contracting with
TDH to provide Medicaid Managed Care.
4.8.2 This contract was awarded in part based upon HMO's representation
of its current equity and financial ability to bear the risks
under this contract. TDH will consider any misrepresentations of
HMO's equity, HMO's ability to bear financial risks of this
contract or inflating the equity of HMO, solely for the purpose
of being awarded this contract, a material misrepresentation and
fraud under this contract.
4.8.3 Discovery of any material misrepresentation or fraud on the part
of HMO in HMO's application or in HMO's day-to-day activities and
operations may cause this contract to terminate and may result in
legal action being taken against HMO under this contract, and
state and federal civil and criminal laws.
4.9 THIRD PARTY RECOVERY
--------------------
4.9.1 Third Party Recovery. All Members are required to assign their
rights to any benefits to the State and agree to cooperate with
the State in identifying third parties who may be liable for all
or part of the costs for providing services to the Member, as a
condition for participation in the Medicaid program. HMO is
authorized to act as the State's agent in enforcing the State's
rights to third party recovery under this contract.
4.9.2 Identification. HMO must develop and implement systems and
procedures to identify potential third parties who may be liable
for payment of all or part of the costs for providing medical
services to Members under this contract. Potential third parties
must include any of the sources identified in 42 C.F.R. 433.138,
relating to identifying third parties, except workers'
compensation, uninsured and underinsured motorist insurance,
first and third party liability insurance and tortfeasors. HMO
must coordinate with TDH to obtain information from other state
and federal agencies and HMO must cooperate with TDH in obtaining
information from commercial third party resources. HMO must
require all providers to comply with the provisions of 25
TAC ss.28, relating to Third Party Recovery in the Medicaid
program.
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4.9.3 Exchange of Identified Resources. HMO must forward identified
resources of uninsured and underinsured motorist insurance, first
and third party liability insurance and tortfeasors ("excepted
resources") to TDH for TDH to pursue collection and recovery from
these resources. TDH will forward information on all third party
resources identified by TDH to HMO. HMO must coordinate with TDH
to obtain information from other state and federal agencies,
including HCFA for Medicare and the Child Support Enforcement
Division of the Office of the Attorney General for medical
support. HMO must cooperate with TDH in obtaining and exchanging
information from commercial third party resources.
4.9.4 Recovery. HMO must actively pursue and collect from third party
resources which have been identified, except when the cost of
pursuing recovery reasonably exceeds the amount which may be
recovered by HMO. HMO is not required to, but may pursue recovery
and collection from the excepted resources listed in Article
4.9.3. HMO must report the identity of these resources to TDH,
even if HMO win pursue collection and recovery from the excepted
resources.
4.9.4.1 HMO must provide third party resource information to network
providers to whom individual Members have been assigned or who
provide services to Members. HMO must require providers to seek
recovery from potential third party resources prior to seeking
payment from HMO. If network providers are paid capitation, HMO
must either seek recovery from third party resources or account
to TDH for all amounts received by network providers from third
party resources.
4.9.4.2 HMO must prohibit network providers from interfering with or
placing liens upon the State's right or HMO's right, acting as
the State's agent, to recovery from third party resources. HMO
must prohibit network providers from seeking recovery in excess
of the Medicaid payable amount or otherwise violating state and
federal laws.
4.9.5 Retention. HMO may retain as income a amounts recovered from
third party sources as long as recoveries are obtained in
compliance with the contract and state and federal laws.
4.9.6 Accountability. HMO must report all third party recovery efforts
and amounts recovered as required in Article 12.1.12. If HMO
fails to pursue and recover from third parties no later than 180
days after the date of service, TDH may pursue third party
recoveries and retain all amounts recovered without accounting to
HMO for the amounts recovered. Amounts recovered by TDH will be
added to expected third party recoveries to reduce future
capitation rates, except recoveries from those excepted third
party resources listed in Article 4.9.3.
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4.10 CLAIMS PROCESSING REQUIREMENTS
------------------------------
4.10.1 HMO and claims processing subcontractors must comply with TDH's
Texas Managed Care Claims Manual (Claims Manual), which contains
TDH's claims processing requirements. HMO must comply with any
changes to the Claims Manual with appropriate notice of changes
from TDH.
4.10.2 HMO must forward claims submitted to HMO in error to either: 1)
the correct HMO if the correct HMO can be determined from the
claim or is otherwise known to HMO; 2) the State's claims
administrator; or 3) the provider who submitted the claim in
error, along with an explanation of why the claim is being
returned.
4.10.3 HMO must not pay any claim submitted by a provider who has been
excluded or suspended from the Medicare or Medicaid programs for
fraud and abuse when HMO has knowledge of the exclusion or
suspension.
4.10.4 All provider clean claims must be adjudicated (finalized as paid
or denied adjudicated) within 30 days from the date the claim is
received by HMO. HMO must pay providers interest on a clean claim
which is not adjudicated within 30 days from the date the claim
is received by HMO or becomes clean at a rate of 1.5% per month
(18% annual) for each month the clean claim remains
unadjudicated. HMO will be held to a minimum performance level of
90% of all clean claims paid or denied within 30 days of receipt
and 99% of all clean claims paid or denied within 90 days of
receipt. Failure to meet these performance levels is a default
under this contract and could lead to damages or sanctions as
outlined in Article XVII. The performance levels are subject to
changes if required to comply with federal and state laws or
regulations.
4.10.4.1 All claims and appeals submitted to HMO and claims processing
subcontractors must be paid-adjudicated (clean claims),
denied-adjudicated (clean claims), or denied for additional
information (unclean claims) to providers within 30 days from the
date the claim is received by HMO. Providers must be sent a
written notice for each claim that is denied for additional
information (unclean claims) identifying the claim, all reasons
why the claim is being denied, the date the claim was received by
HMO, all information required from the provider in order for HMO
to adjudicate the claim, and the date by which the requested
information must be received from the provider.
4.10.4.2 Claims that are suspended (pended internally) must be
subsequently paid-adjudicated, denied-adjudicated, or denied for
additional information (pended externally) within 30 days from
date of receipt. No claim can be suspended for a period exceeding
30 days from date of receipt of the claim.
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4.10.4.3 HMO must identify each data field of each claim form that is
required from the provider in order for HMO to adjudicate the
claim. HMO must inform all network providers about the required
fields no later than 30 days prior to the effective date of the
contract or as a provision within HMO/provider contract.
Out-of-network providers must be informed of all required fields
if the claim is denied for additional information. The required
fields must include those required by HMO and TDH.
4.10.5 HMO is subject to Article XVI, Default and Remedies, for claims
that are not processed on a timely basis as required by this
contract and the Claims Manual. Notwithstanding the provisions of
Articles 4.10.4, 4.10.4.1 and 4.10.4.2, HMO's failure to
adjudicate (paid, denied, or external pended) at least ninety
percent (90%) of all claims within thirty (30) days of receipt
and ninety-nine percent (99%) within ninety (90) days of receipt
for the contract year to date is a default under Article XVI of
this contract.
4.10.6 HMO must comply with the standards adopted by the U.S. Department
of Health and Human Services under the Health Insurance
Portability and Accountability Act of 1996 submitting and
receiving claims information through electronic data
interchange(EDI) that allows for automated processing and
adjudication of claims within two or three years, as applicable,
from the date the rules promulgated under HIPAA are adopted.
4.10.7 For claims requirements regarding retroactive PCP changes for
mandatory Members, see Article 7.8.12.2.
4.11 INDEMNIFICATION
---------------
4.11.1 HMO/TDH: HMO must agree to indemnify TDH and its agents for any
and all claims, costs, damages and expenses, including court
costs and reasonable attorney's fees, which are related to or
arise out of:
4.11.1.1 Any failure, inability, or refusal of HMO or any of its network
providers or other subcontractors to provide covered services;
4.11.1.2 Claims arising from HMO's, HMO's network provider's or other
subcontractor's negligent or intentional conduct in not providing
covered services; and
4.11.1.3 Failure, inability, or refusal of HMO to pay any of its network
providers or subcontractors for covered services.
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4.11.2 HMO/Provider: HMO is prohibited from requiring providers to
indemnify HMO for HMO's own acts or omissions which result in
damages or sanctions being assessed against HMO either under this
contract or under state or federal law.
ARTICLE V STATUTORY AND REGULATORY COMPLIANCE REQUIREMENTS
5.1 COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS
----------------------------------------------
5.1.1 HMO must know, understand and comply with all state and federal
laws and regulations relating to the Texas Medicaid Program which
have not been waived by HCFA. HMO must comply with all rules
relating to the Medicaid managed care program adopted by TDH,
TDI, THHSC, TDMHMR and any other state agency delegated authority
to operate or administer Medicaid or Medicaid managed care
programs. To the extent there is an inconsistency or conflict
between or among state and federal laws relating to the Texas
Medicaid Program, the Medicaid managed care program, or this
contract, federal law shall apply.
5.1.2 HMO must require, through contract provisions, that all network
providers or subcontractors comply with all state and federal
laws and regulations relating to the Texas Medicaid Program and
all rules relating to the Medicaid managed care program adopted
by TDH, TDI, THHSC, TDMHMR and any other state agency delegated
authority to operate Medicaid or Medicaid Managed Care programs.
5.1.3 HMO must comply with the provisions of the Clean Air Act and the
Federal Water Pollution Control Act, as amended, found at 42
C.F.R. 7401, et seq. and 33 U.S.C. 1251, et seq., respectively.
5.2 PROGRAM INTEGRITY
-----------------
5.2.1 HMO has not been excluded, debarred, or suspended from
participation in any program under Title XVIII or Title XIX under
any of the provisions of Section 1128(a) or (b) of the Social
Security Act (42 USCss.1320 a-7), or Executive Order 12549. HMO
must notify TDH within 3 days of the time it receives notice that
any action is being taken against HMO or any person defined under
the provisions of Section 1128(a) or (b) or any subcontractor,
which could result in exclusion, debarment, or suspension of HMO
or a subcontractor from the Medicaid program, or any program
listed in Executive Order 12549.
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5.2.2 HMO must comply with the provisions of, and file the
certification of compliance required by the Byrd Anti-Lobbying
Amendment, found at 31 U.S.C. 1352, relating to use of federal
funds for lobbying for or obtaining federal contracts.
5.3 FRAUD AND ABUSE COMPLIANCE PLAN
-------------------------------
5.3.1 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. HMO must cooperate and assist TDH and THHSC and
any other state or federal agency charged with the duty of
identifying, investigating, sanctioning or prosecuting suspected
fraud and abuse, HMO must provide originals and/or copies of all
records and information requested and allow access to premises
and provide records to TDH or its authorized agent(s), THHSC,
HCFA, the U.S. Department of Health and Human Services, FBI, TDI,
and the Texas Attorney General's Medicaid Fraud Control Unit. All
copies of records must be provided free of charge.
5.3.2 Compliance Plan. HMO must submit to TDH for approval a written
fraud and abuse compliance plan which is based on the Model
Compliance Plan issued by the U.S. Department of Health and Human
Services, the Office of Inspector General (OIG), no later than 30
days after the effective date of the contract. HMO must designate
an officer or director in its organization who has the
responsibility and authority for carrying out the provisions of
its compliance plan. HMO must submit any updates or modifications
in its compliance plan to TDH for approval at least 30 days prior
to the modifications going into effect. HMO's fraud and abuse
compliance plan must:
5.3.2.1 ensure that all officers, directors, managers and employees know
and understand the provisions of HMO's fraud and abuse compliance
plan.
5.3.2.2 contain procedures designed to prevent and detect potential or
suspected abuse and fraud in the administration and delivery of
services under this contract.
5.3.2.3 contain provisions for the confidential reporting of plan
violations to the designated person in HMO.
5.3.2.4 contain provisions for the investigation and follow-up of any
compliance plan reports.
5.3.2.5 ensure that the identity of individuals reporting violations of
the plan is protected.
5.3.2.6 contain specific and detailed internal procedures for officers,
directors, managers and employees for detecting, reporting, and
investigating fraud and abuse compliance plan violations.
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5.3.2.7 require any confirmed or suspected fraud and abuse under state or
federal law be reported to TDH, the Medicaid Program Integrity
section of the Office of Investigations and Enforcement of the
Texas Health and Human Services Commission, and/or the Medicaid
Fraud Control Unit of the Texas Attorney General.
5.3.2.8 ensure that no individual who reports plan violations or
suspected fraud and abuse is retaliated against.
5.3.3 Training. HMO must designate executive and essential personnel to
attend mandatory training in fraud and abuse detection,
prevention and reporting. The training will be conducted by the
Office of Investigation and Enforcement, Health and Human
Services Commission, and will be provided free of charge. HMO
must schedule and complete training no later than 90 days after
the effective date of any updates or modification of the written
Model Compliance Plan.
5.3.3.1 If HMO's personnel have attended OIE training prior to the
effective date of this contract, they are not required to attend
additional OIE training unless new training is required due to
changes in federal and/or state law or regulations. If additional
OIE training is required, TDH will notify HMO to schedule this
additional training.
5.3.3.2 If HMO updates or modifies its written fraud and abuse compliance
plan, HMO must train its executive and essential personnel on
these updates or modifications no later than 90 days after the
effective date of the updates or modifications.
5.3.3.3 If HMO's executive and essential personnel change or if HMO
employs additional executive and essential personnel, the new or
additional personnel must attend OIE training within 90 days of
employment by HMO.
5.3.4 HMO's failure to report potential or suspected fraud or abuse may
result in sanctions, contract cancellation, or exclusion from
participation in the Medicaid program.
5.3.5 HMO must allow the Texas Medicaid Fraud Control Unit and THHSC's
Office of Investigations and Enforcement, to conduct private
interviews of HMO's employees, subcontractors and their
employees, witnesses, and patients. Requests for information must
be complied with in the form and the language requested. HMO's
employees and its subcontractors and their employees must
cooperate fully and be available in person for interviews,
consultation, grand jury proceedings, pre-trial conference,
hearings, trial and in any other process.
5.3.6 Subcontractors. HMO must submit the documentation described in
Articles 5.3.6.1 through 5.3.6.3, in compliance with Texas
Government Code ss.533.012, regarding any subcontractor providing
health care services under this contract except for those
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providers who have re-enrolled as a provider in the Medicaid
program as required by Section 2.07, Chapter 1153, Acts of the
75th Legislature, Regular Session, 1997, or who modified a
contract in compliance with that section. HMO must submit
information in a format as specified by TDH. Documentation must
be submitted no later than 120 days after the effective date of
this contract. Subcontracts entered into after the effective date
of this contract must be submitted no later than 90 days after
the effective date of the subcontract. The required documentation
required under this provision is not subject to disclosure under
Chapter 552, Government Code.
5.3.6.1 a description of any financial or other business relationship
between HMO and its subcontractor;
5.3.6.2 a copy of each type of contract between HMO and its
subcontractor;
5.3.6.3 a description of the fraud control program used by any
subcontractor.
5.4 SAFEGUARDING INFORMATION
------------------------
5.4.1 All Member information, records and data collected or provided to
HMO by TDH or another State agency is protected from disclosure
by state and federal law and regulations. HMO may only receive
and disclose information which is directly related to
establishing eligibility, providing services and conducting or
assisting in the investigation and prosecution of civil and
criminal proceedings under state or federal law. HMO must include
a confidentiality provision in all subcontracts with individuals.
5.4.2 HMO is responsible for informing Members and providers regarding
the provisions of 42 C.F.R 431, Subpart F, relating to
Safeguarding Information on Applicants and Recipients, and HMO
must ensure that confidential information is protected from
disclosure except for authorized purposes.
5.4.3 HMO must assist network PCPs in developing and implementing
policies for protecting the confidentiality of AIDS and
HIV-related medical information and an anti-discrimination policy
for employees and Members with communicable diseases. Also see
Health and Safety Code, Chapter 85, Subchapter E, relating to the
Duties of State Agencies and State Contractors.
5.4.4 HMO must require that subcontractors have mechanisms in place to
ensure Member's (including minor's) confidentiality for family
planning services.
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5.5 NON-DISCRIMINATION
------------------
HMO agrees to comply with and to include in all subcontracts a
provision that the subcontractor will comply with each of the
following requirements:
5.5.1 Title VI of the Civil Rights Act of 1964, Section 504 of the
Rehabilitation Act of 1973, the Americans with Disabilities Act
of 1990, and all requirements imposed by the regulations
implementing these acts and all amendments to the laws and
regulations. The regulations provide in part that no person in
the United States shall on the grounds of race, color, national
origin, sex, age, disability, political beliefs or religion be
excluded from participation in, or denied, any aid, care, service
or other benefits, or be subjected to any discrimination under
any program or activity receiving federal funds.
5.5.2 Texas Health and Safety Code Section 85.113 (relating to
workplace and confidentiality guidelines regarding AIDS and HIV).
5.5.3 The provisions of Executive Order 11246, as amended by 11375,
relating to Equal Employment Opportunity.
5.5.4 HMO shall not discriminate with respect to participation,
reimbursement, or indemnification as to any provider who is
acting within the scope of the provider's license or
certification under applicable State law, solely on the basis of
such license or certification. This requirement shall not be
construed to prohibit HMO from including providers only to the
extent necessary to meet the needs of HMO's Members or from
establishing any measure designed to maintain quality and control
costs consistent with HMO's responsibilities.
5.6 HISTORICALLY UNDERUTILIZED BUSINESSES (HUBS)
--------------------------------------------
5.6.1 TDH is committed to providing procurement and contracting
opportunities to historically underutilized businesses (HUBs),
under the provisions of Texas Government Code, Title 10, Subtitle
D, Chapter 2161 and 1 TAC ss., 111.11(b) and 111.13 (c)(7).
TDH requires its Contractors and subcontractors to make a good
faith effort to assist HUBs in receiving a portion of the total
contract value of this contract.
5.6.2 The HUB good faith effort goal for this contract is 18.1 % of
total premiums paid. HMO agrees to make a good faith effort to
meet or exceed this goal. HMO acknowledges it made certain good
faith effort representations and commitments to TDH during the
HUB good faith effort determination process. HMO agrees to use
its best efforts to abide by these representations and
commitments' during the contract period.
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5.6.3 HMO is required to submit HUB quarterly reports to TDH as
required in Article 12.11.
5.6.4 TDH will assist HMO in meeting the contracting and reporting
requirements of this Article.
5.7 BUY TEXAS
---------
HMO agrees to "Buy Texas" products and materials when they are
available at a comparable price and in a comparable period of
time, as required by Section 48 of Article IX of the General
Appropriations Act of 1995.
5.8 CHILD SUPPORT
-------------
5.8.1 The Texas Family Code ss.231.006 requires TDH to withhold
contract payments from any for-profit entity or individual who is
at least 30 days delinquent in child support obligations. It is
HMO's responsibility to determine and verify that no owner,
partner, or shareholder who has at least at 25% ownership
interest is delinquent in child support obligations. HMO must
attach a list of the names and Social Security numbers of all
shareholders, partners or owners who have at least a 25%
ownership interest in HMO.
5.8.2 Under Section 231.006 of the Family Code, the contractor
certifies that the contractor is not ineligible to receive the
specified grant, loan, or payment and acknowledges that this
contract may be terminated and payment may be withheld if this
certification is inaccurate. A child support obligor who is more
than 30 days delinquent in paying child support or a business
entity in which the obligor is a sole proprietor, partner,
shareholder, or owner with an ownership interest of at least 25%
is not eligible to receive the specified grant, loan or payment.
5.8.3 If TDH is informed and verifies that a child support obligor who
is more than 30 days delinquent is a partner, shareholder, or
owner with at least a 25% ownership interest, it will withhold
any payments due under this contract until it has received
satisfactory evidence that the obligation has been satisfied or
that the obligor has entered into a written repayment request.
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.1 This contract and all network provider and subcontractor
contracts are subject to public disclosure under the Public
Information Act (Texas Government Code, Chapter 552). TDH may
receive Public Information requests related to this contract,
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information submitted as part of the compliance of the contract
and HMO's application upon which this contract was awarded. TDH
agrees that it will promptly deliver a copy of any request for
Public Information to HMO.
5.9.2 TDH may, in its sole discretion, request a decision from the
Office of the Attorney General (AG opinion) regarding whether the
information requested is excepted from required public
disclosure. TDH may rely on HMO's written representations in
preparing any AG opinion request, in accordance with Texas
Government Code ss.552.305. TDH is not liable for failing to
request an AG opinion or for releasing information which is not
deemed confidential by law, if HMO fails to provide TDH with
specific reasons why the requested information is exempt from the
required public disclosure. TDH or the Office of the Attorney
General will notify all interested parties if an AG opinion is
requested.
5.9.3 If HMO believes that the requested information qualifies as a
trade secret or as commercial or financial information, HMO must
notify TDH-within three (3) working days of HMO's receipt of the
request-of the specific text, or portions of text, which HMO
claims is excepted from required public disclosure. HMO is
required to identify the specific provisions of the Public
Information Act which HMO believes are applicable, and is
required to include a detailed written explanation of how the
exceptions apply to the specific information identified by HMO as
confidential and excepted from required public disclosure.
5.10 NOTICE AND APPEAL
-----------------
HMO must comply with the notice requirements contained in 25 TAC
ss.36.21, and the maintaining benefits and services contained in
25 TAC ss.36.22, whenever HMO intends to take an action affecting
the Member benefits and services under this contract. Also see
the Member appeal requirements contained in Article 8.7 of this
contract.
ARTICLE VI SCOPE OF SERVICES
6.1 SCOPE OF SERVICES
-----------------
HMO is paid capitation for all services included in the State of
Texas Title XIX State Plan and the 1915(b) waiver application for
the SDA currently filed and approved by HCFA, except those
services which are specifically excluded and listed in Article
6.1.8 (non-capitated services).
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6.1.1 HMO must pay for or reimburse for all covered services provided
to mandatory-enrolled Members for whom HMO is paid capitation.
6.1.2 TDH must pay for or reimburse for all covered services provided
to SSI voluntary Members who enroll with HMO on a voluntary
basis. It is at HMO's discretion whether to provide value-added
services to voluntary Members.
6.1.3 HMO must provide covered services described in the 1999 Texas
Medicaid Provider Procedures Manual (Provider Procedures Manual),
subsequent editions of the Provider Procedures Manual also in
effect during the contract period, and all Texas Medicaid
Bulletins which update the 1999 Provider Procedures Manual and
subsequent editions of the Provider Procedures Manual published
during the contract period.
6.1.4 Covered services are subject to change due to changes in federal
law, changes in Texas Medicaid policy, and/or responses to
changes in Medicine, Clinical protocols, or technology.
6.1.5 The STAR Program has obtained a waiver to the State Plan to
include three enhanced benefits to all voluntary and mandatory
STAR Members. Two of these enhanced benefits removed restrictions
which previously applied to Medicaid eligible individuals 21
years and older: the three-prescriptions per month limit; and,
the 30-day spell of illness limit. One of these expanded the
covered benefits to add an annual adult well check.
6.1.6 Value-added Services. Value-added services that are approved by
TDH during the contracting process are included in the Scope of
Services under this contract. Value-added services are listed in
Appendix C.
6.1.6.1 The approval request must include:
6.1.6.1.1 A detailed description of the service to be offered;
6.1.6.1.2 Identification of the category or group of Members eligible to
receive the service if it is a type of service that is not
appropriate for all Members. (HMO has the
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discretion to determine if voluntary Members are eligible for
the value-added services);
6.1.6.1.3 Any limits or restrictions which apply to the service; and
6.1.6.1.4 A description of how a Member may obtain or access the service.
6.1.6.2 Value-added services can only be added or removed by written
amendment of this contract. HMO cannot include a value-added
service in any material distributed to Members or prospective
Members until this contract has been amended to include that
value-added service or HMO has received written approval from TDH
pending finalization of the contract amendment.
6.1.6.2.1 If a value-added service is deleted by amendment, HMO must notify
each Member that the service is no longer available through HMO,
and HMO must revise all materials distributed to prospective
Members to reflect the change in covered services.
6.1.6.3 Value-added services must be offered to all mandatory HMO
Members, as indicated in Article 6.1.6.1.2, unless the contract
is amended or the contract terminates.
6.1.7 HMO may offer additional benefits that are outside the scope of
services of this contract to individual Members on a case-by-case
basis, based on medical necessity, cost-effectiveness, and
satisfaction and improved health/behavioral health status of the
Member/Member family.
6.1.8 Non-Capitated Services. The following Texas Medicaid program
services have been excluded from the services included in the
calculation of HMO capitation rate:
THSteps Dental (including Orthodontia)
Early Childhood Intervention Case
Management/Service/Coordination
MHMR Targeted Case Management
Mental Health Rehabilitation
Pregnant Women and Infants Case Management
THSteps Medical Case Management
Texas School Health and Related Services
Texas Commission for the Blind Case Management
Tuberculosis Services Provided by TDH-approved providers
(Directly Observed Therapy and Contact Investigation)
Vendor Drugs (out-of-office drugs)
Medical Transportation
TDHS Hospice Services
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Refer to relevant chapters in the Provider Procedures Manual and the Texas Medicaid Bulletins for more information.
Although HMO is not responsible for paying or reimbursing for
these non-capitated services, HMO remains responsible for
providing appropriate referrals for Members to obtain or access
these services.
6.1.8.1 HMO is responsible for informing providers that all non-capitated
services must be submitted to TDH for payment or reimbursement.
6.2 PRE-EXISTING CONDITIONS
-----------------------
HMO is responsible for providing all covered services to each
eligible Member beginning on the effective date of the contract
or the Member's date of enrollment under the contract regardless
of pre-existing conditions, prior diagnosis and/or receipt of any
prior health care services.
6.3 SPAN OF ELIGIBILITY
-------------------
The following outlines HMO's responsibilities for payment of
hospital and freestanding psychiatric facility (facility)
admissions:
6.3.1 Inpatient Admission Prior to Enrollment in HMO. HMO is
responsible for payment of physician and non-hospital/facility
charges for the period for which HMO is paid a capitation payment
for that Member. HMO is not responsible for hospital/facility
charges for Members admitted prior to the date of enrollment in
HMO.
6.3.2 Inpatient Admission After Enrollment in HMO. HMO is responsible
for all hospital/facility charges until the Member is discharged
from the hospital/facility or until the Member loses Medicaid
eligibility.
6.3.2.1 If a Member regains Medicaid eligibility and the Member was
enrolled in HMO at the time the Member was admitted to the
hospital, HMO is responsible for hospital/facility charges as
follows:
6.3.2.1.1 Member Re-enrolls into HMO After Regaining Medicaid Eligibility.
HMO is responsible for charges for the period for which HMO
receives capitation payment for the Member or until the Member is
discharged or loses Medicaid eligibility.
6.3.2.1.2 Member Re-enrolls in Another Health Plan After Regaining Medicaid
Eligibility. HMO is responsible for hospital/facility charges
until the Member is discharged or
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loses Medicaid eligibility.
6.3.3 Plan Change. A Member cannot change from one health plan to
another health plan during an inpatient hospital stay.
6.3.4 Hospital/Facility Transfer. Discharge from one acute care
hospital/facility and readmission to another acute care
hospital/facility within 24 hours for continued treatment is not
a discharge under this contract.
6.3.5 HMO insolvency or receivership. HMO is responsible for payment of
all services provided to a person who was a Member on the date of
insolvency or receivership to the same extent they would
otherwise be responsible under this Article 6.3.
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.1 HMO must ensure that the care of newly enrolled Members is not
disrupted or interrupted. HMO must take special care to provide
continuity in the care of newly enrolled Members whose health or
behavioral health condition has been treated by specialty care
providers or whose health could be placed in jeopardy if care is
disrupted or interrupted.
6.4.2 Pregnant Members with 12 weeks or less remaining before the
expected delivery date must be allowed to remain under the care
of the Member's current OB/GYN through the Member's postpartum
checkup, even if the provider is out-of-network. If Member wants
to change her OB/GYN to one who is in the plan, she must be
allowed to do so if the provider to whom she wishes to transfer
agrees to accept her in the last trimester.
6.4.3 HMO must pay a Member's existing out-of-network providers for
covered services until the Member's records, clinical information
and care can be transferred to a network provider. Payment must
be made within the time period required for network providers.
HMO may pay any out-of-network provider a reasonable and
customary amount determined by the HMO. This Article does not
extend the obligation of HMO to reimburse the Member's existing
out-of-network providers of on-going care for more than 90 days
after Member enrolls in HMO or for more than nine months in the
case of a Member who at the time of enrollment in HMO has been
diagnosed with and receiving treatment for a terminal illness.
The obligation of HMO to reimburse the Member's existing
out-of-network provider for services provided to a pregnant
Member with 12 weeks or less remaining before the expected
delivery date extends through delivery of the child, immediate
postpartum care, and the follow-up checkup within the first six
weeks of delivery.
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6.4.4 HMO must provide or pay out-of-network providers who provide
covered services to Members who move out of the service area
through the end of the period for which capitation has been paid
for the Member.
6.5 EMERGENCY SERVICES
------------------
6.5.1 HMO must pay for the professional, facility, and ancillary
services that are medically necessary to perform the medical
screening examination and stabilization of HMO Member presenting
as an emergency medical condition or an emergency behavioral
health condition to the hospital emergency department, 24 hours a
day, 7 days a week, rendered by either HMO's in-network or
out-of-network providers. HMO may elect to pay any emergency
services provider an amount negotiated between the emergency
provider and HMO, or a reasonable and customary amount determined
by the HMO.
6.5.2 HMO must ensure that its network primary care providers (PCPs)
have after-hours telephone availability 24 hours a day, 7 days a
week throughout the service area.
6.5.3 HMO cannot require prior authorization as a condition for payment
for an emergency medical condition, an emergency behavioral
health condition, or labor and delivery.
6.5.4 Medical Screening Examination. A medical screening examination
may range from a relatively simple history, physical examination,
diagnosis, and treatment, to a complex examination, diagnosis,
and treatment that requires substantial use of hospital emergency
department and physician services. HMO must pay for the emergency
medical screening examination required to determine whether an
emergency condition exists, as required by 42 U.S.C. 1395dd. HMOs
must reimburse for both the physician's services and the
hospital's emergency services, including the emergency room and
its ancillary services.
6.5.5 Stabilization Services. HMO must pay for emergency services
performed to stabilize the Member as documented by the Emergency
physician in the Member's medical record. HMOs must reimburse for
physician's services and hospital's emergency services including
the emergency room and its ancillary services. With respect to an
emergency medical condition, to stabilize is to provide such
medical care as to assure within reasonable medical probability
that no deterioration of the condition is likely to result from,
or occur during discharge, transfer, or admission of the Member
from the emergency room.
6.5.6 Post-stabilization Services. Post-stabilization services are
services subsequent to an emergency that a treating physician
views as medically necessary after an emergency medical condition
has been stabilized. They are not "emergency services" and are
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subject to HMO's prior authorization process. HMO must be
available to authorize or deny post-stabilization services within
one hour after being contacted by the treating physician.
6.5.7 HMO must provide access to the TDH-designated Level I and Level
II trauma centers within the State or hospitals meeting the
equivalent level of trauma care. HMOs may make out-of-network
reimbursement arrangements with the TDH-designated Level I and
Level II trauma centers to satisfy this access requirement.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.1 HMO must provide or arrange to have provided to Members all
behavioral health care services included as covered services.
These services are described in detail in the Texas Medicaid
Provider Procedures Manual (Provider Procedures Manual) and the
Texas Medicaid Bulletins, which is the bi-monthly update to the
Provider Procedures Manual. Clinical information regarding
covered services are published by the Texas Medicaid program in
the Texas Medicaid Service Delivery Guide.
6.6.2 HMO must maintain a behavioral health provider network that
includes psychiatrists, psychologists and other behavioral health
providers. HMO must provide or arrange to have provided
behavioral health benefits described as covered services. These
services are indicated in the Provider Procedures Manual and the
Texas Medicaid Bulletins, which is the bi-monthly update to the
Provider Procedures Manual. Clinical information regarding
covered services are published by the Texas Medicaid Program in
the Texas Medicaid Service Delivery Guide. The network must
include providers with experience in serving children and
adolescents to ensure accessibility and availability of qualified
providers to all eligible children and adolescents in the service
area. The list of providers including names, addresses and phone
numbers must be available to TDH upon request.
6.6.3 HMO must maintain a Member education process to help Members know
where and how to obtain behavioral health care services.
6.6.4 HMO must implement policies and procedures to ensure that Members
who require routine or regular laboratory and ancillary medical
tests or procedures to monitor behavioral health conditions are
provided the services by the provider ordering the procedure or
at a lab located at or near the provider's office.
6.6.5 When assessing Members for behavioral health care services, HMO
and network behavioral health providers must use the DSM-IV
multi-axial classification and report axes I, II, III, IV, and V
to TDH. TDH may require use of other assessment
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instrument/outcome measures in addition to the DSM-IV. Providers
must document DSM-IV and assessment/outcome information in the
Member's medical record.
6.6.6 HMO must permit Members to self refer to any in-network
behavioral health care provider without a referral from the
Member's PCP. HMO must permit Members to participate in the
selection or assignment of the appropriate behavioral health
individual practitioner(s) who will serve them. HMO previously
submitted a written copy of its policies and procedures for
self-referral to TDH. Changes or amendments to those policies and
procedures must be submitted to TDH for approval at least 60 days
prior to their effective date.
6.6.7 HMO must require, through contract provisions, that PCPs have
screening and evaluation procedures for detection and treatment
of, or referral for, any known or suspected behavioral health
problems and disorders. PCPs may provide any clinically
appropriate behavioral health care services within the scope of
their practice. This requirement must be included in all Provider
Manuals.
6.6.8 HMO must require that behavioral health providers refer Members
with known or suspected physical health problems or disorders to
their PCP for examination and treatment. Behavioral health
providers may only provide physical health care services if they
are licensed to do so. This requirement must be included in all
Provider Manuals.
6.6.9 HMO must require that behavioral health providers send initial
and quarterly (or more frequently if clinically indicated)
summary reports of Members' behavioral health status to PCP. This
requirement must be included in all Provider Manuals.
6.6.10 HMO must require, through contract provisions, that all Members
receiving inpatient psychiatric services are scheduled for
outpatient follow-up and/or continuing treatment prior to
discharge. The outpatient treatment must occur within 7 days from
the date of discharge. HMO must ensure that behavioral health
providers contact Members who have missed appointments within 24
hours to reschedule appointments.
6.6.11 HMO must provide inpatient psychiatric services to Members under
the age of 21 who have been ordered to receive the services by a
court of competent jurisdiction under the provisions of Chapters
573 and 574 of the Texas Health and Safety Code, relating to
court ordered commitments to psychiatric facilities.
6.6.11.1 HMO cannot deny, reduce or controvert the medical necessity of
any court ordered inpatient psychiatric service for Members under
age 21. Any modification or termination of services must be
presented to the court with jurisdiction over the matter for
determination.
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6.6.11.2 A Member who has been ordered to receive treatment under the
provisions of Chapter 573 or 574 of the Texas Health and Safety
Code cannot appeal the commitment through HMO's complaint or
appeals process.
6.6.12 HMO must comply with 28 TAC ss.ss.3.8001 et seq., regarding
utilization review of chemical dependency treatment.
6.7 FAMILY PLANNING - SPECIFIC REQUIREMENTS
---------------------------------------
6.7.1 Counseling and Education. HMO must require, through contract
provisions, that Members requesting contraceptive services or
family planning services are also provided counseling and
education about family planning and family planning services
available to Members. HMO must develop outreach programs to
increase community support for family planning and encourage
Members to use available family planning services. HMO is
encouraged to include a representative cross-section of Members
and family planning providers who practice in the community in
developing, planning and implementing family planning outreach
programs.
6.7.2 Freedom of Choice. HMO must ensure that Members have the right to
choose any Medicaid participating family planning provider,
whether the provider chosen by the Member is in or outside HMO
provider network. HMO must provide Members access to information
about the providers of family planning services available and the
Member's right to choose any Medicaid family planning provider.
HMO must provide access to confidential family planning services.
6.7.3 Provider Standards and Payment. HMO must require all
subcontractors who are family planning agencies to deliver family
planning services according to the TDH Family Planning Service
Delivery Standards. HMO must provide, at minimum, the full scope
of services available under the Texas Medicaid program for family
planning services. HMO will reimburse family planning agencies
and out-of-network family planning providers the Medicaid fee-for
service amounts for family planning services, including medically
necessary medications, contraceptives, and supplies.
6.7.4 HMO must provide medically-approved methods of contraception to
Members. Contraceptive methods must be accompanied by verbal and
written instructions on their correct use. HMO must establish
mechanisms to ensure all medically approved methods of
contraception are made available to the Member, either directly
or by referral to a subcontractor. The following initial Member
education content may vary according to the educator's assessment
of the Member's current knowledge:
6.7.4.1 general benefits of family planning services and contraception;
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6.7.4.2 information on male and female basic reproductive anatomy and
physiology;
6.7.4.3 information regarding particular benefits and potential side
effects and complications of all available contraceptive methods;
6.7.4.4 information concerning all of the health care provider's
available services, the purpose and sequence of health care
provider procedures, and the routine schedule of return visits;
6.7.4.5 information regarding medical emergencies and where to obtain
emergency care on a 24-hour basis;
6.7.4.6 breast self-examination rationales and instructions unless
provided during physical exam (for females); and
6.7.4.7 information on HIV/STD infection and prevention and safer sex
discussion.
6.7.5 HMO must require, through contractual provisions, that
subcontractors have mechanisms in place to ensure Member's
(including minor's) confidentiality for family planning services.
6.7.6 HMO must develop, implement, monitor, and maintain standards,
policies and procedures for providing information regarding
family planning to providers and Members, specifically regarding
State and federal laws governing Member confidentiality
(including minors). Providers and family planning agencies cannot
require parental consent for minors to receive family planning
services.
6.7.7 HMO must report encounter data on family planning services in
accordance with Article 12.2.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.1 THSteps Services. HMO must develop effective methods to ensure
that children under the age of 21 receive THSteps services when
due and according to the recommendations established by the
American Academy of Pediatrics and the THSteps periodicity
schedule for children. HMO must arrange for THSteps services to
be provided to all eligible Members except when a Member
knowingly and voluntarily declines or refuses services after the
Member has been provided information upon which to make an
informed decision.
6.8.2 Member Education and Information. HMO must ensure that Members
are provided information and educational materials about the
services available through the THSteps program, and how and when
they can obtain the services. The information should tell the
Member how they can obtain dental benefits, transportation
services
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through the TDH Medical Transportation program, and advocacy
assistance from HMO.
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include THSteps
benefits, the periodicity schedule for THSteps checkups and
immunizations, and Comprehensive Care Program (CCP) services
available under the THSteps program to Members under age 21
years. Providers must also be educated and trained regarding the
requirements imposed upon the department and contracting HMOs
under the Consent Decree entered in Frew v. McKinney, et. al.,
Civil Action No. 3:93CV65, in the United States District Court
for the Eastern District of Texas, Paris Division. Providers
should be educated and trained to treat each THSteps visit as an
opportunity for a comprehensive assessment of the Member.
6.8.4 Member Outreach. HMO must provide an outreach unit that works
with Members to ensure they receive prompt services and are
effectively informed about available THSteps services. Each month
HMO must retrieve from the Enrollment Broker BBS a list of
Members who are due and overdue THSteps services. Using these
lists and their own internally generated lists, HMOs will contact
Members and encourage Members who are periodically due or overdue
a THSteps service to obtain the service as soon as possible. HMO
outreach staff must coordinate with TDH THSteps outreach staff to
ensure that Members have access to the Medical Transportation
Program, and that any coordination with other agencies is
maintained.
6.8.5 Initial Checkups Upon Enrollment. HMO must have mechanisms in
place to ensure that all newly enrolled Members receive a THSteps
checkup within 90 days from enrollment, if one is due according
to the American Academy of Pediatrics periodicity schedule, or if
there is uncertainty regarding whether one is due. HMO should
make THSteps checkups a priority to all newly enrolled Members.
6.8.6 Accelerated Services to Migrant Populations. HMO must cooperate
and coordinate with the department, outreach programs and THSteps
regional program staff and agents to ensure prompt delivery of
services to children of migrant farm workers and other migrant
populations who may transition into and out of HMOs program more
rapidly and/or unpredictably than the general population.
6.8.7 Newborn Checkups. HMO must have mechanisms in place to ensure
that all newborn Members have an initial newborn checkup before
discharge from the hospital and again within two weeks from the
time of birth. HMO must require providers to send all THSteps
newborn screens to the TDH Bureau of Laboratories or a TDH
certified laboratory. Providers must include detailed identifying
information for all screened
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newborn Members and the Member's mother to allow TDH to link the
screens performed at the hospital with screens performed at the
two week follow-up.
6.8.7.1 Laboratory Tests: All laboratory specimens collected as a
required component of a THSteps checkup (see Medicaid Provider
Procedures Manual for age-specific requirements) must be
submitted to the TDH Laboratory for analysis. HMO must educate
providers about THSteps program requirements for submitting
laboratory tests to the TDH Bureau of Laboratories.
6.8.8 Coordination and Cooperation. HMO must make an effort to
coordinate and cooperate with existing community and school-based
health and education programs that offer services to school-aged
children in a location that is both familiar and convenient to
the Members. HMO must make a good faith effort to comply with
Head Start's requirement that Members participating in Head Start
receive their THSteps check-up no later than 45 days after
enrolling into either program.
6.8.9 Immunizations. HMO must educate providers on the Immunization
Standard Requirements set forth in Chapter 161, Health and Safety
Code; the standards in the ACIP Immunization Schedule; and the
AAR Periodicity Schedule.
6.8.9.1 ImmTrac Compliance. HMO must educate providers about and require
providers to comply with the requirements of Chapter 161, Health
and Safety Code, relating to the Texas Immunization Registry
(ImmTrac), to include parental consent on the Vaccine Information
Statement.
6.8.10 Claim Forms. HMO must require all THSteps providers to submit
claims for services paid (either on a capitated or fee-for
service basis) on the HCFA 1500 claim form and use the unique
procedure coding required by TDH.
6.8.11 Compliance with THSteps Performance Benchmark. TDH will establish
performance benchmarks against which HMO's full compliance with
the THSteps periodicity schedule will be measured. The
performance benchmarks will establish minimum compliance measures
which will increase over time. HMO must meet all performance
benchmarks required for THSteps services.
6.8.12 Validation of Encounter Data. Encounter data will be validated by
chart review of a random sample of THSteps eligible enrollees
against monthly encounter data reported by HMO. Chart reviews
will be conducted by TDH to validate that all screens are
performed when due and as reported, and that reported data is
accurate and timely. Substantial deviation between reported and
charted encounter data could result in HMO and/or network
providers being investigated for potential fraud and abuse
without notice to HMO or the provider.
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6.9 PERINATAL SERVICES
------------------
6.9.1 HMO's perinatal health care services must ensure appropriate care
is provided to women and infants who are Members of HMO, from the
preconception period through the infant's first year of life.
HMO's perinatal health care system must comply with the
requirements of Health & Safety Code, Chapter 32 Maternal and
Infant Health Improvement Act and 25 TAC ss.37.233 et seq.
6.9.2 HMO shall have a perinatal health care system in place that, at a
minimum, provides the following services:
6.9.2.1 pregnancy planning and perinatal health promotion and education
for reproductive-age women;
6.9.2.2 perinatal risk assessment of nonpregnant women, pregnant and
postpartum women, and infants up to one year of age;
6.9.2.3 access to appropriate levels of care based on risk assessment,
including emergency care;
6.9.2.4 transfer and care of pregnant women, newborns, and infants to
tertiary care facilities when necessary;
6.9.2.5 availability and accessibility of obstetricians/gynecologists,
anesthesiologists, and neonatologists capable of dealing with
complicated perinatal problems;
6.9.2.6 availability and accessibility of appropriate outpatient and
inpatient facilities capable of dealing with complicated
perinatal problems; and
6.9.2.7 compiles, analyzes and reports process and outcome data of
Members to TDH.
6.9.3 HMO must have procedures in place to assign a pediatrician to an
unborn child prior to birth of the child.
6.9.4 HMO must provide inpatient care for its pregnant/delivering
Members and newborn Members in a health care facility, if
requested by the mother or is determined to be medically
necessary by the Member's PCP, for a minimum of:
6.9.4.1 48 hours following an uncomplicated vaginal delivery; and
6.9.4.2 96 hours for an uncomplicated caesarean delivery.
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6.9.5 HMO must establish mechanisms to ensure that medically necessary
inpatient care is provided to either the Member or the newborn
Member for complications following the birth of the newborn using
HMO's prior authorization procedures for a medically necessary
hospitalization.
6.9.6 HMO is responsible for all covered services provided to newborn
Members. The State will enroll newborn children of STAR Members
in accordance with Section 533.0075 of the Texas Government Code
when changes to the DHS eligibility system that are necessary to
implement the law have been made. TDH will notify HMO of the
implementation date of the changes under Section 533.0075 of the
Government Code. Section 533.0075 states that newborn children of
STAR Members will be enrolled in a STAR health plan on the date
on which DHS has completed the newborn's Medicaid eligibility
determination, including the assignment of a Medicaid eligibility
number to the newborn, or 60 days after the date of birth,
whichever is earlier.
6.10 EARLY CHILDHOOD INTERVENTION (ECI)
----------------------------------
6.10.1 ECI Services. HMO must provide all federally mandated services
contained at 34 C.F.R. 303.1 et seq., and 25 TAC ss.621.21 et
seq., relating to identification, referral and delivery of health
care services contained in the Member's Individual Family Service
Plan (IFSP). An IFSP is the written plan which identifies a
Member's disability or chronic or complex condition(s) or
developmental delay, and describes the course of action developed
to meet those needs, and identifies the person or persons
responsible for each action in the plan. The plan is a mutual
agreement of the Member's Primary Care Physician (PCP), Case
Manager, and the Member/family, and is part of the Member's
medical record.
6.10.2 ECI Providers. HMO must contract with qualified providers to
provide ECI services to Members under age 3 with developmental
delays. HMO may contract with local ECI programs or non-ECI
providers who meet qualifications for participation by the Texas
Interagency Council on Early Childhood Intervention to provide
ECI services.
6.10.3 Identification and Referral. HMO must ensure that network
providers are educated regarding the identification of Members
under age 3 who have or are at risk for having disabilities
and/or developmental delays. HMO must use written education
material developed or approved by the Texas Interagency Council
on Early Childhood Intervention. HMO must ensure that all
providers refer identified Members to ECI service providers
within two working days from the day the Member is identified.
Eligibility for ECI services is determined by the local ECI
program using the criteria contained in 25 TAC ss.621.21 et seq.
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6.10.4 Coordination. HMO must coordinate and cooperate with local ECI
programs which perform assessment in the development of the
Individual Family Service Plan (IFSP), including on-going case
management and other non-capitated services required by the
Member's IFSP. Cooperation includes conducting medical diagnostic
procedures and providing medical records required to perform
developmental assessments and develop the IFSP within the time
lines established at 34 C.F.R. 303.1 et seq. ECI case management
is not an HMO capitated service.
6.10.5 Intervention. HMO must require, through contract provisions, that
all medically necessary health and behavioral health care
services contained in the Member's IFSP are provided to the
Member in amount, duration and scope established by the IFSP.
Medical necessity for health and behavioral health care services
is determined by the interdisciplinary team as approved by the
Member's PCP. HMO cannot modify the plan of care or alter the
amount, duration and scope of services required by the Member's
IFSP. HMO cannot create unnecessary barriers for the Member to
obtain IFSP services, including requiring prior authorization for
the ECI assessment and insufficient authorization periods for
prior authorized services.
6.11 SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND
CHILDREN (WIC) - SPECIFIC REQUIREMENTS
--------------------------------------------------------------
6.11.1 HMO must coordinate with WIC to provide certain medical
information which is necessary to determine WIC eligibility, such
as height, weight, hematocrit or hemoglobin (see Article
7.16.3.2).
6.11.2 HMO must direct all eligible Members to the WIC program (Medicaid
recipients are automatically income-eligible for WIC).
6.11.3 HMO must coordinate with existing WIC providers to ensure Members
have access to the Special Supplemental Nutrition Program for
Women, Infants and Children; or HMO must provide these services.
6.11.4 HMO may use the nutrition education provided by WIC to satisfy
health education requirements described in this contract.
6.12 TUBERCULOSIS (TB)
-----------------
6.12.1 Education, Screening, Diagnosis and Treatment. HMO must provide
Members and providers with education on the prevention, detection
and effective treatment of tuberculosis (TB). HMO must establish
mechanisms to ensure all procedures required to screen at-risk
Members and to form the basis for a diagnosis and proper
prophylaxis and management of TB are available to all Members,
except services referenced in Article 6.1.8 as non-capitated
services. HMO must develop policies and
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procedures to ensure that Members who may be or are at risk for
exposure to TB are screened for TB. An at-risk Member refers to a
person who is susceptible to TB because of the association with
certain risk factors, behaviors, drug resistance, or
environmental conditions. HMO must consult with the local TB
control program to ensure that all services and treatments
provided by HMO are in compliance with the guidelines recommended
by the American Thoracic Society (ATS), the Centers for Disease
Control and Prevention (CDC), and TDH policies and standards.
6.12.2 Reporting and Referral. HMO must implement policies and
procedures requiring providers to report all confirmed or
suspected cases of TB to the local TB control program within one
working day of identification of a suspected case, using the
forms and procedures for reporting TB adopted by TDH (25
TAC ss.97). HMO must require that in-state labs report
mycobacteriology culture results positive for M. Tuberculosis and
M. Tuberculosis antibiotic susceptibility to TDH as required for
in-state labs by 25 TAC ss.97.5(a). Referral to state-operated
hospitals specializing in the treatment of tuberculosis should
only be made for TB-related treatment.
6.12.3 Medical Records. HMO must provide access to Member medical
records to TDH and the local TB control program for all confirmed
and suspected TB cases upon request.
6.12.4 Coordination and Cooperation with the Local TB Control Program.
HMO must coordinate with the local TB control program to ensure
that all Members with confirmed or suspected TB have a contact
investigation and receive Directly Observed Therapy (DOT). HMO
must require, through contract provisions, that providers report
any Member who is non-compliant, drug resistant, or who is or may
be posing a public health threat to TDH or the local TB control
program. HMO must cooperate with the local TB control program in
enforcing the control measures and quarantine procedures
contained in Chapter 81 of the Texas Health and Safety Code.
6.12.4.1 HMO must have a mechanism for coordinating a post-discharge plan
for follow-up DOT with the local TB program.
6.12.4.2 HMO must coordinate with the TDH South Texas Hospital and Texas
Center for Infectious Disease for voluntary and court-ordered
admission, discharge plans, treatment objectives and projected
length of stay for Members with multi-drug resistant TB.
6.12.4.3 HMO may contract with the local TB control programs to perform
any of the capitated services required in Article 6.12.
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6.13 PEOPLE WITH DISABILITIES OR CHRONIC OR COMPLEX CONDITIONS
---------------------------------------------------------
6.13.1 HMO shall provide the following services to persons with
disabilities or chronic or complex conditions. These services are
in addition to the covered services described in detail in the
Texas Medicaid Provider Procedures Manual (Provider Procedures
Manual) and the Texas Medicaid Bulletins which is the bi-monthly
update to the Provider Procedures Manual. Clinical information
regarding covered services are published by the Texas Medicaid
program in the Texas Medicaid Service Delivery Guide.
6.13.2 HMO must develop and maintain a system and procedures for
identifying Members who have disabilities or chronic or complex
medical and behavioral health conditions. Once identified, HMO
must have effective health delivery systems to provide the
covered services to meet the special preventive, primary acute,
and speciality health care needs appropriate for treatment of the
individual's condition. The guidelines and standards established
by the American Academy of Pediatrics, the American College of
Obstetrics/Gynecologists, the U.S. Public Health Service, and
other medical and professional health organizations and
associations' practice guidelines whose standards are recognized
by TDH must be used in determining the medically necessary
services and plan of care for each individual.
6.13.3 HMO must require that the PCP for all persons with disabilities
or chronic or complex conditions develops a plan of care to meet
the needs of the Member. The plan of care must be based on health
needs, specialist(s) recommendations, and periodic reassessment
of the Member's developmental and functional status and service
delivery needs. HMO must require providers to maintain record
keeping systems to ensure that each Member who has been
identified with a disability or chronic or complex condition has
an initial plan of care in the primary care provider's medical
records, Member agrees to that plan of care, and that the plan is
updated as often as the Member's needs change, but at least
annually.
6.13.4 HMO must provide primary care and specialty care provider network
for persons with disabilities or chronic or complex conditions.
Specialty and subspecialty providers serving all Members must be
Board Certified/Board Eligible in their specialty. HMO may
request exceptions from TDH for approval of traditional providers
who are not board-certified or board-eligible but who otherwise
meet HMO's credentialing requirements.
6.13.5 HMO must have in its network PCPs and specialty care providers
that have documented experience in treating people with
disabilities or chronic or complex conditions, including
children. For services to children with disabilities or chronic
or complex conditions, HMO must have in its network PCPs and
specialty care providers
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that have demonstrated experience with children with disabilities
or chronic or complex conditions in pediatric specialty centers
such as children's hospitals, medical schools, teaching hospitals
and tertiary center levels.
6.13.6 HMO must provide information, education and training programs to
Members, families, PCPs, specialty physicians, and community
agencies about the care and treatment available in HMO's plan for
Members with disabilities or chronic or complex conditions.
6.13.7 HMO must coordinate care and establish linkages, as appropriate
for a particular Member, with existing community-based entities
and services, including but not limited to: Maternal and Child
Health, Chronically Ill and Disabled Children's Services (CIDC),
the Medically Dependent Children Program (MDCP), Community
Resource Coordination Groups (CRCGs), Interagency Council on
Early Childhood Intervention (ECI), Home and Community-based
Services (HCS), Community Living Assistance and Support Services
(CLASS), Community Based Alternatives (CBA), In Home Family
Support, Primary Home Care, Day Activity and Health Services
(DAHS), Deaf/Blind Multiple Disabled waiver program and Medical
Transportation Program (MTP).
6.13.8 HMO must include TDH approved pediatric transplant centers, TDH
designated trauma centers, and TDH designated hemophilia centers
in its provider network (see Appendices E, F, and G for a listing
of these facilities).
6.13.9 HMO must ensure Members with disabilities or chronic or complex
conditions have access to treatment by a multidisciplinary team
when determined to be medically necessary for effective
treatment, or to avoid separate and fragmented evaluations and
service plans. The teams must include both physician and
non-physician providers determined to be necessary by the
Member's PCP for the comprehensive treatment of the Member. The
team must:
6.13.9.1 Participate in hospital discharge planning;
6.13.9.2 Participate in pre-admission hospital planning for non-emergency
hospitalizations;
6.13.9.3 Develop specialty care and support service recommendations to be
incorporated into the primary care provider's plan of care;
6.13.9.4 Provide information to the Member and the Member's family
concerning the specialty care recommendations; and
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6.13.9.5 Develop and implement training programs for primary care
providers, community agencies, ancillary care providers, and
families concerning the care and treatment of a Member with a
disability or chronic or complex conditions.
6.13.10 HMO must identify coordinators of medical care to assist
providers who serve Members with disabilities and chronic or
complex conditions and the Members and their families in locating
and accessing appropriate providers inside and outside HMO's
network.
6.13.11 HMO must assist, through information and referral, eligible
Members in accessing providers of non-capitated Medicaid services
listed in Article 6.1.8, as applicable.
6.13.12 HMO must ensure that Members who require routine or regular
laboratory and ancillary medical tests or procedures to monitor
disabilities or chronic or complex conditions are allowed by HMO
to receive the services from the provider in the provider's
office or at a contracted lab located at or near the provider's
office.
6.14 HEALTH EDUCATION AND WELLNESS AND PREVENTION PLANS
--------------------------------------------------
6.14.1 Health Education Plan. HMO must develop and implement a Health
Education plan. The health education plan must tell Members how
HMO system operates, how to obtain services, including emergency
care and out-of-plan services. The plan must emphasize the value
of screening and preventive care and must contain
disease-specific information and educational materials.
6.14.2 Wellness Promotion Program. HMO must conduct wellness promotion
programs to improve the health status of its Members. HMO may
cooperatively conduct Health Education classes for all enrolled
STAR Members with one or more HMOs also contracting with TDH in
the service area to provide services to Medicaid recipients in
all counties of the service area. Providers and HMO staff must
integrate health education, wellness and prevention training into
the care of each Member. HMO must provide a range of health
promotion and wellness information and activities for Members in
formats that meet the needs of all Members. HMO must:
(1) develop, maintain and distribute health education services
standards, policies and procedures to providers;
(2) monitor provider performance to ensure the standards for
health education services are complied with;
(3) inform providers in writing about any non-compliance with
the plan standards, policies or procedures;
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(4) establish systems and procedures that ensure that provider's medical instruction and education on preventive services provided to the Member are documented in the Member's medical record; and
(5) establish mechanisms for promoting preventive care
services to Members who do not access care, e.g.
newsletters, reminder cards, and mail-outs.
6.14.3 Health Education Activities Report. HMO must submit, upon
request, a Health Education Activities Schedule to TDH or its
designee listing the time and location of classes, health fairs
or other events conducted during the time period of the request.
6.15 SEXUALLY TRANSMITTED DISEASES (STDS) AND HUMAN IMMUNODEFICIENCY
VIRUS (HIV)
---------------------------------------------------------------
HMO must provide STD services that include STD/HIV prevention,
screening, counseling, diagnosis, and treatment. HMO is
responsible for implementing procedures to ensure that Members
have prompt access to appropriate services for STDs, including
HIV.
6.15.1 HMO must allow Members access to STD services and HIV diagnosis
services without prior authorization or referral by PCP. HMO must
comply with Texas Family Code ss.32.003, relating to consent to
treatment by a child.
6.15.2 HMO must provide all covered services required to form the basis
for a diagnosis and treatment plan for STD/HIV by the provider.
6.15.3 HMO must consult with TDH regional public health authority to
ensure that Members receiving clinical care of STDs, including
HIV, are managed according to a protocol which has been approved
by TDH (see Article 7.16.1 relating to cooperative agreements
with public health authorities).
6.15.4 HMO must make education available to providers and Members on the
prevention, detection and effective treatment of STDs, including
HIV.
6.15.5 HMO must require providers to report all confirmed cases of STDs,
including HIV, to the local or regional health authority
according to 25 Texas Administrative Code, Sections 97.131 -
97.134, using the required forms and procedures for reporting
STDs.
6.15.6 HMO must coordinate with the TDH regional health authority to
ensure that Members with confirmed cases of syphilis, chancroid,
gonorrhea, chlamydia and HIV receive
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risk reduction and partner elicitation/notification counseling.
Coordination must be included in the subcontract required by
Article 7.16.1. HMO may contract with local or regional health
authorities to perform any of the covered services required in
Article 6.15.
6.15.7 HMO's PCPs may enter into contracts or agreements with
traditional HIV service providers in the service area to provide
services such as case management, psychosocial support and other
services. If the service provided is a covered service under this
contract, the contract or agreement must include payment
provisions.
6.15.8 The subcontract with the respective TDH regional offices and city
and county health departments, as described in Article 7.16.1,
must include, but not be limited to, the following topics:
6.15.8.1 Access for Case Investigation. Procedures must be established to
make Member records available to public health agencies with
authority to conduct disease investigation, receive confidential
Member information, and follow up.
6.15.8.2 Medical Records and Confidentiality. HMO must require that
providers have procedures in place to protect the confidentiality
of Members provided STD/HIV services. These procedures must
include, but are not limited to, the manner in which medical
records are to be safeguarded; how employees are to protect
medical information; and under what conditions information can be
shared. HMO must inform and require its providers who provide
STD/HIV services to comply with all state laws relating to
communicable disease reporting requirements. HMO must implement
policies and procedures to monitor provider compliance with
confidentiality requirements.
6.15.8.3 Partner Referral and Treatment. Members who are named as contacts
to an STD, including HIV, should be evaluated and treated
according to HMO's protocol. All protocols must be approved by
TDH. HMO's providers must coordinate referral of non-Member
partners to local and regional health department STD staff.
6.15.8.4 Informed Consent and Counseling. HMO must have policies and
procedures in place regarding obtaining informed consent and
counseling Members. The subcontracts with providers who treat HIV
patients must include provisions requiring the provider to refer
Members with HIV infection to public health agencies for in-depth
prevention counseling, on-going partner elicitation and
notification services and other prevention support services. The
subcontracts must also include provisions that require the
provider to direct-counsel or refer an HIV-infected Member about
the need to inform and refer all sex and/or needle-sharing
partners that might have been exposed to the infection for
prevention counseling and antibody testing.
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6.16 BLIND AND DISABLED MEMBERS
--------------------------
6.16.1 HMO must arrange for all covered health and health-related
services required under this contract for all voluntarily
enrolled Blind and Disabled Members. HMO is not required to
provide value-added services to Blind and Disabled Members.
6.16.2 HMO must perform the same administrative services and functions
as are performed for mandatory Members under this contract. These
administrative services and functions include, but are not
limited to:
6.16.2.1 Prior authorization of services;
6.16.2.2 All customer services functions offered Members in mandatory
participation categories, including the complaint process,
enrollment services, and hotline services;
6.16.2.3 Linguistic services, including providing Member materials in
alternative formats for the blind and disabled;
6.16.2.4 Health education;
6.16.2.5 Utilization management using TDH Claims Administrator encounter
data to provide appropriate interventions for Members through
administrative case management;
6.16.2.6 Quality assurance activities as needed and Focused Studies as
required by TDH; and
6.16.2.7 Coordination to link Blind and Disabled Members with applicable
community resources and targeted case management programs (see
Non-Capitated Services in Article 6.1.8).
6.16.3 HMO must require network providers to submit claims for health
and health-related services to TDH's Claims Administrator for
claims adjudication and payment.
6.16.4 HMO must provide services to Blind and Disabled Members within
HMO's network unless necessary services are unavailable within
network. HMO must also allow referrals to out-of-network
providers if necessary services are not available within HMO's
network. Records must be forwarded to Member's PCP following a
referral visit.
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ARTICLE VII PROVIDER NETWORK REQUIREMENTS
7.1 PROVIDER ACCESSIBILITY
----------------------
7.1.1 HMO must enter into written contracts with properly credentialed
health care service providers. The names of all providers must be
submitted to TDH as part of HMO subcontracting process. HMO must
have its own credentialing process to review, approve and
periodically recertify the credentials of all participating
providers in compliance with 28 TAC 11.1902, relating to
credentialing of providers in HMOs.
7.1.2 HMO must require tax I.D. numbers from all providers. HMO is
required to do backup withholding from all payments to providers
who fail to give tax I.D. numbers or who give incorrect numbers.
7.1.3 Timeframes for Access Requirements. HMO must have sufficient
network providers and establish procedures to ensure Members have
access to routine, urgent, and emergency services; telephone
appointments; advice and Member service lines. These services
must be accessible to Members within the following timeframes:
7.1.3.1 Urgent Care within 24 hours of request;
7.1.3.2 Routine care within 2 weeks of request;
7.1.3.3 Physical/Wellness Exams for adults must be provided within 8 to
10 weeks of the request;
7.1.3.4 HMO must establish policies and procedures to ensure that THSteps
Checkups be provided within 90 days of new enrollment, except
newborn Members should be seen within 2 weeks of enrollment, and
in all cases for all Members be consistent with the American
Academy of Pediatrics and THSteps periodicity schedule which is
based on the American Academy of Pediatrics schedule and
delineated in the Texas Medicaid Provider Procedures Manual and
the Medicaid bi-monthly bulletins (see Article 6.1, Scope of
Services). If the Member does not request a checkup, HMO must
establish a procedure for contacting the Member to schedule the
checkup.
7.1.4 HMO is prohibited from requiring a provider or provider group to
enter into an exclusive contracting arrangement with HMO as a
condition for participation in its provider network.
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7.2 PROVIDER CONTRACTS
------------------
7.2.1 All providers must have a written contract, either with an
intermediary entity or an HMO, to participate in the Medicaid
program (provider contract). HMO must make all contracts
available to TDH upon request, at the time and location requested
by TDH. All standard formats of provider contracts must be
submitted to TDH for approval no later than 60 days after the
effective date of this contract, unless previously filed with
TDH. HMO must submit 1 paper copy and 1 electronic copy in a form
specified by TDH. Any change to the standard format must be
submitted to TDH for approval no later than 30 days prior to the
implementation of the new standard format. All provider contracts
are subject to the terms and conditions of this contract and must
contain the provisions of Article V, Statutory and Regulatory
Compliance, and the provisions contained in Article 3.2.4.
7.2.1.1 TDH has 15 working days to review the materials and recommend any
suggestions or required changes. If TDH has not responded to HMO
by the fifteenth day, HMO may execute the contract. TDH reserves
the right to request HMO to modify any contract that has been
deemed approved.
7.2.2 Primary Care Provider (PCP) contracts and specialty care
contracts must contain provisions relating to the requirements of
the provider types found in this contract. For example, PCP
contracts must contain the requirements of Article 7.8 relating
to Primary Care Providers.
7.2.3 Provider contracts that are requested by any agency with
authority to investigate and prosecute fraud and abuse must be
produced at the time and place required by TDH or the requesting
agency. Provider contracts requested in response to a Public
Information request must be produced within 48 hours of the
request. Requested contracts and all related records must be
provided free-of-charge to the requesting agency.
7.2.4 The form and substance of all provider contracts are subject to
approval by TDH. TDH retains the authority to reject or require
changes to any contract that do not comply with the requirements
or duties and responsibilities of this contract. HMO REMAINS
RESPONSIBLE FOR PERFORMING AND FOR ANY FAILURE TO PERFORM ALL
DUTIES, RESPONSIBILITIES AND SERVICES UNDER THIS CONTRACT
REGARDLESS OF WHETHER THE DUTY, RESPONSIBILITY OR SERVICE IS
CONTRACTED TO ANOTHER FOR ACTUAL PERFORMANCE.
7.2.5 TDH reserves the right and retains the authority to make
reasonable inquiry and conduct investigations into patterns of
provider and Member complaints against HMO or any intermediary
entity with whom HMO contracts to deliver health care services
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under this contract. TDH may impose appropriate sanctions and
contract remedies to ensure HMO compliance with the provisions of
this contract.
7.2.6 HMO must not restrict a provider's ability to provide opinions or
counsel to a Member with respect to benefits, treatment options,
and provider's change in network status.
7.2.7 To the extent feasible within HMO's existing claims processing
systems, HMO should have a single or central address to which
providers must submit claims. If a central processing center is
not possible within HMO's existing claims processing system, HMO
must provide each network provider a complete list of all
entities to whom the providers must submit claims for processing
and/or adjudication. The list must include the name of the
entity, the address to which claims must be sent, explanation for
determination of the correct claims payer based on services
rendered, and a phone number the provider may call to make claims
inquiries. HMO must notify providers in writing of any changes in
the claims filing list at least 30 days prior to effective date
of change. If HMO is unable to provide 30 days notice, providers
must be given a 30-day extension on their claims filing deadline
to ensure claims are routed to correct processing center.
7.2.8 HMO, all IPAs, and other intermediary entities must include
contract language which substantially complies with the following
standard contract provisions in each Medicaid provider contract.
This language must be included in each contract with an actual
provider of services, whether through a direct contract or
through intermediary provider contracts:
7.2.8.1 [Provider] is being contracted to deliver Medicaid managed care
under the TDH STAR program. HMO must provide copies of the
TDH/HMO Contract to the [Provider] upon request. [Provider)
understands that services provided under this contract are funded
by State and federal funds under the Medicaid program. [Provider]
is subject to all state and federal laws, rules and regulations
that apply to all persons or entities receiving state and federal
funds. [Provider] understands that any violation by a provider of
a State or federal law relating to the delivery of services by
the provider under this HMO/Provider contract or any violation of
the TDR/HMO contract could result in liability for money damages,
and/or civil or criminal penalties and sanctions under state
and/or federal law.
7.2.8.2 [Provider] understands and agrees that HMO has the sole
responsibility for payment of covered services rendered by the
provider under HMO/Provider contract. In the event of HMO
insolvency or cessation of operations, [Provider's] sole recourse
is against HMO through the bankruptcy, conservatorship, or
receivership estate of HMO.
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7.2.8.3 [Provider] understands and agrees TDH is not liable or
responsible for payment for any Medicaid covered services
provided to mandatory Members under HMO/Provider contract.
Federal and State laws provide severe penalties for any provider
who attempts to collect any payment from or bill a Medicaid
recipient for a covered service.
7.2.8.4 [Provider] agrees that any modification, addition, or deletion of
the provisions of this contract will become effective no earlier
than 30 days after HMO notifies TDH of the change in writing. If
TDH does not provide written approval within 30 days from receipt
of notification from HMO, changes can be considered provisionally
approved, and will become effective. Modifications, additions or
deletions which are required by TDH or by changes in state or
federal law are effective immediately.
7.2.8.5 This contract is subject to all state and federal laws and
regulations relating to fraud and abuse in health care and the
Medicaid program. [Provider] must cooperate and assist TDH and
any state or federal agency that is charged with the duty of
identifying, investigating, sanctioning or prosecuting suspected
fraud and abuse. [Provider] must provide originals and/or copies
of any and all information, allow access to premises and provide
records to TDH or its authorized agent(s), THHSC, HCFA, the U.S.
Department of Health and Human Services, FBI, TDI, and the Texas
Attorney General's Medicaid Fraud Control Unit, upon request, and
free-of-charge. [Provider] must report any suspected fraud or
abuse including any suspected fraud and abuse committed by HMO or
a Medicaid recipient to TDH for referral to THHSC.
7.2.8.6 [Provider] is required to submit proxy claims forms to HMO for
services provided to all STAR Members that are capitated by HMO
in accordance with the encounter data submissions requirements
established by HMO and TDH.
7.2.8.7 HMO is prohibited from imposing restrictions upon the
[Provider's] free communication with Members about a Member's
medical conditions, treatment options, HMO referral policies, and
other HMO policies, including financial incentives or
arrangements and all STAR managed care plans with whom [Provider]
contracts.
7.2.8.8 The Texas Medicaid Fraud Control Unit must be allowed to conduct
private interviews of [Providers] and the [Provider's] employees,
contractors, and patients. Requests for information must be
complied with, in the form and language requested. [Providers]
and their employees and contractors must cooperate fully in
making themselves available in person for interviews,
consultation, grand jury proceedings, pre-trial conference,
hearings, trial and in any other process, including
investigations. Compliance with this Article is at HMO's and
[Provider's] own expense.
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7.2.8.9 HMO must include the method of payment and payment amounts in all
provider contracts.
7.2.8.10 All provider clean claims must be adjudicated within 30 days. HMO
must pay provider interest on all clean claims that are not paid
within 30 days at a rate of 1.5% per month (18% annual) for each
month the claim remains unadjudicated.
7.2.8.11 HMO must prohibit network providers from interfering with or
placing liens upon the state's right or HMO's right, acting as
the state's agent, to recovery from third party resources. HMO
must prohibit network providers from seeking recovery in excess
of the Medicaid payable amount or otherwise violating state and
federal laws.
7.2.9 HMO must follow the procedures outlined in article 20A.18A of the
Texas Insurance Code if terminating a contract with a provider,
including an STP. At least 30 days before the effective date of
the proposed termination of the provider's contract, HMO must
provide a written explanation to the provider of the reasons for
termination. HMO may immediately terminate a provider contract if
the provider presents imminent harm to patient health, actions
against a license or practice, or fraud.
7.2.9.1 Within 60 days of the termination notice date, a provider may
request a review of HMO's proposed termination by an advisory
review panel, except in a case in which there is imminent harm to
patient health, an action against a private license, or fraud.
The advisory review panel must be composed of physicians and
providers, as those terms are defined in article 20A.02(r) and
(t), including at least one representative in the provider's
specialty or a similar specialty, if available, appointed to
serve on the standing quality assurance committee or utilization
review committee of HMO. The decision of the advisory review
panel must be considered by HMO but is not binding on HMO. HMO
must provide to the affected provider, on request, a copy of the
recommendation of the advisory review panel and HMO's
determination.
7.2.9.2 A provider who is terminated is entitled to an expedited review
process by HMO on request by the provider. HMO must provide
notification of the provider's termination to HMO's Members
receiving care from the terminated provider at least 30 days
before the effective date of the termination. If a provider is
terminated for reasons related to imminent harm to patient
health, HMO may notify its Members immediately.
7.2.10 HMO must notify TDH no later than 90 days prior to terminating
any subcontract affecting a major performance function of this
contract. If HMO seeks to terminate a provider's contract for
imminent harm to patient health, actions against a license or
practice, or fraud, contract termination may be immediate. TDH
will require assurances that any contract termination will not
result in an interruption of an essential service or major
contract function.
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7.2.11 HMO must include a complaint and appeals process which complies
with the requirements of Article 20A.12 of the Texas Insurance
Code relating to Complaint Systems in all provider contracts.
HMO's complaint and appeals process must be the same for all
providers.
7.3 PHYSICIAN INCENTIVE PLANS
-------------------------
7.3.1 HMO may operate a physician incentive plan only if: (1) no
specific payment may be made directly or indirectly under a
physician incentive plan to a physician or physician group as an
inducement to reduce or limit medically necessary services
furnished to a Member; and (2) the stop-loss protection, enrollee
surveys and disclosure requirements of this Article are met.
7.3.2 HMO must disclose to TDH information required by federal
regulations found at 42 C.F.R.ss.417.479. The information must be
disclosed in sufficient detail to determine whether the incentive
plan complies with the requirements at 42 C.F.R.ss.417.479. The
disclosure must contain the following information:
7.3.2.1 Whether services not furnished by a physician or physician group
(referral services) are covered by the incentive plan. If only
services furnished by the physician or physician group are
covered by the incentive plan, disclosure of other aspects of the
incentive plan are not required to be disclosed.
7.3.2.2 The type of incentive arrangement (e.g. withhold, bonus,
capitation).
7.3.2.3 The percent of the withhold or bonus, if the incentive plan
involves a withhold bonus.
7.3.2.4 Whether the physician or physician group has evidence of a
stop-loss protection, including the amount and type of stop-loss
protection.
7.3.2.5 The panel size and the method used for pooling patients, if
patients are pooled.
7.3.2.6 The results of Member and disenrollee surveys, if HMO is required
under 42 C.F.R.ss.417.479 to conduct Member and disenrollee
surveys.
7.3.3 HMO must submit the information required in Articles 7.3.2.1 -
7.3.2.5 to TDH by the effective date of this contract and each
anniversary date of the contract.
7.3.4 HMO must submit the information required in Article 7.3.2.6 one
year after the effective date of initial contract or effective
date of renewal contract, and annually each subsequent year under
the contract. HMO's who put physicians or physician
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groups at substantial financial risk must conduct a survey of all
Members who have voluntarily disenrolled in the previous year. A
list of voluntary disenrollees may be obtained from the
Enrollment Broker.
7.3.5 HMO must provide Members with information regarding Physician
Incentive Plans upon request. The information must include the
following:
7.3.5.1 whether HMO uses a physician incentive plan that covers referral
services;
7.3.5.2 the type of incentive arrangement (i.e., withhold, bonus,
capitation);
7.3.5.3 whether stop-loss protection is provided; and
7.3.5.4 results of enrollee and disenrollee surveys, if required under 42
C.F.R. ss.417.479.
7.3.5.5 HMO must ensure that IPAs and ANHCs with whom HMO contracts
comply with the requirements above. HMO is required to meet the
requirements above for all levels of subcontracting.
7.4 PROVIDER MANUAL AND PROVIDER TRAINING
-------------------------------------
7.4.1 HMO must prepare and issue a Provider Manual(s), including any
necessary specialty manuals (e.g. behavioral health) to the
providers in the HMO network and to newly contracted providers in
the HMO network within five (5) working days from inclusion of
the provider into the network. The Provider Manual must contain
sections relating to special requirements of the STAR Program as
required under this contract. See Appendix D, Required Critical
Elements, for specific details regarding content requirements.
Provider Manual and any revisions must be approved by TDH prior
to publication and distribution to providers (see Article 3.4.1
regarding the process for plan materials review).
7.4.2 HMO must provide training to all network providers and their
staff regarding the requirements of the TDH/HMO contract and
special needs of STAR Members.
7.4.2.1 HMO training for all providers must be completed no later than 30
days after placing a newly contracted provider on active status.
HMO must provide on-going training to new and existing providers
as required by HMO or TDH to comply with this contract.
7.4.2.2 HMO must include in all PCP training how to screen for and
identify behavioral health disorders, HMO's referral process to
behavioral health care services and clinical
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coordination requirements for behavioral health. HMO must include
in all training for behavioral health providers how to identify
physical health disorders, HMO's referral process to primary care
and clinical coordination requirements between physical medicine
and behavioral health providers. HMO must include training on
coordination and quality of care such as behavioral health
screening techniques for PCPs and new models of behavioral health
interventions.
7.4.3 HMO must provide primary care and behavioral health providers
with screening tools and instruments approved by TDH.
7.4.4 HMO must maintain and make available upon request enrollment or
attendance rosters dated and signed by each attendee or other
written evidence of training of each network provider and their
staff.
7.4.5 HMO must have its written policies and procedures for the
screening, assessment and referral processes between behavioral
health providers and physical medicine providers available for
TDH review prior to the effective date of the contract.
7.5 MEMBER PANEL REPORTS
--------------------
HMO must furnish each PCP with a current list of enrolled Members
enrolled or assigned to that Provider no later than 5 days after
HMO receives the Enrollment File from the Enrollment Broker each
month. If the 5th day falls on a weekend or state holiday, the
file must be provided by the following working day.
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
7.6.1 HMO must develop implement and maintain a provider complaint
system which must be in compliance with all applicable state and
federal law or regulations. Modifications and amendments to the
complaint system must be submitted to TDH no later than 30 days
prior to the implementation of the modification or amendment.
7.6.2 HMO must include the provider complaint and appeal procedure in
all network provider contracts or in the provider manual.
7.6.3 HMO's complaint and appeal process cannot contain provisions
requiring a Member to submit a complaint or appeal to TDH for
resolution in lieu of the HMO's process.
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7.6.4 HMO must establish mechanisms to ensure that network providers
have access to a person who can assist providers in resolving
issues relating to claims payment, plan administration, education
and training, and complaint procedures.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following
qualifications:
--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center meets the standards
established by federal rules and procedures. The FQHC must
also be an eligible provider enrolled in the Medicaid
program.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an M.D.
or a D.O. in the State of Texas either as a primary care
provider or in the area of specialization under which they
will provide medical services under contract with HMO; who is
a provider enrolled in the Medicaid program; and who has a
valid Drug Enforcement Agency registration number and a Texas
Controlled Substance Certificate, if either is required in
their practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by
the State of Texas under Chapter 241 of the Health and Safety
Code and Private Psychiatric Hospitals under Chapter 577 of
the Health and Safety Code (or is a provider which is a
component part of a State or local government entity which
does not require a license under the laws of the State of
Texas), which is enrolled as a provider in the Texas Medicaid
Program. HMO will require that all facilities in the network
used for acute inpatient specialty care for people under age
21 with disabilities or chronic or complex conditions will
have a designated pediatric unit; 24-hour laboratory and
blood bank availability; pediatric radiological capability;
meet JCAHO standards; and have discharge planning and social
service units.
--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the State of Texas who is enrolled in the
Provider Texas Medicaid Program or an individual properly trained to
provide behavioral health support services who practices
under the direct supervision of an appropriately licensed
professional.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the
Laboratory Federal Clinical Laboratory Improvement Act (CLIA), and
enrolled in the Texas Medicaid Program.
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for
Clinic (RHC) designation as a rural health clinic, and enrolled in the
Texas Medicaid Program.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization Act
ss. 121.031 ff.
--------------------------------------------------------------------------------
Local Mental Under Section 531.002(8) of the Health and Safety Code, the
Health Authority local component of the TXMHMR system designated by TDMHMR to
(LMHA) carry out the legislative mandate for planning, policy
development, coordination, and resource
development/allocation and for supervising and ensuring the
provision of mental health care services to persons with
mental illness in one or more local service areas.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility Provider credentialed to provide services, and enrolled in the Texas
Medicaid Program.
--------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide on-site
Health Clinic primary and preventive care to children and adolescents.
(SBHC)
--------------------------------------------------------------------------------
7.8 PRIMARY CARE PROVIDERS
----------------------
7.8.1 HMO must have a system for monitoring Member enrollment into its
plan to allow HMO to effectively plan for future needs and
recruit network providers as necessary to ensure adequate access
to primary care and specialty care. The Member enrollment
monitoring system must include the length of time required for
Members to access care within the network. The monitoring system
must also include monitoring after-hours availability and
accessibility of PCPs.
7.8.2 HMO must maintain a primary care provider network in sufficient
numbers and geographic distribution to serve a minimum of
forty-five percent (45%) of the mandatory STAR eligibles in each
county of the service area. HMO is required to increase the
capacity of the network as necessary to accommodate enrollment
growth beyond the forty-fifth percentile (45%).
7.8.3 HMO must maintain a provider network that includes pediatricians
and physicians with pediatric experience in sufficient numbers
and geographic distribution to serve eligible children and
adolescents in the service area and provide timely access to the
full scope of benefits, especially THSteps checkups and
immunizations.
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7.8.4 HMO must comply with the access requirements as established by
the Texas Department of Insurance for all HMOs doing business in
Texas, except as otherwise required by this contract.
7.8.5 HMO must have physicians with board eligibility/certification in
pediatrics available for referral for Members under the age of
21.
7.8.5.1 Individual PCPs may serve more than 2,000 Members. However, if
TDH determines that a PCP's Member enrollment exceeds the PCP's
ability to provide accessible, quality care, TDH may prohibit the
PCP from receiving further enrollments. TDH may direct HMOs to
assign or reassign Members to another PCP's panel.
7.8.6 HMO must have PCPs available throughout the service area to
ensure that no Member must travel more than 30 miles to access
the PCP, unless an exception to this distance requirement is made
by TDH.
7.8.7 HMO's primary care provider network may include providers from
any of the following practice areas: General Practitioners;
Family Practitioners; Internists; Pediatricians;
Obstetricians/Gynecologists (OB/GYN); Pediatric and Family
Advanced Practice Nurses (APNs) and Certified Nurse Midwives
Women Health (CNMs) practicing under the supervision of a
physician; Physician Assistants (PAs) practicing under the
supervision of a physician specializing in Family Practice,
Internal Medicine, Pediatrics or Obstetrics/Gynecology who also
qualifies as a PCP under this contract; or Federally Qualified
Health Centers (FQHCs), Rural Health Clinics (RHCs) and similar
community clinics; and specialists who are willing to provide
medical homes to selected Members with special needs and
conditions (see Article 7.9.4).
7.8.8 The PCP for a Member with disabilities or chronic or complex
conditions may be a specialist who agrees to provide PCP services
to the Member. The specialty provider must agree to perform all
PCP duties required in the contract and PCP duties must be within
the scope of the specialist's license. Any interested person may
initiate the request for a specialist to serve as a PCP for a
Member with disabilities or chronic or complex conditions.
7.8.9 PCPs must either have admitting privileges at a hospital, which
is part of HMO network of providers, or make referral
arrangements with an HMO provider who has admitting privileges to
a network hospital.
7.8.10 HMO must require, through contract provisions, that PCPs are
accessible to Members 24 hours a day, 7 days a week. The
following are acceptable and unacceptable phone arrangements for
contacting PCPs after normal business hours.
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Acceptable:
(1) Office phone is answered after-hours by an answering
service which meets language requirements of the major
population groups and which can contact the PCP or another
designated medical practitioner. All calls answered by an
answering service must be returned within 30 minutes.
(2) Office phone is answered after normal business hours by a
recording in the language of each of the major population
groups served directing the patient to call another number
to reach the PCP or another provider designated by the
PCP. Someone must be available to answer the designated
provider's phone. Another recording is not acceptable.
(3) Office phone is transferred after office hours to another
location where someone will answer the phone and be able
to contact the PCP or another designated medical
practitioner, who can return the call within 30 minutes.
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Unacceptable:
(1) Office phone is only answered during office hours.
(2) Office phone is answered after-hours by a recording which tells patients to leave a message.
(3) Office phone is answered after-hours by a recording which directs patients to go to an Emergency Room for any services needed.
(4) Returning after-hours calls outside of 30 minutes.
7.8.11 HMO must require PCPs, through contract provisions or provider
manual, to provide primary care services and continuity of care
to Members who are enrolled with or assigned to the PCP. Primary
care services are all services required by a Member for the
prevention, detection, treatment and cure of illness, trauma,
disease or disorder, which are covered and/or required services
under this contract. All services must be provided in compliance
with generally accepted medical and behavioral health standards
for the community in which services are rendered. HMO must
require PCPs, through contract provisions or provider manual, to
provide children under the age of 21 services in accordance with
the American Academy of Pediatric recommendations and the THSteps
periodicity schedule and provide adults services in accordance
with the U.S. Preventive Services Task Force's publication "Put
Prevention Into Practice".
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7.8.11.1 HMO must require PCPs, through contract provisions or provider
manual, to assess the medical needs of Members for referral to
specialty care providers and provide referrals as needed. PCP
must coordinate care with specialty care providers after
referral.
7.8.11.2 HMO must require PCPs, through contract provisions or provider
manual, to make necessary arrangements with home and community
support services to integrate the Member's needs. This
integration may be delivered by coordinating the care of Members
with other programs, public health agencies and community
resources which provide medical, nutritional, behavioral,
educational and outreach services available to Members.
7.8.11.3 HMO must require, through contract provisions or provider manual,
that the Member's PCP or HMO provider through whom PCP has made
arrangements, be the admitting or attending physician for
inpatient hospital care, except for emergency medical or
behavioral health conditions or when the admission is made by a
specialist to whom the Member has been referred by the PCP. HMO
must require, through contract provisions or provider manual,
that PCP assess the advisability and availability of outpatient
treatment alternatives to inpatient admissions. HMO must require,
through contract provisions or provider manual, that PCP provide
or arrange for pre-admission planning for non-emergency inpatient
admissions, and discharge planning for Members. PCP must call the
emergency room with relevant information about the Member. PCP
must provide or arrange for follow-up care after emergency or
inpatient care.
7.8.11.4 HMO must require PCPs for children under the age of 21 to provide
or arrange to have provided all services required under Article
6.8 relating to Texas Health Steps, Article 6.9 relating to
Perinatal Services, Article 6.10 relating to Early Childhood
Intervention, Article 6.11 relating to WIC, Article 6.13 relating
to People With Disabilities or Chronic or Complex Conditions, and
Article 6.14 relating to Health Education and Wellness and
Prevention Plans. PCP must cooperate and coordinate with HMO to
provide Member and the Member's family with knowledge of and
access to available services.
7.8.12 PCP Selection and Changes. All Medicaid recipients who are
eligible for participation in the STAR program have the right to
select their PCP and HMO.- Medicaid recipients who are mandatory
STAR participants who do not select a PCP and/or HMO during the
time period allowed will be assigned to a PCP and/or HMO using
the TDH default process. Members may change PCPs at any time, but
these changes are limited to four (4) times per year.
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7.8.12.1 Voluntary SSI Members. PCP changes cannot be performed
retroactively for voluntary SSI Members. If an SSI Member
requests a PCP change on or before the 15th of the month, the
change will be effective the first day of the next month. If an
SSI Member requests a PCP change after the 15th of the month, the
change will be effective the first day of the second month that
follows. Exceptions to this policy will be allowed for reasons of
medical necessity or other extenuating circumstances.
7.8.12.2 Mandatory Members. Retroactive changes to a Member's PCP should
only be made if it is medically necessary or there are other
circumstances which necessitate a retroactive change. HMO must
pay claims for services provided by the original PCP. If the
original PCP is paid on a capitated basis and services were
provided during the period for which capitation was paid, HMO
cannot recoup the capitation.
7.9 OB/GYN PROVIDERS
----------------
HMO must allow a female Member to select an OB/GYN within its
provider network or within a limited provider network in addition
to a PCP, to provide health care services within the scope of the
professional specialty practice of a properly credentialed
OB/GYN. See Article 21.53D of the Texas Insurance Code and 28 TAC
Sections 11.506, 11.1600 and 11.1608. A Member who selects an
OB/GYN must be allowed direct access to the health care services
of the OB/GYN without a referral by the woman's PCP or a prior
authorization or precertification from HMO. HMO must allow
Members to change OB/GYNs up to four times per year. Health care
services must include, but not be limited to:
7.9.1 One well-woman examination per year;
7.9.2 Care related to pregnancy;
7.9.3 Care for all active gynecological conditions; and
7.9.4 Diagnosis, treatment, and referral for any disease or condition
within the scope of the professional practice of a properly
credentialed obstetrician or gynecologist.
7.9.5 HMOs which allow its Members to directly access any OB/GYN
provider within its network, must ensure that the provisions of
Articles 7.9.1 through 7.9.4 continue to be met.
7.9.6 OB/GYN providers must comply with HMO's procedures contained in
HMO's provider manual or provider contract for OB/GYN providers,
including but not limited to prior authorization procedures.
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7.10 SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, including pediatric
specialty providers, within the network in sufficient numbers and
areas of practice to meet the needs of all Members requiring
specialty care or services.
7.10.2 HMO must require, through contract provisions or provider manual,
that specialty providers send a record of consultation and
recommendations to a Member's PCP for inclusion in Member's
medical record and report encounters to the PCP and/or HMO.
7.10.3 HMO must ensure availability and accessibility to appropriate
specialists.
7.10.4 HMO must ensure that no Member is required to travel in excess of
75 miles to secure initial contact with referral specialists;
special hospitals, psychiatric hospitals; diagnostic and
therapeutic services; and single service health care physicians,
dentists or providers. Exceptions to this requirement may be
allowed when an HMO has established, through utilization data
provided to TDH, that a normal pattern for securing health care
services within an area exists or HMO is providing care of a
higher skill level or specialty than the level which is available
within the service area such as, but not limited to, treatment of
cancer, burns, and cardiac diseases.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services
through its network specialists, subspecialists and specialty
care facilities (e.g., children's hospitals, and tertiary care
hospitals).
7.11.2 HMO must include requirements for pre-admission and discharge
planning in its contracts with network hospitals. Discharge plans
for a Member must be provided by HMO or the hospital to the
Member/family, the PCP and specialty care physicians.
7.11.3 HMO must have appropriate multidisciplinary teams for people with
disabilities or chronic or complex medical conditions. These
teams must include the PCP and any individuals or providers
involved in the day-to-day or on-going care of the Member.
7.11.4 HMO must include in its provider network a TDH-designated
perinatal care facility, as established by ss.32.042, Texas
Health and Safety Code, once the designated system is finalized
and perinatal care facilities have been approved for the service
area (see Article 6.9.1).
7.12 BEHAVIORAL HEALTH - LOCAL MENTAL HEALTH AUTHORITY (LMHA)
--------------------------------------------------------
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7.12.1 Assessment to determine eligibility for rehabilitative and
targeted MHMR case management services is a function of the LMHA.
HMO must provide all covered services described in detail in the
Texas Medicaid Provider Procedures Manual (Provider Procedures
Manual) and the Texas Medicaid Bulletins which is the bi-monthly
update to the Provider Procedures Manual. Clinical information
regarding covered services are published by the Texas Medicaid
program in the Texas Medicaid Service Delivery Guide. Covered
services must be provided to Members with SPMI and SED, when
medically necessary, whether or not they are also receiving
targeted case management or rehabilitation services through the
LMHA.
7.12.2 HMO will coordinate with the LMHA and state psychiatric facility
regarding admission and discharge planning, treatment objectives
and projected length of stay for Members committed by a court of
law to the state psychiatric facility.
7.12.3 HMO must enter into written agreements with all LMHAs in the
service area which describes the process(es) which HMO and LMHA
will use to coordinate services for STAR Members with SPMI or
SED. The agreement will contain the following provisions:
7.12.3.1 Describe the behavioral health covered services indicated in
detail in the Provider Procedures Manual and the Texas Medicaid
Bulletins which is the bi-monthly update to the Provider
Procedures Manual. Clinical information regarding covered
services are published by the Texas Medicaid program in the Texas
Medicaid Service Delivery Guide. Also include the amount,
duration, and scope of basic and value-added services, and HMO's
responsibility to provide these services;
7.12.3.2 Describe criteria, protocols, procedures and instrumentation for
referral of STAR Members from and to HMO and LMHA;
7.12.3.3 Describe processes and procedures for referring Members with SPMI
or SED to LMHA for assessment and determination of eligibility
for rehabilitation or targeted case management services;
7.12.3.4 Describe how the LMHA and HMO will coordinate providing
behavioral health care services to Members with SPMI or SED;
7.12.3.5 Establish clinical consultation procedures between HMO and LMHA
including consultation to effect referrals and on-going
consultation regarding the Member's progress;
7.12.3.6 Establish procedures to authorize release and exchange of
clinical treatment records;
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7.12.3.7 Establish procedures for coordination of assessment,
intake/triage, utilization review/utilization management and care
for persons with SPMI or SED;
7.12.3.8 Establish procedures for coordination of inpatient psychiatric
services (including court ordered commitment of Members under 21)
in state psychiatric facilities within the LMHA's catchment area;
7.12.3.9 Establish procedures for coordination of emergency and urgent
services to Members; and
7.12.3.10 Establish procedures for coordination of care and transition of
care for new HMO Members who are receiving treatment through the
LMHA.
7.12.4 HMO must offer licensed practitioners of the healing arts, who
are part of the Member's treatment team for rehabilitation
services, the opportunity to participate in HMO's network. The
practitioner must agree to accept the standard provider
reimbursement rate, meet the credentialing requirements, comply
with all the terms and conditions of the standard provider
contract of HMO.
7.12.5 Members receiving rehabilitation services must be allowed to
choose the licensed practitioners of the healing arts who are
currently a part of the Member's treatment team for
rehabilitation services. If the Member chooses to receive these
services from licensed practitioners of the healing arts who are
part of the Member's rehabilitation services treatment team, HMO
must reimburse the LMHA at current Medicaid fee-for-service
amounts.
7.13 SIGNIFICANT TRADITIONAL PROVIDERS (STPS)
----------------------------------------
HMO must seek participation in its provider network from:
7.13.1 Each health care provider in the service area who has
traditionally provided care to Medicaid recipients;
7.13.2 Each hospital in the service area that has been designated as a
disproportionate share hospital under Medicaid; and
7.13.3 Each specialized pediatric laboratory in the service area,
including those laboratories located in children's hospitals.
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7.14 RURAL HEALTH PROVIDERS
----------------------
7.14.1 In rural areas of the service area, HMO must seek the
participation in its provider network of rural hospitals,
physicians, home and community support service agencies, and
other rural health care providers who:
7.14.1.1 are the only providers located in the service area; and
7.14.1.2 are Significant Traditional Providers.
7.14.2 In order to contract with HMO, rural health providers must:
7.14.2.1 agree to accept the prevailing provider contract rate of HMO
based on provider type; and
7.14.2.2 have the credentials required by HMO, provided that lack of board
certification or accreditation by JCAHO may not be the only
grounds for exclusion from the provider network.
7.14.3 HMO must reimburse rural hospitals with 100 or fewer licensed
beds in counties with fewer than 50,000 persons for acute care
services at a rate calculated using the higher of the prospective
payment system rate or the cost reimbursed methodology authorized
under the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA). Hospitals reimbursed under TEFRA cost principles shall
be paid without the imposition of the TEFRA cap.
7.14.4 HMO must reimburse physicians who practice in rural counties with
fewer than 50,000 persons at a rate using the current Medicaid
fee schedule, including negotiated fee-for-service.
7.15 FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS) AND RURAL HEALTH
CLINICS (RHCS)
-----------------------------------------------------------
7.15.1 HMO must make reasonable efforts to include FQHCs and RHCs
(Freestanding and hospital-based) in its provider network.
7.15.2 FQHCs or RHCs will receive a cost settlement from TDH and must
agree to accept initial payments from HMO in an amount that is
equal to or greater than HMO's payment terms for other providers
providing the same or similar services.
7.15.2.1 HMO must submit monthly FQHC and RHC encounter and payment
reports to all contracted FQHCs and RHCs, and FQHCs and RHCs with
whom there have been
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encounters, not later than 21 days from the end of the month for
which the report is submitted. The format will be developed by
TDH. The FQHC and RHC must validate the encounter and payment
information contained in the report(s). HMO and the FQHC/RHC must
both sign the report(s) after each party agrees that it
accurately reflects encounters and payments for the month
reported. HMO must submit the signed FQHC and RHC encounter and
payment reports to TDH not later than 45 days from the end of the
month for which the report is submitted.
7.15.2.2 For FQHCs, TDH will determine the amount of the interim
settlement based on the difference between: an amount equal to
the number of Medicaid allowable encounters multiplied by the
rate per encounter from the latest settled FQHC fiscal year cost
report, and the amount paid by HMO to the FQHC for the quarter.
For RHCs, TDH will determine the amount of the interim settlement
based on the difference between a reasonable cost amount
methodology provided by TDH and the amount paid by HMO to the RHC
for the quarter. TDH will pay the FQHC or the RHC the amount of
the interim settlement, if any, as determined by TDH or collect
and retain the quarterly recoupment amount, if any.
7.15.2.3 TDH will cost settle with each FQHC and RHC annually, based on
the FQHC or the RHC fiscal year cost report and the methodology
described in Article 7.15.2.2. TDH will make additional payments
or recoup payments from the FQHC or the RHC based on reasonable
costs less prior interim payment settlements.
7.15.2.4 Cost settlements for RHCs, and HMO's obligation to provide RHC
reporting described in Article 7.15, are retroactive to October
1, 1997.
7.16 COORDINATION WITH PUBLIC HEALTH
-------------------------------
7.16.1 Reimbursed Arrangements. HMO must make a good faith effort to
enter into a subcontract for the covered health care services as
specified below with TDH Public Health Regions, city and/or
county health departments or districts in each county of the
service area that will be providing these services to the Members
(Public Health Entities), who will be paid for services by HMO,
including any or all of the following services or any covered
service which the public health department and HMO have agreed to
provide:
7.16.1.1 Sexually Transmitted Diseases (STDs) Services (see Article 6.15);
7.16.1.2 Confidential HIV Testing (see Article 6.15);
7.16.1.3 Immunizations;
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7.16.1.4 Tuberculosis (TB) Care (see Article 6.12);
7.16.1.5 Family Planning Services (see Article 6.7);
7.16.1.6 THSteps checkups (see Article 6.8); and
7.16.1.7 Prenatal services (see Article 6.9).
7.16.2 HMO must make a good faith effort to enter into subcontracts with
public health entities in the service area. The subcontracts must
be available for review by TDH or its designated agent(s) on the
same basis as all other subcontracts. If any changes are made to
the contract, it must be resubmitted to TDH. If an HMO is unable
to enter into a contract with public health entities, HMO must
document current and past efforts to TDH. Documentation must be
submitted no later than 120 days after the execution of this
contract. Public health subcontracts must include the following
areas:
7.16.2.1 The general relationship between HMO and the Public Health
entity. The subcontracts must specify the scope and
responsibilities of both parties, the methodology and agreements
regarding billing and reimbursements, reporting responsibilities,
Member and provider educational responsibilities, and the
methodology and agreements regarding sharing of confidential
medical record information between the public health entity and
the PCP.
7.16.2.2 Public Health Entity responsibilities:
(1) Public health providers must inform Members that
confidential health care information will be provided to
the PCP.
(2) Public health providers must refer Members back to PCP for
any follow-up diagnostic, treatment, or referral services.
(3) Public health providers must educate Members about the
importance of having a PCP and accessing PCP services
during office hours rather than seeking care from
Emergency Departments, Public Health Clinics, or other
Primary Care Providers or Specialists.
(4) Public health entities must identify a staff person to act
as liaison to HMO to coordinate Member needs, Member
referral, Member and provider education, and the transfer
of confidential medical record information.
7.16.2.3 HMO Responsibilities:
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(1) HMO must identify care coordinators who will be available to assist public health providers and PCPs in getting efficient referrals of Members to the public health providers, specialists, and health-related service providers either within or outside HMO's network.
(2) HMO must inform Members that confidential healthcare information will be provided to the PCP.
(3) HMO must educate Members on how to better utilize their
PCPs, public health providers, emergency departments,
specialists, and health-related service providers.
7.1.6.2.4 Existing contracts must include the provisions in Articles
7.16.2.1 through 7.16.2.3.
7.16.3 Non-Reimbursed Arrangements with Public Health Entities.
--------------------------------------------------------
7.16.3.1 Coordination with Public Health Entities. HMOs must make a good
faith effort to enter into a Memorandum of Understanding (MOU)
with Public Health Entities in the service area regarding the
provision of services for essential public health care services.
These MOUs must be entered into in each service area and are
subject to TDH approval. If any changes are made to the MOU, it
must be resubmitted to TDH. If an HMO is unable to enter into an
MOU with a public health entity, HMO must document current and
past efforts to TDH. Documentation must be submitted no later
than 120 days after the execution of this contract. MOUs must
contain the roles and responsibilities of HMO and the public
health department for the following services:
(1) Public health reporting requirements regarding
communicable diseases and/or diseases which are
preventable by immunization as defined by state law;
(2) Notification of and referral to the local Public Health
Entity, as defined by state law, of communicable disease
outbreaks involving Members;
(3) Referral to the local Public Health Entity for TB contact
investigation and evaluation and preventive treatment of
persons whom the Member has come into contact;
(4) Referral to the local Public Health Entity for STD/HIV
contact investigation and evaluation and preventive
treatment of persons whom the Member has come into
contact; and,
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(5) Referral for WIC services and information sharing;
(6) Coordination and follow-up of suspected or confirmed cases
of childhood lead exposure.
7.16.3.2 Coordination with Other TDH Programs. HMOs must make a good faith
effort to enter into a Memorandum of Understanding (MOU) with
other TDH programs regarding the provision of services for
essential public health care services. These MOUs must be entered
into in each service area and are subject to TDH approval. If any
changes are made to the MOU, it must be resubmitted to TDH. If an
HMO is unable to enter into an MOU with other TDH programs, HMO
must document current and past efforts to TDH. Documentation must
be submitted no later than 120 days after the execution of this
contract. MOUs must delineate the roles and responsibilities of
HMO and the TDH programs for the following services:
(1) Use of the TDH laboratory for THSteps newborn screens;
lead testing; and hemoglobin/hematocrit tests;
(2) Availability of vaccines through the Vaccines for Children
Program;
(3) Reporting of immunizations provided to the statewide
ImmTrac Registry including parental consent to share data;
|
(4) Referral for WIC services and information sharing;
(5) Pregnant, Women and Infant (PWI) Targeted Case Management;
(6) THSteps outreach, informing and Medical Case Management;
(7) Participation in the community-based coalitions with the Medicaid-funded case management programs in MHMR, ECI, TCB, and TDH (PWI, CIDC and THSteps Medical Case Management);
(8) Referral to the TDH Medical Transportation Program;
(9) Cooperation with activities required of public health authorities to conduct the annual population and community based needs assessment; and
(10) Coordination and follow-up of suspected or confirmed cases
of childhood lead exposure.
7.16.4 All public health contracts must contain provider network
requirements in Article VII, as applicable.
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7.17 COORDINATION WITH TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY
SERVICES
---------------------------------------------------------------
7.17.1 HMO must cooperate and coordinate with the Texas Department of
Protective and Regulatory Services (TDPRS) for the care of a
child who is receiving services from or has been placed in the
conservatorship of TDPRS.
7.17.2 HMO must comply with all provisions of a Court Order or TDPRS
Service Plan with respect to a child in the conservatorship of
TDPRS (Order) entered by a Court of Continuing Jurisdiction
placing a child under the protective custody of TDPRS or a
Service Plan voluntarily entered into by the parents or person
having legal custody of a minor and TDPRS, which relates to the
health and behavioral health care services required to be
provided to the Member.
7.17.3 HMO cannot deny, reduce, or controvert the medical necessity of
any health or behavioral health care services included in an
Order entered by a court. HMO may participate in the preparation
of the medical and behavioral care plan prior to TDPRS submitting
the health care plan to the Court. Any modification or
termination of court ordered services must be presented and
approved by the court with jurisdiction over the matter.
7.17.4 A Member or the parent or guardian whose rights are subject to an
Order or Service Plan cannot appeal the necessity of the services
ordered through HMO's complaint or appeal processes, or to TDH
for a Fair Hearing.
7.17.5 HMO must include information in its provider training and manuals
regarding:
7.17.5.1 providing medical records;
7.17.5.2 scheduling medical and behavioral health appointments within 14
days unless requested earlier by TDPRS; and
7.17.5.3 recognition of abuse and neglect and appropriate referral to
TDPRS.
7.17.6 HMO must continue to provide a covered services to a Member
receiving services from or in the protective custody of TDPRS
until the Member has been disenrolled from HMO as a result of
loss of eligibility in Medicaid managed care or placement into
foster care.
7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)
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7.18.1 All HMO contracts with any of the entities described in Texas
Insurance Code Article 20A.02(ee) and a group of providers who
are licensed to provide the same health care services or an
entity that is wholly-owned or controlled by one or more
hospitals and physicians including a physician-hospital
organization (delegated network contracts) must:
7.18.1.1 contain the mandatory contract provisions for all subcontractors
in Article 3.2 of this contract;
7.18.1.2 comply with the requirements, duties and responsibilities of this
contract;
7.18.1.3 not create a barrier for full participation to significant
traditional providers;
7 18.1.4 not interfere with TDH's oversight and audit responsibilities
including collection and validation of encounter data; or
7.18.1.5 be consistent with the federal requirement for simplicity in the
administration of the Medicaid program.
7.18.2 In addition to the mandatory provisions for all subcontracts
under Articles 3.2. and 7.2 all HMO/delegated network contracts
must include the following mandatory standard provisions:
7.18.2.1 HMO is required to include subcontract provisions in its
delegated network contracts which require the UM protocol used by
a delegated network to produce substantially similar outcomes, as
approved by TDH, as the UM protocol employed by the contracting
HMO. The responsibilities of an HMO in delegating UM functions to
a delegated network will be governed by Article 16.3.11 of this
contract.
7.18.2.2 Delegated networks that are delegated claims payment
responsibilities by HMO must also have the responsibility to
submit encounter, utilization, quality, and financial data to
HMO. HMO remains responsible for integrating all delegated
network data reports into HMO's reports required under this
contract. If HMO is not able to collect and report a delegated
network data for HMO reports required by this contract, HMO must
not delegate claims processing to the delegated network.
7.18.2.3 The delegated network must comply with the same records retention
and production requirements, including Open Records requirements,
as the HMO under this contract.
7.18.2.4 The delegated network is subject to the same marketing
restrictions and requirements as the HMO under this contract.
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7.18.2.5 HMO is responsible for ensuring that delegated network contracts
comply with the requirements and provisions of the TDH/HMO
contract. TDH will impose appropriate sanctions and remedies upon
HMO for any default under the TDH/HMO contract which is caused
directly or indirectly by the acts or omissions of the delegated
network.
7.18.3 HMO cannot enter into contracts with delegated networks to
provide services under this contract which require the delegated
network to enter into exclusive contracts with HMO as a condition
for participation with HMO.
7.18.3.1 Article 17.18.3 does not apply to providers who are employees or
participants in limited provider networks.
7.18.4 All delegated networks that limit Member access to those
providers contracted with the delegated network (closed or
limited panel networks) with whom HMO contracts must either
independently meet the access provisions of 28 Texas
Administrative Code ss.11.1607, relating to access requirements
for those Members enrolled or assigned to the delegated network,
or HMO must provide for access through other network providers
outside the closed panel delegated network.
7.18.5 HMO cannot delegate to a delegated network the enrollment,
re-enrollment, assignment or reassignment of a Member.
7.18.6 In addition to the above provision HMO and approved Non-Profit
Health Corporations must comply with all of the requirements
contained in 28 TAC ss.11.1604, relating to Requirements of
Certain Contracts between Primary HMOs and ANHCs and Primary HMOs
and Provider HMOs.
7.18.7 HMO REMAINS RESPONSIBLE FOR PERFORMING ALL DUTIES,
RESPONSIBILITIES AND SERVICES UNDER THIS CONTRACT REGARDLESS OF
WHETHER THE DUTY, RESPONSIBILITY OR SERVICE IS CONTRACTED OR
DELEGATED TO ANOTHER HMO MUST PROVIDE A COPY OF THE CONTRACT
PROVISIONS THAT SET OUT HMO'S DUTIES, RESPONSIBILITIES, AND
SERVICES TO ANY PROVIDER NETWORK OR GROUP WITH WHOM HMO CONTRACTS
TO PROVIDE HEALTH CARE SERVICES ON A RISK SHARING OR CAPITATED
BASIS OR TO PROVIDE HEALTH CARE SERVICES.
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ARTICLE VIII MEMBER SERVICES REQUIREMENTS
8.1 MEMBER EDUCATION
----------------
HMO must provide the Member education requirements as contained
in Article VI at 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13,
and 6.14, and this Article of the contract.
8.2 MEMBER HANDBOOK
---------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no
later than five (5) days after HMO receives the Enrollment File.
If the 5th day falls on a weekend or state holiday, the Member
Handbook must be mailed by the following working day. The Member
Handbook must be written at a 4th - 6th grade reading
comprehension level. The Member Handbook must contain all
critical elements specified by TDH. See Appendix D, Required
Critical Elements, for specific details regarding content
requirements. HMO must submit a Member Handbook to TDH for
approval prior to the effective date of the contract unless
previously approved (see Article 3.4.1 regarding the process for
plan materials review).
8.2.2 Member Handbook Updates. HMO must provide updates to the Handbook
to all Members as changes are made to the Required Critical
Elements in Appendix D. HMO must make the Member Handbook
available in the languages of the major population groups and the
visually impaired served by HMO.
8.2.3 THE MEMBER HANDBOOK AND ANY REVISIONS OR CHANGES MUST BE APPROVED
BY TDH PRIOR TO PUBLICATION AND DISTRIBUTION TO MEMBERS (see
Article 3.4.1 regarding the process for plan materials review).
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal and state law require HMOs and providers to maintain
written policies and procedures for informing and providing
written information to all adult Members 18 years of age and
older about their rights under state and federal law, in advance
of their receiving care (Social Security Act ss.1902(a)(57)
and ss.1903 (m)(1)(A)). The written policies and procedures must
contain procedures for providing written information regarding
the Member's right to refuse, withhold or withdraw medical
treatment advance directives. HMO's policies and procedures must
comply with provisions contained in 42 CFR ss.434.28 and 42
CFR ss.489, SubPart 1, relating to advance directives for all
hospitals, critical access hospitals, skilled nursing facilities,
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home health agencies, providers of home health care, providers of
personal care services and hospices, as well as the following
state laws and rules:
8.3. 1. 1 a Member's right to self-determination in making health care
decisions; and
8.3.1.2 the Advance Directives Act, Chapter 166, Texas Health and Safety
Code, which includes:
8.3.1.2.1 a Member's right to execute an advance written directive to
physicians and family or surrogates, or to make a non-written
directive to administer, withhold or withdraw life-sustaining
treatment in the event of a terminal or irreversible condition;
8.3.1.2.2 a Member's right to make written and non-written Out-of-Hospital
Do-Not-Resuscitate Orders; and
8.3.1.2.3 a Member's right to execute a Medical Power of Attorney to
appoint an agent to make health care decisions on the Member's
behalf if the Member becomes incompetent.
8.3.2 HMO must maintain written policies for implementing a Member's
advance directive. Those policies must include a clear and
precise statement of limitations if HMO or a participating
provider cannot or will not implement a Member's advance
directive.
8.3.2.1 A statement of limitation on implementing a Member's advance
directive should include at least the following information:
8.3.2. 1.1 a clarification of any differences between HMO's conscience
objections and those which may be raised by the Member's PCP or
other providers;
8.3.2.1.2 identification of the state legal authority permitting HMO's
conscience objections to carrying out an advance directive; and
8.3.2.1.3 a description of the range of medical conditions or procedures
affected by the conscience objection.
8.3.3 HMO cannot require a Member to execute or issue an advance
directive as a condition for receiving health care services.
8.3.4 HMO cannot discriminate against a Member based on whether or not
the Member has executed or issued an advance directive.
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8.3.5 HMO's policies and procedures must require HMO and subcontractor
to comply with the requirements of state and federal law relating
to advance directives. HMO must provide education and training to
employees, Members, and the community on issues concerning
advance directives.
8.3.6 All materials provided to Members regarding advance directives
must be written at a 7th - 8th grade reading comprehension level,
except where a provision is required by state or federal law and
the provision cannot be reduced or modified to a 7th- 8th grade
reading level because it is a reference to the law or is required
to be included "as written" in the state or federal law. HMO must
submit to TDH any revisions to existing approved advance
directive materials.
8.3.7 HMO must notify Members of any changes in state or federal laws
relating to advance directives within 90 days from the effective
date of the change, unless the law or regulation contains a
specific time requirement for notification.
8.4 MEMBER ID CARDS
---------------
8.4.1 A Medicaid Identification Form (Form 3087) is issued monthly by
the TDHS. The form includes the "STAR" Program logo and the name
and toll free number of the Member's health plan. A Member may
have a temporary Medicaid Identification (Form 1027-A) which will
include a STAR indicator.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within five (5) days from receiving the Enrollment File from the
Enrollment Broker. If the 5th day falls on a weekend or state
holiday, the ID Card must be issued by the following working day.
The ID Card must include, at a minimum, the following: Member's
name; Member's Medicaid number; either the issue date of the card
or effective date of the PCP assignment; PCP's name, address, and
telephone number; name of HMO; name of IPA to which the Member's
PCP belongs, if applicable; the 24-hour, seven (7) day a week
toll-free telephone number operated by HMO; the toll-free number
for behavioral health care services; and directions for what to
do in an emergency. The ID Card must be reissued if the Member
reports a lost card, there is a Member name change, if Member
requests a new PCP, or for any other reason which results in a
change to the information disclosed on the ID Card.
8.5 MEMBER HOTLINE
--------------
HMO must maintain a toll-free Member telephone hotline 24 hours a
day, seven days a week for Members to obtain assistance in
accessing services under this contract. Telephone availability
must be demonstrated through an abandonment rate of less than
10%.
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8.6 MEMBER COMPLAINT PROCESS
------------------------
8.6.1 HMO must develop, implement and maintain a Member complaint
system that complies with the requirements of Article 20A.12 of
the Texas Insurance Code, relating to the Complaint System,
except where otherwise provided in this contract and in
applicable federal law. The complaint and appeals procedure must
be the same for all Members and must comply with Texas Insurance
Code, Article 20A.12 or applicable federal law. Modifications
and amendments must be submitted to TDH at least 30 days prior to
the implementation of the modification or amendment.
8.6.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving of Member
complaints. The procedures must be reviewed and approved in
writing by TDH. Any changes or modifications to the procedures
must be submitted to TDH for approval thirty (30) days prior to
the effective date of the amendment.
8.6.3 HMO must designate an officer of HMO who has primary
responsibility for ensuring that complaints are resolved in
compliance with written policy and within the time required. An
"officer" of HMO means a president, vice president, secretary,
treasurer, or chairperson of the board for a corporation, the
sole proprietor, the managing general partner of a partnership,
or a person having similar executive authority in the
organization.
8.6.4 HMO must have a routine process to detect patterns of complaints
and disenrollments and involve management and supervisory staff
to develop policy and procedural improvements to address the
complaints. HMO must cooperate with TDH and TDH's Enrollment
Broker in Member complaints relating to enrollment and
disenrollment.
8.6.5 HMO's complaint procedures must be provided to Members in writing
and in alternative communication formats. A written description
of HMO's complaint procedures must be in appropriate languages
and easy for Members to understand. HMO must include a written
description in the Member Handbook. HMO must maintain at least
one local and one toll-free telephone number for making
complaints.
8.6.6 HMO's process must require that every complaint received in
person, by telephone or in writing, is recorded in a written
record and is logged with the following details: date;
identification of the individual filing the complaint;
identification of the individual recording the complaint; nature
of the complaint; disposition of the complaint; corrective action
required; and date resolved.
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8.6.7 HMO's process must include a requirement that the Governing Body
of HMO reviews the written records (logs) for complaints and
appeals.
8.6.8 HMO is prohibited from discriminating against a Member because
that Member is making or has made a complaint.
8.6.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be
referred to TDH within five (5) business days after the Member
makes a disenrollment request.
8.6.10 HMO must develop, implement and maintain an appeal of adverse
determination procedure that complies with the requirements of
Article 21.58A of the Texas Insurance Code, relating to the
utilization review, except where otherwise provided in this
contract and in applicable federal law. The appeal of an adverse
determination procedure must be the same for all Members and must
comply with Texas Insurance Code, Article 21.58A or applicable
federal law. Modifications and amendments must be submitted to
TDH no less than 30 days prior to the implementation of the
modification or amendment. When an enrollee, a person acting on
behalf of an enrollee, or an enrollee's provider of record
expresses orally or in writing any dissatisfaction or
disagreement with an adverse determination, HMO or UR agent must
regard the expression of dissatisfaction as a request to appeal
an adverse determination.
8.6.11 If a complaint or appeal of an adverse determination relates to
the denial, delay, reduction, termination or suspension of
covered services by either HMO or a utilization review agent
contracted to perform utilization review by HMO, HMO must inform
Members they have the right to access the TDH Fair Hearing
process at any time in lieu of the internal complaint system
provided by HMO. HMO is required to comply with the requirements
contained in 1 TAC Chapter 357, relating to notice and Fair
Hearings in the Medicaid program, whenever an action is taken to
deny, delay, reduce, terminate or suspend a covered service.
8.6.12 If Members utilize HMO's internal complaint or appeal of adverse
determination system and the complaint relates to the denial,
delay, reduction, termination or suspension of covered services
by either HMO or a utilization review agent contracted to perform
utilization review by HMO, HMO must inform the Member that they
continue to have a right to appeal the decision through the TDH
Fair Hearing process.
8.6.13 The provisions of Article 21.58A, Texas Insurance Code, relating
to a Member's right to appeal an adverse determination made by
HMO or a utilization review agent by an independent review
organization, do not apply to a Medicaid recipient. Federal fair
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hearing requirements (Social Security Act ss.1902a(33), codified
at 42 C.F.R. 431.200 et. seq.) require the agency to make a final
decision after a fair hearing, which conflicts with the State
requirement that the IRO make a final decision. Therefore, the
State requirement is pre-empted by the federal requirement.
8.6.14 HMO will cooperate with the Enrollment Broker and TDH to resolve
all Member complaints. Such cooperation may include, but is not
limited to, participation by HMO or Enrollment Broker and/or TDH
internal complaint committees.
8.6.15 HMO must have policies and procedures in place outlining the role
of HMO's Medical Director in the Member Complaint System and
appeal of an adverse determination. The Medical Director must
have a significant role in monitoring, investigating and hearing
complaints.
8.6.16 HMO must provide Member Advocates to assist Members in
understanding and using HMO's complaint system and appeal of an
adverse determination.
8.6.17 HMO's Member Advocates must assist Members in writing or filing a
complaint or appeal of an adverse determination and monitoring
the complaint or appeal through the Contractor's complaint or
appeal of an adverse determination process until the issue is
resolved.
8.7 MEMBER NOTICE, APPEALS AND FAIR HEARINGS
----------------------------------------
8.7.1 HMO must send Members the notice required by 1 Texas
Administrative Code ss.357.5, whenever HMO takes an action to
deny, delay, reduce or terminate covered services to a Member.
The notice must be mailed to the Member no less than 10 days
before HMO intends to take an action. If an emergency exists, or
if the time within which the service must be provided makes
giving 10 days notice impractical or impossible, notice must be
provided by the most expedient means reasonably calculated to
provide actual notice to the Member, including by phone, direct
contact with the Member, or through the provider's office.
8.7.2 The notice must contain the following information:
8.7.2.1 Member's right to immediately access TDH's Fair Hearing process;
8.7.2.2 a statement of the action HMO will take;
8.7.2.3 the date the action will be taken;
8.7.2.4 an explanation of the reasons HMO will take the action;
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8.7.2.5 a reference to the state and/or federal regulations which support
HMO's action;
8.7.2.6 an address where written requests may be sent and a toll-free
number Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair Hearing;
8.7.2.7 a procedure by which Member may appeal HMO's action through
either HMO's complaint process or TDH's Fair Hearings process;
8.7.2.8 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative, legal
counsel or another spokesperson;
8.7.2.9 an explanation of whether, and under what circumstances, services
may be continued if a complaint is filed or a Fair Hearing
requested;
8.7.2.10 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within 90
days of the date on the notice or the right to request a hearing
is waived;
8.7.2.11 a statement explaining that HMO must make its decision within 30
days from the date the complaint is received by HMO; and
8.7.2.12 a statement explaining that a final decision must be made by TDH
within 90 days from the date a Fair Hearing is requested.
8.8 MEMBER ADVOCATES
----------------
8.8.1 HMO must provide Member Advocates to assist Members. Member
Advocates must be physically located within the service area.
Member Advocates must inform Members of their rights and
responsibilities, the complaint process, the health education and
the services available to them, including preventive services.
8.8.2 Member Advocates must assist Members in writing complaints and
are responsible for monitoring the complaint through HMO's
complaint process until the Member's issues are resolved or a TDH
Fair Hearing requested (see Articles 8.6.15, 8.6.16, and 8.6.17).
8.8.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care
provided or the way care is delivered. Member Advocates are also
responsible for helping or referring Members to
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community resources available to meet Member needs that are not
available from HMO as Medicaid covered services.
8.8.4 Member Advocates must provide outreach to Members and participate
in TDH-sponsored enrollment activities.
8.9 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.9.1 Cultural Competency Plan. HMO must have a comprehensive written
Cultural Competency Plan describing how HMO will ensure
culturally competent services, and provide linguistic and
disability-related access. The Plan must describe how the
individuals and systems within HMO will effectively provide
services to people of all cultures, races, ethnic backgrounds,
and religions as well as those with disabilities in a manner that
recognizes, values, affirms, and respects the worth of the
individuals and protects and preserves the dignity of each. HMO
must submit a written plan to TDH prior to the effective date of
this contract unless previously submitted. Modifications and
amendments to the written plan must be submitted to TDH no later
than 30 days prior to implementation of the modification or
amendment. The Plan must also be made available to HMO's network
of providers.
8.9.2 The Cultural Competency Plan must include the following:
8.9.2.1 HMO's written policies and procedures for ensuring effective
communication through the provision of linguistic services
following Title VI of the Civil Rights Act guidelines and the
provision of auxiliary aids and services, in compliance with the
Americans with Disabilities Act, Title III, Department of Justice
Regulation 36.303. HMO must disseminate these policies and
procedures to ensure that both Staff and subcontractors are aware
of their responsibilities under this provision of the contract.
8.9.2.2 A description of how HMO will educate and train its staff and
subcontractors on culturally competent service delivery, and the
provision of linguistic and/or disability related access as
related to the characteristics of its Members;
8.9.2.3 A description of how HMO will implement the plan in its
organization, identifying a person in the organization who will
serve as the contact with TDH on the Cultural Competency Plan;
8.9.2.4 A description of how HMO will develop standards and performance
requirements for the delivery of culturally competent care and
linguistic access, and monitor adherence with those standards and
requirements;
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8.9.2.5 A description of how HMO will provide outreach and health
education to Members, including racial and ethnic minorities,
non-English speakers or limited-English speakers, and those with
disabilities; and
8.9.2.6 A description of how HMO will help Members access culturally and
linguistically appropriate community health or social service
resources;
8.9.3 Linguistic, Interpreter Services, and Provision of Auxiliary Aids
and Services. HMO must provide experienced, professional
interpreters when technical, medical, or treatment information is
to be discussed. See Title VI of the Civil Rights Act of 1964, 42
U.S.C.ss.ss.2000d, et seq. HMO must ensure the provision of
auxiliary aids and services necessary for effective
communication, as per the Americans with Disabilities Act, Title
III, Department of Justice Regulations 36.303.
8.9.3.1 HMO must adhere to and provide to Members the Member Bill of
Rights and Responsibilities as adopted by the Texas Health and
Human Services Commission and contained at 1 Texas Administrative
Code (TAC) ss.ss.353.202-353.203. The Member Bill of Rights and
Responsibilities assures Members the right "to have interpreters,
if needed, during appointments with their providers and when
talking to their health plan. Interpreters include people who can
speak in their native language, assist with a disability, or help
them understand the information."
8.9.3.2 HMO must have in place policies and procedures that outline how
Members can access face-to-face interpreter services in a
provider's office if necessary to ensure the availability of
effective communication regarding treatment, medical history or
health education for a Member. HMOs must inform its providers on
how to obtain an updated list of participating, qualified
interpreters.
8.9.3.3 A competent interpreter is defined as someone who is:
8.9.3.4 proficient in both English and the other language;
8.9.3.5 has had orientation or training in the ethics of interpreting;
and
8.9.3.6 has the ability to interpret accurately and impartially.
8.9.3.7 HMO must provide 24-hour access to interpreter services for
Members to access emergency medical services within HMO's
network.
8.9.3.8 Family Members, especially minor children, should not be used as
interpreters in assessments, therapy or other medical situations
in which impartiality and confidentiality are critical, unless
specifically requested by the Member. However, a
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family member or friend may be used as an interpreter if they can
be relied upon to provide a complete and accurate translation of
the information being provided to the Member; provided that the
Member is advised that a free interpreter is available; and the
Member expresses a preference to rely on the family member or
friend.
8.9.4 All Member orientation presentations education classes and
materials must be presented in the languages of the major
population groups making up 10% or more of the Medicaid
population in the service area, as specified by TDH. HMO must
provide auxiliary aids and services, as needed, including
materials in alternative formats (i.e., large print, tape or
Braille), and interpreters or real-time captioning to accommodate
the needs of persons with disabilities that affect communication.
8.9.5 HMO must provide or arrange access to TDD to Members who are deaf
or hearing impaired.
8.10 On the date of the new Member's enrollment, TDH will provide HMOs
with the Member's Medicaid certification date.
ARTICLE IX MARKETING AND PROHIBITED PRACTICES
9.1 MARKETING MATERIAL MEDIA AND DISTRIBUTION
-----------------------------------------
HMOs may present their marketing materials to eligible Medicaid
recipients through any method or media determined to be
acceptable by TDH. The media may include but are not limited to:
written materials, such as brochures, posters, or fliers which
can be mailed directly to the Member or left at Texas Department
of Human Services eligibility offices; TDH-sponsored community
enrollment events; and paid or public service announcements on
radio. All marketing materials must be approved by TDH prior to
distribution (see Article 3.4).
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
HMO must require that all HMO staff having direct contact with
Members as part of their job duties and their supervisors
satisfactorily complete TDH's marketing orientation and training
program prior to engaging in marketing activities on behalf of
HMO. TDH will notify HMO of scheduled orientations.
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9.3 PROHIBITED MARKETING PRACTICES
------------------------------
9.3.1 HMO and its agents, subcontractors and providers are prohibited
from engaging in the following marketing practices:
9.3.1.1 conducting any direct-contact marketing to prospective Members
except through TDH-sponsored enrollment events;
9.3.1.2 making any written or oral statement containing material
misrepresentations of fact or law relating to HMO's plan or the
STAR program;
9.3.1.3 making false, misleading or inaccurate statements relating to
services or benefits of HMO or the STAR program;
9.3.1.4 offering prospective Members anything of material or financial
value as an incentive to enroll with a particular PCP or HMO; and
9.3.1.5 discriminating against an eligible Member because of race, creed,
age, color, sex, religion, national origin, ancestry, marital
status, sexual orientation, physical or mental handicap, health
status, or requirements for health care services.
9.3.2 HMO may offer nominal gifts with a retail value of no more than
$10 and/or free health screens to potential Members, as long as
these gifts and free health screenings are offered whether or not
the potential Member enrolls in their HMO. Free health screenings
cannot be used to discourage less healthy potential Members from
joining HMO. All gifts must be approved by TDH prior to
distribution to Members. The results of free screenings must be
shared with the Member's PCP if the Member enrolls with HMO
providing the screen.
9.3.3 Marketing representatives may not conduct or participate in
marketing activities for more than one HMO.
9.4 NETWORK PROVIDER DIRECTORY
--------------------------
9.4.1 The provider directory and any revisions must be approved by TDH
prior to publication and distribution to prospective Members (see
Article 3.4.1 regarding the process for plan materials review).
The directory must contain all critical elements specified by
TDH. See Appendix D, Required Critical Elements, for specific
details regarding content requirements.
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9.4.2 If HMO contracts with limited provider networks, the provider
directory must comply with the requirements of 28 TAC 11.
1600(b)(11), relating to the disclosure and notice of limited
provider networks.
9.4.3 Updates to the provider directory must be provided to the
Enrollment Broker at the beginning of each State fiscal year
quarter. This includes the months of September, December, March
and June. HMO is responsible for submitting draft updates to TDH
only if changes other than PCP information are incorporated. HMO
is responsible for sending three final paper copies and one
electronic copy of the updated provider directory to TDH each
quarter. If an electronic format is not available, five paper
copies must be sent. TDH will forward two updated provider
directories, along with its approval notice, to the Enrollment
Broker to facilitate the distribution of the directories.
ARTICLE X MIS SYSTEM REQUIREMENTS
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.1 HMO must maintain an MIS that will provide support for all
functions of HMO's processes and procedures related to the flow
and use of data within HMO. The MIS must enable HMO to meet the
requirements of this contract. The MIS must have the capacity and
capability of capturing and utilizing various data elements to
develop information for HMO administration.
10.1.2 HMO must maintain a claim retrieval service processing system
that can identify date of receipt, action taken on all provider
claims or encounters (i.e., paid, denied, other), and when any
action was taken in real time.
10.1.3 HMO must have a system that can be adapted to the change in
Business Practices/Policies within a short period of time.
10.1.4 HMO is required to submit and receive data as specified in this
contract and HMO Encounter Data Submissions Manual. HMO must
provide complete encounter data of all capitated services within
the scope of services of the contract between HMO and TDH.
Encounter data must follow the format, data elements and method
of transmission specified in the contract and HMO Encounter Data
Submissions Manual. HMO must submit encounter data, including
adjustments to encounter data. The Encounter transmission will
include all encounter data and encounter data adjustments
processed by HMO for the previous month. Data quality validation
will incorporate assessment standards developed jointly by HMO
and TDH. Original records will be
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made available for inspection by TDH for validation purposes.
Data which do not meet quality standards must be corrected and
returned within a time period specified by TDH.
10.1.5 HMO must use the procedure codes, diagnosis codes, and other
codes used for reporting encounters and fee-for-service claims in
the most recent edition of the Medicaid Provider Procedures
Manual or as otherwise directed by TDH. Any exceptions will be
considered on a code-by-code basis after TDH receives written
notice from HMO requesting an exception. HMO must also use the
provider numbers as directed by TDH for both encounter and
fee-for-service claims submissions.
10.1.6 HMO must have hardware, software, network and communications
system with the capability and capacity to handle and operate all
MIS subsystems.
10.1.7 HMO must notify TDH of any changes to HMO's MIS department
dedicated to or supporting this contract by Phase I of Renewal
Review. Any updates to the organizational chart and the
description of responsibilities must be provided to TDH at least
30 days prior to the effective date of the change. Official
points of contact must be provided to TDH on an on-going basis.
An Internet E-mail address must be provided for each point of
contact.
10.1.8 HMO must operate and maintain a MIS that meets or exceeds the
requirements outlined in the Model MIS Guidelines that follow:
10.1.8.1 The Contractor's system must be able to meet all eight MIS Model
Guidelines as listed below. The eight subsystems are used in the
Model MIS Requirements to identify specific functions or features
required by HMO's MIS. These subsystems focus on the individual
systems functions or capabilities to support the following
|
operational and administrative areas:
(1) Enrollment/Eligibility Subsystem
(2) Provider Subsystem
(3) Encounter/Claims Processing Subsystem
(4) Financial Subsystem
(5) Utilization/Quality Improvement Subsystem
(6) Reporting Subsystem
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(7) Interface Subsystem
(8) TPR Subsystem
HMO MIS system must include functions and/or features which must apply across all subsystems as follows:
(1) Ability to update and edit data.
(2) Maintain a history of changes and adjustments and audit trails for current and retroactive data. Audit trails will capture date, time, and reasons for the change, as well as who made the change.
(3) Allow input mechanisms through manual and electronic transmissions.
(4) Have procedures and processes for accumulating, archiving, and restoring data in the event of a system or subsystem failure.
(5) Maintain automated or manual linkages between and among all MIS subsystems and interfaces.
(6) Ability to relate Member and provider data with utilization, service, accounting data, and reporting functions.
(7) Ability to relate and extract data elements into summary and reporting formats attached as Appendices to contract.
(8) Must have written process and procedures manuals which document and describe all manual and automated system procedures and processes for all the above functions and features, and the various subsystem components.
(9) Maintain and cross-reference all Member-related
information with the most current Medicaid number.
10.3 ENROLLMENT/ELIGIBILITY SUBSYSTEM
--------------------------------
The Enrollment/Eligibility Subsystem is the central processing
point for the entire MIS. It must be constructed and programmed
to secure all functions which require Membership data. It must
have functions and/or features which support requirements as
follows:
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(1) Identify other health coverage available or third party liability (TPL), including type of coverage and effective dates.
(2) Maintain historical data (files) as required by TDH.
(3) Maintain data on enrollments/disenrollments and complaint activities. The data must include reason or type of disenrollment, complaint, and resolution--by incident.
(4) Receive, translate, edit and update files in accordance with TDH requirements prior to inclusion in HMO's MIS. Updates will be received from TDH's agent and processed within two working days after receipt.
(5) Provide error reports and a reconciliation process between new data and data existing in MIS.
(6) Identify enrollee changes in primary care provider and the reason(s) for those changes and effective dates.
(7) Monitor PCP capacity and limitations prior to connecting the enrollee to PCP in the system, and provide a kick-out report when capacity and limitations are exceeded.
(8) Verify enrollee eligibility for medical services rendered or for other enrollee inquiries.
(9) Generate and track referrals, e.g., Hospitals/Specialists.
(10) Search records by a variety of fields (e.g., name, unique identification numbers, date of birth, SSN, etc.) for eligibility verification.
(11) Send PCP assignment updates to TDH in the format as
specified by TDH.
10.4 PROVIDER SUBSYSTEM
------------------
The provider subsystem must accept, process, store and retrieve
current and historical data on providers, including services,
payment methodology, license information, service capacity, and
facility linkages.
Functions and Features:
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(1) Identify specialty(s), admission privileges, enrollee linkage, capacity, facility linkages, emergency arrangements or contact, and other limitations, affiliations, or restrictions.
(2) Maintain provider history files to include audit trails and effective dates of information.
(3) Maintain provider fee schedules/remuneration agreements to permit accurate payment for services based on the financial agreement in effect on the date of service.
(4) Support HMO credentialing, recredentialing, and credential tracking processes; incorporates or links information to provider record.
(5) Support monitoring activity for physician to enrollee ratios (actual to maximum) and total provider enrollment to physician and HMO capacity.
(6) Flag and identify providers with restrictive conditions (e.g., limits to capacity, type of patient, age restrictions, and other services if approved out-of-network).
(7) Support national provider number format (UPIN, NPIN, CLIA, etc., as required by TDH).
(8) Provide provider network files 90 days prior to implementation and updates monthly. Format will be provided by TDH to contracted entities.
(9) Support the national CLIA certification numbers for clinical laboratories.
(10) Exclude providers from participation that have been
identified by TDH as ineligible or excluded. Files must be
updated to reflect period and reason for exclusion.
10.5 ENCOUNTER/CLAIMS PROCESSING SUBSYSTEM
-------------------------------------
The encounter/claims processing subsystem must collect, process,
and store data on all health care services delivered for which
HMO is responsible. The functions of these subsystems are
claims/encounter processing and capturing health service
utilization data. The subsystem must capture all health care
services, including medical supplies, using standard codes (e.g.
CPT-4, HCPCS, ICD9-CM UB92 Revenue Codes), rendered by
health-care providers to an eligible enrollee regardless of
payment arrangement (e.g. capitation or fee-for-service). It
approves, prepares for
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payment, or may reject or deny claims submitted. This subsystem
may integrate manual and automated systems to validate and
adjudicate claims and encounters. HMO must use encounter data
validation methodologies prescribed by TDH.
Functions and Features:
(1) Accommodate multiple input methods: electronic submission,
tape, claim document, and media.
(2) Support entry and capture of a minimum of all required
data elements specified in the Encounter Data Submission
Manual.
(3) Edit and audit to ensure allowed services are provided by
eligible providers for Members.
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(4) Interface with Member and provider subsystems.
(5) Capture and report TPL potential, reimbursement or denial.
(6) Edit for utilization and service criteria, medical policy, fee schedules, multiple contracts, contract periods and conditions.
(7) Submit data to TDH through electronic transmission using specified formats.
(8) Support multiple fee schedule benefit packages and capitation rates for all contract periods for individual providers, groups, services, etc. A claim encounter must be initially adjudicated and all adjustments must use the fee applicable to the date of service.
(9) Provide timely, accurate, and complete data for monitoring claims processing performance.
(10) Provide timely, accurate, and complete data for reporting medical service utilization.
(11) Maintain and apply prepayment edits to verify accuracy and validity of claims data for proper adjudication.
(12) Maintain and apply edits and audits to verify timely, accurate, and complete encounter data reporting.
(13) Submit reimbursement to non-contracted providers for emergency care rendered to enrollees in a timely and accurate fashion.
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(14) Validate approval and denials of precertification and prior authorization requests during adjudication of claims/encounters.
(15) Track and report the exact date a service was performed. Use of date ranges must have State approval.
(16) Receive and capture claim and encounter data from TDH.
(17) Receive and capture value-added services codes.
(18) Capability of identifying adjustments and linking them to
the original claims/encounters.
10.6 FINANCIAL SUBSYSTEM
-------------------
The financial subsystem must provide the necessary data for 100%
of all accounting functions including cost accounting, inventory,
fixed assets, payroll, general ledger, accounts receivable,
accounts payable, financial statement presentation, and any
additional data required by TDH. The financial subsystem must
provide management with information that can demonstrate that the
proposed or existing HMO is meeting, exceeding, or failing short
of fiscal goals. The information must also provide management
with the necessary data to spot the early signs of fiscal
distress, far enough in advance to allow management to take
corrective action where appropriate.
Functions and Features:
(1) Provide information on HMO's economic resources, assets,
and liabilities and present accurate historical data and
projections based on historical performance and current
assets and liabilities.
(2) Produce financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) and in the format
prescribed by TDH.
(3) Provide information on potential third party payers;
information specific to the Member; claims made against
third party payers; collection amounts and dates; denials,
and reasons for denials.
(4) Track and report savings by category as a result of cost
avoidance activities.
(5) Track payments per Member made to network providers
compared to utilization of the provider's services.
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(6) Generate Remittance and Status Reports.
(7) Make claim and capitation payments to providers or groups.
(8) Reduce/increase accounts payable/receivable based on
adjustments to claims or recoveries from third party
resources.
10.7 UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM
-----------------------------------------
The quality management/quality improvement/utilization review
subsystem combines data from other subsystems, and/or external
systems, to produce reports for analysis which focus on the
review and assessment of quality of care given, detection of over
and under utilization, and the development of user defined
reporting criteria and standards. This system profiles
utilization of providers and enrollees and compares them against
experience and norms for comparable individuals. This system also
supports the quality assessment function.
The subsystem tracks utilization control function(s) and
monitoring inpatient admissions, emergency room use, ancillary,
and out-of-area services. It provides provider profiles,
occurrence reporting, and monitoring and evaluation studies. The
subsystem may integrate HMO's manual and automated processes or
incorporate other software reporting and/or analysis programs.
The subsystem incorporates and summarizes information from
enrollee surveys, provider and enrollee complaints, and appeal
processes.
Functions and Features:
(1) Supports provider credentialing and recredentialing
activities.
(2) Supports HMO processes to monitor and identify deviations
in patterns of treatment from established standards or
norms. Provides feedback information for monitoring
progress toward goals, identifying optimal practices, and
promoting continuous improvement.
(3) Supports development of cost and utilization data by
provider and service.
(4) Provides aggregate performance and outcome measures using
standardized quality indicators similar to HEDIS or as
specified by TDH.
(5) Supports quality-of-care Focused Studies.
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(6) Supports the management of referral/utilization control processes and procedures, including prior authorization and precertifications and denials of services.
(7) Monitors primary care provider referral patterns.
(8) Supports functions of reviewing access, use and coordination of services (i.e. actions of Peer Review and alert/flag for review and/or follow-up; laboratory, x-ray and other ancillary service utilization per visit).
(9) Stores and reports patient satisfaction data through use of enrollee surveys.
(10) Provides fraud and abuse detection, monitoring and reporting.
(11) Meets minimum report/data collection/analysis functions of Article XI and Appendix A - Standards For Quality Improvement Programs.
(12) Monitors and tracks provider and enrollee complaints and
appeals from receipt to disposition or resolution by
provider.
10.8 REPORT SUBSYSTEM
----------------
The reporting subsystem supports reporting requirements of all
HMO operations to HMO management and TDH. It allows HMO to
develop various reports to enable HMO management and TDH to make
decisions regarding HMO activity.
Functions and Capabilities:
(1) Produces standard, TDH-required reports and ad hoc reports
from the data available in all MIS subsystems. All reports
will be submitted as a paper copy or electronically in a
format approved by TDH.
(2) Have system flexibility to permit the development of
reports at irregular periods as needed.
(3) Generate reports that provide unduplicated counts of
enrollees, providers, payments and units of service unless
otherwise specified.
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(4) Generate an alphabetic Member listing.
(5) Generate a numeric Member listing.
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(6) Generate a Member eligibility listing by PCP (panel report).
(7) Report on PCP change by reason code.
(8) Report on TPL (COB) information to TDH.
(9) Report on provider capacity and assignment from date of service to date received.
(10) Generate or produce an aged outstanding liability report.
(11) Produce a Member ID Card.
(12) Produce Member/provider mailing labels.
10.9 DATA INTERFACE SUBSYSTEM
------------------------
10.9.1 The interface subsystem supports incoming and outgoing data from
and to other organizations. It allows HMO to maintain enrollee,
benefit package, eligibility, disenrollment/enrollment status,
and medical services received outside of capitated services and
associated cost. All interfaces must follow the specifications
frequencies and formats listed in the Interface Manual.
10.9.2 HMO must obtain access to the TexMedNet BBS. Some file transfers
and E-mail will be handled through this mechanism.
10.9.3 Provider Network File. The provider file shall supply Network
Provider data between an HMO and TDH. This process shall
accomplish the following:
(1) Provide identifying information for all managed care
providers (e.g. name, address, etc.).
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(2) Maintain history on provider enrollment/disenrollment.
(3) Identify PCP capacity.
(4) Identify any restrictions (e.g., age, sex, etc.).
(5) Identify number and types of specialty providers available
to Members.
10.9.4 Eligibility/Enrollment Interface. The enrollment interface must
provide eligibility data between TDH and HMOs.
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(1) Provides benefit package data to HMOs in accordance with capitated services.
(2) Provides PCP assignments.
(3) Provides Member eligibility status data.
(4) Provides Member demographics data.
(5) Provides HMOs with cross-reference data to identify
duplicate Members.
10.9.5 Encounter/Claim Data Interface. The encounter/claim interface
must transfer paid fee-for-service claims data to HMOs and
capitated services/encounters from HMO, including adjustments.
This file will include all service types, such as inpatient,
outpatient, and medical services. TDH's agent will process claims
for non-capitated services.
10.9.6 Capitation Interface. The capitation interface must transfer
premium and Member information to HMO. This interface's basic
purpose is to balance HMO's Members and premium amount.
10.9.7 TPR Interface. TDH will provide a data file that contains
information on enrollees that have other insurance. Because
Medicaid is the payer of last resort, all services and encounters
should be billed to the other insurance companies for recovery.
TDH will also provide an insurance company data file which
contains the name and address of each insurance company.
10.9.8 TDH will provide a diagnosis file which will give the code and
description of each diagnosis permitted by TDH.
10.9.9 TDH will provide a procedure file which contains the procedures
which must be used on all claims and encounters. This file
contains HCPCS, revenue, and ICD9-CM surgical procedure codes.
10.9.10 TDH will provide a provider file that contains the Medicaid
provider numbers, and the provider's names and addresses. The
provider number authorized by TDH must be submitted on all
claims, encounters, and network provider submissions.
10.10 TPR SUBSYSTEM
-------------
HMO's third party recovery system must have the following
capabilities and capacities:
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(1) Identify, store, and use other health coverage available to eligible Members or third party liability (TPL) including type of coverage and effective dates.
(2) Provide changes in information to TDH as specified by TDH.
(3) Receive TPL data from TDH to be used in claim and
encounter processing.
10.11 YEAR 2000 (Y2K) COMPLIANCE
--------------------------
10.11.1 HMO must take all appropriate measures to make all software which
will record, store, and process and present calendar dates
failing on or after January 1, 2000, perform in the same manner
and with the same functionality, data integrity and performance,
as dates falling on or before December 31, 1999, at no added cost
to TDH. HMO must take all appropriate measures to ensure that the
software will not lose, alter or destroy records containing dates
falling on or after January 1, 2000. HMO will ensure that all
software will interface and operate with all TDH, or its agent's,
data systems which exchange data, including but not limited to
historical and archived data. In addition, HMO guarantees that
the year 2000 leap year calculations will be accommodated and
will not result in software, firmware or hardware failures.
10.11.2 TDH and all subcontracted entities are required by state and
federal law to meet Y2K compliance standards. Failure of TDH or a
TDH contractor other than an HMO to meet Y2K compliance standards
which results in an HMO's failure to meet the Y2K requirements of
this contract is a defense of an HMO against a declaration by TDH
of default by an HMO under this contract.
ARTICLE XI QUALITY ASSURANCE AND QUALITY IMPROVEMENT PROGRAM
11.1 QUALITY IMPROVEMENT PROGRAM (QIP) SYSTEM
----------------------------------------
HMO must develop, maintain, and operate a Quality Improvement
Program (QIP) system which complies with federal regulations
relating to Quality Assurance systems, found at 42 C.F.R.
ss.434.34. The system must meet the Standards for Quality
Improvement Programs contained in Appendix A.
11.2 WRITTEN QIP PLAN
----------------
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HM0 must have on file with TDH an approved plan describing its
Quality Improvement Plan (QIP), including how HMO will accomplish
the activities pertaining to each Standard (I-XVI) in Appendix A.
Modifications and amendments must be submitted to TDH no later
than 60 days prior to the implementation of the modification or
amendment.
11.3 QIP SUBCONTRACTING
------------------
If HMO subcontracts any of the essential functions or reporting
requirements of QIP to another entity, HMO must maintain a file
of the subcontractors. The file must be available for review by
TDH or its designee upon request. HMO must notify TDH no later
than 90 days prior to terminating any subcontract affecting a
major performance function of this contract (see Article
3.2.1.2).
11.4 ACCREDITATION
-------------
If HMO is accredited by an external accrediting agency,
documentation of accreditation must be provided to TDH. HMO must
provide TDH with their accreditation status upon request.
11.5 BEHAVIORAL HEALTH INTEGRATION INTO QIP
--------------------------------------
HMO must integrate behavioral health into its QIP system and
include a systematic and on-going process for monitoring,
evaluating, and improving the quality and appropriateness of
behavioral health care services provided to Members. HMO's QIP
must enable HMO to collect data, monitor and evaluate for
improvements to physical health outcomes resulting from
behavioral health integration into the overall care of the
Member.
11.6 QIP REPORTING REQUIREMENTS
--------------------------
HMO must meet all of the QIP Reporting Requirements contained in
Article XII.
ARTICLE XII REPORTING REQUIREMENTS
12.1 FINANCIAL REPORTS
-----------------
12.1.1 Monthly MCFS Report. HMO must submit the Managed Care
Financial-Statistical Report (MCFS) included in Appendix I. The
report must be submitted to TDH no later than 30 days after the
end of each state fiscal year quarter (i.e., Dec. 30, March
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30, June 30, Sept. 30) and must include complete financial and
statistical information for each month. The MCFS Report must be
submitted for each claims processing subcontractor in accordance
with this Article. HMO must incorporate financial and statistical
data received by its delegated networks (IPAs, ANHCs, Limited
Provider Networks) in its MCFS Report.
12.1.2 For any given month in which an HMO has a net loss of $200,000 or
more for the contract period to date, HMO must submit an MCFS
Report for that month by the 30th day after the end of the
reporting month. The MCFS Report must be completed in accordance
with the Instructions for Completion of the Managed Care
Financial-Statistical Report developed by TDH.
12.1.3 An HMO must submit monthly reports for each of the first 6 months
following the Implementation Date. If the cumulative net loss for
the contract period to date after the 6th month is less than
$200,000, HMO may submit quarterly reports in accordance with the
above provisions unless the condition in Article 12.1.2 exists,
in which case monthly reports must be submitted.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
Financial- Statistical Reports. The first final report must
reflect expenses incurred through the 90th day after the end of
the contract year. The first final report must be filed on or
before the 120th day after the end of the contract year. The
second final report must reflect data completed through the 334th
day after the end of the contract year and must be filed on or
before the 365th day following the end of the contract year.
12.1.5 Administrative expenses reported in the monthly and Final MCFS
Reports must be reported in accordance with Appendix L, Cost
Principles for Administrative Expenses. Indirect administrative
expenses must be based on an allocation methodology for Medicaid
managed care activities and services that is developed or
approved by TDH.
12.1.6 Affiliate Report. HMO must submit an Affiliate Report to TDH if
this information has changed since the last report was submitted.
The report must contain the following information:
12.1.6.1 A listing of all Affiliates; and
12.1.6.2 A schedule of all transactions with Affiliates which, under the
provisions of this Contract, will be allowable as expenses in
either Line 4 or Line 5 of Part 1 of the MCFS Report for services
provided to HMO by the Affiliates for the prior approval of TDH.
Include financial terms, a detailed description of the services
to be provided,
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and an estimated amount which will be incurred by HMO for such
services during the Contract period.
12.1.7 Annual Audited Financial Report. On or before June 30th of each
year, HMO must submit to TDH a copy of the annual audited
financial report filed with TDI.
12.1.8 Form HCFA-1513. HMO must file an updated Form HCFA-1513 regarding
control, ownership, or affiliation of HMO 30 days prior to the
end of the contract year. An updated Form HCFA 1513 must also be
filed no later than 30 days after any change in control,
ownership, or affiliation of HMO. Forms may be obtained from TDH.
12.1.9 Section 1318 Financial Disclosure Report. HMO must file an
updated HCFA Public Health Service (PHS) "Section 1318 Financial
Disclosure Report" no later than 30 days after the end of the
contract year and no later than 30 days after entering into,
renewing, or terminating a relationship with an affiliated party.
These forms may be obtained from TDH.
12.1.10 TDI Examination Repo Report. HMO must furnish a copy of any TDI
Examination Report no later than 10 days after receipt of the
final report from TDI.
12.1.11 IBNR Plan. HMO must furnish a written IBNR Plan to manage
incurred-but-not-reported (IBNR) expenses, and a description of
the method of insuring against insolvency, including information
on all existing or proposed insurance policies. The Plan must
include the methodology for estimating IBNR. The plan and
description must be submitted to TDH no later than 60 days after
the effective date of this contract, unless previously submitted
to TDH. Changes to the IBNR plan and description must be
submitted to TDH no later than 30 days before changes to the plan
are implemented by HMO.
12.1.12 Third Party Recovery (TPR) Reports. HMO must file quarterly Third
Party Recovery (TPR) Reports in accordance with the format
developed by TDH. TPR reports must include total dollars
recovered from third party payers for services to HMO's Members
for each month and the total dollars recovered through
coordination of benefits, subrogation, and worker's compensation.
12.1.13 Each report required under this Article must be mailed to: Bureau
of Managed Care; Texas Dept. of Health; 1100 West 49th Street;
Austin, TX 78756-3168 (Exception: The MCFS Report may be
submitted to TDH via E-mail). HMO must also mail a copy of the
reports, except for items in Article 12.1.7 and Article 12.1.10
to Texas Department of Insurance, Mail Code 106-3A, HMO Division,
Attention: HMO Division Director, P.O. Box 149104, Austin, TX
78714-9104.
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12.2 STATISTICAL REPORTS
-------------------
12.2.1 HMO must electronically file the following monthly reports: (1)
encounter; (2) encounter detail; (3) institutional; (4)
institutional detail; and (5) claims detail for cost-reimbursed
services filed, if any, with HMO. Encounter data must include the
data elements, follow the format, and use the transmission method
specified by TDH in the Encounter Data Submission Manual.
Encounters must be submitted by HMO to TDH no later than 45 days
after the date of adjudication (finalization) of the claims.
12.2.2 Monthly reports must include current month encounter data and
encounter data adjustments to the previous month's data.
12.2.3 Data quality standards will be developed jointly by HMO and TDH.
Encounter data must meet or exceed data quality standards. Data
that does not meet quality standards must be corrected and
returned within the period specified by TDH. Original records
must be made available to validate all encounter data.
12.2.4 HMO must require providers to submit claims and encounter data to
HMO no later than 95 days after the date services are provided.
12.2.5 HMO must use the procedure codes, diagnosis codes and other codes
contained in the most recent edition of the Texas Medicaid
Provider Procedures Manual and as otherwise provided by TDH.
Exceptions or additional codes must be submitted for approval
before HMO uses the codes.
12.2.6 HMO must use its TDH-specified identification numbers on all
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encounter data submissions. Please refer to the TDH Encounter Data Submission Manual for further specifications.
12.2.7 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission of
encounter data to TDH.
12.2.8 All Claims Summary Report. HMO must submit the "All Claims
Summary Report" identified in the Texas Managed Care Claims
Manual as a contract year-to-date report. The report must be
submitted quarterly by the last day of the month following the
reporting period. The reports must be submitted to TDH in a
format specified by TDH.
12.2.9 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO must
file preliminary and final Medicaid Disproportionate Share
Hospital (DSH) reports, required by TDH to identify and reimburse
hospitals that qualify for Medicaid DSH funds. The preliminary
and final DSH reports must include the data elements and be
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submitted in the form and format specified by TDH. The
preliminary DSH reports are due on or before June 1 of the year
following the state fiscal year for which data is being reported.
The final DSH reports are due on or before August 15 of the year
following the state fiscal year for which data is being reported.
12.3 ARBITRATION/LITIGATION CLAIMS REPORT
------------------------------------
HMO must submit an Arbitration/Litigation Claims Report in a
format provided by TDH (see Appendix M) identifying all provider
or HMO requests for arbitration or matters in litigation. The
report must be submitted within 30 days from the date the matter
is referred to arbitration or suit is filed, or whenever there is
a change of status in a matter referred to arbitration or
litigation.
12.4 SUMMARY REPORT OF PROVIDER COMPLAINTS
-------------------------------------
HMO must submit a Summary Report of Provider Complaints. HMO must
also report complaints submitted to its subcontracted risk groups
(e.g., IPAs). The complaint report must be submitted in two paper
copies and one electronic copy on or before the 45 days following
the end of the state fiscal quarter using a form specified by
TDH.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.1 Provider Network Report. HMO must submit to the Enrollment Broker
an electronic file summarizing changes in HMO's provider network
including PCPs, specialists, ancillary providers and hospitals.
The file must indicate if the PCPs and specialists participate in
a closed network and the name of the delegated network. The
electronic file must be submitted in the format specified by TDH
and can be submitted as often as daily but must be submitted at
least weekly.
12.5.2 Provider Termination Report. HMO must submit a monthly report
which identifies any providers who cease to participate in HMO's
provider network, either voluntarily or involuntarily. The report
must be submitted to TDH in the format specified by TDH. HMO will
submit the report no later than thirty (30) days after the end of
the reporting month. The information must include the provider's
name, Medicaid number, the reason for the provider's termination,
and whether the termination was voluntary or involuntary.
12.6 MEMBER COMPLAINTS
-----------------
HMO must submit a quarterly summary report of Member complaints.
HMO must also report complaints submitted to its subcontracted
risk groups (e.g., IPAs). The
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complaint report format must be submitted to TDH as two paper
copies and one electronic copy on or before 45 days following the
end of the state fiscal quarter using a form specified by TDH.
12.7 FRAUDULENT PRACTICES
--------------------
HMO must report all fraud and abuse enforcement actions or
investigations taken against HMO and/or any of its subcontractors
or providers by any state or federal agency for fraud or abuse
under Title XVIII or Title XIX of the Social Security Act or any
State law or regulation and any basis upon which an action for
fraud or abuse may be brought by a State or federal agency as
soon as such information comes to the attention of HMO.
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH
--------------------------------------------------
Behavioral health (BH) utilization management reports are
required on a semi-annual basis with submission of data files
that are, at a minimum, due to TDH or its designee, on a
quarterly basis no later than 150 days following the end of the
period. Refer to Appendix H for the standardized reporting format
for each report and detailed instructions for obtaining the
specific data required in the report and for data file submission
specifications. The BH utilization report and data file
submission instructions may periodically be updated by TDH to
facilitate clear communication to the health plan.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are required
on a semi-annual basis with submission of data files that are, at
a minimum, due to TDH or its designee on a quarterly basis no
later than 150 days following the end of the period. Refer to
Appendix J for the standardized reporting format for each report
and detailed instructions for obtaining specific data required in
the report and for data file submission specifications. The PH
Utilization Management Report and data file submission
instructions may periodically be updated by TDH to facilitate
clear communication to the health plan.
12.10 QUALITY IMPROVEMENT REPORTS
---------------------------
12.10.1 HMO must conduct health Focused Studies in well child and
pregnancy, and a study chosen by HMO that may be performed in the
areas of behavioral health care, asthma, or other chronic
conditions. Well child and pregnancy studies shall be conducted
and data collected using criteria and methods developed by TDH.
The following format shall be utilized:
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(1) Executive Summary.
(2) Definition of the population and health areas of concern.
(3) Clinical guidelines/standards, quality indicators, and audit tools.
(4) Sources of information and data collection methodology.
(5) Data analysis and information/results.
(6) Corrective actions if any, implementation, and follow-up
plans including monitoring, assessment of effectiveness,
and methods for provider feedback.
12.10.2 Annual Focused Studies. Focused Studies on well child, pregnancy,
and a study chosen by the plan, must be submitted to TDH
according to due dates established by TDH.
12.10.3 Annual QIP Summary Report. An annual QIP summary report must be
conducted yearly based on the state fiscal year. The annual QIP
summary report must be submitted by March 31 of each year. This
report must provide summary information on HMO's QIP system and
include the following:
(1) Executive summary of QIP - include results of all QI
reports and interventions.
(2) Activities pertaining to each standard (I through XVI) in
Appendix A. Report must list each standard.
(3) Methodologies for collecting, assessing data and measuring
outcomes.
|
(4) Tracking and monitoring quality of care.
(5) Role of health professionals in QIP review.
(6) Methodology for collection data and providing feedback to provider and staff.
(7) Outcomes and/or action plan.
12.10.4 Provider Medical Record Audit and Report. HMO is required to
conform to commonly accepted medical record standards such as
those used by, NCQA, JCAHO, or those used for credentialing
review such as the Texas Environment of Care Assessment Program
(TECAP), and have documentation on file at HMO for review by TDH
or its designee during an on-site review.
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12.11 HUB REPORTS
-----------
HMO must submit quarterly reports documenting HMO's HUB program
efforts and accomplishments. The report must include a narrative
description of HMO's program efforts and a financial report
reflecting payments made to HUB. HMO must use the format included
in Appendix B for HUB quarterly reports. For HUB Certified
Entities: HMO must include the General Service Commission (GSC)
Vendor Number and the ethnicity/gender under which a contracting
entity is registered with GSC. For HUB Qualified (but not
certified) Entities: HMO must include the ethnicity/gender of the
major owner(s) (51%) of the entity. Any entities for which HMO
cannot provide this information, cannot be included in the HUB
report. For both types of entities, an entity will not be
included in the HUB report if HMO does not list ethnicity/gender
information.
12.12 THSTEPS REPORTS
---------------
Minimum reporting requirements. HMO must submit, at a minimum,
80% of all THSteps checkups on HCFA 1500 claim forms as part of
the encounter file submission to the TDH Claims Administrator no
later than thirty (30) days after the date of final adjudication
(finalization) of the claims. Failure to comply with these
minimum reporting requirements will result in Article XVIII
sanctions and money damages.
ARTICLE XIII PAYMENT PROVISIONS
13.1 CAPITATION AMOUNTS
------------------
13.1.1 TDH will pay HMO monthly premiums calculated by multiplying the
number of Member months by Member risk group times the monthly
capitation amount by Member risk group. HMO and network providers
are prohibited from billing or collecting any amount from a
Member for health care services covered by this contract, in
which case the Member must be informed of such costs prior to
providing non-covered services.
13.1.2 Delivery Supplemental Payment (DSP). TDH has submitted the
delivery supplemental payment methodology to HCFA for approval.
The monthly capitation amounts established for each risk group in
the Bexar Service Area using the DSP methodology will apply only
if the methodology is approved by HCFA, and the methodology is
implemented for all HMO's in all existing service areas by
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contract. The monthly capitation amounts for September 1, 1999,
through August 31, 2000 and the DSP amount are listed below and
will supersede the standard Methodology of Article 13.1.3 upon
approval by HCFA.
-----------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
-----------------------------------------------------------------
TANF Adults $153.73
-----------------------------------------------------------------
TANF Children > 12 Months $ 49.87
of Age
-----------------------------------------------------------------
Expansion Children > 12 $ 59.18
Months of Age
-----------------------------------------------------------------
Newborns (< 12 Months of $375.31
Age)
-----------------------------------------------------------------
TANF Children < 12 Months $375.31
of Age
-----------------------------------------------------------------
Expansion Children < 12 $375.31
Months of Age
-----------------------------------------------------------------
Federal Mandate Children $ 42.25
-----------------------------------------------------------------
CHIP Phase I $ 76.34
-----------------------------------------------------------------
Pregnant Women $241.86
-----------------------------------------------------------------
Disabled/Blind Administration $ 14.00
-----------------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy
supplemental payment for each delivery shall be paid to HMO as
provided below in the following amount: $2,834.10.
13.1.2.1 HMO will receive a DSP for each live or still birth. The one-time
payment is made regardless of whether there is a single or
multiple births at time of delivery. A delivery is the birth of a
liveborn infant, regardless of the duration of the pregnancy, or
a stillborn (fetal death) infant of 20 weeks or more gestation. A
delivery does not
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include a spontaneous or induced abortion, regardless of the
duration pregnancy.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women, TANF
Adults, TANF Children >12 months, Expansion Children >12 months,
Federal Mandate Children >12 months, or CHIP risk group, HMO will
be paid the monthly capitation amount identified in Article
13.1.2 for each month of classification, plus the DSP amount
identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes the
data elements specified by TDH. TDH will consult with contracted
HMOs prior to revising the report data elements and requirements.
The reports must be submitted to TDH in the format and time
specified by TDH. The report must include only unduplicated
deliveries. The report must include only deliveries for which HMO
has made a payment for the delivery, to either a hospital or
other provider. No DSP will be made for deliveries which are not
reported by HMO to TDH within 90 days from the receipt of claim,
or within 30 days from the date of discharge from the hospital
for the stay related to the delivery, whichever is later.
13.1.2.4 HMO must maintain complete claims and adjudication disposition
documentation, including paid and denied amounts for each
delivery. HMO must submit the documentation to TDH within five
(5) days from the date of a TDH request for documents.
13.1.2.5 The DSP will be made by TDH to HMO within twenty (20) state
working days after receiving an accurate report from HMO.
13.1.2.6 All infants of age equal to or less than twelve months (Newborns)
in the TANF Children, Expansion Children, and Newborns risk
groups will be capitated at the Newborns classification
capitation amount in Article 13.1.2.
13.1.3 Standard Methodology. If the DSP methodology is not approved by
HCFA, the monthly capitation amounts established for each risk
group in the Bexar Service Area using the Methodology set forth
in Article 13.1.1, without the DSP, are as follows:
-----------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
-----------------------------------------------------------------
TANF Adults $171.50
-----------------------------------------------------------------
TANF Children $ 60.71
-----------------------------------------------------------------
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-----------------------------------------------------------------
Expansion Children $ 67.32
-----------------------------------------------------------------
Newborns $415.11
-----------------------------------------------------------------
Federal Mandate Children $ 42.39
-----------------------------------------------------------------
CHIP Phase 1 $ 77.81
-----------------------------------------------------------------
Pregnant Women $592.89
-----------------------------------------------------------------
Disabled/Blind Administration $ 14.00
-----------------------------------------------------------------
13.1.4 TDH will re-examine the capitation rates paid to HMO under this
contract during the first year of the contract period and will
provide HMO with capitation rates for the second year of the
contract period no later than 30 days before the date of the
one-year anniversary of the contract's effective date. Capitation
rates for state fiscal year 2001 will be re-examined based on the
most recent available traditional Medicaid cost data for the
contracted risk groups in the service area, trended forward and
discounted.
13.1.4.1 Once HMO has received their capitation rates established by TDH
for the second year of this contract, HMO may terminate this
contract as provided in Article 18.1.6 of this contract. HMO may
also terminate this contract as provided in Article 18.1.6 if
HCFA does not approve the Delivery Supplemental Payment
Methodology described in Article 13.1.2.
13.1.5 The monthly premium payment to HMO is based on monthly
enrollments adjusted to reflect money damages set out in Article
18.8 and adjustments to premiums in Article 13.4
13.1.6 The monthly premium payments will be made to HMO no later than
the 10th working day of the month for which premiums are paid.
HMO must accept payment for premiums by direct deposit into an
HMO account.
13.1.7 Payment of monthly capitation amounts is subject to availability
of appropriations. If appropriations are not available to pay the
full monthly capitation amounts, TDH will equitably adjust
capitation amounts for all participating HMOs, and reduce scope
of service requirements as appropriate.
13.1.8 HMO renewal rates reflect program increases appropriated by the
76th legislature for physician (to include THSteps providers) and
outpatient facility services. HMO must report to TDH any change
in rates for participating physicians (to include THSteps
providers) and outpatient facilities resulting from this
increase. The report must be
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submitted to TDH at the end of the first quarter of the FY2000
and FY2001 contract years according to the deliverables matrix
schedule set for HMO.
13.2 EXPERIENCE REBATE TO STATE
--------------------------
13.1.2 Delivery Supplemental Payment (DSP). TDH has submitted the
delivery supplemental payment methodology to HCFA for approval.
The monthly capitation amounts established for each risk group in
the Travis Service Area using the DSP methodology will apply only
if the methodology is approved by HCFA, and the methodology is
implemented for all HMO's in all existing service areas by
contract. The monthly capitation amounts for September 1, 1999,
through August 31, 2000 and the DSP amount are listed below and
will supersede the standard Methodology of Article 13.1.3 upon
approval by HCFA.
13.2.1 For fiscal year 2000, HMO must pay to TDH the State's portion of
an experience rebate calculated in accordance with the tiered
rebate method listed below based on the excess of allowable HMO
STAR revenues over allowable HMO STAR expenses as measured by any
positive amount on Line 7 of "Part 1: Financial Summary, All
Coverage Groups Combined" of the annual Managed Care
Financial-Statistical Report set forth in Appendix I, as reviewed
and confirmed by TDH. TDH reserves the right to have an
independent audit performed to verify the information provided by
HMO.
|
---------------------------------------------------------------------
Graduated Rebate Method
---------------------------------------------------------------------
Excess as a Percentage HMO Share of State Share of
of Revenues Experience Rebate Experience Rebate
---------------------------------------------------------------------
0%-3% 100% of excess between 0% of excess between
0% and 3%-of revenues 0% and 3% of revenues
---------------------------------------------------------------------
Over 3% - 7% 75% of excess >3% and 25% of excess >3%
<7% of revenues and <7% of revenues
- -
---------------------------------------------------------------------
Over 7% - 10% 50% of excess > 7% and 50% of excess >7%
<10% of revenues and <10% of revenues
- -
---------------------------------------------------------------------
Over 10% - 15% 25% of excess >10% 75% of excess >10%
and < 15% of revenues and < 15% of revenues
- -
---------------------------------------------------------------------
Over 15% 0% of excess of 15% of 100% of excess over
revenues 15% of revenues
---------------------------------------------------------------------
|
13.2.2 Carry Forward of Prior Contract Period Losses: Losses incurred
for one contract period can only be carried forward to the next
contract period.
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13.2.2.1 Carry Forward of Loss from one Service Delivery Area to Another:
If HMO operates in multiple Service Delivery Areas (SDAs), losses
in one SDA cannot be used to offset net income before taxes in
another SDA.
13.2.3 Experience rebate will be based on a pre-tax basis.
13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates: HMO
may subtract from an experience rebate owed to the State,
expenses for population-based health initiatives that have been
approved by TDH. A population-based initiative (PBI) is a project
or program designed to improve some aspect of quality of care,
quality of life, or health care knowledge for the community as a
whole. Value-added service does not constitute a PBI.
Contractually required services and activities do not constitute
a PBI.
13.2.5 There will be two settlements for payment(s) of the state share
of the experience rebate. The first settlement shall equal 100
percent of the state share of the experience rebate as derived
from Line 7 of Part 1 (Net Income Before Taxes) of the annual
Managed Care Financial Statistical (MCFS) Report and shall be
paid on the same day the first annual MCFS Report is submitted to
TDH. The second settlement shall be an adjustment to the first
settlement and shall be paid to TDH on the same day that the
second annual MCFS Report is submitted to TDH if the adjustment
is a payment from HMO to TDH. TDH or its agent may audit or
review the MCFS reports. If TDH determines that corrections to
the MCFS reports are required, based on a TDH audit/review or
other documentation acceptable to TDH, to determine an adjustment
to the amount of the second settlement, then final adjustment
shall be made within two years from the date that HMO submits the
second annual MCFS report. HMO must pay the first and second
settlements on the due dates for the first and second MCFS
reports respectively as identified in Article 12.1.5. TDH may
adjust the experience rebate if TDH determines HMO has paid
affiliates amounts for goods or services that are higher than the
fair market value of the goods and services in the service area.
Fair market value may be based on the amount HMO pays a
non-affiliate(s) or the amount another HMO pays for the same or
similar service in the service area. TDH has final authority in
auditing and determining the amount of the experience rebate.
13.3 PERFORMANCE OBJECTIVES
----------------------
13.3.1 Preventive Health Performance Objectives are contained in this
contract at Appendix K. These reports are submitted annually and
must be submitted no later than 150 days after the end of the
State fiscal year.
13.4 ADJUSTMENTS TO PREMIUM
----------------------
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13.4.1 TDH may recoup premiums paid to HMO in error. Error may be either
human or machine error on the part of TDH or an agent or
contractor of TDH. TDH may recoup premiums paid to HMO if a
Member is enrolled into HMO in error, and HMO provided no covered
services to Member for the period of time for which premium was
paid. If services were provided to Member as a result of the
error, recoupment will not be made.
13.4.2 TDH may recoup premium paid to HMO if a Member for whom premium
is paid moves outside the United States, and HMO has not provided
covered services to the Member for the period of time for which
premium has been paid. TDH will not recoup premium if HMO has
provided covered services to the Member during the period of time
for which premium has been paid.
13.4.3 TDH may recoup premium paid to HMO if a Member for whom premium
is paid dies before the first day of the month for which premium
is paid.
13.4.4 TDH may recoup or adjust premium paid to HMO for a Member if the
Member's eligibility status or program type is changed, corrected
as a result of error, or is retroactively adjusted.
13.4.5 Recoupment or adjustment of premium under Articles 13.4.1 through
13.4.4 may be appealed using the TDH dispute resolution process.
13.4.6 TDH may adjust premiums for all Members within an eligibility
status or program type if adjustment is required by reductions in
appropriations and/or if a benefit or category of benefits is
excluded or included as a covered service. Adjustment must be
made by amendment as required by Article 15.2. Adjustment to
premium under this subsection may not be appealed using the TDH
dispute resolution process.
ARTICLE XIV ELIGIBILITY, ENROLLMENT, AND DISENROLLMENT
14.1 ELIGIBILITY DETERMINATION
-------------------------
14.1.1 TDH will identify Medicaid recipients who are eligible for
participation in the STAR program using the eligibility status
described below.
14.1.2 Individuals in the following categories who reside in any part of
the Service Area must enroll in one of the health plans providing
services in the Service Areas:
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14.1.2.1 TANF ADULTS - Individuals age 21 and over who are eligible for
the TANF program. This category may also include some pregnant
women.
14.1.2.2 TANF CHILDREN - Individuals under age 21 who are eligible for the
TANF program. This category may also include some pregnant women
and some children less than one year of age.
14.1.2.3 PREGNANT WOMEN receiving Medical Assistance Only (MAO) - Pregnant
women whose families' income is below 185% of the Federal Poverty
Level (FPL).
14.1.2.4 NEWBORN (MAO) - Children under age one born to Medicaid-eligible
mothers.
14.1.2.5 EXPANSION CHILDREN (MAO) - Children under age 18, ineligible for
TANF because of the applied income of their stepparents or
grandparents.
14.1.2.6 EXPANSION CHILDREN (MAO) - Children under age 1 whose families'
income is below 185% FPL.
14.1.2.7 EXPANSION CHILDREN MAO - Children age 1- 5 whose families' income
is at or below 133% of FPL.
14.1.2.8 FEDERAL MANDATE CHILDREN (MAO) - Children under age 19 born
before October 10, 1983, whose families' income is below the TANF
income limit.
14.1.2.9 CHIP PHASE I - Children's Health Insurance Program Phase I
(Federal Mandate Acceleration) Children under age nineteen (19)
born before October 1, 1983, with family income below 100%
Federal Poverty Income Level.
14.1.3 The following individuals are eligible for the STAR Program and
are not required to enroll in a health plan but have the option
to enroll in a plan. HMO will be required to accept enrollment of
those Medicaid recipients from this group who elect to enroll in
HMO.
14.1.3.1 DISABLED AND BLIND INDIVIDUALS WITHOUT MEDICARE - Recipients with
Supplemental Security Income (SSI) benefits who are not eligible
for Medicare may elect to participate in the STAR program on a
voluntary basis.
14.1.3.2 Certain blind or disabled individuals who lose SSI eligibility
because of Title II income and who are not eligible for Medicare.
14.1.4 During the period after which the Medicaid eligibility
determination has been made but prior to enrollment in HMO,
Members will be enrolled under the traditional
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Medicaid program. All Medicaid-eligible recipients will remain in
the fee-for-service Medicaid program until enrolled in or
assigned to an HMO.
14.2 ENROLLMENT
----------
14.2.1 TDH has the right and responsibility to enroll and disenroll
eligible individuals into the STAR program. TDH will conduct
continuous open enrollment for Medicaid recipients and HMO must
accept all persons who chose to enroll as Members in HMO or who
are assigned as Members in HMO by TDH, without regard to the
Member's health status or any other factor.
14.2.2 All enrollments are subject to the accessibility and availability
limitations and restrictions contained in the ss.1915(b) waiver
obtained by TDH. TDH has the authority to limit enrollment into
HMO if the number and distance limitations are exceeded.
14.2.3 TDH makes no guarantees or representations to HMO regarding the
number of eligible Medicaid recipients who will ultimately be
enrolled as STAR Members of HMO.
14.2.4 HMO must cooperate and participate in all TDH sponsored and
announced enrollment activities. HMO must have a representative
at all TDH enrollment activities unless an exception is given by
TDH. The representative must comply with HMO's cultural and
linguistic competency plan (see Cultural and Linguistic
requirements in Article 8.9). HMO must provide marketing
materials, HMO pamphlets, Member Handbooks, a list of network
providers, HMO's linguistic and cultural capabilities and other
information requested or required by TDH or its Enrollment Broker
to assist potential Members in making informed choices.
14.2.5 TDH will provide HMO with at least 10 days written notice of all
TDH planned activities. Failure to participate in, or send a
representative to a TDH sponsored enrollment activity is a
default of the terms of the contract. Default may be excused if
HMO can show that TDH failed to provide the required notice, or
if HMO's absence is excused by TDH.
14.3 DISENROLLMENT
-------------
14.3.1 HMO has a limited right to request a Member be disenrolled from
HMO without the Member's consent. TDH must approve any HMO
request for disenrollment of a Member for cause. Disenrollment of
a Member may be permitted under the following circumstances:
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14.3.1.1 Member misuses or loans Member's HMO membership card to another
person to obtain services.
14.3.1.2 Member is disruptive, unruly, threatening or uncooperative to the
extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain new
Members, and Member's behavior is not caused by a physical or
behavioral health condition.
14.3.1.3 Member steadfastly refuses to comply with managed care
restrictions (e.g., repeatedly using emergency room in
combination with refusing to allow HMO to treat the underlying
medical condition).
14.3.2 HMO must take reasonable measures to correct Member behavior
prior to requesting disenrollment. Reasonable measures may
include providing education and counseling regarding the
offensive acts or behaviors.
14.3.3 HMO must notify the Member of HMO's decision to disenroll the
Member if all reasonable measures have failed to remedy the
problem.
14.3.4 If the Member disagrees with the decision to disenroll the Member
from HMO, HMO must notify the Member of the availability of the
complaint procedure and TDH's Fair Hearing process.
14.3.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN THE
MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH ARE
MEDICALLY NECESSARY FOR TREATMENT OF A MEMBER'S CONDITION.
14.4 AUTOMATIC RE-ENROLLMENT
-----------------------
14.4.1 Members who are disenrolled because they are temporarily
ineligible for Medicaid will be automatically re-enrolled into
the same health plan. Temporary loss of eligibility is defined as
a period of 6 months or less.
14.4.2 HMO must inform its Members of the automatic re-enrollment
procedure. Automatic re-enrollment must be included in the Member
Handbook (see Article 8.2.1).
14.5 ENROLLMENT REPORTS
------------------
14.5.1 TDH will provide HMO enrollment reports listing all STAR Members
who have enrolled in or were assigned to HMO during the initial
enrollment period.
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14.5.2 TDH will provide monthly HMO Enrollment Reports to HMO on or
before the first of the month.
14.5.3 TDH will provide Member verification to HMO and network providers
through telephone verification or TexMedNet.
ARTICLE XV GENERAL PROVISIONS
15.1 INDEPENDENT CONTRACTOR
----------------------
HMO, its agents, employees, network providers, and subcontractors
are independent contractors and do not perform services under
this contract as employees or agents of TDH. HMO is given
express, limited authority to exercise the State's right of
recovery as provided in Article 4.9.
15.2 AMENDMENT
---------
15.2.1 This contract must be amended by TDH if amendment is required to
comply with changes in state or federal laws, rules, or
regulations.
15.2.2 TDH and HMO may amend this contract if reductions in funding or
appropriations make full performance by either party
impracticable or impossible, and amendment could provide a
reasonable alternative to termination. If HMO does not agree to
the amendment, contract may be terminated under Article XVIII.
15.2.3 This contract must be amended if either party discovers a
material omission of a negotiated or required term, which is
essential to the successful performance or maintaining compliance
with the terms of the contract. The party discovering the
omission must notify the other party of the omission in writing
as soon as possible after discovery. If there is a disagreement
regarding whether the omission was intended to be a term of the
contract, the parties must submit the dispute to dispute
resolution under Article 15.9.
15.2.4 This contract may be amended by mutual agreement at any time.
15.2.5 All amendments to this contract must be in writing and signed by
both parties.
15.2.6 No agreement shall be used to amend this contract unless it is
made a part of this contract by specific reference, and is
numbered sequentially by order of its adoption.
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15.3 LAW, JURISDICTION AND VENUE
---------------------------
Venue and jurisdiction shall be in the state and federal district
courts of Travis County, Texas. The laws of the State of Texas
shall be applied in all matters of state law.
15.4 NON-WAIVER
----------
Failure to enforce any provision or breach shall not be taken by
either party as a waiver of the right to enforce the provision or
breach in the future.
15.5 SEVERABILITY
------------
Any part of this contract which is found to be unenforceable,
invalid, void, or illegal shall be severed from the contract. The
remainder of the contract shall be effective.
15.6 ASSIGNMENT
----------
This contract was awarded to HMO based on HMO's qualifications to
perform personal and professional services. HMO cannot assign
this contract without the written consent of TDI and TDH. This
provision does not prevent HMO from subcontracting duties and
responsibilities to qualified subcontractors. If TDI and TDH
consent to an assignment of this contract, a transition period of
90 days will run from the date the assignment is approved by TDI
and TDH so that Members' services are not interrupted and, if
necessary, the notice provided for in Article 15.7 can be sent to
Members. The assigning HMO must also submit a transition plan, as
set out in Article 18.2.1, subject to TDH's approval.
15.7 MAJOR CHANGE IN CONTRACTING
---------------------------
TDH may send notice to Members when a major change affecting HMO
occurs. A "major change" includes, but is not limited to, a
substantial change of subcontractors and assignment of this
contract. The notice letter to Members may permit the Members to
re-select their plan and PCP. TDH will bear the cost of preparing
and sending the notice letter in the event of an approved
assignment of the contract. For any other major change in
contracting, HMO will prepare the notice letter and submit it to
TDH for review and approval. After TDH has approved the letter
for distribution to Members, HMO will bear the cost of sending
the notice letter.
15.8 NON-EXCLUSIVE
-------------
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This contract is a non-exclusive agreement. Either party may
contract with other entities for similar services in the same
service area.
15.9 DISPUTE RESOLUTION
------------------
The dispute resolution process adopted by TDH in accordance with
Chapter 2260, Texas Government Code, will be used to attempt to
resolve all disputes arising under this contract. All disputes
arising under this contract shall be resolved through TDH's
dispute resolution procedures, except where a remedy is provided
for through TDH's administrative rules or processes. All
administrative remedies must be exhausted prior to other methods
of dispute resolution. TDH will assist HMO in resolution of a
conflict of law or interpretation of law between or among state
agencies with authority to regulate and enforce this contract.
15.10 DOCUMENTS CONSTITUTING CONTRACT
-------------------------------
This contract includes this document and all amendments and
appendices to this document, the Request for Application, the
Application submitted in response to the Request for Application,
the Texas Medicaid Provider Procedures Manual and Texas Medicaid
Bulletins addressed to HMOs, contract interpretation memoranda
issued by TDH for this contract, and the federal waiver granting
TDH authority to contract with HMO. If any conflict in provisions
between these documents occurs, the terms of this contract and
any amendments shall prevail. The documents listed above
constitute the entire contract between the parties.
15.11 FORCE MAJEURE
-------------
TDH and HMO are excused from performing the duties and
obligations under this contract for any period that they are
prevented from performing their services as a result of a
catastrophic occurrence, or natural disaster, clearly beyond the
control of either party, including but not limited to an act of
war, but excluding labor disputes.
15.12 NOTICES
-------
Notice may be given by any means which provides for verification
of receipt. All notices to TDH shall be addressed to Bureau
Chief, Texas Department of Health, Bureau of Managed Care, 1100
W. 49th Street, Austin, TX 78756-3168, with a copy to the
Contract Administrator. Notices to HMO shall be addressed to
President/CEO, Michael A. Seltzer, Vice President, West Region,
8431 Fredericksburg Road, San Antonio, Texas, 78229; AND Medicaid
Director, Cheryl Dietz, 8303 Mopac, Suite 450-C, Austin, Texas
78759
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15.13 SURVIVAL
--------
The provisions of this contract which relate to the obligations
of HMO to maintain records and reports shall survive the
expiration or earlier termination of this contract for a period
not to exceed six (6) years unless another period may be required
by record retention policies of the State of Texas or HCFA.
ARTICLE XVI DEFAULT AND REMEDIES
16.1 DEFAULT BY TDH
--------------
16.1.1 FAILURE TO MAKE CAPITATION PAYMENTS
-----------------------------------
Failure by TDH to make capitation payments when due is a default
under this contract.
16.1.2 FAILURE TO PERFORM DUTIES AND RESPONSIBILITIES
----------------------------------------------
Failure by TDH to perform a material duty or responsibility as
set out in this contract is a default under this contract.
16.2 REMEDIES AVAILABLE TO HMO FOR TDH'S DEFAULT
-------------------------------------------
HMO may terminate this contract as set out in Article 18.1.5 of
this contract if TDH commits either of the events of default set
out in Article 16.1.
16.3 DEFAULT BY HMO
--------------
16.3.1 FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION
---------------------------------------------
Failure of HMO to perform an administrative function is a default
under this contract. Administrative functions are any
requirements under this contract that are not direct delivery of
health care services, including claims payment; encounter data
submission; filing any report when due; cooperating in good faith
with TDH, an entity acting on behalf of TDH, or an agency
authorized by statute or law to require the cooperation of HMO in
carrying out an administrative, investigative, or prosecutorial
function of the Medicaid program; providing or producing records
upon request; or entering into contracts or implementing
procedures necessary to carry out contract obligations.
16.3.1.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
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All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to perform an administrative function under
this contract, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess liquidated money damages as set out in
Article 18.4; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.2 ADVERSE ACTION AGAINST HMO BY TDI
---------------------------------
Termination or suspension of HMO's TDI Certificate of Authority
or any adverse action taken by TDI that TDH determines will
affect the ability of HMO to provide health care services to
Members is a default under this contract.
16.3.2.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For an adverse action against HMO by TDI, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.3 INSOLVENCY
----------
Failure of HMO to comply with state and federal solvency
standards or incapacity of HMO to meet its financial obligations
as they come due is a default under this contract.
16.3.3.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
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All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's insolvency, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.4 FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS
---------------------------------------------------
Failure of HMO to comply with the federal requirements for
Medicaid, including, but not limited to, federal law regarding
misrepresentation, fraud, or abuse; and, by incorporation,
Medicare standards, requirements, or prohibitions, is a default
under this contract.
The following events are defaults under this contract pursuant to
42 U.S.C. "1396b(m)(5), 1396u-2(e)(1)(A):
16.3.4.1 HMO's substantial failure to provide medically necessary items
and services that are required under this contract to be provided
to Members;
16.3.4.2 HMO's imposition of premiums or charges on Members in excess of
the premiums or charge permitted by federal law;
16.3.4.3 HMO's acting to discriminate among Members on the basis of their
health status or requirements for health care services, including
expulsion or refusal to enroll an individual, except as permitted
by federal law, or engaging in any practice that would reasonably
be expected to have the effect of denying or discouraging
enrollment with HMO by eligible individuals whose medical
condition or history indicates a need for substantial future
medical services;
16.3.4.4 HMO's misrepresentation or falsification of information that is
furnished to HCFA, TDH, a Member, a potential Member, or a health
care provider;
16.3.4.5 HMO's failure to comply with the physician incentive requirements
under 42 U.S.C. '1396b(m)(2)(A)(x); or
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16.3.4.6 HMO's distribution, either directly or through any agent or
independent contractor, of marketing materials that contain false
or misleading information, excluding materials prior approved by
TDH.
16.3.5 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. If HMO repeatedly
fails to meet the requirements of Articles 16.3.4.1 through and
including 16.3.4.6, TDH must, regardless of what other sanctions
are provided, appoint temporary management and permit Members to
disenroll without cause. Exercise of any remedy in whole or in
part does not limit TDH in exercising all or part of any
remaining remedies.
For HMO's failure to comply with federal laws and regulations,
TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Appoint temporary management as set out in Article
18.5; Initiate disenrollment of a Member of Members without cause
as set out in Article 18.6; Suspend or default all enrollment of
individuals; Suspend payment to HMO; Recommend to HCFA that
sanctions be taken against HMO as set out in Article 18.7; Assess
civil monetary penalties as set out in Article 18.8; and/or
Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.6 FAILURE TO COMPLY WITH APPLICABLE STATE LAW
-------------------------------------------
HMO's failure to comply with Texas law applicable to Medicaid,
including, but not limited to, Article 32.039 of the Texas Human
Resources Code and state law regarding misrepresentation, fraud,
or abuse, is a default under this contract.
16.3.6.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
ALL of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to comply with applicable state law, TDH may:
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Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess administrative penalties as set out in
Article 32.039, Government Code, with the opportunity for notice
and appeal as required by Article 32.039; and/or Require
forfeiture of all or part of the TDI performance bond as set out
in Article 18.9.
16.3.7 MISREPRESENTATION OR FRAUD UNDER ARTICLE 4.8
--------------------------------------------
HMO's misrepresentation or fraud under Article 4.8 of this
contract is a default under this contract.
16.3.7.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's misrepresentation or fraud under Article 4.8, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.8 EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID
----------------------------------------------------
16.3.8.1 Exclusion of HMO or any of the managing employees or persons with
an ownership interest whose disclosure is required by `1124(a) of
the Social Security Act (the Act) from the Medicaid or Medicare
program under the provisions of '1128(a) and/or (b) of the Act is
a default under this contract.
16.3.8.2 Exclusion of any provider or subcontractor or any of the managing
employees or persons with an ownership interest of the provider
or subcontractor whose disclosure is required by `1124(a) of the
Social Security Act (the Act) from the Medicaid or Medicare
program under the provisions of `1128(a) and/or (b) of the Act is
a default under this contract if the exclusion will materially
affect HMO's performance under this contract.
16.3.8.3 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
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All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's exclusion from Medicare or Medicaid, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.9 FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS AND SUBCONTRACTORS
----------------------------------------------------------------
HMO's failure to make timely and appropriate payments to network
providers and subcontractors is a default under this contract.
Withholding or recouping capitation payments as allowed or
required under other articles of this contract is not a default
under this contract.
16.3.9.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to make timely and appropriate payments to
network providers and subcontractors, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; Assess liquidated money damages as set out in
Article 18.4; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.10 FAILURE TO TIMELY ADJUDICATE CLAIMS
-----------------------------------
Failure of HMO to adjudicate (paid, denied, or external pended)
at least ninety (90%) of all claims within thirty (30) days of
receipt and ninety-nine percent (99%) of all
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claims within ninety days of receipt for the contract year is a
default under this contract.
16.3.10.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consequently, Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to timely adjudicate claims, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.11 FAILURE TO DEMONSTRATE THE ABILITY TO PERFORM CONTRACT FUNCTIONS
----------------------------------------------------------------
Failure to pass any of the mandatory system or delivery functions
of the Readiness Review required in Article I of this contract is
a default under the contract.
16.3.11.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole all or in part does not limit TDH in exercising
or part of any remaining remedies.
For HMO's failure to demonstrate the ability to perform contract
functions, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.12 FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF CONTRACTORS OR
NETWORK PROVIDERS
-----------------
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16.3.12.1 Failure of HMO to audit, monitor, supervise, or enforce functions
delegated by contract to another entity that results in a default
under this contract or constitutes a violation of state or
federal laws, rules, or regulations is a default under this
contract.
16.3.12.2 Failure of HMO to property credential its providers, conduct
reasonable utilization review, or conduct quality monitoring is a
default under this contract.
16.3.12.3 Failure of HMO to require providers and contractors to provide
timely and accurate encounter, financial, statistical, and
utilization data is a default under this contract.
16.3.12.4 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to monitor and/or supervise activities of
contractors or network providers, TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or Require forfeiture of all or part of the TDI
performance bond as set out in Article 18.9.
16.3.13 PLACING THE HEALTH AND SAFETY OF MEMBERS IN JEOPARDY
----------------------------------------------------
HMO's placing the health and safety of the Members in jeopardy is
a default under this contract.
16.3.13.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's placing the health and safety of Members in jeopardy,
TDH may:
Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met; Suspend new enrollment as set out in
Article 18.3; and/or
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Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
16.3.14 FAILURE TO MEET ESTABLISHED BENCHMARK
-------------------------------------
Failure of HMO to meet any benchmark established by TDH under
this contract is a default under this contract.
16.3.14.1 REMEDIES AVAILABLE TO TDH FOR THIS HMO DEFAULT
----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to TDH by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit TDH in exercising all
or part of any remaining remedies.
For HMO's failure to meet any benchmark established by TDH under
this contract, TDH may:
Remove the THSteps component from the capitation paid to HMO if
the benchmark(s) missed is for THSteps; Terminate the contract if
the applicable conditions set out in Article 18.1.1 are met;
Suspend new enrollment as set out in Article 18.3; Assess
liquidated money damages as set out in Article 18.4; and/or
Require forfeiture of all or part of the TDI performance bond as
set out in Article 18.9.
ARTICLE XVII NOTICE OF DEFAULT AND CURE OF DEFAULT
17.1 TDH will provide HMO with written notice of default (Notice of
Default) under this contract. The Notice of Default may be given
by any means that provides verification of receipt. The Notice of
Default must contain the following information:
17.1.1 A clear and concise statement of the circumstances or conditions
that constitute a default under this contract;
17.1.2 The contract provision(s) under which default is being declared;
17.1.3 A clear and concise statement of how and/or whether the default
may be cured;
17.1.4 A clear and concise statement of the time period during which HMO
may cure the default if HMO is allowed to cure;
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17.1.5 The remedy or remedies TDH is electing to pursue and when the
remedy or remedies will take effect;
17.1.6 If TDH is electing to impose money damages and/or civil monetary
penalties, the amount that TDH intends to withhold or impose and
the factual basis on which TDH is imposing the chosen remedy or
remedies;
17.1.7 Whether any part of money damages or civil monetary penalties, if
TDH elects to pursue one or both of those remedies, may be passed
through to an individual or entity who is or may be responsible
for the act or omission for which default is declared;
17.1.8 Whether failure to cure the default within the given time period,
if any, will result in TDH pursuing an additional remedy or
remedies, including, but not limited to, additional damages or
sanctions, referral for investigation or action by another
agency, and/or termination of the contract.
ARTICLE XVIII EXPLANATION OF REMEDIES
18.1 TERMINATION
-----------
18.1.1 TERMINATION BY TDH
------------------
TDH may terminate this contract if:
18.1.1.1 HMO substantially fails or refuses to provide medically necessary
services and items that are required under this contract to be
provided to Members after notice and opportunity to cure;
18.1.1.2 HMO substantially fails or refuses to perform administrative
functions under this contract after notice and opportunity to
cure;
18.1.1.3 HMO materially defaults under any of the provisions of Article
XVI;
18.1.1.4 Federal or state funds for the Medicaid program are no longer
available; or
18.1.1.5 TDH has a reasonable belief that HMO has placed the health or
welfare of Members in jeopardy.
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18.1.2 TDH must give HMO 90 days written notice of intent to terminate
this contract if termination is the result of HMO's substantial
failure or refusal to perform administrative functions or a
material default under any of the provisions of Article XVI. TDH
must give HMO reasonable notice under the circumstances if
termination is the result of federal or state funds for the
Medicaid program no longer being available. TDH must give the
notice required under TDH's formal hearing procedures set out in
Section 1.2.1 in Title 25 of the Texas Administrative Code if
termination is the result of HMO's substantial failure or refusal
to provide medically necessary services and items that are
required under the contract to be provided to Members or TDH's
reasonable belief that HMO has placed the health or welfare of
Members in jeopardy.
18.1.2.1 Notice may be given by any means that gives verification of
receipt.
18.1.2.2 Unless termination is the result of HMO's substantial failure or
refusal to provide medically necessary services and items that
are required under this contract to be provided to Members or is
the result of TDH's reasonable belief that HMO has placed the
health or welfare of Members in jeopardy, the termination date is
90 days following the date that HMO receives the notice of intent
to terminate. For HMO's substantial failure or refusal to provide
services and items, HMO is entitled to request a pre-termination
hearing under TDH's formal hearing procedures set out in Section
1.2.1 of Title 25, Texas Administrative Code.
18.1.3 TDH may, for termination for HMO's substantial failure or refusal
to provide medically necessary services and items, notify HMO's
Members of any hearing requested by HMO and permit Members to
disenroll immediately without cause. Additionally, if TDH
terminates for this reason, TDH may enroll HMO's Members with
another HMO or permit HMO's Members to receive Medicaid-covered
services other than from an HMO.
18.1.4 HMO must continue to perform services under the transition plan
described in Article 18.2.1 until the last day of the month
following 90 days from the date of receipt of notice if the
termination is for any reason other than TDH's reasonable belief
that HMO is placing the health and safety of the Members in
jeopardy. If termination is due to this reason, TDH may prohibit
HMO's further performance of services under the contract.
18.1.5 If TDH terminates this contract, HMO may appeal the termination
under ss.32.034, Texas Human Resources Code.
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18.1.6 TERMINATION BY HMO
------------------
HMO may terminate this contract if TDH fails to pay HMO as
required under Article XIII of this contract or otherwise
materially defaults in its duties and responsibilities under this
contract, or by giving notice no later than 30 days after
receiving the capitation rates for the second contract year.
Retaining premium, recoupment, sanctions, or penalties that are
allowed under this contract or that result from HMO's failure to
perform or HMO's default under the terms of this contract is not
cause for termination.
18.1.61 HMO may terminate this contract without cause, except HMO cannot
terminate this contract without cause for the 90 days immediately
following the effective date of the contract.
18.1.7 HMO must give TDH 90 days written notice of intent to terminate
this contract, either for cause or without cause. Notice may be
given by any means that gives verification of receipt. The
termination date will be calculated as the last day of the month
following 90 days from the date the notice of intent to terminate
is received by TDH.
18.1.8 TDH must be given 30 days from the date TDH receives HMO's
written notice of intent to terminate for failure to pay HMO to
pay all amounts due. If TDH pays all amounts then due within this
30-day period, HMO cannot terminate the contract under this
article for that reason.
18.1.9 TERMINATION BY MUTUAL CONSENT
-----------------------------
This contract may be terminated at any time by mutual consent of
both HMO and TDH.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
----------------------------------------------
When termination of the contract occurs, TDH and HMO must meet
the following obligations:
18.2.1 TDH and HMO must prepare a transition plan, which is acceptable
to and approved by TDH, to ensure that Members are reassigned to
other plans without interruption of services. That transition
plan will be implemented during the 90-day period between receipt
of notice and the termination date unless termination is the
result of TDH's reasonable belief that HMO is placing the health
or welfare of Members in jeopardy.
18.2.2 If the contract is terminated by TDH for any reason other than
federal or state funds for the Medicaid program no longer being
available or if HMO terminates the contract
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based on lower capitation rates for the second contract year as
set out in Article 13.1.4.1:
18.2.2.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.2.2 HMO is responsible for all expenses related to giving notice to
Members; and
18.2.2.3 HMO is responsible for all expenses incurred by TDH in
implementing the transition plan.
18.2.3 If the contract is terminated by HMO for any reason other than
based on lower capitation rates for the second contract year as
set out in Article 13.1.4.1:
18.2.3.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services;
18.2.3.2 TDH is responsible for all expenses related to giving notice to
Members; and
18.2.3.3 TDH is responsible for all expenses it incurs in implementing the
transition plan.
18.2.4 If the contract is terminated by mutual consent:
18.2.4.1 TDH is responsible for notifying all Members of the date of
termination and how Members can continue to receive contract
services
18.2.4.2 HMO is responsible for all expenses related to giving notice to
Members; and
18.2.4.3 TDH is responsible for all expenses it incurs in implementing the
transition plan.
18.3 SUSPENSION OF NEW ENROLLMENT
----------------------------
18.3.1 TDH must give HMO 30 days notice of intent to suspend new
enrollment in the Notice of Default other than for default for
fraud and abuse or imminent danger to the health or safety of
Members. The suspension date will be calculated as 30 days
following the date that HMO receives the Notice of Default.
18.3.2 TDH may immediately suspend new enrollment into HMO for a default
declared as a result of fraud and abuse or imminent danger to the
health and safety of Members.
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18.3.3 The suspension of new enrollment may be for any duration, up to
the termination date of the contract. TDH will base the duration
of the suspension upon the type and severity of the default and
HMO's ability, if any, to cure the default.
18.4 LIQUIDATED MONEY DAMAGES
------------------------
18.4.1 The measure of damages in the event that HMO fails to perform its
obligations under this contract may be difficult or impossible to
calculate or quantify. Therefore, should HMO fail to perform in
accordance with the terms and conditions of this contract, TDH
may require HMO to pay sums as specified below as liquidated
damages. The liquidated damages set out in this Article are not
intended to be in the nature of a penalty but are intended to be
reasonable estimates of TDH's financial loss and damage resulting
from HMO's non-performance.
18.4.2 If TDH imposes money damages, TDH may collect those damages by
reducing the amount of any monthly premium payments otherwise due
to HMO by the amount of the damages. Money damages that are
withheld from monthly premium payments are forfeited and will not
be subsequently paid to HMO upon compliance or cure of default
unless a determination is made after appeal that the damages
should not have been imposed.
18.4.3 Failure to file or filing incomplete or inaccurate annual,
semi-annual or quarterly reports may result in money damages of
not more than $11,000.00 for every month from the month the
report is due until submitted in the form and format required by
TDH. These money damages apply separately to each report.
18.4.4 Failure to produce or provide records and information requested
by TDH, an entity acting on behalf of TDH, or an agency
authorized by statute or law to require production of records at
the time and place the records were required or requested may
result in money damages of not more than $5,000.00 per day for
each day the records are not produced as required by the
requesting entity or agency if the requesting entity or agency is
conducting an investigation or audit relating to fraud or abuse,
and not more than $1,000.00 per day for each day records are not
produced if the requesting entity or agency is conducting routine
audits or monitoring activities.
18.4.5 Failure to file or filing incomplete or inaccurate encounter data
may result in money damages of not more than $25,000 for each
month HMO fails to submit encounter data in the form and format
required by TDH. TDH will use the encounter data validation
methodology established by TDH to determine the number of
encounter data and the number of months for which damages will be
assessed.
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18.4.6 Failing or refusing to cooperate with TDH, an entity acting on
behalf of TDH, or an agency authorized by statute or law to
require the cooperation of HMO in carrying out an administrative,
investigative, or prosecutorial function of the Medicaid program
may result in money damages of not more than $8,000.00 per day
for each day HMO fails to cooperate.
18.4.7 Failure to enter into a required or mandatory contract or failure
to contract for or arrange to have all services required under
this contract provided may result in money damages of not more
than $1,000.00 per day that HMO either fails to negotiate in good
faith to enter into the required contract or fails to arrange to
have required services delivered.
18.4.8 Failure to meet the benchmark for benchmarked services under this
contract may result in money damages of not more than $25,000 for
each month that HMO fails to meet the established benchmark.
18.4.9 TDH may also impose money damages for a default under Article
16.3.9, Failure to Make Payments to Network Providers and
subcontractors, of this contract. These money damages are in
addition to the interest HMO is required to pay to providers
under the provisions of Articles 4.10.4 and 7.2.7.10 of this
contract.
18.4.9.1 If TDH determines that HMO has failed to pay a provider for a
claim or claims for which the provider should have been paid, TDH
may impose money damages of $2 per day for each day the claim is
not paid from the date the claim should have been paid
(calculated as 30 days from the date a clean claim was received
by HMO) until the claim is paid by HMO.
18.4.9.2 If TDH determines that HMO has failed to pay a capitation amount
to a provider who has contracted with HMO to provide services on
a capitated basis, TDH may impose money damages of $10 per day,
per Member for whom the capitation is not paid, from the date on
which the payment was due until the capitation amount is paid.
18.5 APPOINTMENT OF TEMPORARY MANAGEMENT
-----------------------------------
18.5.1 TDH may appoint temporary management to oversee the operation of
HMO upon a finding that there is continued egregious behavior by
HMO or there is a substantial risk to the health of the Members.
18.5.2 TDH may appoint temporary management to assure the health of
HMO's Members if there is a need for temporary management while:
18.5.2.1 there is an orderly termination or reorganization of HMO; or
1999 Renewal Contract
Bexar Service Area
August 9, 1999
138
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18.5.2.2 are made to remedy violations found under Article 16.3.4.
18.5.3 Temporary management will not be terminated until TDH has
determined that HMO has the capability to ensure that the
violations that triggered appointment of temporary management
will not recur.
18.5.4 TDH is not required to appoint temporary management before
terminating this contract.
18.5.5 No pre-termination hearing is required before appointing
temporary management.
18.5.6 As with any other remedy provided under this contract, TDH will
provide notice of default as is set out in Article XVII to HMO.
Additionally, as with any other remedy provided under this
contract, under Article 18.1 of this contract, HMO may dispute
the imposition of this remedy and seek review of the proposed
remedy.
18.6 TDH-INITIATED DISENROLLMENT OF A MEMBER OR MEMBERS WITHOUT CAUSE
----------------------------------------------------------------
TDH must give HMO 30 days notice of intent to initiate
disenrollment of a Member of Members in the Notice of Default.
The TDH-initiated disenrollment date will be calculated as 30
days following the date that HMO receives the Notice of Default.
18.7 RECOMMENDATION TO HCFA THAT SANCTIONS BE TAKEN AGAINST HMO
----------------------------------------------------------
18.7.1 If HCFA determines that HMO has violated federal law or
regulations and that federal payments will be withheld, TDH will
deny and withhold payments for new enrollees of HMO.
18.7.2 HMO must be given notice and opportunity to appeal a decision of
TDH and HCFA pursuant to 42 CFR '434.67.
18.8 CIVIL MONETARY PENALTIES
------------------------
18.8.1 For a default under Article 16.3.4.1, TDH may assess not more
than $25,000 for each default;
18.8.2 For a default under Article 16.3.4.2, TDH may assess double the
excess amount charged in violation of the federal requirements
for each default. The excess amount shall be deducted from the
penalty and returned to the Member concerned.
1999 Renewal Contract
Bexar Service Area
August 9, 1999
139
|
18.8.3 For a default under Article 16.3.4.3, TDH may assess not more
than $100,000 for each default, including $15,000 for each
individual not enrolled as a result of the practice described in
Article 16.3.4.3.
18.8.4 For a default under Article 16.3.4.4, TDH may assess not more
than $100,000 for each default if the material was provided to
HCFA or TDH and not more than $25,000 for each default if the
material was provided to a Member, a potential Member, or a
health care provider.
18.8.5 For a default under Article 16.3.4.5, TDH may assess not more
than $25,000 for each default.
18.8.6 For a default under Article 16.3.4.6, TDH may assess not more
than $25,000 for each default.
18.8.7 HMO may be subject to civil money penalties under the provisions
of 42 CFR 1003 in addition to or in place of withholding payments
for a default under Article 16.3.4.
18.9 FORFEITURE OF ALL OR A PART OF THE TDI PERFORMANCE BOND
-------------------------------------------------------
TDH may require forfeiture of all or a portion of the face amount
of the TDI performance bond if TDH determines that an event of
default has occurred. Partial payment of the face amount shall
reduce the total bond amount available pro rata.
18.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED
------------------------------------------
18.10.1 HMO may dispute the imposition of any sanction under this
contract. HMO notifies TDH of its dispute by filing a written
response to the Notice of Default, clearly stating the reason HMO
disputes the proposed sanction. With the written response, HMO
must submit to TDH any documentation that supports HMO's
position. HMO must file the review within 15 days from HMO's
receipt of the Notice of Default. Filing a dispute in a written
response to the Notice of Default suspends imposition of the
proposed sanction.
18.10.2 HMO and TDH must attempt to informally resolve the dispute. If
HMO and TDH are unable to informally resolve the dispute, HMO
must notify the Bureau Chief of Managed Care that HMO and TDH
cannot agree. The Bureau Chief will refer the dispute to the
Associate Commissioner for Health Care Financing who will appoint
a committee to review the dispute under TDH's dispute resolution
procedures. The decision of the dispute resolution committee will
be TDH's final administrative decision.
1999 Renewal Contract
Bexar Service Area
August 9, 1999
140
|
ARTICLE XIX TERM
19.1 The effective date of this contract is September 1, 1999. This
contract will terminate on August 31, 2001, unless terminated
earlier as provided for elsewhere in this contract.
19.2 This contract may be renewed for an additional one-year period by
written amendment to the contract executed by the parties prior
to the termination date of the present contract. TDH will notify
HMO no later than 90 days before the end of the contract period
of its intent not to renew the contract.
19.3 If either party does not intend to renew the contract beyond its
contract period, the party intending not to renew must submit a
written notice of its intent not to renew to the other party no
later than 90 days before the termination date set out in Article
19.1.
19.4 If either party does not intend to renew the contract beyond its
contract period and sends the notice required in Article 19.3, a
transition period of 90 days will run from the date the notice of
intent not to renew is received by the other party. By signing
this contract, the parties agree that the terms of this contract
shall automatically continue during any transition period.
19.5 The party that does not intend to renew the contract beyond its
contract period and sends the notice required by Article 19.3 is
responsible for sending notices to all Members on how the Member
can continue to receive covered services. The expense of sending
the notices will be paid by the non-renewing party. If TDH does
not intend to renew and sends the required notice, TDH is
responsible for any costs it incurs in ensuring that Members are
reassigned to other plans without interruption of services. If
HMO does not intend to renew and sends the required notice, HMO
is responsible for any costs TDH incurs in ensuring that Members
are reassigned to other plans without interruption of services.
If both parties do not intend to renew the contract beyond its
contract period, TDH will send the notices to Members and the
parties will share equally in the cost of sending the notices and
of implementing the transition plan.
19.6 Non-renewal of this contract is not a contract termination for
purposes of appeal rights under the Human Resources
Code ss.32.034.
1999 Renewal Contract
Bexar Service Area
August 9, 1999
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SIGNED 1st day of September, 1999.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
BY: /s/ William R. Archer, III, M.D. BY: /s/ Michael A. Seltzer
-------------------------------- ------------------------------------
William R. Archer, III, M.D. Printed Name: Michael A. Seltzer
Commissioner of Health Title: Vice President, West Region
Humana Health Plan of Texas, Inc.
|
Approved as to Form:
/s/ ------------------------------------ Office of General Counsel |
1999 Renewal Contract
Bexar Service Area
August 9, 1999
TDH Doc. # 4810323494 *2001
AMENDMENT NO. 1
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 1 is entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Bexar Service Area, dated September 1, 1999. The effective date of this Amendment is September 1,1999. All other contract provisions remain in full force and effect.
The Parties agree to amend the Contract as follows:
1. Article XIII is amended by deleting existing 13.1.2, 13.1.2.2, and 13.1.2.3 and replacing them with the new Article 13.1.2, 13.1.2.2, and 13.1.2.3 as follows:
(delete the stricken language and add the bold and italicized)
[Deletion]
13.1.2 Delivery Supplemental Payment (DSP). TDH has submitted
the delivery supplemental payment methodology to HCFA for
approval. The monthly capitation amounts for September 1,
1999, through August 31, 2000, and the DSP amount are
listed below. These amounts are effective September 1,
1999. The monthly capitation amounts established for each
risk group in the Bexar Service Area using the Standard
methodology (listed in Article 13.1.3) will apply if the
DSP methodology is not approved by HCFA.
Bexar SDA
|
-----------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 1999 - August 31,
2000
-----------------------------------------------------------------
TANF Adults $153.73
-----------------------------------------------------------------
TANF Children (less than) 12 Months of Age $ 49.87
-----------------------------------------------------------------
Expansion Children (less than) 12 Months of Age $ 59.18
-----------------------------------------------------------------
Newborns (greater than or equal to) 12 Months of Age $375.31
-----------------------------------------------------------------
TANF Children (greater than or equal to)
12 Months of Age $375.31
-----------------------------------------------------------------
Expansion Children (greater than or equal to)
12 Months of Age $375.31
-----------------------------------------------------------------
Federal Mandate Children $ 42.25
-----------------------------------------------------------------
CHIP Phase I $ 76.34
-----------------------------------------------------------------
Pregnant Women $241.86
-----------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
-----------------------------------------------------------------
|
Delivery Supplemental Payment: A one-time per pregnancy supplemental payment for each delivery shall be paid to HMO as provided below in the following amount: $2,834.10.
13.1.2.2 For an HMO Member who is classified in the Pregnant Women, TANF
Adults, TANF Children (less than) 12 months, Expansion Children
(less than) 12 months, Federal Mandate Children [Deletion], or
CHIP risk group, HMO will be paid the monthly capitation amount
identified in Article 13.1.2 for each month of classification,
plus the DSP amount identified in Article 13.1.2.
13.1.2.3 HMO must submit a monthly DSP Report (report) that includes the
data elements specified by TDH. TDH will consult with contracted
HMOs prior to revising the report data elements and requirements.
The reports must be submitted to TDH in the format and time
specified by TDH. The report must include only unduplicated
deliveries. The report must include only deliveries for which HMO
has made a payment for the delivery, to either a hospital or
other provider. No DSP will be made for deliveries which are not
reported by HMO to TDH within [Deletion] 210 days after the date
of delivery, or within 30 days from the date of discharge from
the hospital for the stay related to the delivery, whichever is
later.
2. Article XIII is amended by deleting existing 13.2.5 and replacing it
with the new Article 13.2.5 as follows: (delete the stricken language
and add the bold and italicized)
Bexar SDA
2
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13.2.5 There will be two settlements for payment(s) of the state share
of the experience rebate. The first settlement shall equal 100
percent of the state share of the experience rebate as derived
from Line 7 of Part 1 (Net Income Before Taxes) of the [deleted]
Final Managed Care Financial Statistical (MCFS) Report and shall
be paid on the same day the first [deleted] Final MCFS Report is
submitted to TDH. The second settlement shall be an adjustment to
the first settlement and shall be paid to TDH on the same day
that the second [deleted] Final MCFS Report is submitted to TDH
if the adjustment is a payment from HMO to TDH. TDH or its agent
may audit or review the MCFS reports. If TDH determines that
corrections to the MCFS reports are required, based on a TDH
audit/review or other documentation acceptable to TDH, to
determine an adjustment to the amount of the second settlement,
then final adjustment shall be made within two years from the
date that HMO submits the second [deleted] Final MCFS report. HMO
must pay the first and second settlements on the due dates for
the first and second Final MCFS reports respectively as
identified in Article 12.1.5. TDH may adjust the experience
rebate if TDH determines HMO has paid affiliates amounts for
goods or services that are higher than the fair market value of
the goods and services in the service area. Fair market value may
be based on the amount HMO pays a non-affiliate(s) or the amount
another HMO pays for the same or similar service in the service
area and will be determined on a case-by-case basis. TDH has
final authority in auditing and determining the amount of the
experience rebate.
|
AGREED AND SIGNED by an authorized representative of the parties on December 9, 1999.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ William R. Archer, III., M.D. By: /s/ Michael A. Seltzer
--------------------------------- ------------------------
William Archer, III., M.D. Michael A. Seltzer
Commissioner of Health V.P., Western Region
Approved as to Form:
/s/
-------------------------
Office of General Counsel
Bexar SDA
|
AMENDMENT NO.2
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 2 is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Bexar Service Area, dated September 1, 1999. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect.
1. Article II is amended by adding the bold and italicized language
DEFINITIONS
Call coverage means arrangements made by a facility or an attending physician with an appropriate level of health care provider who agrees to be available on an as-needed basis to provide medically appropriate services for routine/high risk/or emergency medical conditions or emergency Behavioral Health condition that present without being scheduled at the facility or when the attending physician is unavailable.
Enrollment report/enrollment file means the daily or monthly list of Medicaid recipients who are enrolled with an HMO as Members on the day or for the month the report is issued.
2. Article VI is amended by adding the bold and italicized language and deleting the stricken language.
6.9.2 HMO must have a perinatal health care system in place that, at a
minimum, provides the following services:
6.9.3 HMO must have a process to expedite scheduling a prenatal appointment
for an obstetrical exam for a TP40 Member no later than two weeks after
receiving the daily enrollment file verifying enrollment of the Member
into the HMO.
6.9.4 HMO must have procedures in place to contact and assist a
pregnant/delivering Member in selecting a PCP for her baby either
before the birth or as soon as the
|
baby is born.
6.9.4.5 HMO must provide inpatient care and professional services related
to labor and delivery for its pregnant/delivering Members and
neonatal care for its newborn Members (see Article 14.3.1) at the
time of delivey and for up to 48 hours following an uncomplicated
vaginal delivery and 96 hours following an uncomplicated
Caesarian delivery.
6.9.5.1 HMO must reimburse in-network providers, out-of-network
providers, and specialty physicians who are providing call
coverage, routine, and/or specialty consultation services for the
period of time covered in Article 6.9.5
6.9.5.1.1 HMO must adjudicate provider claims for services provided to a
newborn Member in accordance with TDH's claims processing
requirements using the proxy ID number or State-issued Medicaid
ID number (see Article 4.10). HMO cannot deny claims based on
provider non-use of State-issued Medicaid ID number for a newborn
Member. HMO must accept provider claims for newborn services
based on mother's name and/or Medicaid ID number with
accommodations for multiple births, as specified by the HMO.
6.9.5.2 HMO cannot require prior authorization or PCP assignment to
adjudicate newborn claims for the period of time covered by 6.9.5
6.9.6 HMO may require prior authorization requests for hospital or
professional services provided beyond the time limits in Article
6.9.5 and may
|
utilized the determination of medical necessity beyond routine care.
HMO must respond to these prior authorization within the requirements
of 28 TAC(s)19.1710-19.1712 and Article 21.58a of the Texas Insurance
Code.
6.9.6.1 HMO must notify providers involved in the care of pregnant/delivering
women and newborns (including out-of-network providers and hospitals)
regarding the HMO's prior authorization requirements.
6.9.6.2 HMO cannot require a prior authorization for services provided to a
pregnant/delivering Member or newborn Member for a medical condition
which requires emergency services, regardless of when the emergency
condition arises (see Article 6.5.6).
|
3. Article VIII is amended by adding the bold and italicized language and deleting the stricken language.
8.4.2 HMO must issue a Member Identification Card (ID) to the Member within
five (5) days from the date the HMO receives the monthly Enrollment
File from the Enrollment Broker. If the 5th day falls on a weekend or
state holiday, the ID Card must be issued by the following working day.
The ID Card must include, at a minimum, the following: Member's name;
Member's Medicaid number; either the issue date of the card or
effective date of the PCP assignment; PCP's name, address, and
telephone number; name of HMO; name of IPA to which the Member's PCP
belongs, if applicable; the 24-hour, seven (7) day a week toll-free
telephone number operated by HMO; the toll-free number for behavioral
health care services; and directions for what to do in an emergency.
The ID Card must be reissued if the Member reports a lost card, there
is a Member name change, if Member requests a new PCP, or for any other
reason which results in a change to the information disclosed on the ID
Card.
|
4. Article XII is amended by adding the bold and italicized language and deleting the stricken language.
12.2 STATISTICAL REPORTS
-------------------
12.2.4 HMO cannot submit newborn encounters to TDH until the State-issued
Medicaid ID number is received for a newborn. HMO must match the proxy
ID number issued by the HMO with the State-issued Medicaid ID number
prior to submission of encounters to TDH and submit the encounter in
accordance to the HMO Encounter Data Submission Manual. The encounter
must include the State-issued Medicaid ID number. Exceptions to the
45-day deadline for submission of encounter data in Paragraph 12.2.1
will be granted it cases in which the Medicaid ID number is not
available for a newborn Member.
|
12.2.5 HMO must require providers to submit claims and encounter data to HMO
no later than 95 days after the date services are provided.
12.2.6 HMO must use the procedure codes, diagnosis codes and other codes
contained in the most recent edition of the Texas Medicaid Provider
Procedures Manual and as otherwise provided by TDH. Exceptions or
additional codes must be submitted for approval before HMO uses the
codes.
12.2.7 HMO must use its TDH-specified identification-numbers on all encounter
data submissions. Please refer to the TDH Encounter Data Submission
Manual for further specifications
12.2.8 HMO must validate all encounter data using the encounter data
validation methodology prescribed by TDH prior to submission of
encounter data to TDH.
12.2.9 All Claims Summary Report. HMO must submit the "All Claims Summary
-------------------------
Report" identified in the Texas Managed Care Claims Manual as a
contract year-to-date report. The report must be submitted quarterly
by the last day of the month following the reporting period. The
reports must be submitted to TDH in a format specified by TDH.
12.2.10 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO must file
------------------------------------------------------
preliminary and final Medicaid Disproportionate Share Hospital (DSH)
reports, required by TDH to identify and reimburse hospitals that
qualify for Medicaid DSH funds. The preliminary and final DSH reports
must include the data elements and be submitted in the form and format
specified by TDH. The preliminary DSH reports are due on or before
June 1 of the year following the state fiscal year for which data is
being reported. The final DSH reports are due on or before August 15
of the year following the state fiscal year for which data is being
reported.
|
5. Article XIII is amended by adding the bold and italicized language.
13.5 NEWBORN AND PREGNANT WOMEN PAYMENT PROVISIONS
---------------------------------------------
13.5.1 Newborns born to Medicaid eligible mothers who are enrolled in HMO
are enrolled into HMO for 90 days following the date of birth.
13.5.1.1 The mother of the newborn Member may change her newborn to another
HMO during the first 90 days following the date of birth, but may
only do so through TDH Customer Services.
13.5.2 MAXIMUS will provide HMO with a daily enrollment file which will
list all newborns who have received State-issued Medicaid ID numbers.
This file will
|
include the Medicaid eligible mothers Medicaid ID number to allow the
HMO to link the newborn's State-issued Medicaid ID numbers with the
proxy ID number. TDH will guarantee capitation payments to HMO for all
newborns who appear on the MAXIMUS daily enrollment file as HMO
Members for each month the newborn is enrolled in the HMO.
13.5.3 All non-TP45 newborns who are born to mothers whose enrollment in HMO
is effective on or before the date of the birth of the newborn will
be retroactively enrolled into the HMO through a manual process
by DHS Data Control
13.5.4 Newborns who do not appear on the MAXIMUS daily enrollment file before
the end of the sixth month following the date of birth will not be
retroactively enrolled into the HMO. TDH will manually reconcile
payment to the HMO for services provided from the date of birth
for TP45 and all other eligibility categories of newborns. Payment
will cover services rendered from the effective date of the proxy ID
number when first issued by the HMO regardless of plan assignment
at the time the State-issued Medicaid ID number is receive.
13.5.5 MW3iWUS will provide HMO with a daily enrollment file which will list
all TP40 Members who have received State-issued Medicaid ID numbers.
TDH will guarantee capitation payments to HMO for all TP40 Members
who appear on the MAXIMUS daily enrollment file as HMO Members for
each month the TP40 Member enrollment is effective
6. Article XIV is amended by adding the bold and italicized language.
14.3 NEWBORN ENROLLMENT
------------------
The HMO is responsible for newborns who are born to mothers whose
enrollment in HMO is effective on or before the date of birth as
follows:
14.3.1 Newborns are presumed Medicaid eligible and enrolled in the mother's
HMO for at least 90 days from the date of birth.
14.3.l.1 A mother of a newborn Member may change plans for her newborn during
the first 90 days by contacting TDH Customer Services. TDH will
notify HMO of newborn plan changes made by a mother when the change
is made by TDH Customer Services.
14.3.2 HMO must establish and implement written policies and procedures to
require professional and facility providers to notify HMOs of a birth
of a newborn to a Member at the time of delivery.
14.3.2.1 HMO must create a proxy ID number in the HMO's Enrollment/Eligibility
and
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date of birth of the newborn.
14.3.2.2 HMO must match the proxy ID number and the State-issued Medicaid
ID number once the State-issued Medicaid ID number is received.
14.3.2.3 HMO must submit a Form 7484A to DHS Data Control requesting DHS
Data Control to research DHS's files for a Medicaid ID number if
HMO has not received a State-issued Medicaid ID number for a
newborn within 30 days from the date of birth. If DHS finds that
no Medicaid ID number has been issued to the newborn, DHS Data
Control will issue the Medicaid ID number using the information
provided on the Form 7484A.
14.3.3 Newborns certified Medicaid eligible after the end of the sixth
month following the date of birth will not be retroactively
enrolled to an HMO, but will be enrolled in Medicaid
fee-for-service. TDH will manually reconcile payment to the HMO
for services provided from the date of birth for all Medicaid
eligible newborns as described in Article 13.5.4.
14. DISENROLLMENT
-------------
14.4.1 HMO has a limited right to request a Member be disenrolled from
HMO without the Member's consent. TDH must approve any HMO
request for disenrollment of a Member for cause. Disenrollment of
a Member may be permitted under the following circumstances:
14.4.1.1 Member misuses or loans Member's HMO membership card to another
person to obtain services.
14.4.1.2 Member is disruptive, unruly, threatening or uncooperative to the
extent that Member's membership seriously impairs HMO's or
provider's ability to provide services to Member or to obtain
new Members, and Member's behavior is not caused by a physical or
behavioral health condition.
14.4.1.3 Member steadfastly refuses to comply with managed care
restrictions (e.g., repeatedly using emergency room in
combination with refusing to allow HMO to treat the underlying
medical condition).
14.4.2.1 HMO must take reasonable measures to correct Member behavior
prior to requesting disenrollment. Reasonable measures may
include providing education and counseling regarding the
offensive acts or behaviors.
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14.4.3 HMO must notify the Member of HMO's decision to disenroll the Member
if all reasonable measures have failed to remedy the problem.
14.4.4 If the Member disagrees with the decision to disenroll the Member from
HMO, HMO must notify the Member of the availability of the complaint
procedure and TDH's Fair Hearing process.
14.4.5 HMO CANNOT REQUEST A DISENROLLMENT BASED ON ADVERSE CHANGE IN THE
MEMBER'S HEALTH STATUS OR UTILIZATION OF SERVICES WHICH ARE MEDICALLY
NECESSARY FOR TREATMENT OF MEMBER'S CONDITION.
14.5 AUTOMATIC RE-ENROLLMENT
-----------------------
14.5.1 Members who are disenrolled because they are temporarily ineligible
for Medicaid will be automatically re-enrolled into the same health
plan. Temporary loss of eligibility is defined as a period of 6 months
or less.
14.5.2 HMO must inform its Members of the automatic re-enrollment procedure.
Automatic re-enrollment must be included in the Member Handbook (see
Article 8.2.1).
14. ENROLLMENT REPORTS
------------------
14.6.1 TDH will provide HMO enrollment reports listing all STAR Members who
have enrolled in or were assigned to HMO during the initial enrollment
period.
14.6.2 TDH will provide monthly HMO Enrollment Reports to HMO on or before
the first of the month.
14.6.3 TDH will provide Member verification to HMO and network providers
through telephone verification or TexMedNet.
|
AGREED AND SIGNED by an authorized representative of the parties on April 5, 2001
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ C.E. Bell, M.D By: /s/ Michael A. Seltzer
---------------------------- --------------------------------
Charles E. Bell, M.D. Michael Seltzer
Executive Deputy Commissioner Vice President, West Region
of Health
Approved as to Form:
/s/ MaryAnn Slavin
--------------------------------
Office of General Counsel
|
TDH Doc #4810323494* 2001A-01C
AMENDMENT NO.3
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 3 is entered into between the Texas Department of Heath (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Bexar Service Area, dated September 1, 1999. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect.
1. Article III is amended by adding the new bold and italicized language and deleting the stricken language as follows:
3.7 HMO TELEPHONE ACCESS REQUIREMENTS
3.7.1 For all HMO telephone access (including Behavioral Health
telephone services), HMO must ensure [deleted] adequately-staffed
telephone lines. Telephone personnel must receive customer
service telephone training. HMO must ensure that telephone
staffing is adequate to fulfill the standards of promptness and
quality listed below:
1. 80% of all telephone calls must be answered within an average
of 30 seconds;
2. The lost (abandonment) rate must not exceed 10%;
3. HMO cannot impose maximum call duration limits but must allow
calls to be of sufficient length to ensure adequate
information is provided to the Member or Provider.
4. Telephone services must meet cultural competency requirements
(see Article 8.9) and provide "linguistic access" to all
members as defined in Article II. This would include the
provision of interpretive services required for effective
communication for Members and providers.
3.7.2 Member Helpline: The HMO must furnish a toll-free phone line
which members may call 24 hours a day, 7 days a week. An
answering service or other similar mechanism, which allows
callers to obtain information from a live person, may be used for
after-hours and weekend coverage.
3.7.2.1 HMO must provide coverage for the following services at least
during HMO's regular business hours (a minimum of 9 hours a day,
between 8 a.m. and 6.p.m.), [deleted] Monday through Friday:
1. Member ID information
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2. To change PCP
3. Benefit explanations
4. PCP verification
5. Access issues (including referrals to specialists)
6. Problems Accessing PCP
7. Member eligibility
8. Complaints
9. Service area issues (including when member is
temporarily out-of-service area)
10. Other services covered by member services.
3.7.2.2 HMO must provide TDH with policies and procedures indicating how
the HMO will meet the needs of members who are unable to contact
HMO during regular business hours.
3.7.3 HMO must ensure that PCPs are available 24 hours a day, 7 days a
week (see Article 7.8). This includes PCP telephone coverage (see
28 TAC 11.2001 (a)1A).
3.7.4 Behavioral Health Hotline Services. HMO must have emergency and
crisis Behavioral Health hotline services available 24 hours a
day, 7 days a week, toll-free throughout the service area. Crisis
hotline staff must include or have access to qualified behavioral
health professionals to assess behavioral health emergencies.
Emergency and crisis behavioral health services may be arranged
through mobile crisis teams. It is not acceptable for an
emergency intake line to be answered by an answering machine.
Hotline services must meet the requirements described in Article
3.7.1
2. Article V is amended by adding the new bold and italicized language and
deleting the stricken language as follows:
5.9 REQUESTS FOR PUBLIC INFORMATION
-------------------------------
5.9.3 Notwithstanding 5.9.2. If HMO believes that the requested
information qualifies as a trade secret or as commercial or
financial information, HMO must notify TDH-within three (3)
working days after TDH gives notice that a request has been made
for public information [deleted] -- and request TDH to submit the
request for public information to the Attorney General for an
Open Records Opinion. The HMO will be responsible for presenting
all exceptions to public disclosure to the Attorney General if an
opinion is requested. [deleted]
|
3. Article VI is amended by adding the new bold and italicized language as
follows:
6.4 CONTINUITY OF CARE AND OUT-OF-NETWORK PROVIDERS
-----------------------------------------------
6.4.5 HMO must provide assistance to providers requiring PCP
verification 24 hours a day, 7 days a week.
6.4.5.1 HMO must provide TDH with policies and procedures indicating how
the HMO will provide PCP verification as indicated in article
6.4.5. HMOs providing PCP verification via a telephone must meet
the requirements of 3.7.1.
4. Article VII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
7.6 PROVIDER COMPLAINT AND APPEAL PROCEDURES
----------------------------------------
7.6.3 HMO's complaint and appeal process cannot contain provisions
requiring a [deleted] provider to submit a complaint or appeal to
TDH for resolution in lieu of the HMO's process.
7.18 DELEGATED NETWORKS (IPAs, LIMITED PROVIDER NETWORKS AND ANHCs)
--------------------------------------------------------------
7.18.2.1 HMO is required to include subcontract provisions in its
delegated network contracts which require the UM protocol used by
a delegated network to produce substantially similar outcomes, as
approved by TDH, as the UM protocol employed by the contracting
HMO. The responsibilities of an HMO in delegating UM functions to
a delegated network will be governed by Article [deleted] 16.3.12
of this contract.
5. Article VIII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
8.3 ADVANCE DIRECTIVES
------------------
8.3.1 Federal and state law require HMOs and providers to maintain
written policies and procedures for informing and providing
written information to all adult Members 18 years of age and
older about their rights under state and federal law, in advance
of their receiving care (Social Security Act ss.1902(a)(57) and
ss.1903(m)(1)(A)). The written policies and procedures must
contain procedures for providing written information regarding
advance directives and the Member's right to refuse, withhold or
withdraw medical treatment and mental health treatment. [deleted]
HMO's policies and procedures must comply with provisions
contained in 42 CFR ss.434.28 and 42 CFR ss.489, SubPart I,
relating to advance directives for all hospitals,
|
critical access hospitals, skilled nursing facilities, home
health agencies, providers of home health care, providers of
personal care services and hospices, as well as the following
state laws and rules:
8.3.1.2.3 a Member's right to execute a Medical Power of Attorney to
appoint an agent to make health care decisions on the Member's
behalf if the Member becomes incompetent; and
8.3.1.3 the declaration for Mental Health Treatment, Chapter 137, Texas
Civil Practice and Remedies code, which includes: a Member's
right to execute a declaration for mental health treatment in a
document making a declaration of preferences or instructions
regarding mental health treatment.
8.3.2 HMO must maintain written policies for implementing a Member's
advance directive. Those policies must include a clear and
precise statement of limitation if HMO or a participating
provider cannot or will not implement a Member's advance
directive.
8.3.2.1.3 a description of the [deleted] medical and mental health
conditions or procedures affected by the conscience objection.
[deleted]
8.5 MEMBER COMPLAINT PROCESS
------------------------
8.5.1 HMO must develop, implement and maintain a Member complaint
system that complies with the requirements of Article 20A.12 of
the Texas Insurance Code, relating to the Complaint System,
except where otherwise provided in this contract and in
applicable federal law. The complaint and appeals procedure must
be the same for all Members and must comply with Texas Insurance
Code, Article 20A.12 or applicable federal law. Modifications and
amendments must be submitted to TDH at least 30 days prior to the
implementation of the modification or amendment.
8.5.2 HMO must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving of Member
complaints. The procedures must be reviewed and approved in
writing by TDH. Any changes or modifications to the procedures
must be submitted to TDH for approval thirty (30) days prior to
the effective date of the amendment.
8.5.3 HMO must designate an officer of HMO who has primary
responsibility for ensuring that complaints are resolved in
compliance with written policy and within the time required. An
"officer" of HMO means a president, vice president, secretary,
|
treasurer, or chairperson of the board for a corporation, the
sole proprietor, the managing general partner of a partnership,
or a person having similar executive authority in the
organization.
8.5.4 HMO must have a routine process to detect patterns of complaints
and disenrollments and involve management and supervisory staff
to develop policy and procedural improvements to address the
complaints. HMO must cooperate with TDH and TDH's Enrollment
Broker in Member complaints relating to enrollment and
disenrollment.
8.5.5 HMO's complaint procedures must be provided to Member in writing
and in alternative communication formats. A written description
of HMO's complaint procedures must be in appropriate languages
and easy for Members to understand. HMO must include a written
description in the Member Handbook. HMO must maintain at least
one local and one toll-free telephone number for making
complaints.
8.5.6 HMO's process must require that every complaint received in
person, by telephone or in writing, is recorded in a written
record and is logged with the following details: date;
identification of the individual filing the complaint;
identification of the individual recording the complaint; nature
of the complaint; disposition of the complaint; corrective action
required; and date resolved.
8.5.7 HMO's process must include a requirement that the Governing Body
of HMO reviews the written records (logs) for complaints and
appeals.
8.5.8 HMO is prohibited from discriminating against a Member because
that Member is making or has made a complaint.
8.5.9 HMO cannot process requests for disenrollments through HMO's
complaint procedures. Requests for disenrollments must be
referred to TDH within five (5) business days after the Member
makes a disenrollment request.
8.5.10 HMO must develop, implement and maintain an appeal of adverse
determination procedure that complies with the requirements of
Article 21.58A of the Texas Insurance Code, relating to the
utilization review, except where otherwise provided in this
contract and in applicable federal law. The appeal of an adverse
determination procedure must be the same for all Members and must
comply with Texas Insurance Code, Article 21.58A or applicable
federal law. Modifications and amendments must be submitted to
TDH no less than 30 days prior to the implementation of the
modification or amendment. When an enrollee, a person acting on
behalf of an enrollee, or an enrollee's provider of record
expresses orally or in writing any dissatisfaction or
disagreement with an adverse determination, HMO or UR agent must
regard the expression of dissatisfaction as a request to appeal
an adverse determination.
|
8.5.11 If a complaint or appeal of an adverse determination relates to
the denial, delay, reduction, termination or suspension of
covered services by either HMO or a utilization review agent
contracted to perform utilization review by HMO. HMO must inform
Members they have the right to access the TDH Fair Hearing
process at any time in lieu of the internal complaint system
provided by HMO. HMO is required to comply with the requirements
contained in 1 TAC Chapter 357, relating to notice and Fair
Hearings in the Medicaid program, whenever an action is taken to
deny, delay, reduce, terminate or suspend a covered service.
8.5.12 If Members utilize HMO's internal complaint or appeal of adverse
determination system and the complaint relates to the denial,
delay. reduction. termination or suspension of covered services
by either HMO or a utilization review agent contracted to perform
utilization review by HMO, HMO must inform the Member that they
continue to have a right to appeal the decision through the TDH
Fair Hearing process.
8.5.13 The provisions of Article 21.58A, Texas Insurance Code, relating
to a Member's right to appeal an adverse determination made by
HMO or a utilization review agent by an independent review
organization, do not apply to a Medicaid recipient. Federal fair
hearing requirements (Social Security Act ss.1902a(3). codified
at 42 C.F.R. 431.200 et. seq.) require the agency to make a final
decision after a fair hearing, which conflicts with the State
requirement that the IRO make a final decision. Therefore, the
State requirement is pre-empted by the federal requirement.
8.5.14 HMO will cooperate with the Enrollment Broker and TDH to resolve
all Member complaints. Such cooperation may include, but is not
limited to. participation by HMO or Enrollment Broker and/or TDH
internal complaint committees.
8.5.15 HMO must have policies and procedures in place outlining the role
of HMO's Medical Director in the Member Complaint System and
appeal of an adverse determination. The Medical Director must
have a significant role in monitoring, investigating and hearing
complaints.
8.5.16 HMO must provide Member Advocates to assist Members in
understanding and using HMO's complaint system and appeal of an
adverse determination.
8.5.17 HMO's Member Advocates must assist Members in writing or filing a
complaint or appeal of an adverse determination and monitoring
the complaint or appeal through the Contractors complaint or
appeal of an adverse determination process until the issue is
resolved.
8.6 MEMBER NOTICE, APPEALS AND FAIR HEARINGS
----------------------------------------
8.6.1 HMO must send Members the notice required by 1 Texas
Administrative Code ss.357.5, whenever HMO takes an action to
deny, delay, reduce or terminate covered
|
services to a Member. The notice must be mailed to the Member no
less than 10 days before HMO intends to take an action. If an
emergency exists, or if the time within which the service must be
provided makes giving 10 days notice impractical or impossible,
notice must be provided by the most expedient means reasonably
calculated to provide actual notice to the Member, including by
phone, direct contact with the Member, or through the provider's
office.
8.6.2 The notice must contain the following information:
8.6.2.1 Member's right to immediately access TDH's Fair Hearing process:
8.6.2.2 a statement of the action HMO will take;
8.6.2.3 the date the action will be taken;
8.6.2.4 an explanation of the reasons HMO will take the action:
8.6.2.5 a reference to the state and/or federal regulations which support
HMO's action;
8.6.2.6 an address where written requests may be sent and a toll-free
number Member can call to: request the assistance of a Member
representative, or file a complaint, or request a Fair Hearing;
8.6.2.7 a procedure by which Member may appeal HMO's action though either
HMO's complaint process or TDH's Fair Hearings process;
8.6.2.8 an explanation that Members may represent themselves, or be
represented by HMO's representative, a friend, a relative, legal
counsel or another spokesperson;
8.6.2.9 an explanation of whether, and under what circumstances, services
may be continued if a complaint is filed or a Fair Hearing
requested;
8.6.2.10 a statement that if the Member wants a TDH Fair Hearing on the
action, Member must make the request for a Fair Hearing within 90
days of the date on the notice or the right to request a hearing
is waived;
8.6.2.11 a statement explaining that HMO must make its decision within 30
days from the date the complaint is received by HMO; and
8.6.2.12 a statement explaining that a final decision must be made by TDH
within 90 days from the date a Fair Hearing is requested.
8.7 MEMBER ADVOCATES
----------------
8.7.1 HMO must provide Member Advocates to assist Members. Member
Advocates must be
|
physically located within the service area. Member Advocates must
inform Members of their rights and responsibilities, the
complaint process, the health education and the services
available to them, including preventive services.
8.7.2 Member Advocates must assist Members in writing complaints and
are responsible for monitoring the complaint through HMOs
complaint process until the Member's issues are resolved or a TDH
Fair Hearing requested (see Articles 8.6.15, 8.6.16, and 8.6.17).
8.7.3 Member Advocates are responsible for making recommendations to
management on any changes needed to improve either the care
provided or the way care is delivered. Member Advocates are also
responsible for helping or referring Members to community
resources available to meet Member needs that are not available
from HMO as Medicaid covered services.
8.7.4 Member Advocates must provide outreach to Members and participate
in TDH-sponsored enrollment activities.
8.8 MEMBER CULTURAL AND LINGUISTIC SERVICES
---------------------------------------
8.8.1 Cultural Competency Plan. HMO must have a comprehensive written
Cultural Competency Plan describing how HMO will ensure
culturally competent services, and provide linguistic and
disability-related access. The Plan must describe how the
individuals and systems within HMO will effectively provide
services to people of all cultures, races, ethnic backgrounds,
and religions as well as those with disabilities in a manner that
recognizes, values, affirms, and respects the worth of the
individuals and protects and preserves the dignity of each. HMO
must submit a written plan to TDH prior to the effective date of
this contract unless previously submitted. Modifications and
amendments to the written plan must be submitted to TDH no later
than 30 days prior to implementation of the modification or
amendment. The Plan must also be made available to HMO's network
of providers.
8.8.2 The Cultural Competency Plan must include the following:
8.8.2.1 HMO's written policies and procedures for ensuring effective
communication through the provision of linguistic services
following Title VI of the Civil Rights Act guidelines and the
provision of auxiliary aids and services, in compliance with the
Americans with Disabilities Act, Title III, Department of Justice
Regulation 36.303. HMO must disseminate these policies and
procedures to ensure that both Staff and subcontractors are aware
of their responsibilities under this provision of the contract.
8.8.2.2 A description of how HMO will educate and train its staff and
subcontractors on culturally competent service delivery, and the
provision of linguistic and/or disability-related access as
related to the characteristics of its Members;
|
8.8.2.3 A description of how HMO will implement the plan in its
organization, identifying a person in the organization who will
serve as the contact with TDH on the Cultural Competency Plan;
8.8.2.4 A description of how HMO will develop standards and performance
requirements for the delivery of culturally competent care and
linguistic access, and monitor adherence with those standards and
requirements;
8.8.2.5 A description of how HMO will provide outreach and health
education to Members, including racial and ethnic minorities,
non-English speakers or limited-English speakers, and those with
disabilities; and
8.8.2.6 A description of how HMO will help Members access culturally and
linguistically appropriate community health or social service
resources;
8.8.3 Linguistic, Interpreter Services, and Provision of Auxiliary Aids
and Services. HMO must provide experienced, professional
interpreters when technical, medical, or treatment information is
to be discussed. See Title VI of the Civil Rights Act of 1964, 42
U.S.C. ss.ss. 2000d, et. seq. HMO must ensure the provision of
auxiliary aids and services necessary for effective
communication, as per the Americans with Disabilities Act, Title
III, Department of Justice Regulations 36.303.
8.8.3.1 HMO must adhere to and provide to Members the Member Bill of
Rights and Responsibilities as adopted by the Texas Health and
Human Services Commission and contained at 1 Texas Administrative
Code (TAC) ss.ss.353.202-353.203. The Member Bill of Rights and
Responsibilities assures Members the right to have interpreters,
if needed, during appointments with their providers and when
talking to their health plan. Interpreters include people who can
speak in their native language, assist with a disability, or help
them understand the information."
8.8.3.2 HMO must have in place policies and procedures that outline how
Members can access face-to-face interpreter services in a
provider's office if necessary to ensure the availability of
effective communication regarding treatment, medical history or
health education for a Member. HMOs must inform its providers on
how to obtain an updated list of participating, qualified
interpreters.
8.8.3.3 A competent interpreter is defined as someone who is:
8.8.3.4 proficient in both English and the other language;
8.8.3.5 has had orientation or training in the ethics of interpreting;
ant
8.8.3.6 has the ability to interpret accurately and impartially.
8.8.3.7 HMO must provide 24-hour access to interpreter services for
Members to access
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emergency medical services within HMO's network.
8.8.3.8 Family Members, especially minor children, should not be used as
interpreters in assessments, therapy or other medical situations
in which impartiality and confidentiality are critical, unless
specifically requested by the Member. However, a family member or
friend may be used as an interpreter if they can be relied upon
to provide a complete and accurate translation of the information
being provided to the Member; provided that the Member is advised
that a free interpreter is available; and the Member expresses a
preference to rely on the family member or friend.
8.8.4 All Member orientation presentations education classes and
materials must be presented in the languages of the major
population groups making up 10% or more of the Medicaid
population in the service area, as specified by TDH. HMO must
provide auxiliary aids and services, as needed, including
materials in alternative formats (i.e., large print, tape or
Braille), and interpreters or real-time captioning to accommodate
the needs of persons with disabilities that affect communication.
8.8.5 HMO must provide or arrange access to TDD to Members who are deaf
or hearing impaired.
8.9 CERTIFICATION DATE
------------------
8.9.1 On the date of the new Member's enrollment, TDH will provide HMOs
with the Members Medicaid certification date.
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6. Article XII is amended by adding the new bold and italicized language and deleting the stricken language as follows:
12.1 FINANCIAL REPORTS
-----------------
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
Financial-Statistical Reports. The first final report must
reflect expenses incurred through the 90th day after the end of
the contract [deleted]. The first final report must be filed on
or before the 120th day after the end of the contract [deleted].
The second final report must reflect data completed through the
334th day after the end of the contract and must be filed on
or before the 365th day following the end of the contract
[deleted].
12.2.9 Medicaid Disproportionate Share Hospital (DSH) Reports. HMO must
file preliminary and final Medicaid Disproportionate Share
Hospital (DSH) reports, required by TDH to identify and reimburse
hospitals that qualify for Medicaid DSH funds. The preliminary
and final DSH reports must include the data elements and be
submitted in the form and format specified by TDH. The
preliminary DSH reports are due on or before June 1 of the year
following the state fiscal year for which data is being reported.
The final DSH reports are due [deleted] no later
|
than July 15 of the year following the state fiscal year for
which data is being reported.
12.8 UTILIZATION MANAGEMENT REPORTS - BEHAVIORAL HEALTH
--------------------------------------------------
Behavioral Health (BH) utilization management reports are
required on a semi-annual basis [deleted]. Refer to Appendix H
for the standardized reporting format for each report and
detailed instructions for obtaining the specific data required in
the report. [deleted]
12.8.1 In addition, files are due to the TDH External Quality Review
Organization five (5) working days following the end of each
State Quarter. See Appendix H for Submission instructions. The BH
utilization report and data file submission instructions may
periodically updated by TDH to facilitate clear communication to
the health plans.
12.9 UTILIZATION MANAGEMENT REPORTS - PHYSICAL HEALTH
------------------------------------------------
Physical health (PH) utilization management reports are required
on a semi-annual basis [deleted]. Refer to Appendix J for the
standardized reporting format for each report and detailed
instructions for obtaining specific data required in the report.
[deleted]
12.9.1 In addition, data files are due to the TDH External Quality
Review Organization five (5) working days following the end of
each State Quarter. See Appendix J for submission instructions.
The PH utilization report and data file submission instruction
may periodically be updated by TDH to facilitate clear
communication to the health plan.
7. Article XIII is amended by adding the new bold and italicized language
and deleting the stricken language as follows:
13.1 CAPITATION AMOUNTS
------------------
13.1.1 TDH will pay HMO monthly premiums calculated by multiplying the
number of Member months by Member risk group times the monthly
capitation amount by Member risk group. For additional
information regarding the actuarial basis and
|
methodology used to compute the capitation rates, please
reference the waiver under the document titled "Actuarial
Methodology for Determination of Maximum Monthly Capitation
Amounts". HMO and network providers are prohibited from billing
or collecting any amount from a Member for health care services
covered by this contract, in which case the Member must be
informed of such costs prior to providing non-covered services.
13.2 EXPERIENCE REBATE TO STATE
--------------------------
13.2.1 For the contract period [deleted], HMO must pay to TDH experience
rebate calculated in accordance with the tiered rebate method
listed below based on the excess of allowable HMO STAR revenues
over allowable HMO STAR expenses as measured by any positive
amount on Line 7 of "Part 1: Financial Summary, All Coverage
Groups Combined" of the annual Managed Care Financial-Statistical
Report set forth in Appendix I, as reviewed and confirmed by TDH.
TDH reserves the right to have an independent audit performed to
verify the information provided by HMO.
13.2.5 There will be two settlements for payment(s) [deleted] of the
experience rebate allocated to the state in the table 13.2.1
under the column entitled "State Share of Experience Rebate." The
first settlement shall equal 100 percent [deleted] of the
experience rebate as derived from Line 7 of Part 1 (Net Income
Before Taxes) of the first final [deleted] Managed Care Financial
Statistical (MCFS) Report and shall be paid on the same day the
first final [deleted] MCFS Report is submitted to TDH. The second
settlement shall be an adjustment to the first settlement and
shall be paid to TDH on the same day that the second final
[deleted] MCFS Report is submitted to TDH if the adjustment is a
payment from HMO to TDH. TDH or its agent may audit or review the
MCFS reports. If TDH determines that corrections to the MCFS
reports are required, based on a TDH audit/review or other
documentation acceptable to TDH, to determine an adjustment to
the amount of the second settlement, then final adjustment shall
be made within two years from the date that HMO submits the
second final [deleted] MCFS report. HMO must pay the first and
second settlements on the due dates for the first and second
final MCFS reports respectively as identified in Article
[deleted] 12.1.4. TDH may adjust the experience rebate if TDH
determines HMO has paid affiliates amounts for goods or services
that are higher than the fair market value of the goods and
services in the service area. Fair market value may be based on
the amount HMO pays a non-affiliate(s) or the amount another HMO
pays for the same or similar service in the service area. TDH has
final authority in auditing and determining the amount of the
experience rebate.
8. The Appendices are amended by deleting Appendix H, "Utilization
Management Report -Behavioral Health" and replacing it with new Appendix
H, "Utilization Management Report -Behavioral Health", as attached.
9. The Appendices are amended by deleting Appendix J, "Utilization
Management Report -Physical Health' and replacing it with new Appendix
J, `Utilization Management Report -
|
Physical Health", as attached.
10. The Appendices are amended by deleting Appendix K, "Preventative Health
Performance Objectives" and replacing it with new Appendix K.
"Preventative Health Performance Objectives", as attached.
|
AGREED AND SIGNED by an authorized representative of the parties on February 5, 2001.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ C. E. Bell, M.D By: /s/ Michael A. Seltzer
--------------------------------- ------------------------
Charles. E. Bell, M.D. Michael A. Seltzer
Executive Deputy Commissioner Vice President Western Region
Approved as to Form:
/s/ Mary Ann Slavin
-------------------------
Office of General Counsel
TDH DOC # 4810323494* 2001A - 01C
-----------------------
|
AMENDMENT NO. 4
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 4 is entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO), to amend the Contract for Services between the Texas Department of Health and HMO in the Bexar Service Area, dated September 1, 1999. The effective date of this Amendment is [deleted] September 1, 2000. All other contract provisions remain in full force and effect.
The Parties agree to amend the Contract to read as follows:
Article XIII is amended by adding the bold and italicized language and deleting the stricken language.
13.1.2 Delivery Supplemental Payment (DSP). [Deleted]
-----------------------------------------------------------------
Risk Group Monthly Capitation Amounts
September 1, 2000 - August 31,
2001
-----------------------------------------------------------------
TANF Adults $153.73
-----------------------------------------------------------------
TANF Children > 12 Months of Age [deleted] $49.91
-----------------------------------------------------------------
Expansion Children > 12 Months of Age [deleted] $59.22
-----------------------------------------------------------------
Newborns < 12 Months of Age [deleted] $375.50
-
-----------------------------------------------------------------
TANF Children < 12 Months of Age [deleted] $375.50
-
-----------------------------------------------------------------
Expansion Children < 12 Months of Age [deleted] $375.50
-
-----------------------------------------------------------------
Federal Mandate Children [deleted] $42.29
-----------------------------------------------------------------
CHIP Phase I [deleted] $76.38
-----------------------------------------------------------------
Pregnant Women $241.86
-----------------------------------------------------------------
Disabled/Blind $ 14.00
Administration
-----------------------------------------------------------------
|
Delivery Supplemental Payment: A one-time per pregnancy supplemental payment for each delivery shall be paid to HMO as provided below in the following amount: $2834.10.
[deleted]
13.1.3 TDH will re-examine the capitation rates paid to HMO order this
contract during the first year of the contract period and will
provide HMO with capitation rates for the second year of the
contract period no later than 30 days before the date of the
one-year anniversary of the contract's effective date. Capitation
rates for state fiscal year 2001 will be re-examined based on the
most recent available traditional Medicaid cost data for the
contracted risk groups in the service area, trended forward and
discounted.
13.1.3.1 Once HMO has received their capitation rates established by TDH
for the second year of this contract, HMO may terminate this
contact as provided in Article 18.1.6 of this contract.
13.1.4 The monthly premium payment to HMO is based on monthly
enrollments adjusted to reflect money damages set out in Article
18.8 and adjustments to premiums in Article 13.5.
13.1.5 The monthly premium payments will be made to HMO no later than
the 10th working day of the month for which premiums are paid.
HMO must accept payment for premiums by direct deposit into an
HMO account.
|
13.1.6 Payment of monthly capitation amounts is subject to availability
of appropriations. If appropriations are not available to pay the
full monthly capitation amounts, TDH will equitably adjust
capitation amounts for all participating HMOs, and reduce scope
of service requirement as appropriate.
13.1.7 HMO renewal rates reflect program increases appropriated by the
76th legislature for physician (to include THSteps providers) and
outpatient facility services. HMO must report to TDH any change
in rates for participating physicians (to include THSteps
providers) and outpatient facilities resulting from this
increase. The report must be submitted to TDH at the end of the
first quarter of the FY2000 and FY2001 contract years according
to the deliverables matrix schedule set for HMO.
|
AGREED AND SIGNED by an authorized representative of the parties on September 7, 2000.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ William R. Archer, III., M.D. By: /s/ Michael A. Seltzer
--------------------------------- ---------------------------------
William R. Archer, III., M.D. Michael A. Seltzer
Commissioner of Health Vice President, Western Region
|
Approved as to Form:
/s/ Illegible ------------------------- Office of General Counsel |
TDH Doc. No. 4810323494*01-01D
AMENDMENT NO. 5.
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 5 is entered into between the Texas Department of Health (TDH) and PCA Health Plans of Texas, Inc. (HMO), to amend the 1999 Contract for Services between the Texas Department of Health and HMO in the Bexar Service Area. The effective date of this Amendment is the date TDH signs this Amendment. All other contract provisions remain in full force and effect.
1. Article II & IV is amended by adding the new bold and italicized language and deleting the stricken language as follows:
2.0 DEFINITION
----------
Clean claim means a claim submitted by a physician or
provider for medical care or health care services rendered to
an enrollee, with documentation reasonably necessary for the
HMO or subcontracted claims processor to process the claim,
as set forth in 28 TAC ss.21.2802(4) and to the extent that
it is not in conflict with the provisions of this contract.
[deleted]
4.10 CLAIMS PROCESSING REQUIREMENTS
------------------------------
4.10.1 HMO and claims processing subcontractors must comply with 28
TAC ss.ss.21.2801 through 21.2816 "Submission of Clean
Claims", to the extent they are not in conflict with
provisions of this contract.
4.10.2 HMO must use a TDH approved or identified claim format that
contains all data fields for final adjudication of the claim.
The required data fields must be complete and accurate. The
TDH required data fields are identified in TDH's "HMO
Encounter Data Claims Submission Manual."
12/21/00
Page 1 of 3
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4.10.3 HMO and claims processing subcontractors must comply with
TDH's Texas Medicaid Managed Care Claims Manual (Claims
Manual), which contains TDH's claims processing requirements.
HMO must comply with any changes to the Claims Manual with
appropriate notice of changes from TDH.
4.10.4 HMO must forward claims submitted to HMO in error to either:
1) the correct HMO, if the correct HMO can be determined from
the claim or is otherwise known to HMO; 2) the State's claims
administrator; or 3) the provider who submitted the claim in
error, along with an explanation of why the claim is being
returned.
4.10.5 HMO must not pay any claim submitted by a provider who has
been excluded or suspended from the Medicare or Medicaid
programs for fraud and abuse when HMO has knowledge of the
exclusion or suspension.
4.10.6 All provider clean claims must be adjudicated (finalized as
paid or denied adjudicated) within 30 days from the date the
claim is received by HMO. HMO must pay providers interest on
a clean claim which is not adjudicated within 30 days from
the date the claim is received by HMO or becomes clean at a
rate of 1.5% per month (18% annual) for each month the clean
claim remains unadjudicated. HMO will be held to a minimum
performance level of 90% of all clean claims paid or denied
within 30 days of receipt and 99% of all clean claims paid or
denied within 90 days of receipt. Failure to meet these
performance levels is a default under this contract and could
lead to damages or sanctions as outlined in Article XVII. The
performance levels are subject to changes if required to
comply with federal and state laws or regulations.
4.10.6.1 All claims and appeals submitted to HMO and claims processing
subcontractors must be paid-adjudicated (clean claims),
denied-adjudicated (clean claims), or denied for additional
information (unclean claims) to providers within 30 days from
the date the claim is received by HMO. Providers must be sent
a written notice for each claim that is denied for additional
information (unclean claims) identifying the claim, all
reasons why the claim is being denied, the date the claim was
received by HMO, all information required from the provider
in order for HMO to adjudicate the claim, and the date by
which the requested information must be received from the
provider.
4.10.6.2 Claims that are suspended (pended internally) must be
subsequently paid-adjudicated, denied-adjudicated, or denied
for additional information (pended externally) within 30 days
from date of receipt. No claim can be suspended for a period
exceeding 30 days from date of receipt of the claim.
12/21/00
Page 2 of 3
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4.10.6.3 HMO must identify each data field of each claim form that is
required from the provider in order for HMO to adjudicate the
claim. HMO must inform all network providers about the
required fields no later than 30 days prior to the effective
date of the contract or as a provision within HMO/provider
contract. Out-of-network providers must be informed of all
required fields if the claim is denied for additional
information. The required fields must include those required
by HMO and TDH.
4.10.7 HMO is subject to Article XVI, Default and Remedies, for
claims that are not processed on a timely basis as required
by this contract and the Claims Manual. Notwithstanding the
provisions of Articles 4.10.4, 4.10.4.1 and 4.10.4.2, HMO's
failure to adjudicate (paid, denied, or external pended) at
least ninety percent (90%) of all claims within thirty (30)
days of receipt and ninety-nine percent (99%) within ninety
(90) days of receipt for the contract year to date is a
default under Article XVI of this contract.
4.10.8 HMO must comply with the standards adopted by the U.S.
Department of Health and Human Services under the Health
Insurance Portability and Accountability Act of 1996
submitting and receiving claims information through
electronic data interchange (EDI) that allows for automated
processing and adjudication of claims within two or three
years, as applicable, from the date the rules promulgated
under HIPAA are adopted.
4.10.9 For claims requirements regarding retroactive PCP changes for
mandatory Members, see Article 7.8.12.2.
|
AGREED AND SIGNED by an authorized representative of the parties on April 2, 2001.
TEXAS DEPARTMENT OF HEALTH PCA Health Plans of Texas, Inc.
By: /s/ Charles E. Bell, M.D. By: /s/ Michael A. Seltzer
-------------------------- -------------------------------
Charles E. Bell, M.D. Michael A. Seltzer
Executive Deputy Vice President, West Region
Commissioner of Health
Approved as to Form:
/s/ Mary Ann Slavin
-------------------------
Office of General Counsel
TDH DOC. NO. 4810323494* 01-01D
12/21/00
Page 3 of 3
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TDH DOC 0. 4810323494* 2001-01E
--------------------
AMENDMENT NO. 6
TO THE
|
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
The 1999 Contract for Services entered into between the Texas Department of Health and PCA Health Plans of Texas, Inc. (HMO) in the Bexar Service Area is hereby amended to reflect the merger of PCA Health Plans of Texas, Inc. into Humana Health Plan of Texas, Inc. The Texas Department of Insurance has approved the merger and all requisite documents have been filed. Copies of the Agreement and Plan of Merger, Articles of Merger, and Official Order of the Commissioner of Insurance are attached.
This Amendment No. 6 hereby substitutes Humana Health Plan of Texas, Inc. in the place of PCA Health Plans of Texas, Inc. into the 1999 Contract for Services referenced above. Humana Health Plan of Texas, Inc. agrees to abide by the Application submitted in response to the Texas Department of Health's Request for Application and all of the terms and conditions set forth in the 1999 Contract for Services and all of its duly executed Amendments.
AGREED TO:
TEXAS DEPARTMENT OF HEALTH HUMANA HEALTH PLAN OF TEXAS, INC.
By: /s/ Charles E. Bell, M.D By: /s/ Michael A. Seltzer
------------------------------------- ------------------------------
Charles E. Bell, M.D. Michael A. Seltzer
Deputy Commissioner of Health CEO, South Texas Market
Date: 05/16/01 Date: ____________________
Approved as to Form:
/s/ Mary Ann Slavin
----------------------------------------
Office of General Counsel
|
OFFICIAL ORDER
of the COMMISSIONER OF INSURANCE
of the
STATE OF TEXAS
AUSTIN, TEXAS
Date: Mar 31, 2000
Subject Considered: MERGER OF
PCA HEALTH PLANS OF TEXAS, INC.
Austin, Texas
TDI No. 28-05818
AND
HUMANA HMO TEXAS, INC.
San Antonio, Texas
TDI No. 28-94466
INTO
HUMANA HEALTH PLAN OF TEXAS, INC.
San Antonio, Texas
TDI No. 28-93827
CONSENT ORDER
DOCKET NO. C-00-0296
General remarks and official action taken:
On this day, came for consideration by the Commissioner of Insurance pursuant to TEX. INS. CODE ANN. art. 20A and art. 21.25 the Plan and Agreement of Merger by and between PCA HEALTH PLANS OF TEXAS, INC., Austin, Texas, hereinafter referred to as "PCA HEALTH" and HUMANA HMO TEXAS, INC., San Antonio, Texas, hereinafter referred to as "HUMANA HMO", and collectively hereinafter referred to as "NON-SURVIVORS", whereby NON-SURVIVORS would be merged with and into HUMANA HEALTH PLAN OF TEXAS, INC., San Antonio, Texas, hereinafter referred to as "HUMANA HEALTH" with HUMANA HEALTH being the survivor.
Staff for the Texas Department of Insurance and the duly authorized
representative for NON-SURVIVORS and HUMANA HEALTH have consented to the entry
of this order and have requested the Commissioner of Insurance informally
dispose of this matter pursuant to the provisions of TEX. INS. CODE
ANN.ss.36.104 (former article 1.33 (e)), TEX. GOV'T CODE ANN.ss.2001.056, and 28
TEX. ADMIN. CODE ss.1.47.
WAIVER
NON-SURVIVORS and HUMANA HEALTH acknowledge the existence of their rights including but not limited to, the issuance and service of
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
notice of hearing, a public hearing, a proposal for decision, rehearing by the Commissioner of Insurance, and judicial review of this administrative action, as provided for in TEX. INS. CODE ANN.ss.ss.36.201-36.205 (former article 1.04)(D) and TEX. GOV'T CODE ANN.ss.ss.2001.051, 2001.052, 2001.145 and 2001.146, and have expressly waived each and every such right.
FINDINGS OF FACT
Based upon the information provided to the Texas Department of Insurance pursuant to TEX. ADMIN. CODE, art. 11.301(4)(D) and art.ss.11.1202, the Commissioner of Insurance makes the following findings of fact:
1. NON-SURVIVORS and HUMANA HEALTH have represented to the Commissioner of Insurance that they desire to waive all procedural requirements for the entry of an order, including but not limited to, notice of hearing, a public hearing, a proposal for decision, rehearing by the Commissioner of Insurance, and judicial review of the order as provided in TEX. INS. CODE ANN.ss.ss.36.201-36.205 (former article 1.04), and TEX. GOV'T CODE ANN. ss.ss.2001.051, 2001.052, 2001.145 and 2001.146.
2. PCA HEALTH is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the provisions of Chapter 20A of the Texas Insurance Code.
3. HUMANA HMO is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the provisions of Chapter 20A of the Texas Insurance Code.
4. HUMANA HEALTH is a domestic Health Maintenance Organization duly licensed in the State of Texas pursuant to the provisions of Chapter 20A of the Texas Insurance Code.
5. NON-SURVIVORS and HUMANA HEALTH are authorized to do a similar line of
business, which is a prerequisite for merger approval under TEX. INS.
CODE ANN. art. 20A.04 and 28 TEX. ADMIN. CODE ss.11.301(4)(D).
6. Documentation has been presented to the Texas Department of Insurance evidencing the fact that the Plan and Agreement of Merger has been approved by the Board of Directors and
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA TEXAS, INC.
shareholders of both NON-SURVIVORS and HUMANA HEALTH in accordance with the requirements of TEX. INS. CODE ANN. art. 21.25.
7. As a result of the mergers, all of the issued and outstanding shares of stock of NON-SURVIVORS shall be canceled.
8. HUMANA HEALTH shall be the surviving corporation of the merger transactions.
9. As a result of the mergers, HUMANA HEALTH will assume and carry out all the liability and responsibility under insurance or reinsurance agreements now entered into by NON-SURVIVORS and any other obligations outstanding against such companies the time of merger on the same terms and under the same conditions as provided in such policies, contracts, insurance or reinsurance agreements.
10. As December 31, 1999 on a proforma basis, HUMANA HEALTH would have had a consolidated net worth of $34,613,362.
11. Pursuant to Article 1, of the Agreement and Plan of Merger, the effective date of the merger is the close of business on March 31, 2000.
12. No evidence has been presented that the Plan and Agreement of Merger between NON-SURVIVORS and HUMANA HEALTH is contrary to law, is not in the best interest of the policyholders affected by the merger, or would substantially reduce the security of and service to be rendered to policyholders of NON-SURVIVORS in Texas or elsewhere.
13. No evidence has been presented that immediately upon consummation of the transactions contemplated in the Plan and Agreement of Merger, HUMANA HEALTH would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which NON-SURVIVORS are presently licensed.
14. No evidence has been presented that the effect of such acquisition of control as a result of the mergers would be
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
substantially to lessen competition in insurance in this state or tend to create a monopoly therein.
15. No evidence was presented that the financial condition of HUMANA HEALTH is such as might jeopardize the financial stability or prejudice the interests of its policyholders.
16. No evidence was presented that HUMANA HEALTH has any plans or proposals to liquidate the surviving corporation, cause it to declare dividends or make other distributions, sell any of its assets, consolidate or merge it with any person, make any material change in its business or corporate structure or management, or cause the health maintenance organization to enter into material agreements, arrangements, or transactions of any kind with any party that are unfair, prejudicial, hazardous, or unreasonable to the policyholders of HUMANA HEALTH, the surviving corporation, and not in the public interest.
17. No evidence was presented that the competence, integrity, trustworthiness, and experience of those persons who would control the operations of HUMANA HEALTH are such that it would not be in the interests of the policyholders of NON-SURVIVORS and HUMANA HEALTH and the public to permit the merger.
CONCLUSIONS OF LAW
Based upon the foregoing findings of fact the Commissioner of Insurance makes the following conclusions of law:
1. The Commissioner of Insurance has jurisdiction over this matter pursuant to TEX. INS. CODE ANN. art. 20A and art. 21.25.
2. The proposed mergers of NON-SURVIVORS and HUMANA HEALTH is properly supported by the required documents and meets all requirements of law for its approval.
3. The Commissioner of Insurance has no substantial evidence upon which to predicate denial of the mergers.
IT IS, THEREFORE, THE ORDER of the Commissioner of Insurance that the mergers whereby PCA HEALTH PLANS OF TEXAS, INC., Austin, Texas, and
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
HUMANA HMO TEXAS, INC., San Antonio, Texas, are to be merged with and into HUMANA HEALTH PLAN OF TEXAS, INC., San Antonio, Texas, with HUMANA HEALTH PLAN OF TEXAS, INC. being the survivor, all as specified in the Plan and Agreement of Merger, be, and the same is hereby, approved.
IT IS FURTHER ORDERED that Certificate of Authority No. 9152, dated February 26, 1990, issued to PCA HEALTH PLANS OF TEXAS, INC. and Certificate of Authority No. 11004, dated February 28, 1996, issued to HUMANA HMO TEXAS, INC., San Antonio, Texas, be canceled, and that the mergers be effective as of the close of business on March 31, 2000.
JOSE MONTEMAYOR
COMMISSIONER OF INSURANCE
By: /s/ Betty Patterson ------------------------------------- Betty Patterson Senior Associate Commissioner Financial Program Order No. 94-0576 |
Recommended by:
/s/ Loretta Calderon ----------------------------- Loretta Calderon Insurance Specialist |
Company Licensing & Registration
Reviewed by:
/s/ Steve Harper ----------------------------- Steve Harper, Financial Analysis & Examination |
00-0377
COMMISSIONER'S ORDER
PCA HEALTH PLANS OF TEXAS, INC.
HUMANA HMO TEXAS, INC.
Accepted by:
PCA HEALTH PLANS OF TEXAS, INC.
/s/ Kathleen Pellegrino ------------------------------------- Title: Vice President |
Accepted by:
HUMANA HMO TEXAS, INC.
/s/ Kathleen Pellegrino ------------------------------------- Title: Vice President |
Accepted by:
HUMANA HEALTH PLAN OF TEXAS, INC.
/s/ Walter E. Neely ------------------------------------- Title: Vice President |
ARTICLES OF MERGER
OF
HUMANA HMO TEXAS, INC.
a TEXAS Health Maintenance Organization
&
PCA HEALTH PLANS OF TEXAS, INC.
a TEXAS Health Maintenance Organization
INTO
HUMANA HEALTH PLAN OF TEXAS, INC.
a TEXAS Health Maintenance Organization
Pursuant to provisions of the Texas Business Corporation Act, Articles 5.01B, 5.03A, 5.04A, 5.07, and 5.16, and the Texas Insurance Code, Article 21.25, the domestic corporations herein named do hereby adopt the following Articles of Merger:
1. The Agreement and Plan of Merger ("Plan") as set forth in Exhibit A, attached hereto, and made a part hereof, for merging HUMANA HMO TEXAS, INC., a Texas health maintenance organization, and PCA HEALTH PLANS OF TEXAS, INC., a Texas health maintenance organization (collectively the "Non-Survivors"), into HUMANA HEALTH PLAN OF TEXAS, INC., a Texas health maintenance organization (the "Survivor"), was approved by Unanimous Written Consent of the Board of Directors of the Non-Survivors dated December 27, 1999 and approved by Unanimous Written Consent of the Board of Directors of the Survivor dated December 27, 1999.
2. HUMANA HEALTH PLAN OF TEXAS, INC. shall be the surviving corporation of said merger.
3. Survivor shall be responsible for the payment of all fees and franchise taxes of the Non-Survivors as required by law, and Survivor will be obligated to pay such fees and franchise taxes if not timely paid.
4. The Articles of Incorporation of the Survivor, as filed with the Texas Secretary of State and incorporated herein by reference, shall be the Articles of Incorporation of the surviving corporation. No changes or amendments shall be made to the Articles of Incorporation because of the merger.
5. The Plan was approved by unanimous written consent of the shareholders of each of the undersigned corporations, and:
(i) the designation, number of outstanding shares, and number of votes entitled to be cast by each voting group entitled to vote separately on the Plan as to each corporation were:
---------------------------------------------------------------------------------------------
Number of Number of Votes
Name of Corporation Designation Outstanding Shares Entitled to be Cast
------------------- ----------- ------------------ -------------------
PCA HEALTH PLANS Common 100,000 100 000
OF TEXAS, INC. Preferred 30,000 Series A 30,000 Series A
30,000 Series B 30,000 Series B
HUMANA HMO Common 1,000 1,000
TEXAS, INC.
HUMANA HEALTH Common 1,000 1,000
PLAN OF TEXAS, INC.
---------------------------------------------------------------------------------------------
|
(ii) the total number of undisputed votes represented by the unanimous written consent of the sole shareholder, cast for the Plan separately by each voting group was:
---------------------------------------------------------------------------------------------
Total Number of
Undisputed Votes Cast
Name of Corporation Voting Group For the Plan
------------------- ------------ ------------
PCA HEALTH PLANS OF Common 100,000
TEXAS, INC.
Preferred 30,000 Series A
30,000 Series B
HUMANA HMO TEXAS, Common 1,000
INC.
HUMANA HEALTH PLAN
OF TEXAS INC. Common 1,000
---------------------------------------------------------------------------------------------
|
and the action being unanimous, the number of votes cast for the Plan by each voting group was sufficient for approval by that group.
6. An executed copy of the Plan, subject to approval by the Texas Department of Insurance and the Texas Secretary of State, shall be kept on file at the principal executive office of the Survivor at 500 West Main Street, Louisville, KY 40202, with a duplicate copy at the administrative address of the Survivor at 8431 Fredericksburg Road, San Antonio, TX 78229.
7. The effective time and date of the merger in the State of Texas shall be at the close of business on March 31, 2000.
Dated as of this 30th day of December, 1999.
HUMANA HMO TEXAS, INC.
By: /s/ Walter E. Neely ------------------------------------- Walter E. Neely Vice President |
PCA HEALTH PLANS OF TEXAS, INC
By: /s/ Walter E. Neely ------------------------------------- Walter E. Neely Vice President |
HUMANA HEALTH PLAN OF TEXAS, INC.
By: /s/ Kathleen Pellegrino ------------------------------------- Kathleen Pellegrino Vice President |
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Plan of Merger"), dated as of December 30. 1999, by and among HUMANA HMO TEXAS, INC., and PCA HEALTH PLANS OF TEXAS, INC., (collectively the "Non-Survivors"), both Texas health maintenance organizations, into HUMANA HEALTH PLAN OF TEXAS, INC., (the "Surviving Corporation"), a Texas health maintenance organization and a wholly-owned subsidiary of Humana Inc. ("HUMANA"), a Delaware corporation.
WITNESSETH:
The respective Board of Directors of the Surviving Corporation and the Non-Survivors deem it advisable to merger the Non-Survivors into the Surviving Corporation ("Merger") pursuant to this Plan of Merger to be executed by the Surviving Corporation and the Non-Survivors.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:
ARTICLE 1
GENERAL PROVISION
1.1 Execution of Articles of Merger. Subject to the provisions of this Plan of Merger, and subject to the approval by the Texas Department of Insurance and the Secretary of State of Texas, Articles of Merger required to effectuate the terms of this Plan of Merger (collectively the "Merger Documents") shall be executed, acknowledged, and thereafter delivered to the offices of the Texas Department of Insurance and the Secretary of State of Texas, the domestic state of the Non-Survivors and the Surviving Corporation, for filing and recording in accordance with applicable law, with an effective date and time of the close of business on March 31, 2000 (the "Effective Time of Merger").
The plan of merger is as follows
(1) Entities: The Non-Survivors shall merge into Humana Health Plan Texas, Inc. (the "Surviving Corporation"), a Texas corporation (the "Merger"), which is hereinafter designated as the surviving corporation of the Merger (the "Surviving Corporation"); and
(2) Terms of the Merger: The Merger shall become effective at the close of business at the Effective Time of Merger. At the Effective Time of Merger (i) the separate existence of the Non-Survivors shall cease and the Non-Survivors shall be merged with and into Humana Health Plan of Texas, Inc., with Humana Health Plan of Texas, Inc. continuing in existence as the Surviving Corporation, and (ii) Humana Health Plan of Texas. Inc. shall succeed to all rights and privileges and assume all liabilities and obligations of the Non-Survivors.
(3) Taking of Necessary Action: The Surviving Corporation and the Non-Survivors, respectively, shall take all action as may be necessary or appropriate in order to effectuate the transactions contemplated by these Merger Documents. In case, at any time and from time to time after the Effective Time of Merger, any further action is necessary or desirable to carry out the purposes of these Merger Documents and to vest the Surviving Corporation effective on and after the Effective Time of Merger, with full title to all properties, assets, rights, approvals, immunities and franchises of the Non-Survivors, the persons serving as officer and directors of the Surviving Corporation at the Effective Time of Merger, at the expense of the Surviving Corporation, shall be authorized to take any and all such actions on behalf of the Non-Survivors deemed necessary or desirable by the Surviving Corporation.
(4) Effect on Capital Stock: a) On the Effective Time of the Merger, each issued and outstanding share of capital stock of Humana Health Plan of Texas, Inc. shall remain outstanding and shall represent one issued and outstanding share of the Surviving Corporation and all of the issued and outstanding shares of the capital stock of the Non-Survivors shall be cancelled and no shares of the Surviving Corporation shall be issued in exchange therefor.
(b) There are no rights to acquire shares, obligations, or other securities of the Surviving Corporation or any of the Non-Survivors in whole or in part, for cash or other property.
(5) No Amendment to Articles of Incorporation of Surviving Corporation:
The Articles of Incorporation of Humana Health Plan of Texas, Inc., filed with
the Secretary of State of
Texas and attached as Exhibit 1 shall be the Articles of Incorporation of the Surviving Corporation. No change or amendments shall be made to the Articles of Incorporation because of the Merger.
(a) By-laws of Surviving Corporation. The By-laws of Humana Health Plan of Texas, Inc. shall be the By-laws of the Surviving Corporation. No changes or amendments shall be made to the By-laws because of the Merger.
(b) Directors and Officers. The directors and officers of Humana Health Plan of Texas, Inc. shall be the directors and officers of the Surviving Corporation and shall serve until their successors are duly elected and qualified.
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan of Merger to be executed on its behalf and attested by its duly authorized officers, all as of the day and year first written above.
HUMANA HEALTH PLAN OF TEXAS, INC.
ATTEST
By: /s/ Joan O. Lenahan By: /s/ Kathleen Pellegrino
--------------------------- ---------------------------------
Joan O. Lenahan Kathleen Pellegrino
Secretary Vice President
HUMANA HMO TEXAS, INC.
ATTEST
By: /s/ Joan O. Lenahan By: /s/ Walter E. Neely
--------------------------- --------------------------------
Joan O. Lenahan Walter E. Neely
Secretary Vice President
PCA HEALTH PLANS OF TEXAS, INC.
ATTEST
By: /s/ Joan O. Lenahan By: /s/ Walter E. Neely
--------------------------- --------------------------------
Joan O. Lenahan Walter E. Neely
Secretary Vice President
Page 3 of 3
|
TDH Doc. # 7427705425* 2001-01D
AMENDMENT NO. 7
TO THE
|
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
This Amendment No. 7 entered into between the Texas Department of Health (TDH) and Superior Health Plan, Inc. (HMO) in Bexar Service Area, to amend the 1999 Contract for Services between the Texas Department of Health and HMO. The effective date of this Amendment is the date TDH Signs this Amendment. All other contract provisions remain in full force and effect. The Parties agree to amend the Contract as follows:
Article XII is amended to read as follows:
12.8.1 In addition, data files are due to TDH or its designee no later than
the fifth working day following the end of each month. See Utilization
Data Transfer Encounter Submission Manual for submission instructions.
The BH utilization report and data file submission instructions may
periodically be updated by TDH to facilitate clear communication to the
health plans.
12.9.1 In addition, data files are due to TDH or its designee no later than
the fifth working day following the end of each month. See Utilization
Data Transfer Encounter Submission Manual for submission instructions.
The PH utilization report and data file submission instructions may
periodically be updated by TDH to facilitate clear communication to the
health plan.
|
AGREED AND SIGNED by an authorized representative of the parties on Aug 2, 2001.
Texas Department of Health Superior Health Plan, Inc.
By: /s/ Charles E. Bell, M.D. By: /s/ Michael D. McKinney, M.D.,
--------------------------------------- -------------------------------
Charles E. Bell, M.D. Michael D. McKinney, M.D.
Executive Deputy Commissioner of Health President
Approved as to Form:
/s/ Mary Ann Slavin
----------------------------
Office General Counsel
|
02(992 Orig #
|
AMENDMENT NO. 8
TO THE
1999 CONTRACT FOR SERVICES
BETWEEN
THE TEXAS DEPARTMENT OF HEALTH AND HMO
September 1, 1999 the Texas Department of Health (TDH) and Humana Health Plan of Texas, Inc. entered into a Contract for Services for the provision of comprehensive health care services to qualified and Medicaid eligible recipients in the Bexar Service Area through a managed care delivery system. This Contract for Services was subsequently renewed in 1999 for a period of two years. Section 15.6 of the above referenced contract allows assignment or the contract with the written consent of the Texas Department of Insurance (TDI) and TDH.
Humana Health Plan of Texas, Inc. entered into a Management and Risk Transfer Agreement and an Asset Sale and Purchase Agreement with Superior HealthPlan, Inc. for the assignment and assumption of the Contract for Services. With the written consent of both TDI and TDH, effective June 1, 2001, Humana Health Plan of Texas, Inc. assigned and Superior HealthPlan, Inc. assumed the contract referenced herein in its entirety.
The purpose of this Amendment No. 8 is to substitute Superior HealthPlan, Inc. for Humana Health Plan of Texas, Inc. as the party to this contract as a result of the assignment and assumption. For adequate consideration received Superior HealthPlan, Inc. agrees to abide by the Application submitted by Humana Health Plan of Texas, Inc. in response to the Texas Department of Health's Request for Application and all of the terms and conditions set forth in the 1999 Contract for Services, its subsequent renewal(s), and all of its duly executed Amendments.
AGREED AND SIGNED by an authorized representative of the parties on 8/17/01 2001.
TEXAS DEPARTMENT OF HEALTH SUPERIOR HEALTHPLAN, INC.
By: /s/ Charles E. Bell, M.D. /s/ Michael D. McKinney M.D.
---------------------------------- ---------------------------------
Charles E. Bell, M.D. Michael D. McKinney, M.D.
Deputy Commissioner of Health President
Approved as to Form: /s/ Michael D. McKenney
---------------------------------
Printed Name
/s/ [Illegible] Alexander 8/16/01 /s/ President
--------------------------------- ---------------------------------
Office of General Counsel Title of Signator
|
AMENDMENT NO. 9
TO THE
|
1999 CONTRACT FOR SERVICES
BETWEEN
HEALTH AND HUMAN SERVICES COMMISSION AND HMO
This Amendment No. 9 is entered into between the Health and Human Services Commission (HHSC) and Superior Health Plan, Inc. (HMO), to amend the Contract for Services between the Health and Human Services Commission and HMO in the Bexar Service Area. The effective date of this amendment is September 1, 2001. The Parties agree to amend the Contract as follows:
1. HHSC and HMO acknowledge the transfer of responsibility and the assignment of the original Contract for Services from TDH to HHSC on September 1, 2001. Where the original Contract for Services and any Amendment to the original Contract for Services assigns a right, duty, or responsibility to TDH, that right, duty, or responsibility may be exercised by HHSC or its designee.
2. Articles II, III, VI, VII, VIII, IX, X, XII, XIII, XV, XVI, XVIII and XIX are amended to read as follows:
2.0 DEFINITIONS
Chemical Dependency Treatment Facility means a facility licensed by the Texas Commission on Alcohol and Drug Abuse (TCADA) under See. 464.002 of the Health and Safety Code to provide chemical dependency treatment.
Chemical Dependency Treatment means treatment provided for a chemical dependency condition by a Chemical Dependency Treatment Facility, Chemical Dependency Counselor or Hospital.
Chemical Dependency Condition means a condition which meets at least three of the diagnostic criteria for psychoactive substance dependence in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (DSM IV).
Chemical Dependency Counselor means an individual licensed by TCADA under Sec. 504 of the Occupations Code to provide chemical dependency treatment or a master's level therapist (LMSW-ACP, LMFT or LPC) or a master's level therapist (LMSW-ACP, LMFT or LPC) with a minimum of two years of post licensure experience in chemical dependency treatment.
Contract Extension Amendment
7/18/01
Experience rebate means the portion of the HMO's net income
before taxes (financial Statistical Report, Part 1, Line 7) that
is returned to the state in accordance with Article 13.2.1.
Joint Interface Plan (JIP) means a document used to communicate
basic system interface information of the Texas Medicaid
Administrative System (TMAS) among and across State TMAS
Contractors and Partners so that all entities are aware of the
interfaces that affect their business. This information includes:
file structure, data elements, frequency, media, type of file,
receiver and sender of the file, and file I.D. The JIP must
include each of the HMO's interfaces required to conduct State
TMAS business. The JIP must address the coordination with each of
the Contractor's interface partners to ensure the development and
maintenance of the interface; and the timely transfer of required
data elements between contractors and partners.
3.5 RECORDS REQUIREMENTS AND RECORDS RETENTION
------------------------------------------
3.5.8 The use of Medicaid funds for abortion is prohibited unless the
pregnancy is the result of a rape, incest, or continuation of the
pregnancy endangers the life of the woman. A physician must
certify in writing that based on his/her professional judgment,
the life of the mother would be endangered if the fetus were
carried to term. HMO must maintain a copy of the certification
for at least three years.
6.6 BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS
-------------------------------------------------------
6.6.13 Chemical dependency treatment must conform to the standards set
forth in the Texas Administrative Code, Title 28, Part 1, Chapter
3, Subchapter HH.
6.8 TEXAS HEALTH STEPS (EPSDT)
--------------------------
6.8.3 Provider Education and Training. HMO must provide appropriate
training to all network providers and provider staff in the
providers' area of practice regarding the scope of benefits
available and the THSteps program. Training must include THSteps
benefits, the periodicity schedule for THSteps checkups and
immunizations, the required elements of a THSteps medical screen,
providing or arranging for all required lab screening tests
(including lead screening), and Comprehensive Care Program (CCP)
services available under the THSteps program to Members under age
21 years. Providers must also be educated and trained regarding
the requirements imposed upon the department and contracting HMOs
under the Consent Decree entered in Frew vs. McKinney, et al.,
Civil Action No. 3:93CV65, in the United States District Court
for the Eastern District of Texas, Paris Division. Providers
should be educated and trained to treat each THSteps visit as an
opportunity for a comprehensive assessment of the Member.
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HMO must report provider education and training regarding THSteps
in accordance with Article 7.4.4.
7.2 PROVIDER CONTRACTS
------------------
7.2.5 HHSC reserves the right and retains the authority to make
reasonable inquiry and conduct investigations into provider and
Member complaints against HMO or any intermediary entity with
whom HMO contracts to deliver health care services under this
contract. HHSC may impose appropriate sanctions and contract
remedies to ensure HMO compliance with the provisions of this
contract.
7.5 MEMBER PANEL REPORTS
--------------------
7.5 HMO must furnish each PCP with a current list of enrolled Members
enrolled or assigned to that Provider no later than 5 working
days after HMO receives the Enrollment File from the Enrollment
Broker each month.
7.7 PROVIDER QUALIFICATIONS - GENERAL
---------------------------------
The providers in HMO network must meet the following
qualifications:
--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center meets the standards
established by federal rules and procedures. The FQHC must also
be an eligible provider enrolled in the Medicaid.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an MD or a
DO in the State of Texas either as a primary care provider or in
the area of specialization under which they will provide medical
services under contract with HMO; who is a provider enrolled in
the Medicaid; who has a valid Drug Enforcement Agency
registration number, and a Texas Controlled Substance
Certificate, if either is required in their practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by the
State of Texas under Chapter 241 of the Health and Safety Code
which is enrolled as a provider in the Texas Medicaid Program.
HMO will require that all facilities in the network used for
acute inpatient specialty care for people under age 21 with
disabilities or chronic or complex conditions will have a
designated pediatric unit; 24 hour laboratory and blood bank
availability; pediatric radiological capability; meet JCAHO
standards; and have discharge planning and social service units.
--------------------------------------------------------------------------------
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----------------------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the State of Texas who is enrolled in the
Provider Texas Medicaid Program.
----------------------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the Federal
Laboratory Laboratory Improvement Act (CLIA), and is enrolled in the Texas
Medicaid Program.
----------------------------------------------------------------------------------------------
Rural Health An institution which meets all of the criteria for designation as
Clinic (RHC) a rural health clinic and is enrolled in the Texas Medicaid
Program.
----------------------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization Act
ss.121.031ff.
----------------------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility Provider credentialed to provide services and is enrolled in the Texas
Medicaid Program.
----------------------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide on site primary
Health Clinic and preventive care to children and adolescents.
(SBHC)
----------------------------------------------------------------------------------------------
Chemical A facility licensed by the Texas Commission on Alcohol and Drug
Dependency Abuse (TCADA) under Sec. 464,002 of the Health and Safety Code to
Treatment provide chemical dependency treatment.
Facility
----------------------------------------------------------------------------------------------
Chemical An individual licensed by TCADA under Sec. 504 of the Occupations
Dependency Code to provide chemical dependency treatment or a master's level
Counselor therapist (LMSW-ACP, LMFT or LPC) with a minimum of two years of
post-licensure experience in chemical dependency treatment.
----------------------------------------------------------------------------------------------
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7.10 SPECIALTY CARE PROVIDERS
------------------------
7.10.1 HMO must maintain specialty providers, actively serving within
that specialty, including pediatric specialty providers and
chemical dependency specialty providers, within the network in
sufficient numbers and areas of practice to meet the needs of all
Members requiring specialty care services.
7.11 SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES
-----------------------------------------------
7.11.1 HMO must include all medically necessary specialty services
through its network specialists, sub-specialists and specialty
care facilities (e.g., children's hospitals, licensed chemical
dependency treatment facilities and tertiary care hospitals).
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8.2 MEMBER HANDBOOK
---------------
8.2.1 HMO must mail each newly enrolled Member a Member Handbook no
later than 5 working days after HMO receives the Enrollment File.
The Member Handbook must be written at a 4th - 6th grade reading
comprehension level. The Member Handbook must contain all
critical elements specified by TDH. See Appendix D, Required
Critical Elements, for specific details regarding content
requirements. HMO must submit a Member Handbook to TDH for
approval prior to the effective date of the contract unless
previously approved (see Article 3.4.1 regarding the process for
plan materials review).
8.4 MEMBER ID CARDS
---------------
8.4.2 HMO must issue a Member Identification Card (ID) to the Member
within 5 working days from the date the HMO receives the monthly
Enrollment File from the Enrollment Broker. The ID Card must
include, at a minimum, the following: Member's name; Member's
Medicaid number; either the issue date of the card or effective
date of the PCP assignment; PCP's name, address, and telephone
number; name of HMO; name of IPA to which the Member's PCP
belongs, if applicable; the 24-hour, seven (7) day a week
toll-free telephone number operated by HMO; the toll-free number
for behavioral health care services; and directions for what to
do in an emergency. The ID Card must be reissued if the Member
reports a lost card, there is a Member name change, if Member
requests a new PCP, or for any other reason which results in a
change to the information disclosed on the ID Card.
9.2 MARKETING ORIENTATION AND TRAINING
----------------------------------
9.2.1 HMO must require that all HMO staff having direct marketing
contact with Members as part of their job duties and their
supervisors satisfactorily complete HHSC's marketing orientation
and training program, conducted by HHSC or health plan staff
trained by HHSC, prior to engaging in marketing activities on
behalf of HMO. HHSC will notify HMO of scheduled orientations.
9.2.2 Marketing Policies and Procedures. HMO must adhere to the
Marketing Policies and Procedures as set forth by the Health and
Human Services Commission.
10.1 MODEL MIS REQUIREMENTS
----------------------
10.1.3 HMO must have a system that can be adapted to the change in
Business Practices/Policies within the timeframe negotiated
between HHSC and the HMO.
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10.1.3.1 HMO must notify and advise BIR of major systems changes and
implementations. HMO is required to provide an implementation
plan and schedule of proposed system change at the time of this
notification.
10.1.3.2 BIR conducts a Systems Readiness test to validate the
contractor's ability to meet the MMIS requirements. This is done
through systems demonstration and performance of specific MMIS
and subsystem functions. The System Readiness test may include a
desk review and/or. an onsite review and is conducted for the
following events:
o A new plan is brought into the program
o An existing plan begins business in a new SDA
o An existing plan changes location
o An existing plan changes their processing system
10.1.3.3 Desk Review. HMO must complete and pass systems desk review prior
to onsite systems testing conducted by HHSC.
10.1.3.4 Onsite Review. HMO is required to provide a detailed and
comprehensive Disaster and Recovery Plan, and complete and pass
an onsite Systems Facility Review during the State's onsite
systems testing.
10.1.3.5 HMO is required to provide a Corrective Action Plan in response
to HHSC Systems Readiness Testing Deficiencies no later than 10
working days after notification of deficiencies by HHSC.
10.1.3.6 HMO is required to provide representation to attend and
participate in the HHSC Systems Workgroup as a part of the weekly
Systems Scan Call.
10.1.9 HMO must submit a joint interface plan (JIP) in a format
specified by HHSC. The JIP will include required information on
all contractor interfaces that support the Medicaid Information
Systems. The submission of the JIP will be in coordination with
other TMAS contractors and is due no later than 10 working days
after the end of each state fiscal year calendar.
10.3. ENROLLMENT ELIGIBILITY SUBSYSTEM
--------------------------------
(11) Send PCP assignment updates to HHSC or its designee, in the
format specified by HHSC or its designee. Updates can be sent as
often as daily but must be sent at least weekly.
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12.1 FINANCIAL REPORTS
-----------------
12.1.1 MCFS Report. HMO must submit the Managed Care Financial
Statistical Report (MCFS) included in Appendix I. The report must
be submitted to HHSC no later than 30 days after the end of each
state fiscal year quarter (i.e., Dec. 30, March 30, June 30,
Sept. 30) and must include complete and updated financial and
statistical information for each month of the state fiscal
year-to-date reporting period. The MCFS Report must be submitted
for each claims processing subcontractor in accordance with this
Article. HMO must incorporate financial and statistical data
received by its delegated networks (IPAs, ANHCs, Limited Provider
Networks) in its MCFS Report.
12.1.4 Final MCFS Reports. HMO must file two Final Managed Care
Financial-statistical Reports after the end of the second year of
the contract for the first two- year portion of the contract and
again after the third year of the contract for the third year
(second portion) of the contract. The first final report must
reflect expenses incurred through the 90th day after the end of
the first two-year portion of the contract and again after the
end of the third year of the contract for the third year (second
portion) of the contract. The first final report must be filed on
or before the 120th day after the end of each portion of the
contract. The second final report must reflect data completed
through the 334th day after the end of the second year of the
contract for the first two year portion of the contract and again
after the end of the third year of the contract for the third
year (second portion) of the contract and must be filed on or
before the 365th day following the end of each portion of the
contract year.
12.5 PROVIDER NETWORK REPORTS
------------------------
12.5.3 PCP Error Report. HMO must submit to the Enrollment Broker an
electronic file summarizing changes in PCP assignments. The file
must be submitted in a format specified by HHSC and can be
submitted as often as daily but must be submitted at least
weekly. When HMO receives a PCP assignment Error Report /File,
HMO must send corrections to HHSC or its designee within five
working days.
12.13 EXPEDITED PRENATAL OUTREACH REPORT
----------------------------------
12.13 HMO must submit the Expedited Prenatal Outreach Report for each
monthly reporting period in accordance with a format developed by
HHSC in consultation with the HMOs. The report must include
elements that demonstrate the level of effort and the outcomes of
the HMO in outreaching to pregnant women for the purpose of
scheduling and/or completing the initial obstetrical examination
prior to 14 days after the receipt of the daily enrollment file
by the HMO. Each monthly report is due by the last day of the
month following each monthly reporting period.
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13.1 CAPITATION AMOUNTS
------------------
13.1.2 Delivery Supplemental Payment (DSP). The monthly capitation
amounts and the DSP amount are listed below.
-------------------------------------------------------------
Risk Group Monthly Capitation Amounts
-------------------------------------------------------------
TANF Adults $180.43
-------------------------------------------------------------
TANF Children (less than 12
or equal to)
Months of Age $65.49
-------------------------------------------------------------
Expansion Children (less than 12
or equal to)
Months of Age $60.94
-------------------------------------------------------------
Newborns (greater than) 12 Months of
or equal to)
Age $378.59
-------------------------------------------------------------
TANF Children (greater than 12
or equal to)
Months of Age $378.59
-------------------------------------------------------------
Expansion Children (greater than 12
or equal to)
Months of Age $378.59
-------------------------------------------------------------
Federal Mandate Children $54.61
-------------------------------------------------------------
CHIP Phase I $72.19
-------------------------------------------------------------
Pregnant Women $255.17
-------------------------------------------------------------
Disabled/Blind
Administration $14.00
-------------------------------------------------------------
Delivery Supplemental Payment: A one-time per pregnancy
supplemental payment for each delivery shall be paid to HMO as
provided below in the following amount: $2,834.10.
13.1.3.1 Once HMO has received its capitation rates established by HHSC
for the second or third year of this contract, HMO may terminate
this contract as provided in Article 18.1.6.
13.1.7 HMO renewal rates reflect program increases appropriated by the
76th and 77th legislature for physician (to include THSteps
providers) and outpatient facility services. HMO must report to
HHSC any change in rates for participating physicians (to include
THSteps providers) and outpatient facilities resulting from this
increase. The report must be submitted to HHSC at the end of the
first quarter of the FY2000, FY2001 and FY2002 contract years
according to the deliverables matrix schedule set for HMO.
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13.2 EXPERIENCE REBATE TO THE STATE
------------------------------
13.2.1 For the contract period, HMO must pay to TDH an experience rebate
calculated in accordance with the tiered rebate method listed
below based on the excess of allowable HMO STAR revenues over
allowable HMO STAR expenses as measured by any positive amount on
Line 7 of "Part 1: Financial Summary, All Coverage Groups
Combined" of the annual Managed Care Financial-Statistical Report
set forth in Appendix I, as reviewed and confirmed by TDH. TDH
reserves the right to have an independent audit performed to
verify the information provided by HMO.
-----------------------------------------------------------------
Graduated Rebate Method
-----------------------------------------------------------------
Net income before HMO Share State Share
taxes as a Percentage
of Revenues
-----------------------------------------------------------------
0% -3% 100% 0%
-----------------------------------------------------------------
Over 3% - 7 % 75% 25%
-----------------------------------------------------------------
Over 7% - 10% 50% 50%
-----------------------------------------------------------------
Over 10% - 15% 25% 75%
-----------------------------------------------------------------
Over 15% 0% 100%
-----------------------------------------------------------------
13.2.2.1 The experience rebate for the HMO shall be calculated by applying
the experience rebate formula in Article 13.2.1 to the sum of the
net income before taxes (Financial Statistical Report, Part 1,
Line 7) for all STAR Medicaid service areas contracted between
the State and HMO.
13.2.4 Population-Based Initiatives (PBIs) and Experience Rebates: HMO
may subtract from an experience rebate owed to the State,
expenses for population-based health initiatives that have been
approved by HHSC. A population-based initiative (PBI) is a
project or program designed to improve some aspect of quality of
care, quality of life, or health care knowledge for the Medicaid
population that may also benefit the community as a whole.
Value-added service does not constitute a PBI. Contractually
required services and activities do not constitute a PBI.
13.2.5 There will be two settlements for payment(s) of the experience
rebate for FY 2000-2001 and two settlements for payment(s) for
the experience rebate for FY 2002. The first settlement for the
specified time period shall equal 100 percent
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of the experience rebate as derived from Line 7 of Part I (Net
Income Before Taxes) of the first final Managed Care Financial
Statistical (MCFS) Report and shall be paid on the same day the
first final MCFS Report is submitted to HHSC for the specified
time period. The second settlement shall be an adjustment to the
first settlement and shall be paid to HHSC on the same day that
the second final MCFS Report is submitted to HHSC for that
specified time period if the adjustment is a payment from HMO to
HHSC. If the adjustment is a payment from HHSC to HMO, HHSC shall
pay such adjustment to HMO within thirty (30) days of receipt of
the second final MCFS Report. HHSC or its agent may audit or
review the MCFS report. If HHSC determines that corrections to
the MCFS reports are required, based on a HHSC audit/review of
other documentation acceptable to HHSC, to determine an
adjustment to the amount of the second settlement, then final
adjustment shall be made within two years from the date, that HMO
submits the second final MCFS report. HMO must pay the first and
second settlements on the due dates for the first and second
final MCFS reports, respectively as identified in Article 12.1.4.
HHSC may adjust the experience rebate if HHSC determines HMO has
paid affiliates amounts for goods or services that are higher
than the fair market value of the goods and services in the
service area. Fair market value may be based on the amount HMO
pays a non-affiliate(s) or the amount another HMO pays for the
same or similar service in the service area. HHSC has final
authority in auditing and determining the amount of the
experience rebate.
13.3 PERFORMANCE OBJECTIVES INCENTIVES
---------------------------------
13.3.1 Preventive Health Performance Objectives. Preventive Health
Performance Objectives are contained in this contract at Appendix
K. HMO must accomplish the performance objectives or a designated
percentage in order to be eligible for payment of financial
incentives. Performance objectives are subject to change. HHSC
will consult with HMO prior to revising performance objectives.
13.3.2 HMO will receive credit for accomplishing a performance objective
upon receipt of accurate encounter data required under Article
10.5 and 12.2 of this contract and/or a Detailed Data Element
Report from HMO with report formal as determined by HHSC and
aggregate data report by HMO in accordance with a report format
as determined by HHSC (Performance Objective Report). Accuracy
and completeness of the Detailed Data Element Report and the
Aggregate Data Performance Objective Report will be determined by
HHSC through an HHSC audit of the HMO claims processing system.
If HHSC determines that the Detailed Data Element Report and
Performance Objectives Report are sufficiently supported by the
results of the HHSC audit, the payment of financial incentives
will be made to HMO. Conversely, if the audit results do not
support the reports as determined by HHSC, HMO will not receive
payment
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of the financial incentive. HHSC may conduct provider chart
reviews to validate the accuracy of the claims data related to
HMO accomplishment of performance objectives. If the results of
the chart review do not support the HMO claims system data or the
HMO Detailed Data Element Report and the Performance Objectives
Report, HHSC may recoup payment made to the HMO for performance
objectives incentives.
13.3.3 HMO will also receive credit for performance objectives performed
by other organizations if a network primary pare provider or the
HMO retains documentation from the performing organization which
satisfies the requirements contained in Appendix K of this
contract.
13.3.4 HMO will receive performance objective bonuses for accomplishing
the following percentages of performance objectives:
-----------------------------------------------------------------
Percent of Each Performance Percent of Performance Objective
Objective Accomplished Allocations Paid to HMO
-----------------------------------------------------------------
60% to 65 % 20%
-----------------------------------------------------------------
65% to 70% 30%
-----------------------------------------------------------------
70% to 75 % 40%
-----------------------------------------------------------------
75% to 80% 50%
-----------------------------------------------------------------
80% to 85% 60%
-----------------------------------------------------------------
85% to 90% 70%
-----------------------------------------------------------------
90% to 95% 80%
-----------------------------------------------------------------
95% to 100% 90%
-----------------------------------------------------------------
100% 100%
-----------------------------------------------------------------
13.3.5 HMO must submit the Detailed Data Element Report and the
Performance Objectives Report regardless of whether or not the
HMO intends to claim payment of performance objective bonuses.
13.3.6 Payment of performance objective bonus is contingent upon
availability of appropriations. If appropriations are not
available to pay performance objective bonuses as set out below,
HHSC will equitably distribute all available funds to each HMO
that has accomplished performance objectives.
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13.3.7 In addition to the capitation amounts set forth in Article
13.1.2, a performance premium of two dollars ($2.00) per Member
month will be allocated by HHSC for the accomplishment of
performance objectives.
13.3.8 The HMO must submit the Performance Objectives Report and the
Detailed Data Element Report as referenced in Article 13.3.2,
within 150 days from the end of each State fiscal year.
Performance premiums will be paid to HMO within 120 days after
the State receives and validates the data contained in each
required Performance Objectives Report.
13.3.9 The performance objective allocation for HMO shall be assigned to
each performance objective, described in Appendix K, in
accordance with the following percentages:
-----------------------------------------------------------------
EPSDT SCREENS Percent of Performance Objective
Incentive Fund
-----------------------------------------------------------------
1. < 12 months 12%
-----------------------------------------------------------------
2. 12 to 24 months 12%
-----------------------------------------------------------------
3. 25 months - 20 years 20%
-----------------------------------------------------------------
-----------------------------------------------------------------
IMMUNIZATIONS Percent of Performance Objective
Incentive Fund
-----------------------------------------------------------------
4. < 12 months 7%
-----------------------------------------------------------------
5. 12 to 24 months 5%
-----------------------------------------------------------------
-----------------------------------------------------------------
ADULT ANNUAL VISITS Percent of Performance Objective
Incentive Fund
-----------------------------------------------------------------
6. Adult Annual Visits 3%
-----------------------------------------------------------------
-----------------------------------------------------------------
PREGNANCY VISITS Percent of Performance Objective -
Incentive Fund
-----------------------------------------------------------------
7. Initial prenatal exam 15%
-----------------------------------------------------------------
8. Visits by Gestational Age 14%
-----------------------------------------------------------------
9. Postpartum visit 12%
-----------------------------------------------------------------
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13.3.10 Compass 21 Encounter Data Conversion Performance Incentive. A
Compass 21 encounter data conversion performance incentive payment
will be paid by the State to each HM0 that achieves the identified
conversion performance standard for at least one month in the
first quarter of SFY 2002 as demonstration of successful
conversion to the C21 system. The encounter data conversion
performance standard is as follows:
------------------------------------------------------------------
Performance Objective Encounter Data Conversion
Performance Incentive
------------------------------------------------------------------
Percentage of encounters 65%
submitted that are successfully
accepted into
C21
------------------------------------------------------------------
13.3.10.1 The amount of the incentive will be based on the total amount
identified by the state for the encounter data conversion
performance incentive pool ("Pool"). The pool will be equally
distributed between all the HMOs that achieve the performance
objective within the first quarter of SFY 2002. HMOs with multiple
contracts with HHSC are eligible to receive only one allocation
from the Pool. Required HMO performance for the identified
objectives will be verified by HHSC for accuracy and completeness.
The incentive will be paid only after HHSC has verified that HMO
performance has met the required performance standard. Payments
will be made in the second quarter of the fiscal year.
13.5.4 NEWBORN AND PREGNANT WOMAN PAYMENT PROVISIONS
---------------------------------------------
13.5.4 Newborns who appear on the MAXIMUS daily enrollment file but do
not appear on the MAXIMUS monthly enrollment or adjustment file
before the end of the sixth month following the date of birth will
not be retroactively enrolled into the HMO. HHSC will manually
reconcile payment to the HMO for services provided from the date
of birth for TP45 and all other eligibility categories of
newborns. Payment will cover services rendered from the effective
date of the proxy ID number when first issued by the HMO
regardless of plan assignment at the time the State-issued
Medicaid ID number is received.
15.6 ASSIGNMENT
----------
15.6 This contract was awarded to HMO based on HMO's qualifications to
perform personal and professional services. HMO cannot assign this
contract without the written consent of HHSC. This provision does
not prevent HMO from
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subcontracting duties and responsibilities to qualified
subcontractors. If HHSC consents to an assignment of this
contract, a transition period of 90 days will run from the date
the assignment is approved by HHSC so that Members' services are
not interrupted and, if necessary, the notice provided for in
Article 15.7 can be sent to Members. The assigning HMO must also
submit a transition plan, as set out in Article 18.2,1, subject to
HHSC 's approval.
16.3 DEFAULT BY HMO
--------------
16.3.14.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to HHSC by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit HHSC in exercising all
or part of any remaining remedies.
For HMO's failure to meet any benchmark established by HHSC under
this contract, or for failure to meet improvement targets, as
identified by HHSC, HHSC may:
o Remove all or part of the THSteps component from the
capitation paid to HMO
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
|
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4;
and/or
o Require forfeiture of all or part of the TDI performance bond
as set out in Article 18.9.
16.3.15 FAILURE TO PERFORM A MATERIAL DUTY OR RESPONSIBILITY
----------------------------------------------------
Failure of HMO to perform a material duty or responsibility as
set out in this Contract is a default under this contract and
HHSC may impose one or more of the remedies contained within its
provisions and all other remedies available to HHSC by law or in
equity.
16.3.15.1 REMEDIES AVAILABLE TO HHSC FOR THIS HMO DEFAULT
-----------------------------------------------
All of the listed remedies are in addition to all other remedies
available to HHSC by law or in equity, are joint and several, and
may be exercised concurrently or consecutively. Exercise of any
remedy in whole or in part does not limit HHSC in exercising all
or part of any remaining remedies.
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For HMO's failure to perform an administrative function under
this contract, HHSC may:
o Terminate the contract if the applicable conditions set out in
Article 18.1.1 are met;
o Suspend new enrollment as set out in Article 18.3;
o Assess liquidated money damages as set out in Article 18.4;
and/or
o Require forfeiture of all or part of the TDI performance bond
as set out in Article 18.9.
18. 1.6 TERMINATION BY HMO
18.1.6 HMO may terminate this contract if HHSC fails to pay HMO as
required under Article XIII of this contract or otherwise
materially defaults in its duties and responsibilities under this
contract, or by giving notice no later than 30 days after
receiving the capitation rates for the second or third contract
years. Retaining premium, recoupment, sanctions, or penalties
that are allowed under this contract or that result from HMO's
failure to perform or HMO's default under the terms of this
contract is not cause for termination.
18.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION
18.2.2 If the contract is terminated by HHSC for any reason other than
federal or state funds for the Medicaid program no longer being
available or if HMO terminates the contract based on lower
capitation rates for the second or third contract years as set
out in Article 13.1.3.1:
18.2.3 If the contract is terminated by HMO for any reason other than
based on lower capitation rates for the second or third contract
years as set out in Article 13.1.3.1:
Article XIX TERM
----
19.1 The effective date of this contract is August 30, 1999. This
contract will terminate on August 31, 2002, unless terminated
earlier as provided for elsewhere in the contract.
|
3. The Appendices are amended by replacing page 10 of Appendix A "Standards for Quality Improvement Programs" to incorporate a change in item F, number 1 on recredentialing.
4. The Appendices are amended by deleting Appendix D, "Required Critical Elements," and replacing it with new Appendix D, "Required Critical Elements", as attached.
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AGREED AND SIGNED by an authorized representative of the parties on ____________________________ 2001.
Health and Human Services Commission Superior Health Plan, Inc.
By: /s/ Don A. Gilbert By: /s/ Michael D. McKinney, M.D.
--------------------------------- -------------------------------
Don A. Gilbert Michael D. McKinney, M.D.
President & CEO
Approved as to Form:
/s/ ILLEGIBLE
---------------------------------
Office of General Counsel
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Exhibit 10.7
CONTRACT BETWEEN
THE OFFICE OF MEDICAID POLICY AND PLANNING,
THE OFFICE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM
AND
COORDINATED CARE CORPORATION INDIANA, INC.
This Contract is made and entered into by and between the State of Indiana (hereinafter "State" or "State of Indiana"), through the Office of Medicaid Policy and Planning and the Office of Children's Health Insurance Program (hereinafter "the Offices"), of the Indiana Family and Social Services Administration, 402 West Washington Street, W382, Indianapolis, Indiana, and Coordinated Care Corporation Indiana, Inc., doing business as Managed Health Services, 950 North Meridian, Suite 200, Indianapolis, Indiana., (hereinafter "Contractor").
WHEREAS, I.C. 12-15-30-1 and I.C. 12-l7.6 authorize the Offices to enter into contracts to assist in the administration of the Indiana Medicaid and the Indiana Children's Health Insurance Program (CHIP), respectively;
WHEREAS, the State of Indiana desires to contract for services to arrange for and to administer a risk-based managed care program (RBMC) for certain Hoosier Healthwise enrollees in Packages A, B and C as procured through BAA 01-28;
WHEREAS this Contract contains the payment rates under which the Contractor shall be paid and that these rates have been determined to be actuarially sound and not in excess of the fee-for-service upper payment limit (FFS-UPL) specified for risk contracts in 42 CFR 447.361;
WHEREAS, the Contractor is willing and able to perform the desired services for Hoosier Healthwise Packages A, B and C;
THEREFORE, the parties to this Contract agree that the terms and conditions specified below will apply to services in connection with this contract, and such terms and conditions are as follows
I. TERM AND RENEWAL OPTION
This Contract is effective from January 1, 2001 through December 31, 2002. At the discretion of the Offices the term may be extended for up to two additional years. In no event shall the term exceed December 31, 2004.
II. DEFINITIONS
For the purposes of this contract, terms not defined herein shall be defined as they are in the documents incorporated in and attached to this document, subject to the order of precedence spelled out in Section V of this document.
"Contract" means this document and all documents or standards incorporated herein, expressly including but not limited to the following documents appended hereto and listed in chronological order and to be given precedence as described in Section V of this document, entitled "Order of Precedence":
Attachment 1 - BAA 01-28, released July 31, 2000;
Attachment 2 - Contractor's response to BAA 0l-28, submitted September
25, 2000, excluding the following sections:
Section 5.3.8
Sections 5.4.3A; 5.4.3D; 5.4.3E; 5.4.3F; 5.4.3G; 5.4.3H;
5.4.3I
Sections 5.4.4-C; 5.4.4D; 5.4.4H; 5.4.4M; 5.4.4X
Sections 5.4.6D; 5.4.6I
Sections 5.4.8U; 5.4.8V
and,
Any other documents, standards, laws, rules or regulations incorporated by reference in the above materials, all of which are hereby incorporated by reference.
"Covered Services" means all services required to be arranged, administered, managed or provided by or on behalf of the Contractor under this contract.
"Effective Date of Enrollment" means:
. The first day of birth month of a newborn that is determined by the Offices to be an enrolled member;
. The fifteenth day of the current month for a member who has, between the twenty-sixth day of the previous month and the tenth day of the current month, been determined by the Offices to be enrolled member; and,
. The first day of the following month for a member who has, between the eleventh day and the twenty-fifth day of a month, been determined by the Offices to be an enrolled member.
"Enrolled Member", or "Enrollee", means a Hoosier Healthwise-eligible member who is listed by the Offices on the enrollment rosters to receive covered services from the Contractor or its subcontractors, employees, agents, or providers, as of the Effective Date of Enrollment, under this contract.
"Provider" means a physician, hospital, home health agency or any other institution, or health or other professional person or entity, which participates in the provision of services to an enrolled member under BAA 01-28, whether as an independent contractor, a subcontractor, employee, or agent of the Contractor.
"Broad Agency Announcement", or "BAA", means BAA 01-28 for providers of managed care services, released July 31, 200O.
III. DUTIES OF THE CONTRACTOR
B. The Contractor agrees to perform all duties and arrange and administer the provision of all services as set out herein and contained in the BAA as attached and the Contractor's responses to the BAA as attached, all of which are incorporated into this Contract by reference. In addition, the Contractor shall comply with all policies and procedures defined in any bulletin, manual, or handbook yet to be distributed by the State or its agents insofar as those policies and procedures provide further clarification and are no more restrictive than any policies and procedures contained in the BAA and any amendments to the BAA. The Contractor agrees to comply with all pertinent state and federal statutes and regulations in effect throughout the duration of this Contract and as they may be amended from time to time.
C. The Contractor agrees that it will not discriminate against individuals eligible to be covered under this Contract on the basis of health status or need for health services; and the Contractor may not terminate an enrollee's enrollment, or act to encourage an enrollee to terminate his/her enrollment, because of an adverse change in the enrollee's health. The disenrollment function will be carried out by a State contractor who is independent of the Contractor; therefore, any request to terminate an enrollee's enrollment must be approved by the Offices.
D. The Contractor agrees that no services or duties owed by the Contractor under this Contract will be performed or provided by any person or entity other than the Contractor, except as
contained in written subcontracts or other legally binding agreements. Prior to entering into any such subcontract or other legally binding agreement, the Contractor shall, in each case, submit the proposed subcontract or other legally binding agreement to the Offices for prior review and approval. Prior review and approval of a subcontract or legally binding agreement shall not be unreasonably delayed by the Offices. The Offices shall, in appropriate cases and as requested by the Contractor, expedite the review and approval process. Under no circumstances shall the Contractor be deemed to have breached its obligations under this Contract if such breach was a result of the Offices' failure to review and approve timely any proposed subcontract or other legally binding agreement. If the Offices disapprove any proposed subcontract or other legally binding agreement, the Offices shall state with reasonable particularity the basis for such disapproval. No subcontract into which the Contractor enters with respect to performance under this Contract shall in any way relieve the Contractor of any responsibility for the performance of duties under this Contract. All subcontracts and amendments thereto executed by the Contractor under this Contract must meet the following requirements; any existing subcontracts or legally binding agreements which fail to meet the following requirements shall be revised to include the requirements within ninety (90) days from the effective date of this Contract:
1. Be in writing and specify the functions of the subcontractor.
2. Be legally binding agreements.
3. Specify the amount, duration and scope of services to be provided by the subcontractor.
4. Provide that the Offices may evaluate, through inspection or other means, the quality, appropriateness, and timeliness of services performed.
5. Provide for inspections of any records pertinent to the contract by the Offices.
6. Require an adequate record system to be maintained for recording services, charges, dates and all other commonly accepted information elements for services rendered to recipients under the contract.
7. Provide for the participation of the Contractor and subcontractor in any internal and external quality assurance, utilization review, peer review, and grievance procedures established by the Contractor, in conjunction with the Offices.
8. Provide that the subcontractor indemnify and hold harmless the State of Indiana, its officers, and employees from all claims and suits, including court costs, attorney's fees, and other expenses, brought because of injuries or damage received or sustained by any person, persons, or property that is caused by any act or omission of the Contractor and/or the subcontractors. The State shall not provide such indemnification to the subcontractor.
9. Identify and incorporate the applicable terms of this Contract and any incorporated documents. The subcontract shall provide that the subcontractor agrees to perform duties under the subcontract, as those duties pertain to enrollees, in accordance with the applicable terms and conditions set out in this Contract, any incorporated documents, and all applicable state and federal laws, as amended.
E. The Contractor agrees that, during the term of this Contract, it shall
maintain, with any in-network provider rendering health care services under
the BAA, provider service agreements which meet the following requirements;
any existing provider service agreements which fail to meet the following
requirements shall be revised to include the requirements within ninety
(90) days from the effective date of this Contract. The provider service
agreements shall:
1. Identify and incorporate the applicable terms of this Contract and any incorporated documents. Under the terms of the provider services agreement, the provider shall agree that the applicable terms and conditions set out in this Contract, any incorporated documents, and all applicable state and federal laws, as amended, govern the duties and responsibilities of the provider with regard to the provision of services to enrollees.
2. Reference a written provider claim resolution procedure as set out in section III.Q. below.
F. The Contractor agrees that all laboratory testing sites providing services under this Contract must have a valid Clinical Laboratory Improvement Amendments (CLIA) certificate and comply with the CLIA regulations at 42 C.F.R. Part 493.
G. The Contractor agrees that it shall:
1. Retain, at all times during the period of this Contract, a valid Certificate of Authority under applicable State laws issued by the State of Indiana Department of Insurance:
2. Ensure that, during the term of this Contract, each provider rendering health care services under the BAA is authorized to do so in accordance with the following:
a. The provider must maintain a current Indiana Health Coverage Programs (IHCP) provider agreement and must be duly licensed in accordance with the appropriate state licensing board and shall remain in good standing with said board.
b. If a provider is not authorized to provide such services under a current IHCP provider agreement or is no longer licensed by said board, the Contractor is obligated to terminate its contractual relationship authorizing or requiring such to provide services under the BAA. The Contractor must
terminate its contractual relationship with the provider as soon as the Contractor has knowledge of the termination of the provider's license or the IHCP provider agreement.
3. Comply with the specific requirements for Health Maintenance Organizations (HMOs) eligible to receive Federal Financial Participation (FFP) under Medicaid, as listed in the State Organization and General Administration Chapter of the Health Care Financing Administration (HCFA) Medicaid Manual. These requirements include, but are not limited to the following:
a. The Contractor shall meet the definition of HMO as specified in the Indiana State Medicaid Plan.
b. Throughout the duration of this Contract, the Contractor shall satisfy the Chicago Regional Office of the Health Care Financing Authority (hereinafter called HCFA) that the Contractor is compliant with the Federal requirements for protection against insolvency pursuant to 42 CFR 434.20(c)(3) and 434.50(a), the requirement that the Contractor shall continue to provide services to Contractor enrollees until the end of the month in which insolvency has occurred, and the requirement that the Contractor shall continue to provide inpatient services until the date of discharge for an enrollee who is institutionalized when insolvency occurs. The Contractor shall meet this requirement by posting a performance bond pursuant to Section VII, paragraph C, of this Contract, and satisfying the statutory reserve requirements of the Indiana DepLartment of Insurance.
c. The Contractor shall comply with, and shall exclude from participation as either a provider or subcontractor of the Contractor, any entity or person that has been excluded under the authority of Sections 1124A, 1128 or 1128A of the Social Security Act or does not comply with the requirements of Section 1128(b) of the Social Security Act.
d. In the event that the HCFA determines that the Contractor has violated any of the provisions of 42 CFR 434.67(a), HCFA may deny payment of FFP for new enrollees of the HMO under 42 USC 1396b(m)(5)(B)(ii). The Offices shall automatically deny State payment for new enrollees whenever, and for so long as, Federal payment for such enrollees has been denied.
H. The Contractor shall submit proof, satisfactory to the Offices, of indemnification of the Contractor by the Contractor's parent corporation, if applicable, and by all of its subcontractors.
I. The Contractor shall submit proof, satisfactory to the Offices, that all subcontractors will hold the State harmless from liability under the subcontract. This assurance in no way relieves the Contractor of any responsibilities under the BAA or this Contract.
J. The Contractor agrees that, prior to initially enrolling any Hoosier Healthwise Package A, B or C enrollees, it shall go through and satisfactorily complete the readiness review as described in the BAA. The required readiness review shall begin before the contract between the Contractor and the State is finalized and executed. Within ninety (90) days from the effective date of this Contract, the Contractor shall make a good faith effort to resolve, to the satisfaction of the Offices, any outstanding issues brought to the Contractor's attention by the Offices as a result of the readiness review.
K. The Contractor shall establish and maintain a quality improvement program that meets the requirements of 42 CFR 434.34, as well as other specific requirements set forth in the BAA. The Offices and the HCFA may evaluate, through inspection or other means, including but not limited to, the review of the quality assurance reports required under this Contract, and the quality, appropriateness, and timeliness of services performed under this Contract. The Contractor agrees to participate and cooperate, as directed by the Offices, in the annual external quality review of the services furnished by the Contractor.
L. In accordance with 42 CFR 434.28, the Contractor agrees that it and any of its subcontractors shall comply with the requirements, if applicable, of 42 CFR 489, Subpart I, relating to maintaining and distributing written policies and procedures respecting advance directives. The Contractor shall distribute policies and procedures to adult individuals during the enrollee enrollment process and whenever there are revisions to these policies and procedures. The Contractor shall make available for inspection, upon reasonable notice and request by the Offices, documentation concerning its written policies, procedures and distribution of such written procedures to enrollees.
M. Pursuant to 42 C.F.R. 417.479(a), the Contractor agrees that no specific
payment can be made directly or indirectly under a physician incentive plan
to a physician or physician group as an inducement to reduce or limit
medically necessary services furnished to an individual enrollee. The
Contractor must disclose to the State the information on provider incentive
plans listed in 42 C.F.R. 4 17.479(h)(l) and 4 17.479(i) at the times
indicated at 42 C.F.R. 434.70(a)(3), in order to determine whether the
incentive plan meets the requirements of 42 C.F.R. 417(d)-(g). The
Contractor must provide the capitation data required under paragraph
(h)(l)(vi) for the previous calendar year to the State by
application/contract renewal of each year. The Contractor will provide the
information on its physician incentive plan(s) listed in 42 C.F.R.
417.479(h)(3) to any enrollee upon request.
N. The Contractor must not prohibit or restrict a health care professional from advising an enrollee about his/her health status, medical care, or treatment, regardless of whether benefits for such care are provided under this Contract, if the professional is acting within the lawful scope of practice. However, this provision does not require the Contractor to provide coverage of a counseling or referral service if the Contractor objects to the service on moral or religious grounds and makes available information on its policies to potential enrollees and enrollees within ninety (90) days after the date the Contractor adopts a change in policy regarding such counseling or referral service.
0. In accordance with 42 U.S.C. (S) 1396u-2(b)(6), the Contractor agrees that an enrollee may not be held liable for the following:
1. Debts of the Contractor, or its subcontractors, in the event of any organization's insolvency;
2. Services provided to the enrollee in the event the Contractor fails to receive payment from the Offices for such services or in the event a provider fails to receive payment from the Contractor or Offices; or
3. Payments made to a provider in excess of the amount that would be owed by the enrollee if the Contractor had directly provided the services.
P. The Offices may from time to time request and the Contractor, and all of its subcontractors, agree that the Contractor, or its subcontractors, shall prepare and submit additional compilations and reports as requested by the Offices. Such requests will be limited to situations in which the desired data is considered essential and cannot be obtained through existing Contractor reports. The Contractor, and all of its subcontractors, agree that a response to the request shall be submitted within thirty (30) days from the date of the request, or by the Offices' requested completion date, whichever is earliest. The response shall include the additional compilations and reports as requested, or the status of the requested information and an expected completion date. When such requests pertain to legislative inquiries or expedited inquiries from the Office of the Governor, the additional compilations and reports shall be submitted by the Offices' requested completion date. Failure by the Contractor, or its subcontractors, to comply with response time frames shall be considered grounds for the Offices to pursue the provisions outlined in Section 3.16.5 of the BAA. In the event that delays in submissions are a consequence of a delay by the Offices or the Medicaid Fiscal Agent, the time frame for submission shall be extended by the length of time of the delay.
Q. The Contractor shall establish a written claim resolution procedure applicable to both in-network and out-of-network providers which shall be distributed to all in-network providers and shall be available to out-of-network providers upon request. The Contractor shall negotiate the terms of a written claim resolution procedure with in-network providers; but if the Contractor and an in-network provider are unable to reach agreement on the terms of such procedure, the out-of-network provider claims resolution procedure approved by the Offices under this section shall govern the resolution of such in-network provider's claims with the Contractor. The written claim resolution procedure for out-of-network providers (and in-network providers in the absence of an agreement) must be submitted to the Offices for approval within thirty (30) days from the effective date of this Contract and must include, at a minimum, the following elements:
I. A statement noting that providers objecting to determinations involving their claims will be provided procedural due process through the Contractor's claim resolution procedure.
2. A description of both the informal and formal claim resolution procedures that will be available to resolve a provider's objection to a determination involving the provider's claim.
3. An informal claim resolution procedure which:
a. shall be available for the resolution of claims submitted to the Contractor by the provider within the allowable claims submission time limits under federal and state law.
b. shall precede the formal claim resolution procedure;
c. shall be used to resolve a provider's objection to a determination by the Contractor involving the provider's claim, including a provider's objection to:
(1) any determination by the Contractor regarding payment for a claim submitted by the provider, including the amount of such payment; and
(2) the Contractor's determination that a claim submitted by the provider lacks sufficient supporting information, records, or other materials;
d. may, at the election of a provider, be utilized to determine the payment due for a claim in the event the Contractor fails, within thirty (30) days after the provider submits the claim, to notify the provider of:
(1) its determination regarding payment for the provider's claim; or
(2) its determination that the provider's claim lacked sufficient supporting information, records, or other materials;
e. shall be commenced by a provider submitting to the Contractor:
(1) within sixty (60) days after the provider's receipt of written notification of the Contractor's determination regarding the provider's claim, the provider's written objection to the Contractor's determination and an explanation of the objection; or
(2) within sixty (60) days after the Contractor fails to make a determination as described in subparagraph (d), a written notice of the provider's election to utilize the informal claims resolution procedure under subparagraph (d) above;
f. shall allow providers and the Contractor to make verbal inquiries and to otherwise informally undertake to resolve the matter submitted for resolution by the provider pursuant to Paragraph 3.e.
4. In the event the matter submitted for informal resolution is not resolved to the provider's satisfaction within thirty (30) days after the provider commenced the informal claim resolution procedure, the provider shall have sixty (60) days from that point to submit to the Contractor written notification of the provider's election to submit the matter to the formal claim resolution procedure. The provider's notice must specify the basis of the provider's dispute with the Contractor. The Contractor's receipt of the provider's written notice shall commence the formal claim resolution procedure.
5. The formal claim resolution procedure shall be conducted by a panel of one (1) or more individuals selected by the Contractor. Each panel must be knowledgeable about the policy, legal, and clinical issues involved in the matter that is the subject of the formal claim resolution procedure. An individual who has been involved in any previous consideration of the matter by the Contractor may not serve on the panel. The Contractor's medical director, or another licensed physician designated by the medical director, shall serve as a consultant to the panel in the event the matter involves a question of medical necessity or medical appropriateness.
6. The panel shall consider all information and material submitted to it by the provider that bears directly upon an issue involved in the matter that is the subject of the formal claim resolution procedure. The panel shall allow the provider an opportunity to appear in person before the panel, or to communicate with the panel through appropriate other means if the provider is unable to appear in person, and question the panel in regard to issues involved in the matter. The provider shall not be required to be represented by an attorney for purposes of the formal claim review procedure.
7. Within forty-five (45) days after the commencement of the formal claim resolution procedure, the panel shall deliver to the provider the panel's written determination of the matter before it. Such determination shall be the Contractor's final position in regard to the matter. The written determination shall include, as applicable, a detailed explanation of the factual, legal, policy and clinical basis of the panel's determination.
8. In the event the panel fails to deliver to the provider the panel's written determination within forty-five (45) days after the after the commencement of the formal claim resolution procedure, such failure on the part of the panel shall have the effect of a denial by the panel of the provider's claim.
9. The panel's written determination shall include notice to the provider of the provider's right, within sixty (60) days after the provider's receipt of the panel's written determination, to submit to binding arbitration the matter that was the subject of the formal claim resolution procedure. The provider shall also have the right to submit the matter to binding arbitration if the panel has failed to deliver its written determination to the provider within the required forty-five (45) day period.
10. Any procedure involving binding arbitration must be conducted in accordance with the rules and regulations of the American Health Lawyers Association (AHLA), pursuant to the Uniform Arbitration Act as adopted in the State of Indiana at I.C. 34-57-2, unless the provider and Contractor mutually agree to some other binding resolution procedure. However, any Contractor and provider that are subject to statutorily imposed arbitration procedures for the resolution of these claims shall be required to follow the statutorily imposed arbitration procedures, but only to the extent those procedures differ from, or are irreconcilable with, the rules and regulations of the American Health Lawyers Association (AHLA), pursuant to the Uniform Arbitration Act as adopted in the State of Indiana at I.C. 34-57-2. It is the intent of the Offices that the fees and expenses of arbitration be borne by the non-prevailing party.
11. The provider and Contractor may agree, within the requisite sixty (60) day time period, to include in a single arbitration proceeding matters from multiple formal claim resolution procedures involving the Contractor and the provider. If the provider and Contractor are not able to agree, the arbitrator, as selected in Paragraph 10 above, shall have the discretion to include in a single arbitration proceeding matters from multiple fomlal claim resolution procedures involving the Contractor and the provider.
12. For claims disputed under Paragraph 3. c. (2) above:
a. a claim that is finally determined through the Contractor's claim resolution procedure (including arbitration) not to lack sufficient supporting documentation shall be processed by the Contractor within thirty (30) days after such final determination. The processing of the claim and the Contractor's determination involving the claim shall be subject to Paragraph 3.c. and Paragraph 3. d. and the Contractor's formal claim resolution procedure and binding arbitration.
b. a claim that is finally determined through the Contractor's claim
resolution procedure (including arbitration) to lack sufficient
supporting documentation shall be processed by the Contractor within
thirty (30) days after the provider submits to the Contractor the
requisite supporting documentation. The provider shall have thirty
(30) days after written notice of the final determination establishing
that the claim lacked sufficient supporting documentation is received
by the provider to submit the requisite supporting documentation. The
processing of the claim and the Contractor's determination involving
the claim shall be subject to Paragraph 3. c. and Paragraph 3. d. and
the Contractor's formal claim resolution procedure and binding
arbitration.
13. A contractor may not include in its claim resolution procedures for out-of- network providers (and in-network providers in the absence of an agreement) elements that restrict or diminish the claim review procedures, time periods or subject matter provided for in paragraphs 1 through 12 above.
14. A Contractor shall maintain a log of all informally and formally filed provider objections to determinations involving claims. The logged information shall include the provider's name, date of objection, nature of the objection, and disposition. The Contractor shall submit quarterly reports to the Offices regarding the number and type of provider objections.
IV. PAYMENT
A. In consideration of the services to be performed by the Contractor, the Offices agree to pay the Contractor the following amounts per month per enrolled member as contained in the Offices' capitation payment listing based upon the capitation rates by category as listed below:
Category Packages A and B Package C --------------------------------------------------------------------- Newborns $334.98 $129.81 --------------------------------------------------------------------- Preschool $ 71.62 $ 83.20 --------------------------------------------------------------------- Children $ 58.95 $ 70.32 --------------------------------------------------------------------- Adolescents $ 89.75 $101.66 --------------------------------------------------------------------- Adult Males $247.73 --------------------------------------------------------------------- Adult Females $193.81 --------------------------------------------------------------------- Deliveries $3,281.95/delivery $3,281.95/delivery --------------------------------------------------------------------- |
These capitation rates will be adjusted by the medical component of the Consumer Price Index. The initial adjustment will occur in January 2002, with subsequent adjustments to occur annually thereafter. In the event that the Offices adjust the fee-for-service (FFS) rates, the Offices may, in its sole discretion, further adjust the capitation rates in accordance with the FFS adjustment, based on the same methodology or percentage change used for the FFS adjustment. If the Offices make such an adjustment, it shall apply only to the specific service component of the capitation rate that corresponds to the FFS adjustment. Any capitation rates adjusted due to a change in the FFS program may be further adjusted to ensure actuarial soundness. All adjustments are subject to federal regulations that this Contract may not exceed the FFS Upper Payment Limit (UPL).
B. All payment obligations of the Offices are subject to the encumbrance of monies and shall be paid to the Contractor on the first Wednesday after the fifteenth of the month.
C. The capitation payment will be prospective, based upon the number of enrollees assigned to the Contractor as of the first of the month. The Offices will establish an administrative procedure to allow retroactive or other payment adjustments as necessary to implement this contract.
D The Contractor will be provided a capitation payment listing which includes a detailed listing of all enrollees for which the Contractor is receiving a capitatiom payment.
E. The parties agree that the Offices have the option of renegotiating actuarially sound capitation rates annually. Rates revised under this provision shall be implemented only after a contract amendment is executed and approved. Contractor may submit information for the Offices' review and consideration.
G. When the Director of the State Budget Agency makes a written determination that funds are not appropriated or otherwise available to support continuation of performance of this Contract, the Contract shall be cancelled. A determination by the State Budget Director that funds are not appropriated or otherwise available to support continuation of performance shall be final and conclusive.
V. ORDER OF PRECEDENCE
Any inconsistency or ambiguity in this Contract shall be resolved by giving precedence in the following order:
1) The express terms of this document;
2) Attachment 1 - BAA 0l-28, released July 31, 2000;
3) Attachment 2 - the Contractor's response to the BAA;
4) Any other documents, standards, laws, rules or regulations incorporated by reference in the above materials, all of which are hereby incorporated by reference.
VI. NOTICE
A. Whenever notice is required to be given to the other party, it shall be made in writing and delivered to that party. Delivery shall be deemed to have occurred if a signed receipt is obtained when delivered by hand or according to the date on the return receipt if sent by certified mail, return receipt requested. Notices shall be addressed as follows:
In case of notice to the Contractor: In case of notice to the Offices:
Dr. Michael McKinney, President Sharon Steadman, Managed Care Director
Managed Health Services Office of Medicaid Policy and Planning
950 North Meridian, Suite 200 Family and Social Services Administration
Indianapolis, Indiana 46204 402 W. Washington St. IGCS W382, MS07
Indianapolis, Indiana 46204
|
B. Said notices shall become effective on the date of delivery or the date specified within the notice, whichever comes later. Either party may change its address for notification purposes by mailing a notice stating the change and setting forth the new address.
VII. MISCELLANEOUS PROVISIONS
Indianapolis, Indiana 46204, and has obtained all necessary or applicable approval from the home office of the Contractor to make this Contract fully binding upon the Contractor when his/her signature is affixed and is not subject to home office acceptance hereto and accepted by the State of Indiana.
1. Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352), as amended, and all requirements imposed by or pursuant to the Regulation of the Department of Health and Human Services (45 C.F.R. Part 80), to the end that, in accordance with Title VI of that Act and the Regulation, no person in the United States shall on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity for which the Contractor receives Federal financial assistance under this Contract.
2. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and all requirements imposed by or pursuant to the Regulation of the Department of Health and Human Services (45 C.F.R. Part 84), to the end that, in accordance with Section 504 of that Act and the Regulation, no otherwise qualified handicapped individual in
the United States shall, solely by reason of his/her handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity for which the Contractor receives Federal financial assistance under this Contract.
3. The Age Discrimination Act of 1975 (Pub. L. 94-135) as amended, and all requirements imposed by or pursuant to the Regulation of the Department of Health and Human Services (45 C.F.R. Part 91), to the end that, in accordance with the Act and the Regulation, no person in the United States shall, on the basis of age, be denied the benefits of, be excluded from participation in, or be subjected to discrimination under any program or activity for which the Contractor receives Federal financial assistance under this Contract.
4. The Americans with Disabilities Act of 1990 (Pub. L. 10l-336), as amended, and all requirements imposed by or pursuant to the Regulation of the Department of Justice (28 C.F.R. 35.101 et seq.), to the end that in accordance with the Act and Regulation, no person in the United States with a disability shall, on the basis of the disability, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity for which the Contractor receives Federal financial assistance under this Contract.
5. Title IX of the Education Amendments of 1972, as amended (20 U.S.C. (S)(S)1681-1683, and 1685-1686), and all requirements imposed by or pursuant to regulation, to the end that, in accordance with the Amendments, no person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity for which the Contractor receives Federal financial assistance under this Contract.
The Contractor agrees that compliance with this assurance constitutes a condition of continued receipt of Federal financial assistance, and that it is binding upon the Contractor, its successors, transferees and assignees for the period during which such assistance is provided. The Contractor further recognizes that the United States shall have the right to seek judicial enforcement of this assurance.
1. As used in this section:
"Immediate family" means the spouse and the unemancipated children of an individual.
"Interested party" means:
a. The individual executing this Contract;
b. An individual who has an interest of three percent (3%) or more of the Contractor if the Contractor is not an individual; or
C. Any member of the immediate family of an individual specified under subdivision a. or b.
"Department" means the Indiana Department of Administration.
"Commission" means the State Ethics Commission.
2. The Department may cancel this Contract without recourse by the Contractor if any interested party is an employee of the State of Indiana.
3. The Department wi11 not exercise its right of cancellation under section 2 above if the Contractor gives the Department an opinion by the Commission indicating that the existence of this Contract and the employment by the State of Indiana of the interested party does not violate any statute or code relating to ethical conduct of state employees. The Department may take action, including cancellation of this Contract consistent with an opinion of the Commission obtained under this section.
4. The Contractor has an affirmative obligation under this Contract to disclose to the Department when an interested party is or becomes an employee of the State of Indiana. The obligation under this section extends only to those facts which the Contractor knows or reasonably could know.
By this Contract the Contractor specifically waives and/or releases to the State of Indiana any cognizable property right in the Contractor to copyright or patent such information, data, findings, recommendations, proposals, etc. that are developed exclusively in furtherance of the Contract and not developed by the Contractor for its other lines of business and incidentally applied to its Hoosier Healthwise line of business.
The Contractor and the Office shall convene immediately upon notification of termination or non-renewal of the Contract to determine what work shall be suspended, what work shall be completed, and the timeframe for completion and conveyance. The Office will then provide the Contractor with a written schedule of the completion and conveyance activities associated with termination. Documents/materials associated with suspended activities shall be conveyed by the Contractor to the State of Indiana upon five days' notice from the State of Indiana. Upon completion of those remaining activities noted on the written schedule, the Contractor shall also convey all documents and materials to the State of Indiana upon five days' notice from the State of Indiana.
The Contractor agrees that, the existence of a dispute notwithstanding, it will continue without delay to carry out all its responsibilities under this Contract which are not affected by the dispute. Should the Contractor fail to continue without delay to perform its responsibilities under this Contract in the accomplishment of all non-disputed work, any additional costs incurred by the Contractor or the State of Indiana as a result of such failure to proceed shall be borne by the Contractor, and the Contractor shall make no claim against the State of Indiana for such costs. If the Contractor and the State of Indiana cannot resolve a dispute within ten (10) working days following notification in writing by either party of the existence of said dispute, then the following procedure shall apply:
1. The parties agree to resolve such matters through submission of their dispute to the Commissioner of the Indiana Department of Administration who shall reduce her decision to writing and mail or otherwise furnish a copy thereof to the Contractor and the State of Indiana within ten (10) working days after presentation of such dispute for her decision. Her decision shall be final and conclusive unless the Contractor mails or otherwise furnishes to the Commissioner of Administration, within ten (10) working days after receipt of the Commissioner's decision, a written appeal. Within ten (10) working days of receipt by the Commissioner, she may reconsider her decision. If no reconsideration is provided within ten (10) working days the Contractor may submit the dispute to an Indiana court of competent jurisdiction.
2. The State of Indiana may withhold payments on disputed items pending resolution of the dispute. The non-payment by the State of Indiana to the
Contractor of one or more invoices not in dispute shall not constitute default, however, the Contractor may bring suit to collect such monies without following the disputes procedure contained herein.
1. The Contractor hereby covenants and agrees to make a good faith
effort to provide and maintain during the term of this Contract a
drug-free workplace. Contractor will give written notice to the
Office and the Indiana Department of Administration within ten
(10) days after receiving actual notice that an employee of the
Contractor has been convicted of a criminal drug violation
occurring in the Contractor's workplace.
2. In addition to subparagraph (l), if the total amount set forth in this Contract is in excess of twenty-five thousand dollars ($25,000.00), the Contractor hereby further agrees that this Contract is expressly subject to the terms, conditions, and representations contained in the Drug-Free Workplace Certification. The Certification is hereby executed by the Contractor in conjunction with this Contract and set forth in this Contract.
3. It is further expressly agreed that the failure of the Contractor to in good faith comply with the terms of subparagraph (1) above, or falsifying or otherwise violating the terms of the certification referenced in subparagraph (2) above shall constitute a material breach of this Contract, and shall entitle the State of Indiana to impose sanctions against the Contractor including, but not limited to, suspension of contract payment, termination of this Contract and/or debarment of the Contractor from doing further business with the State of Indiana for up to three (3) years.
This Certification is required by Executive Order No. 90-5, April 12, 1990, issued by the Governor of Indiana. Pursuant to its delegated authority, the Indiana Department of Administration is requiring the inclusion of this certification in all contracts with the State of Indiana in excess of $25,000.00. No award of a contract shall be made, and no contract, purchase order or agreement, the total amount of which exceeds $25,000.00 shall be valid, unless and until this certification has been fully executed by the Contractor and made a part of the Contract as part of the Contract documents. False certification or violation of the certification may result in sanctions including, but not limited to, suspension of contract payment, termination of the contract and/or debarment of contracting opportunities with the Contractor for up to three (3) years.
The Contractor certifies and agrees that it will provide a drug-free workplace by:
1. Publishing and providing to all of its employees a statement notifying them that the unlawful manufacture, distribution, dispensing, possession or use of a controlled
substance is prohibited in the Contractor's workplace and specifying the actions that will be taken against employees for violations of such prohibition.
2. Establishing a drug-free awareness program to inform employees of (A) the dangers of drug abuse in the workplace; (B) the Contractor's policy of maintaining a drug-free workplace; (C) any available drug counseling, rehabilitation, and employee assistance programs; and (4) the penalties that may be imposed upon an employee for drug abuse violations occurring in the workplace.
3. Notifying all employees in the statement required by subparagraph (1) above that as a condition of continued employment the employee will (A) abide by the terms of the statement; and (B) notify the Contractor of any criminal drug statute conviction for a violation occurring in the workplace no later than five (5) days after such conviction.
4. Notify the State in writing within ten (10) days after receiving notice from an employee under subdivision (3)(B) above, or otherwise receiving actual notice of such conviction.
5. Within thirty (30) days after receiving notice under subdivision
(3)(B) above of a conviction, imposing the following sanctions or
remedial measures on any employee who is convicted of drug abuse
violations occurring in the workplace: (A) take appropriate personnel
action against the employee, up to and including termination; or (B)
require such employee to satisfactorily participate in a drug abuse
assistance or rehabilitation program approved for such purposes by a
Federal, State, or local health, law enforcement, or other appropriate
agency.
6. Making a good faith effort to maintain a drug-free workplace through the implementation of subparagraphs (1) through (5).
be immediately suspended. If the period of non-performance exceeds thirty
(30) days from the receipt of notice of the Force Majeure Event, the party
whose ability to perform has not been so affected may, by giving written
notice, terminate this Contract.
The Contractor shall be responsible for providing all necessary unemployment and worker compensation insurance for the Contractor's employees.
to develop or assist in the services provided herein, while they are in the possession of the Contractor, and any loss or damage thereto shall be restored at the Contractor's expense. Full, immediate and unrestricted access to the work product of the Contractor during the term of this Contract shall be available to the State of Indiana. The Contractor will give to the State of Indiana, or the State of Indiana's designee, all records of other materials described in this section, after termination of the Contract and upon five (5) days notice of a request from the State of Indiana.
In the event that the Offices request that the Contractor perform any additional services associated with the transition or turnover of this Contract, the Offices agree to pay reasonable costs for those additional services specifically requested by the Offices.
Failure of the Office to enforce at any time any provision of this Contract shall not be construed as a waiver thereof. The remedies herein reserved shall be cumulative and additional to any other remedies in law or equity.
/// The remainder of this page is left intentionally blank. ///
In Witness Whereof, Coordinated Care Corporation Indiana, Inc. and the State of Indiana have, through duly authorized representatives, entered into this agreement. The parties having read and understand the foregoing terms of the Contract do by their respective signatures dated below hereby agree to the terms thereof.
For the Contractor: For the State of Indiana:
/s/ Dr. Michael McKinney /s/ Kathleen D. Gifford
----------------------------------- ---------------------------------
Dr. Michael McKinney, President Kathleen D. Gifford
Coordinated Care Corporation Indiana, Inc. Assistant Secretary
Office of Medicaid Policy & Planning
Date: 12/11/2000 Date: 12/11/2000
------------- ----------------
/s/ Nancy Cobb
---------------------------------
Nancy Cobb, Director
Children's Health Insurance Program
Date: 12/11/2000
----------------
APPROVED: APPROVED:
/s/ [ILLEGIBLE] /s/ Jay D. McQueen for
----------------------------------- ---------------------------------
Betty Cockrum, Director Glenn R. Lawrence, Commissioner
State Budget Agency Department of Administration
Date: 1/10/01 Date: Jan 4, 2001
------------- ----------------
APPROVED AS TO FORM AND LEGALITY
/s/ James F. Schmitt
-----------------------------------
Stephen Carter
Deputy of
Attorney General of Indiana
Date: 2/21/01
-------------
|
make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option, Purchase Authorization, Bonus, or related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. No director shall be liable for any action or determination made in good faith. The Board may, to the full extent permitted by law, delegate any or all of its powers under the Plan to a committee (the "Committee") appointed by the Board, and if the Committee is so appointed and to the extent such powers are delegated, all references to the Board in the Plan shall mean and relate to such Committee.
(i) if the Participant ceases to perform services for any reason other than death or disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of one month after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation;
(ii) if the Participant ceases to perform services because of disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of three months after
the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because of death, the Option, to the extent that the Participant was entitled to exercise it on the date of death, may be exercised within a period of three months after the Participant's death by the person or persons to whom the Participant's rights under the Option pass by will or by the laws of descent or distribution;
provided, however, that no Option or Purchase Authorization may be exercised to any extent by anyone after the date of its expiration; and provided, further, that Options and Purchase Authorizations may be exercised only as to Vested Shares (as defined in the applicable agreement with the Participant) after the Participant has ceased to perform services for any member of the Company Group.
(i) The exercise price per Share subject to such Option shall not be less than 110% of the fair market value of each Share on the date of grant; and
(ii) The Option shall not have a term in excess of five years from the date of grant.
limitation shall apply to the aggregate number of shares for which options may be granted under all such plans.
otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate (including without limitation confirmation that the Participant is aware of any applicable restrictions on transfer of the Shares, as specified in the articles of incorporation or by-laws of the Company, in any agreement among its shareholders, or otherwise) in order to comply with federal and applicable state securities laws. Certificates representing the Shares shall bear an appropriate legend regarding restrictions on transferability.
(a) The term "employee" shall have, for purposes of this Plan, the meaning ascribed to employee" under Section 3401(c) of the Code and the regulations promulgated thereunder.
(b) The term "parent" shall have, for purposes of this Plan, the meaning ascribed to it under Section 424(e) of the Code and the regulations promulgated thereunder.
(c) The term "subsidiary" shall have, for all purposes under this Plan, the meaning ascribed to it under Section 424(f) of the Code and the regulations promulgated thereunder.
(a) no such termination or amendment shall adversely affect or impair any then outstanding Option, Purchase Authorization, Bonus or related agreement without the consent of the Participant holding such Option, Purchase Authorization, Bonus or related agreement; and
(b) no such amendment which (i) increases the maximum number of Shares subject to this Plan (except to the extent provided in Section 3), (ii) materially increases the benefits accruing to Participants, or (iii) materially modifies the requirements as to eligibility for participation in the Plan may be made without obtaining, or being conditioned upon, shareholder approval.
With the consent of the Participant affected, the Board may amend outstanding Options, Purchase Authorizations, Bonuses or related agreements in a manner not inconsistent with the Plan. The Board shall have the right to amend or modify the terms and provisions of the Plan and of any outstanding Incentive Options granted under the Plan to the extent necessary to qualify any or all such Options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code.
Exhibit 10.9
and rescind rules and regulations relating to the plan, to determine the terms and provisions of the respective Options, Purchase Authorizations, Bonuses and related agreements, and to make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option, Purchase Authorization, Bonus, or related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. No director shall be liable for any action or determination made in good faith. The Board may, to the full extent permitted by law, delegate any or all of its powers under the Plan to a committee (the "Committee") appointed by the Board, and if the Committee is so appointed and to, the extent such powers are delegated, all references to the Board in the Plan shall mean and relate to such Committee.
pursuant to a Bonus shall be subject to the Participant's satisfaction of all applicable federal, state and local income and employment tax withholding obligations. Without limiting the generality of the foregoing, the Company shall have the right to deduct from payments of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to any Shares issued upon exercise of Options or purchased or issued pursuant to Purchase Authorizations or Bonuses. The Participant may elect to satisfy such obligation(s), in whole or in part, by (i) delivering to the Company a check for the amount required to be withheld or (ii) if the Board in its sole discretion approves in any specific or general case, having the Company withhold Shares or delivering Company stock, having a value equal to the amount required to be withheld, as determined by the Board.
(i) if the Participant ceases to perform services for any reason other than death or disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of one month after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation;
(ii) if the Participant ceases to perform services because of disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of three months after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because of death, the Option, to the extent that the Participant was entitled to exercise it on the date of death, may be exercised within a period of three months after the Participant's death by the person or persons to whom the Participant's rights under the Option pass by will or by the laws of descent or distribution;
provided, however, that no Option or Purchase Authorization may be exercised to any extent by anyone after the date of its expiration; and provided, further, that Options and Purchase Authorizations may be exercised only as to Vested Shares (as defined in the applicable agreement with the Participant) after the Participant has ceased to perform services for any member of the Company Group.
(i) The exercise price per Share subject to such Option shall not be less than 110% of the fair market value of each Share on the date of grant; and
(ii) The Option shall not have a term in excess of five years from the date of grant.
by outstanding Options and Purchase Authorizations granted hereunder to give effect to any stock dividends, stock splits, stock combinations, recapitalizations and other similar changes in the capital structure of the Company after the effective date of the Plan.
representing the Shares shall bear an appropriate legend regarding restrictions on transferability.
(a) The term "employee" shall have, for purposes of this Plan, the meaning ascribed to employee" under Section 3401(c) of the Code and the regulations promulgated thereunder.
(b) The term "parent" shall have, for purposes of this Plan, the meaning ascribed to it under Section 424(e) of the Code and the regulations promulgated thereunder.
(c) The term "subsidiary" shall have, for all purposes under this Plan, the meaning ascribed to it under Section 424(f) of the Code and the regulations promulgated thereunder.
(a) no such termination or amendment shall adversely affect or impair any then outstanding Option, Purchase Authorization, Bonus or related agreement without the consent of the Participant holding such Option, Purchase Authorization, Bonus or related agreement; and
(b) no such amendment which (i) increases the maximum number of Shares subject to this Plan (except to the extent provided in Section 3), (ii) materially increases the benefits accruing to Participants, or (iii) materially modifies the requirements as to eligibility for participation in the Plan may be made without obtaining, or being conditioned upon, shareholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in
a manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.
Exhibit 10.10
determine the terms and provisions of the respective Options, Purchase Authorizations, Bonuses and related agreements, and to make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option, Purchase Authorization, Bonus, or related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. No director shall be liable for any action or determination made in good faith. The Board may, to the full extent permitted by law, delegate any or all of its powers under the Plan to a committee (the "Committee") appointed by the Board, and if the Committee is so appointed and to the extent such powers are delegated, all references to the Board in the Plan shall mean and relate to such Committee.
pursuant to a Bonus shall be subject to the Participant's satisfaction of all applicable federal, state and local income and employment tax withholding obligations. Without limiting the generality of the foregoing, the Company shall have the right to deduct from payments of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to any Shares issued upon exercise of Options or purchased or issued pursuant to Purchase Authorizations or Bonuses. The Participant may elect to satisfy such obligation(s), in whole or in part, by (i) delivering to the Company a check for the amount required to be withheld or (ii) if the Board in its sole discretion approves in any specific or general case, having the Company withhold Shares or delivering Company stock, having a value equal to the amount required to be withheld, as determined by the Board.
(i) if the Participant ceases to perform services for any reason other than death or disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of one month after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation;
(ii) if the Participant ceases to perform services because of disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of three months after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because of death, the Option, to the extent that the Participant was entitled to exercise it on the date of death, may be exercised within a period of three months after the Participant's death by the person or persons to whom the Participant's rights under the Option pass by will or by the laws of descent or distribution;
provided, however, that no Option or Purchase Authorization may be exercised to any extent by anyone after the date of its expiration; and provided, further, that Options and Purchase Authorizations may be exercised only as to Vested Shares (as defined in the applicable agreement with the Participant) after the Participant has ceased to perform services for any member of the Company Group.
(i) The exercise price per Share subject to such Option shall not be less than 110% of the fair market value of each Share on the date of grant; and
(ii) The Option shall not have a term in excess of five years from the date of grant.
the articles of incorporation or by-laws of the Company, in any agreement among its shareholders, or otherwise) in order to comply with federal and applicable state securities laws. Certificates representing the Shares shall bear an appropriate legend regarding restrictions on transferability.
(a) The term "employee" shall have, for purposes of this Plan, the meaning ascribed to employee" under Section 3401(c) of the Code and the regulations promulgated thereunder.
(b) The term "parent" shall have, for purposes of this Plan, the meaning ascribed to it under Section 424(e) of the Code and the regulations promulgated thereunder.
(c) The term "subsidiary" shall have, for all purposes under this Plan, the meaning ascribed to it under Section 424(f) of the Code and the regulations promulgated thereunder.
(a) no such termination or amendment shall adversely affect or impair any then outstanding Option, Purchase Authorization, Bonus or related agreement without the consent of the Participant holding such Option, Purchase Authorization, Bonus or related agreement; and
(b) no such amendment which (i) increases the maximum number of Shares subject to this Plan (except to the extent provided in Section 3), (ii) materially increases the benefits accruing to Participants, or (iii) materially modifies the requirements as to eligibility for participation in the Plan may be made without obtaining, or being conditioned upon, shareholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in a
manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the code.
Exhibit 10.11
"Committee") appointed by the Board, and if the Committee is so appointed and to the extent such powers are delegated, all references to the Board in the Plan shall mean and relate to such Committee.
(i) if the Participant ceases to perform services for any reason other than death or disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of one
month after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation;
(ii) if the Participant ceases to perform services because of disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of three months after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because of death, the Option, to the extent that the Participant was entitled to exercise it on the date of death, may be exercised within a period of three months after the Participant's death by the person or persons to whom the Participant's rights under the Option pass by will or by the laws of descent or distribution;
provided, however, that no Option or Purchase Authorization may be exercised to any extent by anyone after the date of its expiration; and provided, further, that Options and Purchase Authorizations may be exercised only as to Vested Shares (as defined in the applicable agreement with the Participant) after the Participant has ceased to perform services for any member of the Company Group.
(i) The exercise price per Share subject to such Option shall not be less than 110% of the fair market value of each Share on the date of grant; and
(ii) The Option shall not have a term in excess of five years from the date of grant.
(a) The term "employee" shall have, for purposes of this Plan, the meaning ascribed to employee" under Section 3401(c) of the Code and the regulations promulgated thereunder:
(b) The term "parent" shall have, for purposes of this Plan, the meaning ascribed to it under Section 424(e) of the Code and the regulations promulgated thereunder.
(c) The term "subsidiary" shall have, for all purposes under this Plan, the meaning ascribed to it under Section 424(f) of the Code and the regulations promulgated thereunder.
(a) no such termination or amendment shall adversely affect or impair any then outstanding Option, Purchase Authorization, Bonus or related agreement without the consent of the Participant holding such Option, Purchase Authorization, Bonus or related agreement; and
(b) no such amendment which (i) increases the maximum number of Shares subject to this Plan (except to the extent provided in Section 3), (ii) materially increases the benefits accruing to Participants, or (iii) materially modifies the requirements as to eligibility for participation in the Plan may be made without obtaining, or being conditioned upon, shareholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in a
manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.
Exhibit 10.12
(as amended)
liable for any action or determination made in good faith. The Board may, to the full extent permitted by law, delegate any or all of its powers under the Plan to a committee (the "Committee") appointed by the Board, and if the Committee is so appointed and to the extent such powers are delegated, all references to the Board in the Plan shall mean and relate to such Committee.
Incentive Option, the permission of the Board referred to in clause (ii) of the preceding sentence must be granted at the time the Incentive Option is granted.
(i) if the Participant ceases to perform services for any
reason other than death or disability (as defined in
Section 22(e)(3) of the Code), the Participant may, at any
time within a period of one month after the date of such
cessation of the performance of services, exercise the
Option to the extent that the Option was exercisable on
the date of such cessation;
(ii) if the Participant ceases to perform services because of disability (as defined in Section 22(e)(3) of the Code), the Participant may, at any time within a period of three months after the date of such cessation of the performance of services, exercise the Option to the extent that the Option was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because of death, the Option, to the extent that the Participant was entitled to exercise it on the date of death, may be exercised within a period of three months after the Participant's death by the person or persons to whom the Participant's rights under the Option pass by will or by the laws of descent or distribution;
provided, however, that no Option or Purchase Authorization may be exercised to any extent by anyone after the date of its expiration; and provided, further, that Options and Purchase Authorizations may be exercised only as to Vested Shares (as defined in the applicable agreement with the Participant) after the Participant has ceased to perform services for any member of the Company Group.
(i) The exercise price per Share subject to such Option shall not be less than 110% of the fair market value of each Share on the date of grant; and
(ii) The Option shall not have a term in excess of five years from the date of grant.
(a) The term "employee" shall have, for purposes of this Plan, the meaning ascribed to employee" under Section 3401(c) of the Code and the regulations promulgated thereunder.
(b) The term "parent" shall have, for purposes of this Plan, the meaning ascribed to it under Section 424(e) of the Code and the regulations promulgated thereunder.
(c) The term "subsidiary" shall have, for all purposes under this Plan, the meaning ascribed to it under Section 424(f) of the Code and the regulations promulgated thereunder.
(a) no such termination or amendment shall adversely affect or impair any then outstanding Option, Purchase Authorization, Bonus or related agreement without the consent of the Participant holding such Option, Purchase Authorization, Bonus or related agreement; and
(b) no such amendment which (i) increases the maximum number of Shares subject to this Plan (except to the extent provided in Section 3), (ii) materially increases the benefits accruing to Participants, or (iii) materially modifies the requirements as to eligibility for participation in the Plan may be made without obtaining, or being conditioned upon, shareholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Options, Purchase Authorizations, Bonuses or related agreements in a
manner not inconsistent with the Plan. The Board shall have the right to amend
or modify the terms and provisions of the Plan and of any outstanding Incentive
Options granted under the Plan to the extent necessary to qualify any or all
such Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code.
EXHIBIT 10.13
INCENTIVE STOCK OPTION AGREEMENT
(________ Stock Plan)
THIS AGREEMENT is entered into by and between CENTENE CORPORATION, a Wisconsin corporation (hereinafter the "Company"), and the undersigned employee of the Company (hereinafter the "Optionee").
WHEREAS, the Optionee renders important services to the Company, and the Company desires to grant an incentive stock option to the Optionee;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements herein contained, the parties hereto hereby agree as follows:
(a) The Company hereby grants to the Optionee pursuant to the Stock Plan (the "Plan") the option to purchase from the Company upon the terms and conditions hereinafter set forth the number of shares ("Shares") of the Series A common stock, one-third cent per share par value of the Company ("Common Stock") set forth on the signature page below at the purchase price per Share so set forth (the "Option Price"). The date of grant of this option is the date set forth on the execution page of this Agreement as the "Option Date."
(b) This option is immediately exercisable in full or in part and shall remain exercisable until it expires on the tenth anniversary of the Option Date, unless the option is sooner terminated as hereinafter provided. Only whole Shares may be purchased pursuant to this option.
(a) The option is granted on the condition that the purchase of Shares hereunder shall be for investment purposes and not with a view to resale or distribution, except that such condition shall be inoperative if the offering of Shares subject to the option is registered under the Securities Act of 1933, as amended, or if in the opinion of counsel for the Company such Shares may be resold without registration. At the time of the exercise of the option or any installment thereof, the Optionee will execute such further agreements as the Company may require to implement the foregoing condition and to acknowledge the Optionee's familiarity with restrictions on the resale of the Shares under applicable securities laws, and the
Company may stamp such legend of the certificate representing the Shares as may be necessary or appropriate in light of the foregoing condition.
(b) The Company will furnish upon request of the Optionee copies of the articles of incorporation of the Company, as amended, and by-laws of the Company, as amended, and such publicly available financial and other information concerning the Company and its business and prospects as may be reasonably requested by the Optionee in connection with exercise of this option.
(c) The option shall not be transferable otherwise than by
will or by the laws of descent and distribution, and except as provided in
Section 4 the option shall be exercisable during the lifetime of the Optionee
by the Optionee only. Notwithstanding the foregoing, however, if the Optionee
is determined to be mentally incompetent and a guardian or conservator (or
other similar person) is appointed by a court of competent jurisdiction to
manage the Optionee's affairs, the guardian or conservator (or other similar
person) may exercise the option on behalf of the Optionee, provided that such
exercise is made within the time limits prescribed herein.
(d) The option granted in this Agreement is subject to the terms, conditions and definitions of the Plan, a copy of which is attached hereto. To the extent that the terms, conditions and definitions of this Agreement are inconsistent with those of the Plan, those of this Agreement shall govern. The Optionee hereby accepts this option subject to all such provisions of the Plan and agrees that all decisions under, and interpretations of, such provisions of the Plan by the Board of Directors of the Company (the "Board") or the Committee, as defined in the Plan, shall be final, binding and conclusive upon the Optionee and his or her heirs.
(a) Written notice of the exercise of the option or any installment thereof shall be given to the Company specifying the number of Shares for which the option is exercised and accompanied by payment in full of the Option Price. Payment shall be made: (a) in cash; (b) by check; (c) by Immediate Sales Proceeds, as defined below; (d) by delivery and assignment to the Company of shares of Company stock owned by the Optionee (which shares have a fair market value, as determined by the Board, not less than the Option Price); or (e) by any combination of the foregoing. Notwithstanding the foregoing, this option may not be exercised by delivery and assignment to the Company of shares of Company stock to the extent that such delivery and assignment would constitute a violation of the provisions of any law, or related regulation or rule, or any agreement or Company policy, restricting the transfer or redemption of the Company's stock. As used herein, the term "Immediate Sales Proceeds" shall mean the assignment in form acceptable to the Company of the proceeds of a sale of the Shares acquired on the exercise of this option pursuant to a procedure approved by the Company. The Company reserves, the right to decline to approve any such procedure in the Company's sole and absolute discretion.
(b) The Company's obligation to deliver Shares upon exercise of an option shall be subject to the Optionee's satisfaction of all applicable federal, state and local income and employment tax withholding obligations. Without limiting the generality of the foregoing, the Company shall have the right to deduct from payments
of any kind otherwise due to the Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any Shares issued upon exercise of the option.
(a) If the Optionee ceases to be employed for any reason other than death or disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), the Optionee may at any time within a period of one (1) month after the date of such cessation of employment exercise the option to the extent that the option was exercisable on the date of such cessation;
(b) If the Optionee ceases to be employed because of disability (as defined in Section 22(e)(3) of the Code), the Optionee may at any time within a period of three months after the date of such cessation of employment exercise the option to the extent that the option was exercisable on the date of such cessation; and
(c) If the Optionee ceases to be employed because of death, the option, to the extent that the Optionee was entitled to exercise it on the date of death, may be exercised within a period of three months after the Optionee's death by the person or persons to whom the Optionee's rights under the option shall pass by will or by the laws of descent and distribution; provided, however, that this option may not be exercised to any extent by anyone after the date of its expiration; and provided, further, that this option may be exercised only as to Vested Shares (as defined in Section 5) after the Optionee has ceased to be employed by any member of the Company Group.
Percentage of Shares
Years of Employment which are Vested Shares
------------------- -----------------------
Prior to 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
|
provided, however, that in the event of a "Change in Control" of the Company, all of the then remaining Shares which (but for the application of this clause) are not "Vested Shares" at the time of the occurrence of such Change in Control event shall become "Vested Shares" upon such occurrence. The term "Change in Control" shall mean (i) any sale of all or substantially all of the assets of the Company as a going concern, other than a sale to a person or group of persons who, immediately prior thereto, owned 40% or more, in the aggregate, of the Company's outstanding capital stock on a fully-diluted basis (treating each share of Company preferred stock as equivalent to the number of shares of common stock into which it is convertible) (such person or group of persons is hereinafter referred to as an "Affiliate"); or (ii) any sale (by merger or otherwise) by the Company's shareholders of capital stock of the Company to a person or group of persons (other than an Affiliate) which results in such person or group owning more than 80% of the Company's outstanding capital stock on a fully-diluted basis (treating each share of Company preferred stock as equivalent to the number of share of common stock into which it is convertible).
The Vested Shares shall not be subject to the repurchase right of the Company contained in this Section 5, but shall remain subject to the provisions of Section 6. As used herein, the term "Vesting Commencement Date", shall mean the date so specified on the signature page below; and the term "year(s) of employment" shall mean each full year of employment with a member of the Company Group, measured from the Vesting Commencement Date, it being intended that each year measured from the Vesting Commencement Date shall consist of 365 days (366 days in a leap year).
then exist thereon (including, without limitation, those imposed by Sections 6 and 7 hereof).
Optionee exercises all or part of this option or within two (2) years after the Option Date. At any time during the one or two year periods set forth above, the Company may place a legend on any certificate representing Shares requesting the transfer agent for the Company's stock to notify the Company of any such transfer. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.
"The securities represented by this certificate are subject to certain restrictions on transfer and to certain rights of the Company to purchase such securities and to other limitations, all as set forth in a Stock Option Agreement between the Corporation and the registered holder, a copy of which is on file at the principal office of the Corporation and may be obtained, without charge, from the clerk of the Corporation."
"This security has not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws, and has been acquired for investment and not with a view to, or for sale in connection with, any distribution thereof within the meaning of the Act. This security is subject to transfer restrictions contained in a certain Amended and Restated Shareholders' Agreement, and no transfer of the security shall be made unless the conditions specified in said Agreement has been fulfilled. A copy of said Agreement is on file and available for inspection at the principal offices of the Company."
option under Section 422 of the Code, the Company makes no representation about the tax treatment to the Optionee with respect to receipt or exercise of the option or acquiring, holding or disposing of the Shares, and the Optionee represents that the Optionee has had the opportunity to discuss such treatment (including the possible application of Section 83 of the Code) with the Optionee's tax adviser. The Optionee shall have no rights as a stockholder with respect to the Shares subject to the option until the exercise of the option and the issuance of a stock certificate for the Shares with respect to which the option shall have been exercised.
(a) Appropriate adjustment shall be made by the Board in number, kind, and exercise price of Shares covered by the option granted hereunder to give effect to any stock dividends, stock splits, stock combinations, recapitalizations and other similar changes in the capital structure of the Company after the Option Date.
(b) In the event of a change of the Common Stock resulting from a merger or similar reorganization as to which the Company is the surviving corporation, the number and kind of Shares which thereafter may be purchased pursuant to the option granted hereunder, and the number and kind of Shares then subject to the option granted hereunder and the price per Share thereof shall be appropriately adjusted in such manner as the Board may deem equitable to prevent dilution or enlargement of the rights available or granted hereunder. Except as otherwise determined by the Board, a merger or a similar reorganization which the Company does not survive, or a sale of all or substantially all of the assets of the Company, shall cause this option to terminate, to the extent not then exercised, unless any surviving entity agrees to assume the obligations hereunder.
(a) Until the provisions of this Section 15 terminate, as specified in Section 8 hereof, all Shares purchased pursuant to this Agreement, whether or not such Shares are at the time Vested Shares (the "Unreleased Shares"), shall be held in escrow by the Company, as escrow holder ("Escrow Holder"), together with a stock assignment executed by the Optionee. The Escrow Holder is hereby directed to permit transfer of the Unreleased Shares only in accordance with this Agreement or instructions signed by both the Optionee and the Company. In the event further instructions are desired by the Escrow Holder, the Escrow Holder shall be entitled to rely upon directions executed by a majority of the members of the Board. The Escrow Holder Shall have no personal liability for any act or omission hereunder while acting in good faith in the exercise of the Escrow Holder's own judgment.
(b) If the Company exercises its repurchase rights hereunder, the Escrow Holder, upon receipt of written notice of such exercise from the Company, shall take all steps necessary to accomplish such repurchase.
(c) Subject to the terms hereof, the Optionee shall have all the rights of a stockholder with respect to the Shares while they are held in escrow, including
without limitation, the right to vote the Shares and receive any cash dividends declared thereon. If, from time to time while the Escrow Holder is holding Unreleased Shares, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the undersigned is entitled by reason of his or her ownership of the Unreleased Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter purchaser as "Shares" for purposes of this Agreement and the Company's repurchase rights under Sections 5 and 6 hereof.
(d) It is understood and agreed that should any dispute arise with respect to the delivery, ownership or right of possession of the Shares or other securities held by the Escrow Holder hereunder, the Escrow Holder is authorized and directed to retain in the Escrow Holder's possession without liability to anyone all or any part of said Shares or other securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Holder shall be under no duty whatsoever to institute or defend any such proceedings.
(e) The Escrow Holder reserves the right, upon notice to the Company and the Optionee, to resign from the Escrow Holder's duties as Escrow Holder and to appoint a substitute Escrow Holder.
(f) The responsibility of the Escrow Holder hereunder is limited to the use of good faith and reasonable care in the performance of the Escrow Holder's obligations, and the Escrow Holder shall not be liable for the performance of any duties except those expressly provided by this Agreement to be performed. The Escrow Holder may rely, and shall be protected in acting or refraining from acting, upon any written notice or request furnished to the Escrow Holder hereunder and believed by the Escrow Holder to be genuine and to have been signed or presented by the proper party or parties.
IN WITNESS WHEREOF the parties have executed this Stock Option Agreement as of the Option Date.
Address:
Option Date:
Vesting Commencement
Date:
No. of Shares:
Option Price:
Accepted, both as the issuer of the Shares and as Escrow Holder, in accordance with the terms of the foregoing Option Agreement as of the foregoing Option Date.
CENTENE CORPORATION
By: ________________________________
Michael F. Neidorff,
President and Chief Executive
Officer
Exhibit 10.14
NON-STATUTORY STOCK OPTION AGREEMENT
(____ Stock Plan)
THIS AGREEMENT is entered into by and between CENTENE CORPORATION, a Wisconsin corporation (hereinafter the "Company"), and the undersigned employee of the Company (hereinafter the "Optionee").
WHEREAS, the Optionee renders important services to the Company, and the Company desires to grant a non-statutory stock option to the Optionee;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements herein contained, the parties hereto hereby agree as follows:
(a) The Company hereby grants to the Optionee pursuant to the ______ Stock Plan (the "Plan") the option to purchase from the Company upon the terms and conditions hereinafter set forth the number of shares ("Shares") of the Series A common stock, one-third cent per share par value of the Company ("Common Stock"), set forth on the signature page below at the purchase price per Share so set forth (the "Option Price"). The date of grant of this option is the date set forth on the execution page of this Agreement as the "Option Date."
(b) This option is immediately exercisable in full or in part and shall remain exercisable until it expires on the tenth anniversary of the Option Date, unless the option is sooner terminated as hereinafter provided. Only whole Shares may be purchased pursuant to this option.
(a) The option is granted on the condition that the purchase of Shares hereunder shall be for investment purposes and not with a view to resale or distribution, except that such condition shall be inoperative if the offering of Shares subject to the option is registered under the Securities Act of 1933, as amended, or if in the opinion of counsel for the Company such Shares may be resold without registration. At the time of the exercise of the option or any installment thereof, the Optionee will execute such further agreements as the Company may require to implement the foregoing condition and to acknowledge the Optionee's familiarity with restrictions on the resale of the Shares under applicable securities laws, and the Company may stamp such legend of the certificate representing the Shares as may be necessary or appropriate in light of the foregoing condition.
(b) The Company will furnish upon request of the Optionee copies of the articles of incorporation of the Company, as amended, and by-laws of the Company, as amended, and such publicly available financial and other information concerning the Company and its business and prospects as may be reasonably requested by the Optionee in connection with exercise of this option.
(c) The option shall not be transferable otherwise than by will or by the laws of descent and distribution, and except as provided in Section 4 the option shall be exercisable during the lifetime of the Optionee by the Optionee only. Notwithstanding the foregoing, however, if the Optionee is determined to be mentally incompetent and a guardian or conservator (or other similar person) is appointed by a court of competent jurisdiction to manage the Optionee's affairs, the guardian or conservator (or other similar person) may exercise the option on behalf of the Optionee, provided that such exercise is made within the time limits prescribed herein.
(d) The option granted in this Agreement is subject to the terms, conditions and definitions of the Plan, a copy of which is attached hereto. To the extent that the terms, conditions and definitions of this Agreement are inconsistent with those of the Plan, those of this Agreement shall govern. The Optionee hereby accepts this option subject to all such provisions of the Plan and agrees that all decisions under, and interpretations of, such provisions of the Plan by the Board of Directors of the Company (the "Board") or the Committee, as defined in the Plan, shall be final, binding and conclusive upon the Optionee and his or her heirs.
(a) Written notice of the exercise of the option or any installment thereof shall be given to the Company specifying the number of Shares for which the option is exercised and accompanied by payment in full of the Option Price. Payment shall be made: (a) in cash; (b) by check; (c) by Immediate Sales Proceeds, as defined below; (d) by delivery and assignment to the Company of shares of Company stock owned by the Optionee (which shares have a fair market value, as determined by the Board, not less than the Option Price); or (e) by any combination of the foregoing. Notwithstanding the foregoing, this option may not be exercised by delivery and assignment to the Company of shares of Company stock to the extent that such delivery and assignment would constitute a violation of the provisions of any law, or related regulation or rule, or any agreement or Company policy, restricting the transfer or redemption of the Company's stock. As used herein, the term "Immediate Sales Proceeds" shall mean the assignment in form acceptable to the Company of the proceeds of a sale of the Shares acquired on the exercise of this option pursuant to a procedure approved by the Company. The Company reserves, the right to decline to approve any such procedure in the Company's sole and absolute discretion.
(b) The Company's obligation to deliver Shares upon exercise of an option shall be subject to the Optionee's satisfaction of all applicable federal, state and local income and employment tax withholding obligations. Without limiting the generality of the foregoing, the Company shall have the right to deduct from payments of any kind otherwise due to the Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any Shares issued upon exercise of the option.
(a) If the Optionee ceases to so serve as a director for any reason other than death or disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), the Optionee may at any time within a period of one (1) month after the date of such cessation of service exercise the option to the extent that the option was exercisable on the date of such cessation;
(b) If the Optionee ceases to so serve as a director because of disability (as defined in Section 22(e)(3) of the Code), the Optionee may at any time within a period of three months after the date of such cessation of service exercise the option to the extent that the option was exercisable on the date of such cessation; and
(c) If the Optionee ceases to so serve as a director because of death, the option, to the extent that the Optionee was entitled to exercise it on the date of death, may be exercised within a period of three months after the Optionee's death by the person or persons to whom the Optionee's rights under the option shall pass by will or by the laws of descent and distribution; provided, however, that this option may not be exercised to any extent by anyone after the date of its expiration; and provided, further, that this option may be exercised only as to Vested Shares (as defined in Section 5) after the Optionee has ceased to so serve as a director of the Company Group.
Percentage of Shares
Years of Service which are Vested Shares
---------------- -----------------------
Prior to 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
|
provided, however, that in the event of a "Change in Control" of the Company or if the Optionee is not re-elected as a member of the Board, all of the then remaining Shares which (but for the application of this clause) are not "Vested Shares" at the time of the occurrence of such Change in Control event shall become "Vested Shares" upon such occurrence. The term "Change in Control" shall mean (i) any sale of all or substantially all of the assets of the Company as a going concern, other than a sale to a person or group of persons who, immediately prior thereto, owned 40% or more, in the aggregate, of the Company's outstanding capital stock on a fully-diluted basis (treating each share of Company preferred stock as equivalent to the number of shares of common stock into which it is convertible) (such person or group of persons is hereinafter referred to as an "Affiliate"); or (ii) any sale (by merger or otherwise) by the Company's shareholders of capital stock of the Company to a person or group of persons (other than an Affiliate) which results in such person or group owning more than 80% of the Company's outstanding capital stock on a fully-diluted basis (treating each share of Company preferred stock as equivalent to the number of share of common stock into which it is convertible).
As used herein: the term "Vesting Commencement Date", shall mean the date so specified on the signature page below; and the term "year(s) of service" shall mean each full year of service as a director with a member of the Company Group, measured from the Vesting Commencement Date, it being intended that each year measured from the Vesting Commencement Date shall consist of 365 days (366 days in a leap year).
Optionee to vote or to receive dividends on the Shares or may refuse to register on its books any transfer of the Shares or otherwise to recognize any transfer or change in the ownership of the Shares or in the right to vote thereon or to exercise any of the privileges of a stockholder with respect to the Shares, until the provisions of said Sections 5 or 6 or any such other agreement are complied with to the satisfaction of the Company. The Optionee, if a director, shall not vote with respect to any action taken by the Company's Board in pursuing or exercising its rights under the provisions of Sections 5 or 6 hereof. The provisions of Sections 5 or 6 hereof shall remain applicable whether or not the Optionee is at the time a director of the Company.
"The securities represented by this certificate are subject to certain restrictions on transfer and to certain rights of the Company to purchase such securities and to other limitations, all as set forth in a Stock Option Agreement between the Corporation and the registered holder, a copy of which is on file at the principal office of the Corporation and may be obtained, without charge, from the clerk of the Corporation."
"This security has not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws, and has been acquired for investment and not with a view to, or for sale in connection with, any distribution thereof within the meaning of the Act. This security is subject to transfer restrictions contained in a certain Amended and Restated Shareholders' Agreement, and no transfer of the security shall be made unless the conditions specified in said Agreement has been fulfilled. A copy of said Agreement is on file and available for inspection at the principal offices of the Company."
Optionee represents that the Optionee has had the opportunity to discuss such treatment (including the possible application of Section 83 of the Code) with the Optionee's tax adviser. The Optionee shall have no rights as a stockholder with respect to the Shares subject to the option until the exercise of the option and the issuance of a stock certificate for the Shares with respect to which the option shall have been exercised.
(a) Appropriate adjustment shall be made by the Board in number, kind, and exercise price of Shares covered by the option granted hereunder to give effect to any stock dividends, stock splits, stock combinations, recapitalizations and other similar changes in the capital structure of the Company after the Option Date.
(b) In the event of a change of the Common Stock resulting from a merger or similar reorganization as to which the Company is the surviving corporation, the number and kind of Shares which thereafter may be purchased pursuant to the option granted hereunder, and the number and kind of Shares then subject to the option granted hereunder and the price per Share thereof shall be appropriately adjusted in such manner as the Board may deem equitable to prevent dilution or enlargement of the rights available or granted hereunder. Except as otherwise determined by the Board, a merger or a similar reorganization which the Company does not survive, or a sale of all or substantially all of the assets of the Company, shall cause this option to terminate, to the extent not then exercised, unless any surviving entity agrees to assume the obligations hereunder.
(a) Until the provisions of this Section 13 terminate, as specified in
Section 8 hereof, all Shares purchased pursuant to this Agreement, which at the
time are Unvested Shares (the "Unreleased Shares"), shall be held in escrow by
the Company, as escrow holder ("Escrow Holder"), together with a stock
assignment executed by the Optionee. The Escrow Holder is hereby directed to
permit transfer of the Unreleased Shares only in accordance with this Agreement
or instructions signed by both the Optionee and the Company. In the event
further instructions are desired by the Escrow Holder, the Escrow Holder shall
be entitled to rely upon directions executed by a majority of the members of the
Board. The Escrow Holder Shall have no personal liability for any act or
omission hereunder while acting in good faith in the exercise of the Escrow
Holder's own judgment.
(b) If the Company exercises its repurchase rights hereunder, the Escrow Holder, upon receipt of written notice of such exercise from the Company, shall take all steps necessary to accomplish such repurchase.
(c) Subject to the terms hereof, the Optionee shall have all the rights of a stockholder with respect to the Shares while they are held in escrow, including without limitation, the right to vote the Shares and receive any cash dividends declared thereon. If, from time to time while the Escrow Holder is holding Unreleased Shares, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the undersigned is entitled by reason of his or her ownership of the Unreleased Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter purchaser as "Shares" for purposes of this Agreement and the Company's repurchase rights under Section 5 hereof.
(d) It is understood and agreed that should any dispute arise with respect to the delivery, ownership or right of possession of the Shares or other securities held by the Escrow Holder hereunder, the Escrow Holder is authorized and directed to retain in the Escrow Holder's possession without liability to anyone all or any part of said Shares or other securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Holder shall be under no duty whatsoever to institute or defend any such proceedings.
(e) The Escrow Holder reserves the right, upon notice to the Company and the Optionee, to resign from the Escrow Holder's duties as Escrow Holder and to appoint a substitute Escrow Holder.
(f) The responsibility of the Escrow Holder hereunder is limited to the use of good faith and reasonable care in the performance of the Escrow Holder's obligations, and the Escrow Holder shall not be liable for the performance of any duties except those expressly provided by this Agreement to be performed. The Escrow Holder may rely, and shall be protected in acting or refraining from acting, upon any written notice or request furnished to the Escrow Holder hereunder and believed by the Escrow Holder to be genuine and to have been signed or presented by the proper party or parties.
IN WITNESS WHEREOF the parties have executed this Stock Option Agreement as of the Option Date.
Address:
Option Date:
Vesting Commencement
Date:
No. of Shares:
Option Price:
Accepted, both as the issuer of the Shares and as Escrow Holder, in accordance with the terms of the foregoing Option Agreement as of the foregoing Option Date.
CENTENE CORPORATION
By:________________________________
Michael F. Neidorff,
President and Chief
Executive Officer
Exhibit 10.15
In addition to the duties assigned to him by the Company's President and/or Vice Presidents and/or Board of Directors of Company, Executive shall perform such other duties as are commensurate with his position and responsibilities, including without limitation, exercising his best judgment; safeguarding and saving from waste the assets of Company; and following, maintaining, and implementing the business plans, budgets, business procedures and directives established and promulgated by Company, as modified or amended from time to time.
Except as otherwise provided herein, Executive shall not render services, directly or indirectly, to any other person or organization without his Supervisor's prior written consent and shall not engage in any activity that would interfere significantly with the faithful performance of his duties thereunder. Executive may perform minor services for which he does not receive compensation, provided that the activity does not conflict with the provisions of his duties, without written consent.
(a) Company shall reimburse Executive monthly for actual, reasonable, and necessary out-of-pocket expenses he incurs on Company's business in compliance with company policies and procedures.
(b) Executive shall participate in such of Company's Executive plans or fringe benefit arrangements as provided for all Executives, subject to their terms and conditions.
Company's employment for the 180 day period following the date on which he became Permanently Disabled.
"excess parachute payment" as defined in (S) 280G(b) of the Internal Revenue Code of 1986, as amended. Payments which would be "excess parachute payments" shall be proportionately reduced so that no portion of any payment shall constitute an "excess parachute payment." For purposes hereof a "Change in Control" of the Company shall be deemed to occur if (i) any "person" (as such term is used in (S) 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) persons who, at the date of this Agreement, are the beneficial owners of 25% or more of the Company's voting securities or (B) a group including Executive, is or |
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities, or (ii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation. Further, for purposes hereof, a "Change in Control" also shall be deemed to occur if individuals who, as the date hereof, constitute the Board of Directors of the Company (the "Incumbent Board) cease for any reason to constitute at least a majority of the Board of Directors of the Company; provided, however, that an individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by at least a majority of the directors then comprising the Incumbent Board shall be included within the definition of Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual election contest (or such terms are used in Rule 14a-11 of al or threatened solicitation of proxies or consents by or on behalf of a person other than the Board.
operational, financial or other documents given to Executive during Executive's employment with Company.
(a) Executive shall promptly communicate and disclose in writing to Company all those inventions and developments including software, whether patentable or not, as well as patents and patent applications (hereinafter collectively called "Inventions"), made, conceived, developed, or purchased by him, or under which he acquires the right to grant licenses or to become licensed, alone or jointly with others, which have arisen or jointly with others, which have arisen or may arise out of his employment, or relate to any matters pertaining to, or useful in connection therewith, the business or affairs of Company or any of its subsidiaries. Included herein as if developed during the employment period is any specialized equipment and software developed for use in the business of Company. All of Executive's right, title and interest in, to, and under all such inventions, licenses, and right to grant licenses shall be the sole property of Company. Any such inventions disclosed to anyone by Executive within one (1) year after the termination of employment for any cause whatsoever shall be deemed to have been made or conceived by Executive during the Employment Period.
(b) As to all such invention, Executive shall, upon request of Company:
i. Execute all documents which Company shall deem necessary or proper to enable it to establish title to such inventions or other rights, and to enable it to file and prosecute applications for letters patent of the United States and any foreign country; and
ii. Do all things (including the giving of evidence in suits and other proceedings) which Company shall deem necessary or proper to obtain, maintain, or assert patents for any and all such inventions or to assert its rights in any inventions not patented.
This Agreement shall also be binding upon and shall inure to the benefit of Executive and his legal representatives and assigns, except that Executive's obligations to perform such future services and rights to receive payment therefore are hereby expressly declared to be non-assignable and non-transferable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the day and year first above written.
CENTENE CORPORATION
By /s/ Michael Neidorff ------------------------- "Company" By /s/ Karey L. Witty --------------------------- Karey L. Witty |
Exhibit 10.16
THIS AGREEMENT, made and entered into as of the 6th day of August, 2001, by and between CENTENE CORPORATION, a Wisconsin corporation (hereinafter called the "Company"), and Brian Spanel (hereinafter called the "Executive").
In addition to the duties assigned to him by the Company's President and/or Board of Directors of Company, Executive shall perform such other duties as are commensurate with his position and responsibilities, including without limitation, exercising his best judgment; safeguarding and saving from waste the assets of Company; and following, maintaining, and implementing the business plans, budgets, business procedures and directives established and promulgated by Company, as modified or amended from time to time.
Except as otherwise provided herein, Executive shall not render services, directly or indirectly, to any other person or organization without his Supervisor's prior written consent and shall not engage in any activity that would interfere significantly with the faithful performance of his duties thereunder. Executive may perform minor services for which he does not receive compensation, provided that the activity does not conflict with the provisions of his duties, without written consent.
(a) Company shall reimburse Executive monthly for actual, reasonable, and necessary out-of-pocket expenses he incurs on Company's business in compliance with company policies and procedures.
(b) Executive shall participate in such of Company's Executive plans or fringe benefit arrangements as provided for all Executives, subject to their terms and conditions.
Company's employment for the 180 day period following the date on which he became Permanently Disabled.
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities, or
(ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
at least fifty percent (50%) of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation.
Further, for purposes hereof, a "Change in Control" also shall be
deemed to occur if individuals who, as the date hereof,
constitute the Board of Directors of the Company (the "Incumbent
Board) cease for any reason to constitute at least a majority of
the Board of Directors of the Company; provided, however, that an
individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's
shareholders, was approved by at least a majority of the
directors then comprising the Incumbent Board shall be included
within the definition of Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of either an actual election contest (or such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf a person other than the
Board.
operational, financial or other documents given to Executive during Executive's employment with Company.
(a) Executive shall promptly communicate and disclose in writing to Company all those inventions and developments including software, whether patentable or not, as well as patents and patent applications (hereinafter collectively called "Inventions"), made, conceived, developed, or purchased by him, or under which he acquires the right to grant licenses or to become licensed, alone or jointly with others, which have arisen or jointly with others, which have arisen or may arise out of his employment, or relate to any matters pertaining to, or useful in connection therewith, the business or affairs of Company or any of its subsidiaries. Included herein as if developed during the employment period is any specialized equipment and software developed for use in the business of Company. All of Executive's right, title and interest in, to, and under all such inventions, licenses, and right to grant licenses shall be the sole property of Company. Any such inventions disclosed to anyone by Executive within one (1) year after the termination of employment for any cause whatsoever shall be deemed to have been made or conceived by Executive during the Employment Period.
(b) As to all such invention, Executive shall, upon request of Company:
i. Execute all documents which Company shall deem necessary or proper to enable it to establish to title to such inventions or other rights, and to enable it to file and prosecute applications for letters patent of the United States and any foreign country; and
ii. Do all things (including the giving of evidence in suits and other proceedings) which Company shall deem necessary or proper to obtain, maintain, or assert patents for any and all such inventions or to assert its rights in any inventions not patented.
This Agreement shall also be binding upon and shall inure to the benefit of Executive and his legal representatives and assigns, except that Executive's obligations to perform such future services and rights to receive payment therefore are hereby expressly declared to be non-assignable and non-transferable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the day and year first above written.
CENTENE CORPORATION
By /s/ Michael Neidorff
"Company"
By /s/ Brian Spanel
"Executive"
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Exhibit 10.17
In addition to the duties assigned to his by the Company's President and/or Plan Presidents and/or Vice Presidents and/or Board of Directors of Company, Executive shall perform such other duties as are commensurate with his position and responsibilities, including without limitation, exercising his best judgment; safeguarding and saving from waste the assets of Company; and following, maintaining, and implementing the business plans, budgets, business procedures and directives established and promulgated by Company, as modified or amended from time to time.
Except as otherwise provided herein, Executive shall not render services, directly or indirectly, to any other person or organization without his Supervisor's prior written consent and shall not engage in any activity that would interfere significantly with the faithful performance of his duties thereunder. Executive may perform minor services for which he does not receive compensation, provided that the activity does not conflict with the provisions of his duties, without written consent.
(a) Company shall reimburse Executive monthly for actual, reasonable, and necessary out-of-pocket expenses he incurs on Company's business in compliance with company policies and procedures.
(b) Executive shall participate in such of Company's Executive plans or fringe benefit arrangements as provided for all Executives, subject to their terms and conditions.
Termination Date or Resignation Date, as applicable; provided, however, the amount due and payable for the period on and after the date on which Executive became Permanently Disabled shall not be less than the portion of the Salary that would have been paid to his if he had continued in the Company's employment for the 180 day period following the date on which he became Permanently Disabled.
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities, or (ii) the Shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation.
(a) Executive shall promptly communicate and disclose in writing to Company all those inventions and developments including software, whether patentable or not, as well as patents and patent applications (hereinafter collectively called "Inventions"), made, conceived, developed, or purchased by him, or under which he acquires the right to grant licenses or to become licensed, alone or jointly with others, which have arisen or jointly with others, which have arisen or may arise out of his employment, or relate to any matters pertaining to, or useful in connection therewith, the business or affairs of Company or any of its subsidiaries. Included herein as if developed during the employment period is any specialized equipment and software developed for use in the business of Company. All of Executive's right, title and interest in, to, and under all such inventions, licenses, and right to grant licenses shall be the sole property of Company. Any such inventions disclosed to anyone by Executive within one (1) year after the termination of employment for any cause whatsoever shall be deemed to have been made or conceived by Executive during the Employment Period.
(b) As to all such invention, Executive shall, upon request of Company:
i. Execute all documents which Company shall deem necessary or proper to enable it to establish title to such inventions or other rights, and to enable it to file and prosecute applications for letters patent of the United States and any foreign country; and
ii. Do all things (including the giving of evidence in suits and other proceedings) which Company shall deem necessary or proper to obtain, maintain, or assert patents for any and all such inventions or to assert its rights in any inventions not patented.
This Agreement shall also be binding upon and shall inure to the benefit of Executive and his legal representatives and assigns, except that Executive's obligations to perform such future services and rights to receive payment therefore are hereby expressly declared to be non-assignable and non-transferable.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the day and year first above written.
CENTENE CORPORATION
By /s/ Michael Neidorff ------------------------ "Company" By /s/ Joseph P. Drozda ------------------------ "Executive" |
Date 10/16/00
Exhibit 10.18
This Executive Employment Agreement ("Agreement") is made and entered into this 16th day of December, 1998, by and between Centene Management Corporation a Wisconsin corporation ("Company"), and Mary O'Hara ("Executive").
(a) "Anniversary Date" means December 16, 1998, and each following December 16th during the Employment Term.
(b) "Annual Salary" means the salary payable to Executive pursuant to
Section 4(a).
(c) "Board" means the Company's Board of Directors.
(d) "CMC" means Centene Management Corporation, a Wisconsin corporation.
(e) "Employment Term" means the period beginning December 16, 1998 and ending December 16, 1999 (the "Initial Term"), and thereafter extending automatically from year-to-year (in each case, an "Annual Renewal Term") until the date on which this Agreement is terminated pursuant to Section 5, or by the Company as of the expiration of the Initial Term or any such Annual Renewal Term upon not less than thirty (30) days prior written notice to Executive.
(f) "Effective Date" means December 16 1998.
(g) "Permanent Disability" or "Permanently Disabled" refers to permanent disability within the meaning of the Company's disability insurance policy in effect at the time of the illness or injury causing the disability or, if no disability policy is then in effect, in accordance with the Company's disability policy last in effect.
(h) "Resignation Date" means the date on which Executive terminates employment with the Company as a result of her resignation.
(i) "Termination Date" means the date on which Executive's employment with the Company terminates as a result of action taken by the President and not as a result of Executive's resignation from employment.
(j) "For Cause" refers to termination of Executive's employment with the
Company by the Board because of: (a) any intentional, wanton, or reckless
act or omission that constitutes a material breach by Executive of her
obligations hereunder, (b) engaging in conduct that has caused
demonstrable and serious injury to the Company or the public image or
reputation of the Company, monetary or otherwise, (c) Executive's
perpetration of an act of fraud or embezzlement against the Company or
(d) Executive's commission of a felony.
(a) Executive shall serve as Vice President and Chief Contracting Officer and shall perform such duties, consistent with such position, to the best of her abilities, as are assigned to her from time to time by the President & CEO. Throughout the Employment Term, Executive shall (i) devote substantially all of her working hours to her duties under this Agreement; (ii) faithfully and loyally serve the Company and promote its best interests; and (iii) carry out the lawful and reasonable directions and instructions given to her by her Supervisor and duties for which Executive is responsible under this Agreement and under the by-laws of the Company.
devices, customer lists, supplier lists, business plans, software, programs or other data of the Company, without regard to whether all of the foregoing matters will be otherwise deemed confidential, material or important, the parties stipulating that as between them, the same are important, material and confidential and greatly affect the effective and successful conduct of the business and the goodwill of the Company unless available in the public domain.
(i) Engage in any health maintenance organization, Medicaid reimbursement or related business in the same geographic area which is competitive with any business being conducted by the Company or any affiliate of the Company or as to which the Company or any affiliate of the company has made definitive plans to engage (as any such plans may exist as of the date of termination of Executive's employment in the event of any such termination); or
(ii) Solicit divert or take away any customer, supplier, or employee of the Company (as existing as of the date of termination of Executive's employment in the event of such termination), or employ, or participate in the employment process of, through any other person or entity, any person who is, or has been within one year prior to the date of such employment, an employee of the company.
It is the intention of the parties to restrict the activities of Executive under this section only to extent necessary for the protection of the business interests of the Company, and the parties specifically covenant and agree that should any of the provisions set forth herein, under any set of circumstances, be determined by a court having
jurisdiction to be too broad for that purpose or invalid or unenforceable for any reason, such provisions shall be so interpreted and applied by the court in such a narrow sense as shall be necessary to make the same valid and enforceable to the maximum extent possible, consistent with the intent of the parties expressed in the Agreement, and that such determination shall not affect the enforcement of this section in any other jurisdiction.
The covenants and agreements of Executive contained in this section shall be construed as independent of any other provision of this Agreement and given for valuable independent consideration, and the existence of any defense, claim or cause of action against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants and agreements.
(a) If to the Company to: Centene Management Corporation, Michael F. Neidorff, 7711 Carondelet Avenue, Suite 600, St. Louis, Missouri 63105.
(b) If to Executive, to such address for Executive as is last shown on the payroll records of the Company.
Either party may, by giving written notice to the other party, change the address to which notice shall then be sent.
The parties have executed this Agreement on the date first written above.
Centene Management Corporation
Exhibit 21
List of Subsidiaries
Centene Management Corporation, a Wisconsin corporation
Superior HealthPlan, Inc., a Texas corporation
Centene Corporation of Texas, a Texas corporation
Managed Health Services Illinois, Inc., an Illinois corporation*
Coordinated Care Corporation Indiana, Inc. d/b/a/ Managed Health Services, an Indiana corporation
Managed Health Services Insurance Corp., A Wisconsin insurance corporation
MHS Consulting Corporation, a Wisconsin corporation
*Inactive Subsidiary
Exhibit 23
As independent public accountants, we hereby consent to the use of our reports (and to all references to our Firm) included in or made a part of this registration statement.
/s/ ARTHUR ANDERSEN LLP
St. Louis Missouri
October 9, 2001
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