**1. MAD 312 or 335 PROVIDER PARTICIPATION APPLICATION (FOR MEDICAID
PROVIDERS ONLY)**

a.  The Approved Human Services Department/Medical Assistance Division
    form (MAD 312 or 335 for waivers), which constitutes an agreement to
    provide Medicaid services, shall be considered an attachment to this
    contract/provider agreement and is incorporated herein by reference.

b.  By prior arrangement, contracts/provider agreements entered into by
    the DEPARTMENT with Medicaid providers for services reimbursed by
    New Mexico\'s Medicaid Program are considered approved by the New
    Mexico Department of Finance and Administration.

c.  In the event there is a conflict between any term of this
    contract/provider agreement and an applicable Medicaid rule, the
    applicable Medicaid rule will control, for Medicaid Services
    provided under this contract/provider agreement.

**2. APPROPRIATIONS**

> The performance of this contract/provider agreement is subject to the
> condition that sufficient funds are appropriated, authorized, and
> allocated by the Legislature of the State of New Mexico and/or by the
> federal government. If sufficient appropriations, authorizations, and
> allocations are not made by the Legislature of the State of New Mexico
> and/or by the federal government, necessitating a decrease in the
> amount of contract/provider agreement funds available for expenditure
> by the DEPARTMENT, this contract/provider agreement may be terminated
> or unilaterally amended to a lower amount of funds upon written notice
> being given by the DEPARTMENT to the CONTRACTOR. The decision of the
> DEPARTMENT as to the amount of contract/provider agreement funds
> available for expenditure from the appropriation, authorization and/or
> allocation shall be final and binding on the CONTRACTOR.

**3. PAYMENT**

> **a. STATE GENERAL FUND AND BLOCK GRANT FUNDING**

1.  The DEPARTMENT shall pay the CONTRACTOR for actual services as
    specified in the contract/provider agreement.

2.  Payment shall be based on actual services provided and reported in
    accordance with Article 18, including Reporting Requirements for the
    Behavioral Health Information System (BHIS), FIT Database System,
    Provider Payment System, Unit Price System (UPS) /Human Resource
    Studies, or as otherwise directed by the DEPARTMENT.

3.  Payment shall be made only for those services as specified in the
    contract/provider agreement and which are not funded by any other
    public funding source for the same service provided to the same
    client at the same time, e.g., Medicaid, DWI Grants administered by
    public entities.

4.  The CONTRACTOR may bill the DEPARTMENT and other private funding
    sources for the same service provided to the same client at the same
    time when the combined amount billed to all funding sources does not
    exceed the total cost of the service.

5.  Payment for forensic evaluations by the Behavioral Health Services
    Division to the CONTRACTOR shall only be for clients who are unable
    to pay in accordance with Article 4.a.

> **b. MEDICAID FUNDING**
>
> The CONTRACTOR accepting rates for specific service components shall
> comply with all reporting requirements set forth by the DEPARTMENT and
> The Medical Assistance Division of the Human Services Department (as
> applicable to Medicaid providers) in accordance with the MAD 312 or
> 335, including but not limited to cost-based reporting and other
> fiscal and service utilization reports, as applicable.
>
> **c. CONDITIONS REGARDING PAYMENT**

1.  Payment under contracts/provider agreements will be made upon
    receipt from the CONTRACTOR of certified billing documents, in
    written form or by computerized means, for documenting delivery of
    actual authorized services under the service or treatment plan**.**

2.  Payment under contracts/provider agreements shall be made upon
    receipt from the CONTRACTOR of a certified billing document, in
    written form or by computerized means, showing the number of units
    of services allowed and provided during the billing period, or as
    otherwise specified in the contracts/provider agreements by the
    DEPARTMENT.

3.  Billing documents shall not be submitted more often than once per
    month. Failure to submit billings within one hundred twenty (120)
    days of the close of the month for which payment is sought will
    result in the non-availability of State and/or Federal funds for
    payment.

4.  For the purposes of verifying that the cost of services submitted
    and billed in conjunction with the activities of this
    contract/provider agreement are accurate, complete and current, the
    DEPARTMENT, the CENTER FOR MEDICARE AND MEDICAID SERVICES (CMS) or
    any authorized State and Federal agent shall for six (6) years from
    the date of final payment under this contract/provider agreement,
    have the right to examine the books, records, documents, papers, and
    other supporting data directly involving transactions related to
    this contract/provider agreement, or which are reasonably necessary
    to permit adequate evaluation of the pricing data submitted, along
    with the computations and projections used.

5.  Payment for travel expenses, except as specifically noted or
    authorized, is non-allowable and is considered an indirect cost of
    the administration of this contract/provider agreement.

6.  The Department shall review requests for payment from the CONTRACTOR
    before and after payment. Payment under this contract/provider
    agreement shall not preclude the right of the DEPARTMENT to recover
    excessive or illegal payments and payments made for services,
    including but not limited to payment for services not delivered, or
    for services not delivered appropriately or in accordance with
    applicable standards or regulations.

**d. LATE PAYMENTS**

Within fifteen days after the date the DEPARTMENT receives written
notice from the CONTRACTOR that payment is requested for services or
items of tangible personal property delivered on site and received, the
DEPARTMENT shall issue a written certification of complete or partial
acceptance or rejection of the services or items of tangible personal
property. If the DEPARTMENT finds that the services or items of tangible
personal property are not acceptable, it shall within thirty days after
the date of receipt or written notice from the CONTRACTOR that payment
is requested, provide to the CONTRACTOR a letter of exception explaining
the defect or objection to the services or delivered tangible personal
property along with details of how the CONTRACTOR may proceed to provide
remedial action. Upon certification by the DEPARTMENT that the services
or items of tangible personal property have been received and accepted,
payment shall be tendered to the CONTRACTOR within thirty days after the
date of certification. If payment is made by mail, the payment shall be
deemed tendered on the date it is postmarked. After the thirtieth day
from the date that written certification of acceptance is issued, late
payment charges shall be paid on the unpaid balance due on the contract
to the CONTRACTOR at the rate of 1.5% per month. For purchases funded by
state or federal grants to local public bodies, if the local public body
has received the funds from the federal or state funding agency, but has
already certified that the services or items of tangible personal
property have been received and accepted, payments shall be tendered to
the CONTRACTOR within five working days of receipt of funds from that
funding agency.

4.  **FEES AND OTHER INCOME GENERATED**

    a.  All CONTRACTORS, except those providing HIV/AIDS services
        through contracts with the Public Health Division of the
        DEPARTMENT, Medically Fragile Medicaid Waiver Services, and
        Developmental Disabilities Medicaid Waiver Services, may
        establish a schedule of fees regarding: 1) Fee for Services; 2)
        Implementation of a fee scale based on income and family size;
        and 3) Collection of Fees for Services.

    b.  The CONTRACTOR shall not refuse services to any individual on
        the basis of inability to pay.

**5. STATUS AS INDEPENDENT CONTRACTOR**

> The CONTRACTOR is an independent contractor and shall set its own
> employment and corporate policies, subject to all applicable federal,
> state, and local employment and corporate laws, rules and regulations.
> The CONTRACTOR, its employees, and its agents are not to be construed
> as employees of the DEPARTMENT through the performance of services
> under this contract/provider agreement and no benefits of employment
> by the DEPARTMENT shall accrue to the CONTRACTOR, its employees and
> agents as a result of this contract/provider agreement. The DEPARTMENT
> may designate the results to be accomplished by the CONTRACTOR, but
> the CONTRACTOR shall have the right to determine the manner and method
> by which the results, which are set forth in the Scope of Services of
> this contract/provider agreement, are accomplished. These manners and
> methods by which the results are obtained must be appropriately
> documented by the CONTRACTOR and be available for review by the
> DEPARTMENT and its designated agents.

**6. GOVERNING BODIES**

> The parties agree that the Governing Body of the CONTRACTOR is
> responsible for assuring compliance with all contractual terms, and
> shall have the right and responsibility to establish policy for the
> CONTRACTOR. Nothing herein shall in any way restrict the authority of
> the Governing Body from appropriately delegating day-to-day management
> responsibilities to its employees, agent or agents. By such
> delegation, employees and/or agents of the CONTRACTOR must conduct the
> operation of the CONTRACTOR consistent with the policies and
> procedures approved by the Governing Body.

**7. ASSIGNMENT, SUBCONTRACTING AND AGENCY**

The CONTRACTOR shall not assign or subcontract any of its contractual
rights, liabilities, or the performance of any program component
specified in the Scope of Services under this contract/provider
agreement without the prior written approval of the DEPARTMENT. Long
Term Services Division (LTSD) providers shall comply with subcontracting
requirements as contained in the Special Provisions. The CONTRACTOR
shall not attempt to bind or bind the DEPARTMENT to any contract as its
agent, unless the DEPARTMENT is a signatory party to that contract.

**8. FAILURE TO PERFORM** (For Non-Medicaid Providers Only)

a.  CONTRACTOR agrees that services contracted in the Special Provisions
    shall be provided and reported during the entire term of this
    contract/provider agreement. Exceptions to this requirement may be
    granted in writing by the DEPARTMENT upon mutual agreement on a
    \"services provision\" plan submitted by the CONTRACTOR.

b.  Unless otherwise specified in the Scope of Services, the DEPARTMENT
    may reduce the contract/provider agreement amount of any program
    component for the following reasons: 1) Failure of the CONTRACTOR to
    provide at least ninety percent (90%) of the contracted amount of a
    unit program component or discipline specific services required over
    a period of three months (monthly utilization shall be prorated
    based on the term and amount of the contract/provider agreement); 2)
    Failure to provide non-unit component services in any specified
    period, withholding of payment may occur for that period, and a
    contract amendment reduction may be initiated as needed; and 3)
    Failure of the CONTRACTOR to provide services in accordance with
    applicable DEPARTMENT Regulations, Standards and Policies, after
    written notice to the CONTRACTOR of the deficiency, as stated below.

c.  Before the DEPARTMENT initiates a contract amendment, the DEPARTMENT
    shall give ten (10) calendar days written notice to the CONTRACTOR.
    The CONTRACTOR may provide an explanation of the failure to perform
    (within ten days of notice of reduction) that shall be considered by
    the DEPARTMENT and to which the DEPARTMENT shall give a written
    response.

**9. TERMINATION**

a.  Either the DEPARTMENT or the CONTRACTOR may terminate this
    contract/provider agreement without cause upon at least thirty (30)
    days written notice to the other party. Medicaid providers will be
    afforded due process rights available under state and Federal laws.

b.  The DEPARTMENT may, by written notice to the CONTRACTOR, terminate
    the whole or any part of this contract/provider agreement in any one
    of the following circumstances:

c.  If the CONTRACTOR fails to comply with any terms, conditions,
    requirements, or provisions of this contract/provider agreement, the
    DEPARTMENT shall notify the CONTRACTOR in writing, and, should the
    CONTRACTOR not remedy such failure within a period of time specified
    in writing by the DEPARTMENT, the contract/provider agreement may be
    terminated immediately following the end of the time period for
    remedial action.

d.  If, during the term of this contract/provider agreement, the
    CONTRACTOR or any of its officers, employees or agents commit client
    abuse, neglect or exploitation, malpractice, fraud, embezzlement or
    other serious misuse of funds, the DEPARTMENT may terminate this
    contract/provider agreement immediately upon written notice to the
    CONTRACTOR.

e.  The DEPARTMENT may terminate this contract/provider agreement
    pursuant to the Appropriations Article of this contract/provider
    agreement.

f.  By the methods of termination provided in this subsection neither
    party may nullify obligations already incurred for the performance
    or failure to perform prior to the date of termination.

g.  The CONTRACTOR agrees that the provisions and procedures set forth
    in the Health Facility Receivership Act, Sections 24-1E-1 through
    24-1E-7, NMSA 1978, apply to the CONTRACTOR, and further understands
    that the DEPARTMENT may seek judicial appointment of a receiver as
    set forth in the Health Facility Receivership Act.

**10. TERMINATION MANAGEMENT**

> If this contract/provider agreement is terminated pursuant to the
> provisions of this contract/provider agreement, or if the parties
> mutually agree to discontinue their contractual relationship, or upon
> expiration of the term of the contract/provider agreement, immediately
> upon receipt by either the DEPARTMENT or the CONTRACTOR of written
> notice of termination, the CONTRACTOR shall: 1) not incur any further
> obligations for salaries, services, or any other expenditures of funds
> under this contract/provider agreement without the written approval of
> the DEPARTMENT; 2) continue to provide essential services and supports
> to ensure the health and safety of individual clients as directed by
> the DEPARTMENT during the period of termination management and
> complete the transition of all clients currently receiving services;
> this requirement to continue essential services and supports to ensure
> the health and safety of clients, is not avoided by an inadvertent
> expiration of term for the provider agreement. In this event the
> Department will extend the agreement until all transition of services
> are completed; 3) comply with all directives issued by the DEPARTMENT
> in the notice of termination as to the performance of work under this
> contract/provider agreement; 4) take such action as the DEPARTMENT
> shall direct for the protection, preservation, retention or transfer
> of all property titled to the DEPARTMENT and client records generated
> under this contract/provider agreement in accordance with ARTICLE 11
> FINANCIAL RECORDS, Section b. and ARTICLE 15 DISCLOSURE OF
> INFORMATION, Section c; 5) within five days of the receipt of notice
> of termination from the DEPARTMENT or immediately upon the sending of
> notice of termination by the CONTRACTOR, notify each client served
> under this contract/provider agreement in writing, to the greatest
> extent practicable, of the termination of the contract/provider
> agreement and the procedure for the transfer of the clients' records
> in accordance with applicable legal requirements; 6) within thirty
> (30) days of the date of termination of this contract/provider
> agreement, the CONTRACTOR shall furnish to the DEPARTMENT: (a) a
> complete, detailed inventory of non-expendable DEPARTMENT property;
> and (b) a final closing of the financial records and books of accounts
> which were required to be kept by the CONTRACTOR under the provision
> of this contract/provider agreement regarding financial records.

**11. FINANCIAL RECORDS**

a.  The CONTRACTOR shall maintain accurate financial records, books,
    files and reports (\"financial records\") in accordance with
    generally accepted accounting principles, applicable state and
    federal laws and regulations and the requirements of the DEPARTMENT.

b.  The CONTRACTOR shall preserve all financial records for a period of
    at least six (6) years from the date of the final payment under this
    contract/provider agreement. If any litigation, claim, negotiation,
    or other action involving the records has been started before the
    expiration of the six (6) year period, the financial records shall
    be retained until completion of the action and resolution of all
    issues which arise from it, or until the end of the regular six (6)
    year period, whichever is later.

c.  The CONTRACTOR shall make all financial records available for
    inspection as requested by the DEPARTMENT, the State Auditor, and
    any other federal or state agency that has provided funds under this
    contract/provider agreement and any agents of the agencies listed in
    this subsection. The inspection of financial records and audits of
    payment requests shall be made in accordance with the provisions of
    this contract/provider agreement regarding disclosure of
    information.

    12. **ANNUAL FINANCIAL REPORTS**

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a.  The CONTRACTOR [receiving state funds from the DEPARTMENT and/or
    federal funds]{.underline} shall comply, if applicable, with
    auditing requirements under the Single Audit Act (31 U.S.C. Section
    7501, [et seq]{.underline}.) and the New Mexico State Auditor\'s
    rules and regulations.

b.  CONTRACTORS receiving federal funds in excess of \$300,000 in any
    single state fiscal year which are subject to the Single Audit Act
    shall submit to the DEPARTMENT an audit conducted by a Certified
    Public Accountant in compliance with the Single Audit Act.

c.  CONTRACTORS receiving federal funds in excess of \$300,000 which are
    otherwise exempt from the Single Audit Act or CONTRACTORS receiving
    state funds from the DEPARTMENT in excess of \$100,000 in any single
    state fiscal year shall submit to the DEPARTMENT Annual Financial
    Statements and a Management Letter expressing an opinion on the
    Financial Statements prepared by an external Certified Public
    Accountant.

d.  CONTRACTORS receiving state funds from the DEPARTMENT less than
    \$100,000 or CONTRACTORS receiving federal funds less than \$300,000
    in any single state fiscal year shall submit to the DEPARTMENT**:**

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1.  Annual Financial Statements and a Management Letter expressing an
    opinion on the Financial Statements prepared by an external
    Certified Public Accountant**, or**

2.  If Financial Statements are not normally prepared by a Certified
    Public Accountant, internally prepared Financial Statements are
    acceptable.

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e.  Applicable annual financial reports shall be submitted to the
    DEPARTMENT no later than six months following the close of the
    CONTRACTOR's fiscal year.

f.  CONTRACTORS shall submit their annual financial statements to:

    Department of Health

    Office of Internal Audit

    ATTN: Financial Review

    P. O. Box 26110

    Santa Fe, NM 87502-6110

g.  Unless allowable under provisions of the Single Audit Act or other
    specific contract provisions, the CONTRACTOR shall not request
    payment from the DEPARTMENT for the cost of preparation of
    [annual]{.underline} financial [reports]{.underline} required by
    this Article.

h.  Non-compliance with the above financial reporting conditions shall
    subject the CONTRACTOR to sanctions as set forth in Article 38.

    12. **STANDARDS FOR SERVICES AND LICENSING**

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a.  The CONTRACTOR agrees to provide services as set forth in the
    Services and Payment Specifications for each Program Component, or
    Scope of Work, as applicable. Services are to be provided, as
    applicable, in accordance with:

    1.  "Comprehensive Behavioral Health Standards" as set forth in,
        NMAC 7.20.2, or such regulations as may be amended or adopted by
        the DEPARTMENT,

    2.  "Requirements for Developmental Disabilities Community
        Programs", NMAC 7.26.6, or such regulations as may be amended or
        adopted by the DEPARTMENT,

    3.  Unit of service components are to be provided as described in
        the \"Unit of Service Definitions for FY 2002,\" attached hereto
        and incorporated herein.

b.  The CONTRACTOR shall comply with all applicable state and federal
    laws and regulations concerning professional and health facility
    licensing and certification requirements, the Caregivers' Criminal
    History Screening Act, Sections 29-17-2, [et seq]{.underline}. NMSA
    1978, NMAC 7.1.9, "Caregivers' Criminal History Screening
    Requirements," and any other applicable legal requirements.

c.  The Developmental Disabilities Community Services Act, Sections
    28-16A-1, [et seq]{.underline}., NMSA 1978 and NMAC 7.26.6, are the
    basis for \"Policies and Procedures for the Centralized Admission
    and Discharge Process for New Mexicans with Developmental
    Disabilities,\" adopted by the Department of Health, Long Term
    Services Division (formerly the Developmental Disabilities
    Division), effective January, 1992. All Long Term Services Division
    CONTRACTORS shall comply with these policies and procedures, and any
    amendments or revisions thereto.

d.  The attached service definitions, service standards and
    requirements, and certification standards are incorporated by
    reference. The CONTRACTOR agrees to comply fully with all
    requirements and provisions of DEPARTMENT policies, procedures,
    operations manual and any subsequent updates; current certification
    standards and any subsequent amendments pertinent to each listed
    service; budget, fiscal responsibility conditions, standards and
    requirements described in this contract/provider agreement and
    applied during the approved term of this contract/provider
    agreement.

**14. APPLICABLE FEDERAL LAWS**

> a\. HIPAA: The CONTRACTOR shall comply with all applicable
> requirements of the Health Insurance Portability\
> and Accountability Act of 1996. (HIPPA)
>
> b\. Funding provided through this contract/provider agreement may
> include various state and federal funding sources. Services funded in
> whole or in part by federal funds are also subject to applicable
> federal laws, regulations, and conditions.
>
> c\. For Alcoholism Program Components funded by the Substance Abuse
> Prevention and Treatment Block Grant:
>
> The comprehensive Alcohol and Alcoholism Prevention, Treatment and
> Rehabilitation Act of 1970, as amended (42 U.S.C. Section 290 dd-1,
> [et seq]{.underline}. and the Public Health Service Act 42 U.S.C.
> Sections 300x, [et seq]{.underline}.[,]{.underline} hereafter referred
> to as the \"Act\").
>
> d\. For Mental Health Program Components funded by the Community
> Mental Health Services Block Grant:
>
> The Community Mental Health Centers Act (42 U.S.C. Section 2681, [et
> seq]{.underline}., as amended), the Act (42 U.S.C. Section 300x, [et
> seq]{.underline}.), and applicable federal regulations.
>
> e\. For Mental Health Program Components funded by the Community
> Mental Health Services Block Grant, the following conditions apply:
>
> No funds shall be used to:

1.  provide inpatient services;

2.  make cash payments to intended recipients of health services;

3.  purchase or improve land, purchase, construct, or permanently
    improve (other than minor remodeling) any building or other
    facility, or purchase major medical equipment;

4.  satisfy any requirement for the expenditure of non-Federal funds as
    a condition for the receipt of Federal funds, or

5.  provide financial assistance to any entity other than a public or
    nonprofit private entity.

> f\. For Program Components funded by the Substance Abuse Prevention
> and Treatment Block Grant, 45 CFR (Code of Federal Regulations), Part
> 96, applies.

g\. If any funds other than federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an
officer or employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with this federal contract, grant, loan, or cooperative
agreement, the CONTRACTOR shall complete and submit Standard Form-LLL,
\"Disclosure Form to Report Lobbying,\" in accordance with its
instructions.

> h\. For Program Components funded by Preventive Health Services Block
> Grant funds provisions of the Act (42 U.S.C. Section 300x, [et
> seq]{.underline}.), applies.
>
> i\. All CONTRACTORS shall comply with the provisions of Titles II and
> III of the Americans with Disabilities Act of 1990, P.L. 101-336 (42
> U.S.C. Section 12101, [et seq]{.underline}.) and Section 504 of the
> Rehabilitation Act (29 U.S.C. Section 794).
>
> j\. The CONTRACTOR shall comply with the requirements of the
> Pro-Children Act of 1994 (20 U.S.C. Sections 6083, [et
> seq]{.underline}.) that prohibits smoking in any portion of any indoor
> facility used routinely or regularly for the provision of health
> services to children under the age of 18 funded by federal grants. The
> law does not apply to children\'s services provided in private
> residences, portions of facilities used for inpatient drug or alcohol
> treatment, to service providers whose sole source of federal funding
> is Medicare or Medicaid or facilities where WIC coupons are redeemed.
>
> k*.* For CONTRACTORS approved to provide services under Medicaid
> Programs, the CONTRACTOR agrees to abide by Federal regulations and
> State policies concerning providers of services under Title XIX
> (Medicaid) of the Social Security Act (42 U.S.C. Section 1302) and
> regulations contained in 42 CFR Chapter IV.

l.  For CONTRACTORS approved to provide Early Intervention Services
    under the Family Infant Toddler Program, the federal Individuals
    With Disabilities Education Act, Part C applies.

### 15. DISCLOSURE OF INFORMATION 

a.  Disclosure of any client information shall be made to the DEPARTMENT
    promptly whenever requested for the proper administration of this
    contract/provider agreement. The DEPARTMENT shall maintain the
    confidentiality of all client records irrespective of whether or
    when the client ceases to be a client [in compliance with HIPAA and
    other applicable legal authorities.]{.underline}

b.  It shall be the responsibility of the CONTRACTOR to protect the
    identity, directly or indirectly, of individual clients

receiving services provided through this contract/provider agreement.
For purposes of DEPARTMENT audits, research or program evaluation,
client records shall be disclosed to the DEPARTMENT under any of the
following circumstances: (1) if the client gives written, informed
consent for disclosure; (2) if all identifying information is excluded
from the client\'s records, or; (3) if disclosure is allowed pursuant to
any of the following applicable laws or regulations: a) for alcoholism
and drug abuse services, 42 CFR Part 2, Confidentiality of Alcohol and
Drug Abuse Patient Records; b) for mental health and developmental
disabilities services, Section 43-1-19, NMSA 1978, of the New Mexico
Mental Health and Developmental Disabilities Code, and Section 32A-6-15
NMSA 1978 of the Children's Mental Health and Developmental Disabilities
Code, and; c) any regulations promulgated by the DEPARTMENT or the
federal government.

c\. The CONTRACTOR agrees to retain the client records of all clients
served during the term of this contract/provider agreement and also for
a period of at least (6) years from the date of discharge or the last
date of client services provided, whichever comes first, unless the
client records are transferred to another custodian of the records
pursuant to the Termination Management Article of this contract/provider
agreement. Retention or disposal of client records following the
six-year period remains within the discretion of the CONTRACTOR.

> d\. Long Term Services Division, Family Infant Toddler Program records
> are governed by the Education Department General Administrative
> Regulations (EDGAR) which require that children\'s records be retained
> for six (6) years (34 CFR Part 76).
>
> e\. The CONTRACTOR agrees to maintain the confidentiality of clients
> and client records in accordance with all applicable Federal and State
> laws and regulations including the Health Insurance Portability and
> Accountability Act of 1996 and applicable regulations.

**16. PROGRAM EVALUATIONS**

> a\. In order to monitor the performance of services and compliance
> with the provisions of this contract/provider agreement by the
> CONTRACTOR, employees of the DEPARTMENT and/or State and Federal
> agencies which have provided funds under this contract/provider
> agreement, or their duly authorized representatives, shall visit the
> offices of the CONTRACTOR when necessary to examine the CONTRACTOR\'s
> operations and records. Client records shall be reviewed in accordance
> with the Disclosure of Information Article.
>
> b\. The DEPARTMENT shall conduct site visits to any service locations
> when appropriate. The DEPARTMENT may provide advance notice of the
> site visit to the CONTRACTOR.
>
> c\. The CONTRACTOR shall provide information and access to copies of
> records promptly upon request by the DEPARTMENT.
>
> d\. The CONTRACTOR shall be accredited in accordance with Article 37.
>
> e\. All CONTRACTORS shall have a Quality Management and Improvement
> Plan in accordance with the timeframes specified by the DEPARTMENT.

**17. INCIDENT MANAGEMENT**

> The CONTRACTOR shall comply with the DEPARTMENT's policies on the
> reporting, notification and management of incidents of abuse, neglect,
> exploitation, other reportable incidents, and deaths.

**18. REPORTING REQUIREMENTS FOR CLIENT DEMOGRAPHIC DATA, CONSUMER
INFORMATION, AND**

#  SERVICE/CLAIMS INFORMATION

> The DEPARTMENT will provide at no cost, to the Fee for Service
> providers, a system to facilitate data collection and data submission
> to BHSD.

CONTRACTORS shall use the applicable computerized information systems:

> **[Provider Payment System (PPS)/Unit Price System
> (UPS)]{.underline}:**

a.  To be used to capture claims information in accordance with state
    and federal reporting requirements under

> the Fee-for-Service (FFS) System. Contractors/Agencies providing
> services to the mental health and substance abuse populations under a
> Fee-for-Service contract with the BHSD of the DEPARTMENT are required
> to use the PPS/UPS until October 16, 2003. After that date, the
> Department will provide a web-based methodology for submission of
> claims by FFS providers. All CONTRACTORS providing State General
> Funded, or Federal Grant Funded (non-Medicaid) services are required
> to use the DEPARTMENT OF HEALTH Provider Payment System/Unit Price
> System for reimbursement until October 16, 2003. After that date the
> DEPARTMENT will provide a different system for submission of payment
> claims and documentation.

b.  Agencies under contract/provider agreement to the DEPARTMENT for the
    provision of services to adults with developmental disabilities
    under State General Funds shall submit to the DEPARTMENT a listing
    of all eligible recipients of such services prior to finalization of
    contract/provider agreement negotiations. The DEPARTMENT shall
    approve a list for the services provided under the contract/provider
    agreement. The CONTRACTOR shall obtain prior written approval from
    the DEPARTMENT before providing services to any new non-Medicaid
    adult clients through State General Funds.

c.  Agencies under contract/provider agreement to the DEPARTMENT for the
    provision of services to families of children with, or at risk for,
    developmental delays, will report data on the Family Infant Toddler
    Program (FIT) Database system for Child & Family Support Services.
    Data entry must be completed for each child / family served by the
    CONTRACTOR. Data entry should occur at least monthly with submission
    to the DEPARTMENT on a quarterly basis.

**19. RIGHT TO DATA**

The DEPARTMENT may duplicate, use and disclose, at its discretion, all
data and documents delivered or furnished by the CONTRACTOR to the
DEPARTMENT under this contract/provider agreement in accordance with the
Disclosure of Information Article of this contract/provider agreement.
The DEPARTMENT shall hold harmless the CONTRACTOR from any liability
arising from such duplication and disclosure.

**20. COPYRIGHTS AND PATENTS**

> All tangible and intangible personal property created by the
> CONTRACTOR under a non-unit component of this contract/provider
> agreement shall become the property of the State of New Mexico, and
> shall be delivered by the CONTRACTOR to the DEPARTMENT no later than
> the termination date of this contract/provider agreement and shall not
> be the subject of an application for a copyright or a patent by or on
> behalf of the CONTRACTOR without the express written approval of the
> DEPARTMENT. Nothing in this Article shall prevent the sale of goods
> produced by the clients of a CONTRACTOR funded under this
> contract/provider agreement.

**21. PROPERTY**

> The CONTRACTOR shall not purchase or improve land, purchase, construct
> or permanently improve (other than minor remodeling) any building or
> other facility, or purchase major medical equipment with Block Grant
> funds for Prevention and Treatment of Substance Abuse and for
> Community Mental Health Services as stipulated in the Public Health
> Service Act, 42 U.S.C. Section 300x, [et seq]{.underline}., and 42 CFR
> Part 96, and with Medicaid funding.

22. **PROPERTY INSURANCE**

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a.  The CONTRACTOR shall purchase an insurance policy providing coverage
    for at least the perils of fire, theft, vandalism and malicious
    mischief, and extended coverage for at least eighty percent (80%) of
    the actual cash value of all personal property purchased with funds
    under non-unit service components. The DEPARTMENT shall be named as
    a loss payee on the policy, the term of such policy or policies
    shall extend thirty days beyond the term of this contract/provider
    agreement.

b.  The CONTRACTOR shall purchase comprehensive and collision coverage
    subject to no more than a five hundred dollar (\$500) deductible, on
    vehicles four years old or newer, if vehicles were purchased with
    funds under non-unit service components. The DEPARTMENT shall be
    named as a loss payee on any such policy. Auto liability coverage is
    required by New Mexico law and must be provided for all automobiles.
    The term of this policy or policies shall extend thirty days beyond
    the term of this contract/provider agreement.

c.  The CONTRACTOR shall immediately notify the DEPARTMENT upon the
    cancellation of any insurance policy required by this Article.

d.  In the event that the CONTRACTOR is indemnified, reimbursed, or
    otherwise compensated for any loss, destruction of, or damage to the
    DEPARTMENT property, the CONTRACTOR shall use the proceeds to repair
    or replace the DEPARTMENT property involved, or shall otherwise
    reimburse the DEPARTMENT as directed by the Administrative Services
    Division of the DEPARTMENT.

**23. SURETY AND FIDELITY BONDS**

> [The CONTRACTOR shall obtain a]{.underline} fidelity bond in an amount
> equal to 25% of the total contract/provider agreement amount, unless
> the contract/provider agreement amount is less than \$100,000 per
> year*.* In such cases a minimum bond of \$10,000 will be sufficient.
> The CONTRACTOR shall submit a copy of the bond to the DEPARTMENT
> within thirty (30) days of the effective date of this
> contract/provider agreement. The bond shall include Third Party
> coverage for property of clients. If the contractor is a sole
> proprietorship or partnership, the proprietor or the partners must be
> considered employees under the terms of the bond. Loss payment by the
> bonding company shall be made to the State of New Mexico Department of
> Health. (i.e. State of New Mexico Department of Health shall be named
> as Loss Payee). Contractor shall provide the DEPARTMENT with a
> Certificate of Insurance evidencing these coverages. The certificate
> shall provide the DEPARTMENT with 30 days written notice of bond
> cancellation. The bond shall remain in effect for the term of the
> contract/provider agreement plus thirty days. In lieu of a Third Party
> Fidelity bond, the DEPARTMENT reserves the right to require a
> financial guarantee bond (i.e. surety bond) naming the DEPARTMENT as
> obligee and in an amount to be determined. The DEPARTMENT retains the
> authority to waive either of these bond requirements.

**24. LIABILITY INSURANCE**

a.  The CONTRACTOR agrees that in order to protect itself as well as the
    DEPARTMENT under the indemnification clause below, it shall, at all
    times during the term of this contract/provider agreement, have and
    keep in force liability insurance, including coverage for general
    liability with personal injury endorsement, professional
    malpractice, auto liability (if applicable) and contractual
    assumption of liability covering liability assumed under this
    contract/provider agreement. The State of New Mexico and the
    DEPARTMENT shall be named as [a named insured]{.underline} on the
    policy. Such insurance shall be written by an insurance company
    licensed to do business in New Mexico and shall cover all liability
    which might arise out of the provision of services under this
    contract/provider agreement. The certificate shall provide the
    DEPARTMENT with thirty (30) days written notice of insurance
    cancellation. Such insurance shall provide the following minimum
    limits of coverage: One million dollars (\$1,000,000) per
    occurrence, single limit covering bodily injury and property damage.
    For contracts/provider agreements under one hundred thousand dollars
    (\$100,000), the CONTRACTOR's limits may be reduced to a single
    limit of one hundred thousand dollars (\$100, 000).

b.  Pursuant to Section 15-7-3 (B), NMSA 1978, the Risk Management
    Division of the New Mexico General Services Department provides
    liability coverage for nonprofit corporations providing
    developmental disabilities services pursuant to this
    contract/provider agreement for 42 U.S.C. Section 1983 claims when
    the claim is made by or on behalf of a client.

c.  The CONTRACTOR shall provide the DEPARTMENT, no later than ten (10)
    days after the effective date of the contract/provider agreement,
    proof of insurance coverage, which can be evidenced by a certified
    copy of the insurance policy or a certificate of insurance issued by
    the CONTRACTOR's insurance agent.

d.  The CONTRACTOR shall immediately notify the DEPARTMENT upon the
    cancellation of any insurance policy required by this Article.

e.  The CONTRACTOR shall provide Worker\'s Compensation insurance for
    its employees as required by New Mexico law.

    25. **INDEMNIFICATION**

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a.  The CONTRACTOR shall defend, indemnify and hold harmless the
    DEPARTMENT from **ALL** actions, proceedings, claims, demands,
    costs, damages, attorney\'s fees and all other liabilities and
    expenses of any kind from any source which may arise out of the
    performance of this contract/provider agreement, if caused by the
    tortious act or failure to act by the CONTRACTOR, its officers,
    employees, servants or agents, or if caused by the actions of any
    client resulting in injury or damage to the person or property of
    another person during any time when the CONTRACTOR or any officer,
    agent, employee, or subcontractor thereof has undertaken or is
    furnishing the care and services called for under this
    contract/provider agreement.

b.  The CONTRACTOR shall defend, indemnify and hold harmless the
    DEPARTMENT from **ALL** actions, including, but not limited to,
    civil rights claims, and any other proceedings, claims, demands,
    costs, damages, attorney\'s fees and all other liabilities and
    expenses of any kind from any source arising from any claim that the
    CONTRACTOR's action creates liability on the part of the DEPARTMENT.

c.  In the event that any action, suit or proceeding related to the
    services provided by the CONTRACTOR under this contract/provider
    agreement is brought against the CONTRACTOR, the CONTRACTOR shall as
    soon as practicable, but no more than two working days after notice
    of such action, suit or proceeding, notify the Office of General
    Counsel of the DEPARTMENT by certified mail.

**26. RELEASE**

> The CONTRACTOR, upon final payment of the amount due under this
> contract/provider agreement, releases the DEPARTMENT, its officers and
> employees, and the State of New Mexico from all liabilities, claims
> and obligations, whatsoever, arising from or under this
> contract/provider agreement. The CONTRACTOR agrees not to purport to
> bind the State of New Mexico to any obligation not assumed herein by
> the State of New Mexico, unless the CONTRACTOR has express written
> authority to do so, and then only within the strict limits of that
> authority.

**27. FORGIVENESS FOR NON-PERFORMANCE**

> Neither party hereto shall be held responsible for delay or failure to
> perform hereunder when such delay or failure is due to fire, flood,
> epidemics, strikes, acts of God or the public enemy, unusually severe
> weather, legal acts of the public authorities, or delays or default
> caused by public carriers which cannot reasonably be forecast or
> provided for.

**28. CONFLICT OF INTEREST**

> The CONTRACTOR warrants that it presently has no interest and shall
> not acquire any interest, direct or indirect, which would conflict in
> any manner or degree with the performance or services required under
> this contract/provider agreement. The CONTRACTOR certifies that the
> requirements of the Governmental Conduct Act, Section 10-16-1
> [et.]{.underline} [seq.]{.underline} NMSA 1978, regarding contracting
> with a public officer or state employee have been followed.

**29. LOBBYING ACTIVITY**

> a\. The CONTRACTOR shall not use any funds received under this
> contract/provider agreement, either directly or indirectly, for
> purposes of conducting lobbying activities or hiring a lobbyist or
> lobbyists on its behalf at the federal, state, or local government,
> level as defined in the Lobbyist Regulation Act, Section 2-11-1, [et
> seq.]{.underline}, NMSA 1978, and applicable federal law.
>
> b\. No federal appropriated funds can be paid or will be paid, by or
> on behalf of the CONTRACTOR, to any person for influencing or
> attempting to influence an officer or employee of any agency, a Member
> of Congress, an officer or employee of Congress, or an employee of a
> Member of Congress in connection with the awarding of any federal
> contract, the making of any federal grant, the making of any federal
> loan, the entering into of any cooperative agreement, and the
> extension, continuation, renewal, amendment, or modification of any
> federal contract, grant, loan, or cooperative agreement.

**30. EMPLOYEES AND APPLICANTS FOR EMPLOYMENT**

a.  The CONTRACTOR, unless based on a *bona fide* occupational
    qualification, shall not refuse to hire, to discharge, to promote or
    demote, or to discriminate in matters of compensation for or against
    any person otherwise qualified because of race, age, religion,
    color, national origin, ancestry, sex, sexual orientation, [gender
    identity]{.underline}, a physical or mental handicap, or medical
    condition. The CONTRACTOR agrees to comply with Section 28-15-1,
    NMSA 1978, concerning the reemployment of persons in the armed
    forces.

> b\. The CONTRACTOR is strongly encouraged, in collaboration with
> Temporary Assistance of Needy Families (TANF) and New Mexico Welfare
> to Work Contractors, to train and employ TANF recipients who are
> seeking employment opportunities. The CONTRACTOR is also strongly
> encouraged to train and employ populations enrolled in supported
> employment programs. The CONTRACTOR will keep documentation of their
> compliance on site.
>
> c [If the CONTRACTOR is a "care provider" as defined in the Caregivers
> Criminal History Screening Act, NMSA 1978, Section 29-17-4, the
> CONTRACTOR shall comply with the requirements of the Act and the
> Caregivers Criminal History Screening Requirements, NMAC 7.1.9. The
> CONTRACTOR may not employ any person who has been excluded from the
> Medicare or Medicaid Program.]{.underline}

d\. If a CONTRACTOR is licensed by the New Mexico Regulation and
Licensing Department or by any New Mexico

> licensing board or commission, or if a CONTRACTOR's employees are
> licensed by the New Mexico Regulation
>
> and Licensing Department or by any New Mexico licensing board or
> commission, then the CONTRACTOR shall,
>
> with respect to all proposed or final complaints made to such
> licensing authority regarding the CONTRACTOR or the CONTRACTOR's
> employee: (1) Provide to the DEPARTMENT within 5 days of receipt by
> the CONTRACTOR or the CONTRACTOR's employee, a copy of the licensing
> authority's complaint or other documentation stating with specificity
> the factual basis for the charges against the licensed individual,
> together with any other notice or documentation relating to the
> complaint or proposed disciplinary action; and (2) Provide to the
> DEPARTMENT within 5 days of receipt by the CONTRACTOR or the
> CONTRACTOR's employee, a copy of the licensing authority's
> determination and final action, or determination and final action
> following any hearing or appeal, including any settlement or
> alternative resolution.

31. **CIVIL RIGHTS OF CLIENTS**

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a.  The CONTRACTOR shall not, on the grounds of race, age, religion,
    color, sex, sexual orientation, [gender identity]{.underline},
    ancestry, national origin, physical or mental handicap, medical
    condition, or inability to pay, deny services or benefits, or deny
    eligibility for services or benefits, or provide different services
    or benefits, to any individual or family.

b.  The CONTRACTOR, in determining: 1) the types of service or other
    benefits to be provided under this contract/provider agreement;
    or 2) the class of individuals or families to whom, or the
    situations in which such services or other benefits will be provided
    under this contract/provider agreement; or 3) the class of
    individuals or family to be afforded an opportunity to participate
    in the program shall not utilize criteria or methods of
    administration which have the effect of subjecting individuals or
    families to discrimination because of race, age, religion, color,
    sex, sexual orientation, [gender identity]{.underline}, ancestry,
    national origin, physical or mental handicap, medical condition, or
    inability to pay, or have the effect of defeating or substantially
    impairing accomplishments of the objectives of this
    contract/provider agreement with respect to individuals or families
    of a particular race, age, religion, color, sex, sexual orientation,
    [gender identity]{.underline}, ancestry, national origin, physical
    or mental handicap, medical condition, or inability to pay.

**32. SCOPE OF CONTRACT/PROVIDER AGREEMENT**

> This contract/provider agreement incorporates all of the agreements,
> covenants, and understandings between the parties concerning the
> subject matter herein. No other agreement or understanding of the
> parties or their agents shall be valid or enforceable unless stated in
> this contract/provider agreement.
>
> a\. Complete Agreement. This contract/provider agreement incorporates
> all of the agreements, covenants and\
> understandings between the parties concerning the subject matter
> herein. No other agreement or understanding of the parties or their
> agents shall be valid or enforceable unless stated in this
> contract/provider agreement.
>
> b\. Relation to Third Parties. Nothing in this contract/provider
> agreement shall be construed as creating\
> any right of a recipient of service, or other third party, to enforce
> any provision of this contract/provider\
> agreement, or to assert any claim against the New Mexico Department of
> Health, the Human Services\
> Department, or the CONTRACTOR.

**33. AMENDMENTS**

> This contract/provider agreement shall not be altered, changed or
> amended except by a written document signed by the parties hereto or
> unless a unilateral amendment is executed pursuant to the terms of
> this contract/provider agreement.

34. **ARBITRATION WITH TRIBES, PUEBLOS AND TRIBAL ENTERPRISES**

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a.  All disputes and controversies of every kind and nature between the
    DEPARTMENT and Tribes, Pueblos and Tribal Enterprises (parties) to
    this contract/provider agreement as to the existence, construction,
    validity, interpretation or meaning, performance, non-performance,
    enforcement, operation, breach, continuance, or termination of this
    contract/provider agreement shall be submitted to arbitration
    pursuant to the procedure set forth herein.

b.  Either party may demand such arbitration in writing, which shall
    include the name of the arbitrator appointed by the party demanding
    arbitration, together with a statement of the matter of controversy.

c.  Within twenty (20) days after such demand, the other party shall
    name its arbitrator, or in default of such naming, such arbitrator
    shall be named by the American Arbitration Association, and the two
    arbitrators so selected shall name a third arbitrator within 20 days
    or, in lieu of such agreement on a third arbitrator by the two
    arbitrators so appointed, a third arbitrator shall be appointed by
    the Federal District Court for the District of New Mexico. In the
    event said Court fails to appoint a third arbitrator within 30 days
    of the request therefor, the American Arbitration Association shall
    make the appointment.

d.  The arbitration costs and expenses of each party shall be borne by
    that party and all arbitrators\' fees and other expenses shall be
    borne equally by both parties.

e.  The arbitration hearing shall be held at such time and place as
    designated by the arbitrators on at least 20 days\' written notice
    to the parties.

f.  An award rendered by a majority of the arbitrators appointed
    pursuant to this contract/provider agreement shall be final and
    binding on all parties to the proceeding, and the parties hereto
    agree to be bound by such award.

g.  As to any procedures regarding the conduct of the arbitration that
    are not specified either in this contract/provider agreement or in
    another written agreement signed in advance of the hearing, the
    parties shall follow the Commercial Arbitration Rules of the
    American Arbitration Association.

h.  The parties stipulate that the arbitration provisions of this
    contract/provider agreement shall be a complete defense to any suit,
    action, or proceeding instituted in any federal, state, or tribal
    court or before an administrative tribunal with respect to any
    controversy or dispute arising during the period of this
    contract/provider agreement and which is arbitral as set forth in
    this contract/provider agreement.

i.  The arbitration provisions of this contract/provider agreement
    shall, with respect to such controversy or dispute, survive the
    termination or expiration of this contract/provider agreement.

j.  Nothing contained in this contract/provider agreement shall be
    deemed to give the arbitrators any authority, power, or right to
    alter, change, amend, modify, add to, or subtract from any of the
    provisions of this contract/provider agreement.

k.  Failure by either party to arbitrate any dispute pursuant to the
    procedure set forth herein when a demand to do so has been made by
    the other party or failure by either party to comply with the
    arbitration award shall amount to a material breach of this
    contract/provider agreement and shall entitle the party who demanded
    arbitration to cease performance of any obligation set forth in this
    contract/provider agreement at the sole discretion of that party.

> This contract/provider agreement is not subject to enforcement under
> the Uniform Arbitration Act (Sections 44-7-1 through 44-7-22, NMSA
> 1978).

35. **GROSS RECEIPTS AND INCOME TAXES**

> a\. The CONTRACTOR, shall attach to this contract/provider agreement
> upon return to the DEPARTMENT proof of registration with the New
> Mexico Taxation and Revenue Department for the payment of gross
> receipts tax or proof of the grant of an exemption from payment of
> federal income tax pursuant to the Internal Revenue Code of 1954 \[26
> U.S.C. Section 501 (c) (3)\].

**36. PROHIBITION OF BRIBES, GRATUITIES AND KICKBACKS**

> The Procurement Code, Sections 13-1-28 through 13-1-199, NMSA 1978,
> imposes civil and criminal penalties for its violation. In addition,
> the New Mexico criminal statutes impose felony penalties for bribes,
> gratuities and kickbacks.

**37. ACCREDITATION**

> When a Long Term Services Division contract/provider agreement is for
> program components providing Family Infant Toddler Program Services,
> State General Funded Adult Developmental Disabilities Services,
> Developmental Disabilities Medicaid Waiver Services, and/or Medically
> Fragile Medicaid Waiver Services, the CONTRACTOR shall be accredited
> by an accrediting body specified by the DEPARTMENT including, the
> Commission on Accreditation of Rehabilitation Facilities (CARF), or by
> the Council on Quality and Leadership in Supports for People with
> Disabilities (The Council), or by another national accrediting body as
> approved by the DEPARTMENT. Accreditation shall be obtained within
> eighteen (18) months of the month in which the CONTRACTOR receives an
> initial provider agreement/contract. The DEPARTMENT may extend the
> timeline requirement beyond 18 months, or approve continued services
> when there is a lapse between accreditation terms. The Long Term
> Services Division reserves the right to specify the type of
> accreditation, which the CONTRACTOR is required to obtain/maintain.
> The DEPARTMENT reserves the right to exempt a CONTRACTOR from the
> accreditation requirement. The CONTRACTOR shall submit a written plan
> to the DEPARTMENT, which shall address all accrediting agency
> recommendations within ninety (90) days of the receipt of the
> accreditation report. The plan is subject to approval by the
> DEPARTMENT.

38. **CONTRACT/PROVIDER AGREEMENT ENFORCEMENT**

    a.  PURPOSE AND SCOPE. In order to secure contract/provider
        agreement compliance and to ensure the health and safety of the
        recipients of services under this contract/provider agreement,
        the DEPARTMENT and the CONTRACTOR agree to a compliance and
        remedial scheme under which the DEPARTMENT may impose sanctions,
        in addition to termination and other remedies and sanctions
        provided elsewhere in this contract/provider agreement, [and
        other Medicaid regulations as applies to Medicaid
        provider]{.underline} for the CONTRACTOR\'s failure to fully and
        satisfactorily perform the services required under this
        contract/provider agreement. The DEPARTMENT\'s sanctions
        include, but are not limited to: (1) compensation reduction
        and (2) denial of reimbursement for services for new clients.

    b.  The CONTRACTOR also agrees that the availability of such
        sanctions or the imposition of such sanctions does not limit the
        availability of any other remedy including but not limited to
        the remedy of termination of this contract/provider agreement,
        [or further sanctions under Medicaid regulations, as
        applicable]{.underline} as set forth in Article 9, TERMINATION.
        The CONTRACTOR\'s failure to fully and satisfactorily perform
        under this contract/provider agreement also may result in the
        DEPARTMENT\'s use of more than one remedy or sanction.

    c.  EVIDENCE OF FULL AND SATISFACTORY PERFORMANCE REQUIRED. The
        CONTRACTOR agrees to accurately generate and maintain all
        records and reports required by this contract/provider
        agreement, including medical and treatment records,
        administrative, business and financial records, sufficient to
        evidence performance under this contract/provider agreement. The
        CONTRACTOR further agrees to make available for inspection and
        copying to employees of the DEPARTMENT and other licensing,
        certification, monitoring or enforcement entities or employees
        of such entities, all medical, administrative and financial
        records generated and maintained which may evidence compliance
        or noncompliance with the terms of this contract/provider
        agreement. Failure by the CONTRACTOR to maintain such records or
        to allow inspection and copying of these records constitutes a
        failure to fully and satisfactorily perform under this
        contract/provider agreement.

    d.  MONITORING AND CORRECTIVE ACTIONS. In addition to the Program
        Evaluation provisions of Article 16, the CONTRACTOR understands
        and agrees that DEPARTMENT employees, agents or monitoring
        contractors, may monitor the CONTRACTOR's performance under this
        contract/provider agreement. The CONTRACTOR also understands and
        agrees that evidence of contract/provider agreement performance
        or nonperformance may be obtained by the DEPARTMENT from other
        governmental and private entities, including but not limited to
        the [Center for Medicare and Medicaid Services]{.underline}, the
        New Mexico Human Services Department, the New Mexico Children,
        Youth and Families Department, the Commission on the
        Accreditation of Rehabilitation Facilities (CARF), The Council
        on Quality and Leadership for Persons with Disabilities (The
        Council), the Joint Commission on the Accreditation of
        Healthcare Organizations (JCAHO) and the Medicaid Fraud
        [Control]{.underline} Unit [of the Attorney General's
        Office.]{.underline} The CONTRACTOR agrees that evidence of
        performance not in conformity with this contract/provider
        agreement which the DEPARTMENT obtains through such monitoring
        or through information obtained by such other governmental and
        private entities may form the basis for a corrective action plan
        or for the contract/provider agreement sanctions set forth in
        Article 38.e., or for termination of the contract/provider
        agreement. The DEPARTMENT may require the CONTRACTOR to
        affirmatively carry out a specific corrective action plan for
        the CONTRACTOR\'s failure to fully perform its contract/provider
        agreement obligations, or to remedy deficiencies in the
        CONTRACTOR's performance. The details of the corrective action
        plan (1) may be specified by the DEPARTMENT or (2) may be
        initially designed and submitted by the CONTRACTOR within the
        time specified in the DEPARTMENT's notice and are subject to the
        DEPARTMENT's modification and approval. If the DEPARTMENT
        requires that the CONTRACTOR initially design and submit a
        corrective action plan, the DEPARTMENT shall notify the
        CONTRACTOR within ten days whether the corrective action plan is
        approved. The DEPARTMENT may revise the CONTRACTOR's initially
        designed corrective action plan prior to approving it. The
        actions required of the CONTRACTOR in either the
        DEPARTMENT-specified or the DEPARTMENT-approved corrective
        action plan must be implemented within the time specified in the
        corrective action plan. The CONTRACTOR agrees that all
        requirements of a DEPARTMENT-specified or DEPARTMENT-approved
        corrective action plan become part of the obligations of the
        CONTRACTOR under this contract/provider agreement, and may
        itself become the basis for sanctions or termination, as other
        provisions in this contract/provider

    e.  SANCTIONS. Upon written notice to the CONTRACTOR, the DEPARTMENT
        may sanction nonperformance under the contract/provider
        agreement consistent with DEPARTMENT policy through one or more
        of the following actions:

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1.  COMPENSATION REDUCTION. As a sanction, the DEPARTMENT may recover
    past payments to the CONTRACTOR and/or reduce the compensation of
    the CONTRACTOR for past failure to fully and satisfactorily perform,
    and for any ongoing failure to fully and satisfactorily perform its
    contract/provider agreement obligations. The amount of the
    compensation reduction, may be determined by one of the following
    methods, at the discretion of the DEPARTMENT:

    a.  At the discretion of the DEPARTMENT a penalty amount not to
        exceed twenty five percent (25%) of the total compensation for
        the specific services, whether unit services or non-unit
        services, billed by, paid to, or payable to the CONTRACTOR for
        the time period during which the CONTRACTOR fails or failed to
        fully and satisfactorily perform such services. Imposition of
        such a penalty does not preclude the DEPARTMENT, or any other
        state agency from recouping payments as specifically provided in
        any other law, regulation or agreement.

    b.  The amount of money saved by the CONTRACTOR by virtue of the
        CONTRACTOR's failure to fully and satisfactorily perform, which
        may be measured by the CONTRACTOR's own records or other
        reasonable measures;

    c.  The cost the DEPARTMENT incurs or would have to incur to obtain
        full and satisfactory performance from qualified providers; or

    d.  The amount of the compensation paid to the CONTRACTOR by the
        DEPARTMENT for services that the CONTRACTOR did not fully and
        satisfactorily perform in accordance with the terms of the
        contract/provider agreement.

> The DEPARTMENT may recover funds through any of the four methods set
> out above by requiring the CONTRACTOR to pay the amount specified by
> the DEPARTMENT within a specified time period and/or by reducing
> future compensation of the CONTRACTOR under this contract/provider
> agreement or under any other contract/provider agreement with the
> CONTRACTOR.
>
> When provided notice of a sanction, the CONTRACTOR shall notify the
> DEPARTMENT in writing when the CONTRACTOR has taken all actions
> required for the CONTRACTOR's full and satisfactory performance of its
> obligations under this contract/provider agreement.
>
> The cessation of any prospective, ongoing compensation reduction will
> be effective on the date the CONTRACTOR begins full and satisfactory
> performance of all its contract/provider agreement obligations, as
> determined by the DEPARTMENT.
>
> 2\. DENIAL OF SERVICES FOR NEW CLIENTS. The DEPARTMENT may, when
> appropriate, deny approval of services, proposed or provided by the
> CONTRACTOR under this contract/provider agreement, to new or
> additional clients the CONTRACTOR may obtain. The DEPARTMENT will deny
> compensation and will not authorize reimbursement for services
> provided following the DEPARTMENT's notice to the CONTRACTOR of the
> denial of approval of services to new or additional clients. The
> DEPARTMENT's notice to the CONTRACTOR shall set out the conditions and
> the time period of such denial of approval for new clients.

f\. INFORMAL RESOLUTION. The DEPARTMENT and the CONTRACTOR may
informally resolve any dispute arising from the DEPARTMENT's imposition
of the contract/provider agreement enforcement sanctions. The CONTRACTOR
may initiate the informal resolution process by delivering to the
DEPARTMENT, within five days of its receipt of the notice of the
imposition of the DEPARTMENT's sanctions, a written request for an
informal resolution conference. The DEPARTMENT shall grant the request
for the informal resolution conference. The DEPARTMENT will schedule a
conference in Santa Fe to be held within ten (10) days of the
DEPARTMENT's receipt of the request for an informal conference. Within
five (5) days following the resolution conference, the Division Director
shall inform the CONTRACTOR in writing of the results of the informal
resolution conference. The request for an informal conference does not
postpone or stay any sanction.

The informal conference is an opportunity for the CONTRACTOR to present
new or additional evidence and/or arguments concerning the DEPARTMENT\'s
basis for the sanctions or concerning the sanction itself. The informal
conference is not recorded, the participants are not sworn, no formal
procedural rules apply, and admissions or proposals made for the purpose
of attempting a resolution cannot be used without consent of the party
making the admission or proposal in any subsequent legal proceeding.
However, any compromise or resolution reached shall be written, and
shall be signed by authorized representatives of the DEPARTMENT and
CONTRACTOR.

If dissatisfied with the results of the informal conference, the
CONTRACTOR may request in writing within ten (10) days of the date of
the written results, further discretionary review by the Secretary of
the DEPARTMENT. Within five days of receipt of a written request for
further review by the Secretary, the Secretary, in his discretion, may
decide upon further review or may decline further review. The Secretary
will notify the CONTRACTOR of arrangements, if any, for further review
of the results of the informal conference. The Secretary\'s decision as
to the manner and results of any discretionary review is final. The
Secretary shall provide written notice of the resolution within five (5)
days of the completion of his review, if any.

> g\. For CONTRACTORS approved to provide service under a Medicaid
> Program, the CONTRACTOR, once notified of the intent to terminate [or
> the intent to invoke any other Medicaid sanction]{.underline} by the
> DEPARTMENT, may request an evidentiary hearing. The CONTRACTOR must
> request, in writing, an evidentiary hearing within sixty (60) days
> following the effective date of the action.

39. **WAIVER OF CERTAIN GENERAL PROVISIONS**

    a.  **For State Agencies, Judicial Districts, and State
        Universities,** the DEPARTMENT and the CONTRACTOR agree to waive
        the following Articles:

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    1.  **[Article 5 - Status as Independent Contractor]{.underline}** -
        The entire Article is hereby waived.

    2.  **[Article 20 - Copyrights and Patents]{.underline}** - The
        entire Article is hereby waived.

    3.  **[Article 21 - Property]{.underline}** - The entire Article is
        hereby waived.

    4.  **[Article 22 - Property Insurance]{.underline}** - The entire
        Article is hereby waived.

    5.  **[Article 23 -- Surety and Fidelity Bonds]{.underline}** - The
        entire article is hereby waived.

    6.  **[Article 24 - Liability Insurance]{.underline}** - The entire
        Article is hereby waived.

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    ```
    b.  **For Boards of Education and other quasi-government agencies so
        recognized by the DEPARTMENT,** the DEPARTMENT and the
        CONTRACTOR agree to waive the following Articles:

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1.  **[Article 23 -- Surety and Fidelity Bonds]{.underline}** - The
    entire article is hereby waived.

2.  **[Article 24 - Liability Insurance]{.underline}** - The entire
    article is hereby waived.

    a.  For CONTRACTORS providing only Medicaid services, the DEPARTMENT
        and the CONTRACTOR agree to waive the following Articles:

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1.  **[Article 8 - Failure to Perform]{.underline}** - The entire
    Article is hereby waived.

> **2. [Article 36 - Notice (Re: The Procurement Code)]{.underline}** -
> The entire Article is hereby waived.

**40. APPLICABLE LAWS**

> The laws of the State of New Mexico shall govern this
> contract/provider agreement.