Exhibit 10.16

STATE OF CALIFORNIA

STANDARD AGREEMENT

STD 213 (DHS Rev 7/06)

 

      REGISTRATION NUMBER    AGREEMENT NUMBER       42601106149146    06-55498

 

1 This Agreement is entered into between the State Agency and the Contractor
named below:

 

STATE AGENCY’S NAME

   (Also referred to as CDHS DHS or the State)

California Department of Health Services

 

CONTRACTOR’S NAME

   (Also referred to as Contractor)

Molina Healthcare of California

  

 

2 The term of this Agreement is:     August 1, 2006 through March 31, 2009

 

3 The maximum amount                 $453,626,000

of this Agreement is:                     Four Hundred Fifty-Three Million, Six
Hundred Twenty-Six Thousand Dollars

 

4 The parties agree to comply with the terms and conditions of the following
exhibits, which are by this reference made a part of this Agreement.

 

Exhibit A – Scope of Work

   2 pages

Exhibit A, Attachments 1 through 18 (See Exhibit A, Table of Contents)

   Various pages

Exhibit B – Budget Detail and Payment Provisions

   13 pages

Exhibit B, Attachment 1 – Capitation Rate Worksheet

   18 pages

Exhibit C * – General Terms and Conditions

   GTC 306

Exhibit D (F) – Special Terms and Conditions (Attached hereto as part of this
agreement)

   26 pages

Notwithstanding provisions 2, 3, 4, 5, 6, 7, 10, 11, 12, 14, 15, 16, 22, 25, 28,
29, & 30 which do not apply to this agreement

Exhibit E – Additional Provisions

   2 pages

Exhibit E, Attachment 1 - Definitions

   16 pages

Exhibit E, Attachment 2 – Program Terms and Conditions

   27 pages

Exhibit E, Attachment 3 – Duties of the State

   7 pages

Exhibit E, Attachment 4 – Innovative Activities List

   12 pages

Exhibit F – Contractor’s Release

   1 page

Exhibit G – Health Insurance Portability and Accountability Act (HIPAA)

   6 pages

See Exhibit E, Provision 1 for additional incorporated exhibits

Items shown above with an Asterisk (*), are hereby incorporated by reference and
made part of this agreement as if attached hereto

These documents can be viewed at http://www.ols.dgs.ca.gov/Standard+Language

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.

 

CONTRACTOR   

California Department of

General Services Use Only

CONTRACTOR’S NAME (if other than an individual state whether a corporation
partnership etc) Molina Healthcare of California    BY (Authorized Signature)   

DATE SIGNED (Do not type)

10/24/06                        

  

/s/ Stephen T. O’Dell

     

PRINTED NAME AND TITLE OF PERSON SIGNING

Stephen T. O’Dell, President

      Address       One Golden Shore       Long Beach, CA 90802            
STATE OF CALIFORNIA       AGENCY NAME       California Department of Health
Services       BY (Authorized Signature)   

DATE SIGNED (Do not type)

11-2-06                    

  

/s/ Jayna Qucrin

      Jayna Qucrin,       Chief CMU Policy & Procedures       PRINTED NAME AND
TITLE OF PERSON SIGNING    x  Exempt per: W&I Code 14087.4 Allan Chinn, Chief,
Contracts and Purchasing Services Section    ADDRESS      

1501 Capitol Avenue, Suite 71 2101, MS 1403, P.O. Box 997413

Sacramento, CA 95899-7413

  

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A

Scope of Work

 

Table of Contents

 

I.    Scope of Work       1. Service Overview       2. Service Location       3.
Service Hours       4. Project Representatives    II.    Exhibit A, Attachments
      Attachment 1 – Organization and Administration of the Plan    4 pages   
Attachment 2 – Financial Information    4 pages    Attachment 3 – Management
Information System    2 pages    Attachment 4 – Quality Improvement System   
12 pages    Attachment 5 – Utilization Management    4 pages    Attachment 6 –
Provider Network    8 pages    Attachment 7 – Provider Relations    2 pages   
Attachment 8 – Provider Compensation Arrangements    6 pages    Attachment 9 –
Access and Availability    10 pages    Attachment 10 – Scope of Services    17
pages    Attachment 11 – Case Management and Coordination of Care    15 pages   
Attachment 12 – Local Health Department Coordination    3 pages    Attachment 13
– Member Services    11 pages    Attachment 14 – Member Grievance System    3
pages    Attachment 15 – Marketing    5 pages    Attachment 16 – Enrollments and
Disenrollments    5 pages    Attachment 17 – Reporting Requirements    2 pages
   Attachment 18 – Implementation Plan and Deliverables    17 pages

 

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06-55498

Exhibit A

Scope of Work

 

1. Service Overview

Contractor agrees to provide to the California Department of Health Services
(CDHS) the services described herein.

Provide health care services to eligible Medi-Cal recipients within the scope of
Medi-Cal benefits as defined in the contents of the contract.

 

2. Service Location

The services shall be performed at all contracting and participating facilities
of the Contractor.

 

3. Service Hours

The services shall be provided on a 24-hour, seven (7) days a week basis.

 

4. Project Representatives

 

  A. The project representatives during the term of this agreement will be:

 

California Department of Health    Contractor Services    Stephen T. O’Dell,
President Medi-Cal Managed Care Division    Telephone: (562) 491-7019 Attention:
Chief, Plan Management    Fax: (562) 499-6170 Branch    E-mail: Telephone:
(916) 449-5100    steve.o’dell@molinahealthcare.com Fax: (916) 449-5090   

 

  B. Direct all inquiries to:

 

California Department of Health    Contractor Services    Stephen T. O’Dell,
President Medi-Cal Managed Care Division    One Golden Shore Attention:
Contracting Officer    Long Beach, CA 90802 1501 Capitol Avenue, Suite 71.4001
   Telephone: (562) 491-7019 MS 4407, P.O. Box Number 997413    Fax: (562)
499-6170 Sacramento, CA 95899-7413    E-mail: Telephone: (916) 449-5000   
steve.o’dell@molinahealthcare.com Fax: (916) 449-5005   

 

  C. Either party may make changes to the information above by giving written
notice to the other party. Said changes shall not require an amendment to this
agreement.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 1

 

ORGANIZATION AND ADMINISTRATION OF THE PLAN

 

1. Legal Capacity

Contractor shall maintain the legal capacity to contract with CDHS and maintain
appropriate licensure as a health care service plan in accordance with the
Knox-Keene Health Care Service Plan Act of 1975 as amended.

 

2. Key Personnel (Disclosure Form)

 

  A. Contractor shall file an annual statement with CDHS disclosing any
purchases or leases of services, equipment, supplies, or real property from an
entity in which any of the following persons have a substantial financial
interest:

 

  1) Any person also having a substantial financial interest in the Contractor.

 

  2) Any director, officer, partner, trustee, or employee of the Contractor.

 

  3) Any member of the immediate family of any person designated in 1) or 2)
above.

 

  B. Comply with federal regulations 42 CFR 455.104 (Disclosure by providers and
fiscal agents: Information on ownership and control), 42 CFR 455.105 (Disclosure
by providers: Information related to business transactions), 42 CFR 455.106 and
42 CFR 438.610 (Prohibited Affiliations with Individuals Debarred by Federal
Agencies).

 

3. Conflict Of Interest – Current And Former State Employees

 

  A. This Contract shall be governed by the Conflict of Interest provisions of
Title 22, CCR, Sections 53874 and 53600.

 

  B. Contractor shall not utilize in the performance of this Contract any State
officer or employee in the State civil service or other appointed State official
unless the employment, activity, or enterprise is required as a condition of the
officer’s or employee’s regular State employment. For purposes of this
subsection (B) only, employee in the State civil service is defined to be any
person legally holding a permanent or intermittent position in the State civil
service.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 1

 

4. Contract Performance

Contractor shall maintain the organization and staffing for implementing and
operating the Contract in accordance with Title 28, CCR, Section 1300.67.3 and
Title 22, CCR, Section 53800, 53851 and 53857. Contractor shall ensure the
following:

 

  A. The organization has an accountable governing body.

 

  B. This Contract is a high priority and that the Contractor is committed to
supplying any necessary resources to assure full performance of the Contract.

 

  C. If the Contractor is a subsidiary organization, the attestation of the
parent organization that this Contract will be a high priority to the parent
organization. The parent organization is committed to supplying any necessary
resources to assure full performance of the Contract.

 

  D. Staffing in medical and other health services, and in fiscal and
administrative services sufficient to result in the effective conduct of the
plan’s business.

 

  E. Written procedures for the conduct of the business of the plan, including
the provision of heath care services, so as to provide effective controls.

 

5. Medical Decisions

Contractor shall ensure that medical decisions, including those by
subcontractors and rendering providers, are not unduly influenced by fiscal and
administrative management.

 

6. Medical Director

Contractor shall maintain a full time Physician as Medical Director pursuant to
Title 22, CCR, Section 53857 whose responsibilities shall include, but not be
limited to, the following:

 

  A. Ensuring that medical decisions are:

 

  1) Rendered by qualified medical personnel.

 

  2) Are not influenced by fiscal or administrative management considerations.

 

  B. Ensuring that the medical care provided meets the standards for acceptable
medical care.

 

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06-55498

Exhibit A, Attachment 1

 

 

  C. Ensuring that medical protocols and rules of conduct for plan medical
personnel are followed.

 

  D. Developing and implementing medical policy.

 

  E. Resolving grievances related to medical quality of care.

 

  F. Direct involvement in the implementation of Quality Improvement activities

 

  G. Actively participating in the functioning of the plan grievance procedures.

 

7. Medical Director Changes

Contractor shall report to CDHS any changes in the status of the Medical
Director within ten (10) calendar days.

 

8. Administrative Duties/Responsibilities

Contractor shall maintain the organizational and administrative capabilities to
carry out its duties and responsibilities under the Contract. This will include
at a minimum the following:

 

  A. Member and Enrollment reporting systems as specified in Exhibit A,
Attachment 3, Management Information System, and, Exhibit A, Attachment 13,
Member Services, and Exhibit A, Attachment 14, Member Grievance System.

 

  B. A Member grievance procedure, as specified in Exhibit A, Attachment 14,
Member Grievance System.

 

  C. Data reporting capabilities sufficient to provide necessary and timely
reports to CDHS, as required by Exhibit A, Attachment 3, Management Information
System.

 

  D. Financial records and books of account maintained on the accrual basis, in
accordance with Generally Accepted Accounting Principles, which fully disclose
the disposition of all Medi-Cal program funds received, as specified in Exhibit
A, Attachment 2, Financial Information.

 

  E. Claims processing capabilities as described in Exhibit A, Attachment 8,
Provider Compensation Arrangements.

 

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06-55498

Exhibit A, Attachment 1

 

9. Member Representation

Contractor shall ensure that Medi-Cal Members are represented and participate in
establishing public policy within the plan’s public policy advisory committee.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 2

 

FINANCIAL INFORMATION

 

1. Financial Viability/Standards Compliance

Contractor shall meet and maintain financial viability/standards compliance to
CDHS’ satisfaction for each of the following elements:

 

  A. Tangible Net Equity (TNE).

Contractor at all times shall be in compliance with the TNE requirements in
accordance with Title 28, CCR, Section 1300.76.

 

  B. Administrative Costs.

Contractor’s Administrative Costs shall not exceed the standards as established
under Title 22, CCR, Section 53864(b).

 

  C. Standards of Organization and Financial Soundness.

Contractor shall maintain an organizational structure sufficient to conduct the
proposed operations and ensure that its financial resources are sufficient for
sound business operations in accordance with Title 28, CCR, Sections 1300.67.3,
1300.75.1, 1300.76.3, 1300.77.1, 1300.77.2, 1300.77.3, 1300.77.4, and Title 22,
CCR, Sections 53851, 53863, and 53864.

 

  D. Working capital and current ratio of one of the following:

 

  1) Contractor shall maintain a working capital ratio of at least 1:1; or

 

  2) Contractor shall demonstrate to CDHS that Contractor is now meeting
financial obligations on a timely basis and has been doing so for at least the
preceding two years; or

 

  3) Contractor shall provide evidence that sufficient noncurrent assets, which
are readily convertible to cash, are available to achieve an equivalent working
capital ratio of 1:1, if the noncurrent assets are considered current.

 

2. Financial Audit Reports

Contractor shall ensure that an annual audit is performed according to Welfare &
Institution Code, Section 14459. Combined Financial Statements shall be prepared
to show the financial position of the overall related health care delivery

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 2

 

system when delivery of care or other services is dependent upon Affiliates.
Financial Statements shall be presented in a form that clearly shows the
financial position of Contractor separately from the combined totals.
Inter-entity transactions and profits shall be eliminated if combined statements
are prepared. If an independent accountant decides that preparation of combined
statements is inappropriate, Contractor shall have separate certified Financial
Statements prepared for each entity.

 

  A. The independent accountant shall state in writing reasons for not preparing
combined Financial Statements.

 

  B. Contractor shall provide supplemental schedules that clearly reflect all
inter-entity transactions and eliminations necessary to enable CDHS to analyze
the overall financial status of the entire health care delivery system.

 

  1) In addition to annual certified Financial Statements, Contractor shall
complete the State Department of Managed Health Care (DMHC) required financial
reporting forms. The Certified Public Accountant’s audited Financial Statements
and the DMHC required financial reporting forms shall be submitted to CDHS no
later than 120 calendar days after the close of Contractor’s Fiscal Year.

 

  2) Contractor shall submit to CDHS within 45 calendar days after the close of
Contractor’s fiscal quarter, quarterly financial reports required by Title 22,
CCR, Section 53862(b)(1). The required quarterly financial reports shall be
prepared on the DMHC required financial reporting forms and shall include, at a
minimum, the following reports/schedules:

 

  a) Jurat.

 

  b) Report 1A and 1B: Balance Sheet.

 

  c) Report 2: Statement of Revenue, Expenses, and Net Worth.

 

  d) Statement of Cash Flow, prepared in accordance with Financial Accounting
Standards Board Statement Number 95 (This statement is prepared in lieu of
Report #3: Statement of Changes in Financial Position for Generally Accepted
Accounting Principles (GAAP) compliance.)

 

  e) Report 4: Enrollment and Utilization Table.

 

  f) Schedule F: Unpaid Claims Analysis.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 2

 

  g) Appropriate footnote disclosures in accordance with GAAP.

 

  h) Schedule H: Aging Of All Claims.

 

  C. Contractor shall authorize its independent accountant to allow CDHS
designated representatives or agents, upon written request, to inspect any and
all working papers related to the preparation of the audit report.

 

  D. Contractor shall submit to CDHS all financial reports relevant to
Affiliates as specified in Title 22, CCR, Section 53862(c)(4).

 

  E. Contractor shall submit to CDHS copies of any financial reports submitted
to other public or private organizations as specified in Title 22, CCR,
Section 53862(c)(5).

 

3. Monthly Financial Statements

If Contractor and/or subcontractor is required to file monthly Financial
Statements with the DMHC, Contractor and/or subcontractor shall file monthly
Financial Statements with CDHS.

 

4. Compliance with Audit Requirements

Contractor shall cooperate with CDHS’ audits. Such audits may be waived upon
submission of the financial audit for the same period conducted by DMHC pursuant
to Health and Safety Code, Section 1382.

 

5. Submittal of Financial Information

Contractor shall prepare financial information requested in accordance with GAAP
and where Financial Statements/projections are requested, these
statements/projections should be prepared in accordance with the 1989 HMO
Financial Report of Affairs and Conditions Format. Where appropriate, reference
has been made to the Knox-Keene Health Care Service Plan Act of 1975 rules found
under Title 28, CCR, Section 1300.51 et. seq. Information submitted shall be
based on current operations. Contractor and/or sub-contractors shall submit
financial information consistent with filing requirements of the DMHC unless
otherwise specified by CDHS.

Contractor shall prepare and submit a stand-alone Medi-Cal line of business
income statement for each financial reporting period required. This income
statement shall be prepared in the DMHC required financial reporting format.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 2

 

6. Fiscal Viability of Subcontracting Entities

Contractor shall maintain a system to evaluate and monitor the financial
viability of all risk bearing sub-contracting provider groups including, but not
limited to, HMOs, independent physician/provider associations (IPAs), medical
groups, and Federally Qualified Health Centers.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 3

 

MANAGEMENT INFORMATION SYSTEM

 

1. Management Information System Capability

 

  A. Contractor’s Management and Information System (MIS) shall have the
capability to capture, edit, and utilize various data elements for both internal
management use as well as to meet the data quality and timeliness requirements
of CDHS’s encounter data submission. Contractor shall have and maintain a MIS
that provides, at a minimum,

 

  1) All Medi-Cal eligibility data,

 

  2) Information of Members enrolled in Contractor’s plan,

 

  3) Provider claims status and payment data,

 

  4) Health care services delivery encounter data,

 

  5) Provider network information, and

 

  6) Financial information as specified in Exhibit A, Attachment 1, provision 8.
Administrative Duties/Responsibilities.

 

  B. Contractor’s MIS shall have processes that support the interactions between
Financial, Member/Eligibility; Provider; Encounter Claims; Quality
Management/Quality Improvement/Utilization; and Report Generation subsystems.
The interactions of the subsystems must be compatible, efficient and successful.

 

2. Encounter Data Submittal

Contractor shall implement policies and procedures for ensuring the complete,
accurate, and timely submission of encounter data for all services for which
Contractor has incurred any financial liability, whether directly or through
Subcontracts or other arrangements. Encounter data shall include data elements
specified in CDHS’ most recent Managed Care Data Element Dictionary and all
existing Policy Letters related to encounter data reporting.

Contractor shall require subcontractors and non-contracting providers to provide
encounter data to Contractor, which allows the Contractor to meet their
administrative functions and the requirements set forth in this section.
Contractor shall have in place mechanisms, including edits and reporting systems
sufficient to assure encounter data is complete and accurate prior to submission
to CDHS.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 3

 

Contractor shall submit encounter data to CDHS on a monthly basis in the form
and manner specified in CDHS’ most recent Managed Care Data Element Dictionary
and all existing Policy Letters related to encounter data reporting.

Upon written notice by CDHS that the encounter data is insufficient or
inaccurate, Contractor shall ensure that corrected data is resubmitted within 15
calendar days of receipt of CDHS’ notice. Upon Contractor’s written request,
CDHS may provide a written extension for submission of corrected encounter data.

 

3. MIS/Data Correspondence

Upon receipt of written notice by CDHS of any problems related to the submittal
of data to CDHS, or any changes or clarifications related to Contractor’s MIS
system, Contractor shall submit to CDHS a Corrective Action Plan with measurable
benchmarks within 30 calendar days from the date of the postmark of CDHS’
written notice to Contractor. Within 30 calendar days of CDHS’ receipt of
Contractor’s Corrective Action Plan, CDHS shall approve the Corrective Action
Plan or request revisions. Within 15 calendar days after receipt of a request
for revisions to the Corrective Action Plan, Contractor shall submit a revised
Corrective Action Plan for CDHS approval.

 

4. Health Insurance Portability and Accountability Act (HIPAA)

Contractor shall comply with Exhibit G, Health Insurance Portability and
Accountability Act (HIPAA) requirements and all federal and State regulations
promulgated from this Act, as they become effective.

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 4

 

QUALITY IMPROVEMENT SYSTEM

 

1. General Requirement

Contractor shall implement an effective Quality Improvement System (QIS) in
accordance with the standards in Title 28, CCR, Section 1300.70. Contractor
shall monitor, evaluate, and take effective action to address any needed
improvements in the quality of care delivered by all providers rendering
services on its behalf, in any setting. Contractor shall be accountable for the
quality of all Covered Services regardless of the number of contracting and
subcontracting layers between Contractor and the provider. This provision does
not create a cause of action against the Contractor on behalf of a Medi-Cal
beneficiary for malpractice committed by a subcontractor.

 

2. Accountability

Contractor shall maintain a system of accountability which includes the
participation of the governing body of the Contractor’s organization, the
designation of a quality improvement committee with oversight and performance
responsibility, the supervision of activities by the medical director, and the
inclusion of contracted Physicians and contracted providers in the process of
QIS development and performance review. Participation of non-contracting
providers is discretionary.

 

3. Governing Body

Contractor shall implement and maintain policies that specify the
responsibilities of the governing body including at a minimum the following:

 

  A. Approves the overall QIS and the annual report of the QIS.

 

  B. Appoints an accountable entity or entities within Contractor’s organization
to provide oversight of the QIS.

 

  C. Routinely receives written progress reports from the quality improvement
committee describing actions taken, progress in meeting QIS objectives, and
improvements made.

 

  D. Directs the operational QIS to be modified on an ongoing basis, and tracks
all review findings for follow-up.

 

4. Quality Improvement Committee

Contractor shall implement and maintain a Quality Improvement Committee
designated by, and accountable to the governing body and shall be facilitated by

 

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit A, Attachment 4

 

the medical director or a physician designee. Contractor must ensure that
subcontractors, who are representative of the composition of the contracted
provider network, shall actively participate on the committee.

The committee shall meet at least quarterly but as frequently as necessary to
demonstrate follow-up on all findings and required actions. The activities,
findings, recommendations, and actions of the committee shall be reported to the
governing body in writing on a scheduled basis.

Contractor shall maintain minutes of committee meetings and minutes shall be
submitted to CDHS quarterly. Contractor shall maintain a process to ensure rules
of confidentiality are maintained in quality improvement discussions as well as
avoidance of conflict of interest on the part of committee members.

 

5. Provider Participation

Contractor shall ensure that contracting Physicians and other providers from the
community shall be involved as an integral part of the QIS. Contractor shall
maintain and implement appropriate procedures to keep contracting providers
informed of the written QIS, its activities, and outcomes.

 

6. Delegation of Quality Improvement Activities

 

  A. Contractor is accountable for all quality improvement functions and
responsibilities (e.g. Utilization Management, Credentialing and Site Review)
that are delegated to subcontractors. If Contractor delegates quality
improvement functions, Contractor and delegated entity (subcontractor) shall
include in their Subcontract, at minimum:

 

  1) Quality improvement responsibilities, and specific delegated functions and
activities of the Contractor and subcontractor.

 

  2) Contractor’s oversight, monitoring, and evaluation processes and
subcontractor’s agreement to such processes.

 

  3) Contractor’s reporting requirements and approval processes. The agreement
shall include subcontractor’s responsibility to report findings and actions
taken as a result of the quality improvement activities at least quarterly.

 

  4) Contractor’s actions/remedies if subcontractor’s obligations are not met.

 

  B. Contractor shall maintain a system to ensure accountability for delegated
quality improvement activities, that at a minimum:

 

  1) Evaluates subcontractor’s ability to perform the delegated activities
including an initial review to assure that the subcontractor has the
administrative capacity, task experience, and budgetary resources to fulfill its
responsibilities.

 

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06-55498

Exhibit A, Attachment 4

 

  2) Ensures subcontractor meets standards set forth by the Contractor and CDHS.

 

  3) Includes the continuous monitoring, evaluation and approval of the
delegated functions.

 

7. Written Description

Contractor shall implement and maintain a written description of its QIS that
shall include the following:

 

  A. Organizational commitment to the delivery of quality health care services
as evidenced by goals and objectives which are approved by Contractor’s
governing body and periodically evaluated and updated.

 

  B. Organizational chart showing the key staff and the committees and bodies
responsible for quality improvement activities including reporting relationships
of QIS committee(s) and staff within the Contractor’s organization.

 

  C. Qualifications of staff responsible for quality improvement studies and
activities, including education, experience and training.

 

  D. A description of the system for provider review of QIS findings, which at a
minimum, demonstrates physician and other appropriate professional involvement
and includes provisions for providing feedback to staff and providers, regarding
QIS study outcomes.

 

  E. The role, structure, function of the quality improvement committee.

 

  F. The processes and procedures designed to ensure that all Medically
Necessary Covered Services are available and accessible to all Members
regardless of race, color, national origin, creed, ancestry, religion, language,
age, gender marital status, sexual orientation, health status, or disability,
and that all Covered Services are provided in a culturally and linguistically
appropriate manner.

 

  G. A description of the mechanisms used to continuously review, evaluate, and
improve access to and availability of services. The description shall include
methods to ensure that members are able to obtain appointments within
established standards.

 

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06-55498

Exhibit A, Attachment 4

 

  H. Description of the quality of clinical care services provided, including,
but not limited to, preventive services for children and adults, perinatal care,
primary care, specialty, emergency, inpatient, and ancillary care services.

 

  I. Description of the activities designed to assure the provision of case
management, coordination and continuity of care services.

 

8. Quality Improvement Annual Report

Contractor shall develop an annual quality improvement report for submission to
CDHS on an annual basis. The annual report shall include:

 

  A. A comprehensive assessment of the quality improvement activities undertaken
and an evaluation of areas of success and needed improvements in services
rendered within the quality improvement program, including but not limited to,
the collection of aggregate data on utilization; the review of quality of
services rendered; the results of the External Accountability Set measures; and,
outcomes/findings from Quality Improvement Projects (QIPs), consumer
satisfaction surveys and collaborative initiatives.

 

  B. Copies of all final reports of non-governmental accrediting agencies (e.g.
JCAHO, NCQA) relevant to the Contractor’s Medi-Cal line of business, including
accreditation status and any deficiencies noted. Include the corrective action
plan developed to address noted deficiencies.

 

  C. An assessment of subcontractor’s performance of delegated quality
improvement activities.

 

9. External Quality Review Requirements

At least annually or as designated by CDHS, CDHS shall arrange for an external
quality of care review of the Contractor by an entity qualified to conduct such
reviews in accordance with Title 22, CCR, Section 53860 (d) and Title 42, USC,
Section 1396a(30)(C). Contractor shall cooperate with and assist the External
Quality Review Organization (EQRO) designated by the State in the conduct of
this review.

 

  A. External Accountability Set (EAS) Performance Measures

The External Accountability Set (EAS) consists of a set of Health Plan Employer
Data and Information Set (HEDIS®) measures developed by the

 

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Exhibit A, Attachment 4

 

National Committee for Quality Assurance (NCQA) and CDHS developed performance
measures selected by CDHS for evaluation of health plan performance.

 

  1) On an annual basis, Contractor shall submit to an on-site EAS Compliance
Audit (also referred to as the Health Plan Employer Data and Information Set
(HEDIS®) Compliance Audit™) to assess the Contractor’s information and reporting
systems, as well as the Contractor’s methodologies for calculating performance
measure rates. Contractor shall use the CDHS-selected contractor for performance
of the EAS/HEDIS Compliance Audit and calculation of CDHS-developed performance
measures that constitute the EAS. Compliance Audits will be performed by an EQRO
as contracted and paid for by the State.

 

  2) Contractor shall calculate and report all EAS performance measures at the
county level.

 

  a) HEDIS rates are to be calculated by the Contractor and verified by the
CDHS-selected EQRO. Rates for CDHS-developed performance measures will be
calculated by the EQRO.

 

  b) Contractor shall report audited results on the EAS performance measures to
CDHS no later than June 15 of each year or such date as established by CDHS.
Contractor shall initiate reporting on EAS performance measures for the
reporting cycle following the first year of operation.

 

  3) Contractor shall meet or exceed the CDHS-established Minimum Performance
Level (MPL) for each HEDIS measure.

 

  a) For each measure that does not meet the MPL set for that year, or is
reported as a “Not Report” (NR) due to an audit failure, Contractor must submit
a plan outlining the steps that will be taken to improve the subsequent year’s
performance.

 

  i. The improvement plan must include, at a minimum, identification of the team
that will address the problem, a root cause analysis, identification of
interventions that will be implemented, and a proposed timeline.

 

  ii. Improvement plans are due to the CDHS within 60 calendar days of the CDHS’
notification that the Contractor has performed at or below the MPL for the
period under review.

 

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  iii. Additional reporting may be required of the Contractor until such time as
improvement is demonstrated.

 

  B. Under/Over-Utilization Monitoring

In addition to the EAS performance measures, Contractor shall submit to an audit
of, and report rates for, an Under/Over-Utilization Monitoring Measure Set based
upon selected HEDIS Use of Service measures. These measures will be audited as
part of the EAS/HEDIS Compliance Audit and rates shall be submitted with the EAS
audited rates. CDHS will bear the costs associated with the Compliance Audit as
performed by the contracted EQRO. The measures selected for inclusion in the set
will be chosen by CDHS on an annual basis. By August 1 of each year, CDHS will
notify Contractors of the HEDIS measures selected for inclusion in the following
year’s Utilization Monitoring measure set.

 

  C. Quality Improvement Projects (QIPs)

Contractor is required to conduct and/or participate in four (4) Quality
Improvement Projects. For Contractors holding multiple Medi-Cal managed care
contracts, each contracted entity will be required to conduct and/or participate
in four QIPs.

 

  1) Among the four QIPs:

 

  a) One must be plan-specific (“internal QIP”)

 

  b) One must be in collaboration with at least one other health plan (“small
-group collaborative”)

Collaboratives must include a minimum of two (2) CDHS health plan Contractors
and must use standardized measures and clinical practice guidelines.
Additionally, all health plans participating in a collaborative must agree to
the same timelines for development, implementation, and measurement. Health
plans must also agree on the nature of health plan commitment of staff and other
resources to the collaborative project.

Contractors may include only one county in a collaborative regardless of whether
the health plan’s contract covers multiple counties. However, if multiple
counties are to be

 

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included, Contractor shall demonstrate that the measurement strategies are
adequate to assess the impact of the intervention within each county. CDHS must
approve the Contractor’s proposal before the Contractor proceeds with their
intended approach for multiple county measurement.

 

  c) One must be the state-wide collaborative QIP (“Cal-QIP”)

 

  2) Among the above listed four QIPs:

 

  a) One must be non-clinical (i.e., availability, accessibility or cultural
competency of services; appeals, grievances, and complaints); and

 

  b) One must be clinical (i.e., to improve clinical services or clinical
interventions).

 

  3) Contractor shall use the NCQA Quality Improvement Activity form to propose
initiation of the project and for subsequent periodic reporting.

 

  D. Consumer Satisfaction Survey

At intervals as determined by CDHS, CDHS’ contracted EQRO will conduct a
consumer satisfaction survey. Contractor shall provide appropriate data to the
EQRO to facilitate this survey.

 

10. Site Review

 

  A. General Requirement

Contractor shall conduct site reviews on all Primary Care Provider sites
according to the Site Review Policy Letter, MMCD Policy Letter 02-02 and Title
22, CCR, Section 53856.

 

  B. Pre-Operational Site Reviews

The number of site reviews to be completed prior to initiating plan operation in
a Service Area shall be based upon the total number of new primary care sites in
the provider network. For more than 30 sites in the provider network, a 5%
sample size or a minimum of 30 sites, which ever is greater in number, shall be
reviewed 6 weeks prior to plan operation. Reviews shall be completed on all
remaining sites within six (6) months of Plan operation. For 30 or fewer sites,
reviews shall be completed on all sites six (6) weeks prior to Plan operation.

 

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  C. Credentialing Site Review

A site review is required as part of the credentialing process when both the
facility and the provider are added to the Contractor’s provider network. If a
provider is added to Contractor’s provider network, and the provider site has a
current passing site review survey score, a site survey need not be repeated for
provider credentialing or recredentialing.

 

  D. Corrective Actions

Contractor shall ensure that a corrective action plan is developed to correct
cited deficiencies and that corrections are completed and verified within the
established guidelines as specified in MMCD Policy Letter 02-02, the Site Review
Policy Letter. Primary Care Provider sites that do not correct cited differences
are to be terminated from Contractor network.

 

  E. Data Submission

Contractor shall submit the site review data to CDHS by January 31 and July 31
of each year. All data elements defined by CDHS shall be included in the data
submission report.

 

  F. Continuing Oversight

Contractor shall retain accountability for all site review activities whether
carried out by the Contractor, completed by other Medi-Cal Managed Care
contractors or delegated to other entities.

 

11. Disease Surveillance

Contractor shall implement and maintain procedures for reporting any disease or
condition to public health authorities as required by State law.

 

12. Credentialing and Recredentialing

Contractor shall develop, and maintain written policies and procedures that
include initial credentialing, recredentialing, recertification, and
reappointment of Physicians including Primary Care Physicians and specialists in
accordance with the MMCD Policy Letter 02-03, Credentialing and Recredentialing.
Contractor shall ensure those policies and procedures are reviewed and approved
by the governing body, or designee. Contractor shall ensure that the
responsibility for recommendations regarding credentialing decisions will rest
with a credentialing committee or other peer review body.

 

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  A. Standards

All providers of Covered Services must be qualified in accordance with current
applicable legal, professional, and technical standards and appropriately
licensed, certified or registered. All providers must have good standing in the
Medicare and Medicaid/Medi-Cal programs. Providers that have been terminated
from either Medicare or Medicaid/Medi-Cal cannot participate in Contractor’s
provider network.

 

  B. Delegated Credentialing

Contractor may delegate credentialing and recredentialing activities. If
Contractor delegates these activities, Contractor shall comply with provision 6.
Delegation of Quality Improvement Activities, above.

 

  C. Credentialing Provider Organization Certification

Contractor and their subcontractors (e.g. a medical group or independent
physician organization) may obtain credentialing provider organization
certification (POC) from the National Committee on Quality Assurance (NCQA).
Contractor may accept evidence of NCQA POC certification in lieu of a monitoring
visit at delegated physician organizations.

 

  D. Disciplinary Actions

Contractor shall implement and maintain a system for the reporting of serious
quality deficiencies that result in suspension or termination of a practitioner
to the appropriate authorities. Contractor shall implement and maintain policies
and procedures for disciplinary actions including, reducing, suspending, or
terminating a practitioner’s privileges. Contractor shall implement and maintain
a provider appeal process.

 

  E. Medi-Cal and Medicare Provider Status

The Contractor will verify that their subcontracted providers have not been
terminated as Medi-Cal or Medicare providers or have not been placed on the
Suspended and Ineligible Provider list. Terminated providers in either Medicare
or Medi-Cal/Medicaid or on the Suspended and Ineligible Provider list, cannot
participate in the Contractor’s provider network.

 

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  F. Health Plan Accreditation

If Contractor has received a rating of “Excellent,” Commendable” or “Accredited”
from NCQA, the Contractor shall be “deemed” to meet the CDHS requirements for
credentialing and will be exempt from the CDHS medical review audit of
Credentialing.

Deeming of credentialing certification from other private credentialing
organizations will be reviewed on an individual basis.

 

  G. Credentialing of Other Non-Physician Medical Practitioners

Contractor shall develop and maintain policies and procedures that ensure that
the credentials of Nurse Practitioners, Certified Nurse Midwives, Clinical Nurse
Specialists and Physician Assistants have been verified in accordance with State
requirements applicable to the provider category.

 

13. Medical Records

 

  A. General Requirement

Contractor shall ensure that appropriate Medical Records for Members, pursuant
to Title 28, CCR, Section 1300.80(b)(4) and 42 USC § 1396a(w), shall be
available to health care providers at each Encounter in accordance with Title
28, CCR, Section 1300.67.1(c) and Title 22, CCR, Section 53861 and MMCD Policy
Letter 02-02.

 

  B. Medical Records

Contractor shall develop, implement and maintain written procedures pertaining
to any form of medical records:

 

  1) For storage and filing of medical records including: collection,
processing, maintenance, storage, retrieval identification, and distribution.

 

  2) To ensure that medical records are protected and confidential in accordance
with all Federal and State law.

 

  3) For the release of information and obtaining consent for treatment.

 

  4) To ensure maintenance of medical records in a legible, current, detailed,
organized and comprehensive manner (records may be electronic or paper copy).

 

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  C. On-Site Medical Records

Contractor shall ensure that an individual is delegated the responsibility of
securing and maintaining medical records at each site.

 

  D. Member Medical Record

Contractor shall ensure that a complete medical record is maintained for each
Member in accordance with Title 22, CCR, Section 53861, that reflects all
aspects of patient care, including ancillary services, and at a minimum
includes:

 

  1) Member identification on each page; personal/biographical data in the
record.

 

  2) Member’s preferred language (if other than English) prominently noted in
the record, as well as the request or refusal of language/interpretation
services.

 

  3) All entries dated and author identified; for member visits, the entries
shall include at a minimum, the subjective complaints, the objective findings,
and the plan for diagnosis and treatment.

 

  4) The record shall contain a problem list, a complete record of immunizations
and health maintenance or preventive services rendered.

 

  5) Allergies and adverse reactions are prominently noted in the record.

 

  6) All informed consent documentation, including the human sterilization
consent procedures required by Title 22, CCR, Sections 51305.1 through 51305.6,
if applicable.

 

  7) Reports of emergency care provided (directly by the contracted provider or
through an emergency room) and the hospital discharge summaries for all hospital
admissions.

 

  8) Consultations, referrals, specialists’, pathology, and laboratory reports.
Any abnormal results shall have an explicit notation in the record.

 

  9) For medical records of adults, documentation of whether the individual has
been informed and has executed an advanced directive such as a Durable Power of
Attorney for Health Care.

 

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  10) Health education behavioral assessment and referrals to health education
services.

 

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UTILIZATION MANAGEMENT

 

1. Utilization Management Program

Contractor shall develop, implement, and continuously update and improve, a
Utilization Management (UM) program that ensures appropriate processes are used
to review and approve the provision of Medically Necessary Covered Services.
Contractor is responsible to ensure that the UM program includes:

 

  A. Qualified staff responsible for the UM program.

 

  B. The separation of medical decisions from fiscal and administrative
management to assure those medical decisions will not be unduly influenced by
fiscal and administrative management.

 

  C. Contractor shall ensure that the UM program allows for a second opinion
from a qualified health professional at no cost to the Member.

 

  D. Established criteria for approving, modifying, deferring, or denying
requested services. Contractor shall utilize evaluation criteria and standards
to approve, modify, defer, or deny services. Contractor shall document the
manner in which providers are involved in the development and or adoption of
specific criteria used by the Contractor.

 

  E. Contractor shall communicate to health care practitioners the procedures
and services that require prior authorization and ensure that all contracting
health care practitioners are aware of the procedures and timeframes necessary
to obtain prior authorization for these services.

 

  F. An established specialty referral system to track and monitor referrals
requiring prior authorization through the Contractor. The system shall include
authorized, denied, deferred, or modified referrals, and the timeliness of the
referrals. This specialty referral system should include non-contracting
providers.

Contractor shall ensure that all contracting health care practitioners are aware
of the referral processes and tracking procedures.

 

  G. The integration of UM activities into the Quality Improvement System (QIS),
including a process to integrate reports on review of the number and types of
appeals, denials, deferrals, and modifications to the appropriate QIS staff.

These activities shall be done in accordance with Health and Safety Code
Section 1363.5 and Title 28, CCR, Section 1300.70(b)(2)(H) & (c).

 

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2. Pre-Authorizations and Review Procedures

Contractor shall ensure that its pre-authorization, concurrent review and
retrospective review procedures meet the following minimum requirements:

 

  A. Qualified health care professionals supervise review decisions and a
qualified Physician will review all denials.

 

  B. There is a set of written criteria or guidelines for Utilization Review
that is based on sound medical evidence, is consistently applied, regularly
reviewed, and updated.

 

  C. Reasons for decisions are clearly documented.

 

  D. Notification to Members regarding denied, deferred or modified referrals is
made as specified in Exhibit A, Attachment 13, Member Services. There shall be a
well-publicized appeals procedure for both providers and patients.

 

  E. Decisions and appeals are made in a timely manner and are not unduly
delayed for medical conditions requiring time sensitive services.

 

  F. Prior Authorization requirements shall not be applied to Emergency
Services, family planning services, preventive services, basic prenatal care,
sexually transmitted disease services, and HIV testing.

 

  G. Records, including any Notice of Action, shall meet the retention
requirements described in Exhibit E, Attachment 2, provision 19.

 

  H. Contractor must notify the requesting provider of any decision to deny,
approve, modify, or delay a service authorization request, or to authorize a
service in an amount, duration, or scope that is less than requested. The notice
to the provider may be orally or in writing.

 

3. Timeframes for Medical Authorization

 

  A. Emergency Care: No prior authorization required, following the reasonable
person standard to determine that the presenting complaint might be an
emergency.

 

  B. Post-stabilization: Response to request within 30 minutes or the service is
deemed approved in accordance with Title 22, CCR, Section 53855 (a), or any
future amendments thereto.

 

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  C. Non-urgent care following an exam in the emergency room: Response to
request within 30 minutes or deemed approved.

 

  D. Concurrent Review of authorization for treatment regimen already in place:
Within five (5) working days or less, consistent with urgency of the Member’s
medical condition and in accordance with Health & Safety Code Section 1367.01,
or any future amendments thereto.

 

  E. Retrospective review: Within 30 calendar days in accordance with Health &
Safety Code Section 1367.01, or any future amendments thereto.

 

  F. Pharmaceuticals: 24 hours on all drugs that require prior authorization in
accordance with Welfare & Institutions Code, Section 14185 or any future
amendments thereto.

 

  G. Routine authorizations: Five (5) Working days from receipt of the
information reasonably necessary to render a decision (these are requests for
specialty service, cost control purposes, out-of-network not otherwise exempt
from prior authorization) in accordance with Health & Safety Code,
Section 1367.01, or any future amendments thereto, but, no longer than 14
calendar days from the receipt of the request. The decision may be deferred and
the time limit extended an additional 14 calendar days only where the Member or
the Member’s provider requests an extension, or the Contractor can provide
justification upon request by the State for the need for additional information
and how it is in the Member’s interest. Any decision delayed beyond the time
limits is considered a denial and must be immediately processed as such.

 

  H. Expedited authorizations: Three (3) working days after receipt of the
request for service (these are requests in which a provider indicates, or the
Contractor determines, that following the standard timeframe could seriously
jeopardize the Member’s life or health or ability to attain, maintain, or regain
maximum function). The time limit may be extended by up to 14 calendar days if
the Member requests an extension, or if the Contractor can provide justification
upon request by the State for the need for additional information and how it is
in the Member’s interest. Any decision delayed beyond the time limits is
considered a denial and must be immediately processed as such.

 

  I. Hospice inpatient care: 24-hour response.

 

4. Review of Utilization Data

Contractor shall include within the UM program mechanisms to detect both under-
and over-utilization of health care services. Contractor’s internal reporting
mechanisms used to detect Member utilization patterns shall be reported to CDHS
upon request.

 

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5. Delegating UM Activities

Contractor may delegate UM activities. If Contractor delegates these activities,
Contractor shall comply with Exhibit A, Attachment 4, provision 6. Delegation of
Quality Improvement Activities.

 

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PROVIDER NETWORK

 

1. Network Capacity

Contractor shall maintain a provider network adequate to serve sixty percent
(60%) of all Eligible Beneficiaries in the proposed county and provide the full
scope of benefits. Contractor will increase the capacity of the network as
necessary to accommodate enrollment growth beyond the sixty percent (60%).
However, after the first twelve months of operation, if Enrollments do not
achieve seventy-five (75%) of the required network capacity, the Contractor’s
total network capacity requirement may be renegotiated.

 

2. Network Composition

Contractor shall maintain an adequate number of inpatient Facilities, Service
Sites, professional, allied, specialist and supportive paramedical personnel
within their network to provide Covered Services to its Members.

 

3. Provider to Member Ratios

 

  A. Contractor shall ensure that networks continuously satisfy the following
full-time equivalent provider to Member ratios:

 

1)    Primary Care Physicians       1:2,000                      2)    Total
Physicians       1:1,200                     

 

  B. If Non-Physician Medical Practitioners are included in Contractor’s
provider network, each individual Non-Physician Medical Practitioner shall not
exceed a full-time equivalent provider/patient caseload of one provider per
1,000 patients.

 

4. Physician Supervisor to Non-Physician Medical Practitioner Ratios

Contractor shall ensure compliance with Title 22, CCR, Section 51241, and that
full-time equivalent Physician Supervisor to Non-Physician Medical Practitioner
ratios do not exceed the following:

 

  A. Nurse Practitioners                    1:4

 

  B. Physician Assistants                  1:2

 

  C. Four (4) Non-Physician Medical Practitioners in any combination that does
not include more than three nurse midwives or two Physician assistants.

 

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5. Emergency Services

Contractor shall have as a minimum a designated emergency service facility,
providing care on a 24-hour-a-day, 7-day-a-week basis. This designated emergency
service facility will have one or more Physicians and one Nurse on duty in the
facility at all times.

 

6. Specialists

Contractor shall maintain adequate numbers and types of specialists within their
network to accommodate the need for specialty care in accordance with Title 22,
CCR, Section 53853(a).

 

7. Federally Qualified Health Center (FQHC) Services

Contractor shall meet federal requirements for access to FQHC services,
including those in 42 United States Code Section 1396 b(m). Contractor shall
reimburse FQHCs in accordance with Exhibit A, Attachment 8, Provider
Compensation Arrangements, provision 7. If FQHC services are not available in
the provider network of either the Commercial Health Plan in the county or
Contractor, Contractor shall reimburse FQHCs for services provided out-of-plan
to Contractor’s Members at the FQHC rate determined by CDHS. If FQHC services
are not available in Contractor’s provider network, but are available within
CDHS’ time and distance standards for access to Primary Care for Contractor’s
Members in the Commercial Health Plan’s provider network in the county,
Contractor shall not be obligated to reimburse FQHCs for services provided
out-of-plan to Members (unless authorized by Contractor).

 

8. Time and Distance Standard

Contractor shall maintain a network of Primary Care Physicians which are located
within thirty (30) minutes or ten (10) miles of a Member’s residence unless the
Contractor has a CDHS approved alternative time and distance standard.

 

9. Plan Physician Availability

Contractor shall have a plan or contracting Physician available 24 hours per
day, seven (7) days per week to coordinate the transfer of care of a Member
whose emergency condition is stabilized, to authorize Medically Necessary
post-stabilization services, and for general communication with emergency room
personnel.

 

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10. Provider Network Report

Contractor shall submit to CDHS on a quarterly basis, in a format specified by
CDHS, a report summarizing changes in the provider network.

 

  A. The report shall identify provider deletions and additions and the
resulting impact to:

 

  1) Geographic access for the Members;

 

  2) Cultural and linguistic services including provider and provider staff
language capability;

 

  3) The percentage of Traditional and Safety-Net providers;

 

  4) The number of Members assigned to each Primary Care Physician;

 

  5) The percentage of Members assigned to Traditional and Safety-Net providers;
and

 

  6) The network providers who are not accepting new patients.

 

  B. Contractor shall submit the report 30 calendar days following the end of
the reporting quarter.

 

11. Plan Subcontractors

Contractor shall submit to CDHS, a quarterly report containing the names of all
direct subcontracting provider groups including health maintenance
organizations, independent physician associations, medical groups, and FQHCs and
their subcontracting health maintenance organizations, independent physician
associations, medical groups, and FQHCs. The report must be sorted by
subcontractor type, indicating the county or counties in which Members are
served. In addition, the report should also indicate where relationships or
affiliations exist between direct and indirect subcontractors. The report shall
be submitted within 30 calendar days following the end of the reporting quarter.

 

12. Ethnic and Cultural Composition

Contractor shall ensure that the composition of Contractor’s provider network
meets the ethnic, cultural, and linguistic needs of Contractor’s Members on a
continuous basis.

 

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13. Subcontracts

Contractor may enter into Subcontracts with other entities in order to fulfill
the obligations of the Contract. In doing so, Contractor shall meet the
subcontracting requirements as stated in Title 22, CCR, Section 53867 and this
Contract.

 

  A. Laws and Regulations

All Subcontracts shall be in writing and in accordance with the requirements of
the Knox-Keene Health Care Services Plan Act of 1975, Health and Safety Code
Section 1340 et seq.; Title 28, CCR, Section 1300 et seq.; W&I Code
Section 14200 et seq.; Title 22, CCR, Section 53800 et seq.; and applicable
federal and State laws and regulations.

 

  B. Subcontract Requirements

Each Subcontract as defined in Exhibit E, Attachment 1, item 100. A. shall
contain:

 

  1) Specification of the services to be provided by the subcontractor.

 

  2) Specification that the Subcontract shall be governed by and construed in
accordance with all laws and applicable regulations governing this Contract.

 

  3) Specification that the Subcontract or Subcontract amendments shall become
effective only as set forth in subparagraph C. Departmental Approval –
Non-Federally Qualified HMOs, or subparagraph D, Departmental Approval –
Federally Qualified HMOs.

 

  4) Specification of the term of the Subcontract, including the beginning and
ending dates as well as methods of extension, renegotiation and termination.

 

  5) Language comparable to Exhibit A, Attachment 8, provision 13 for those
subcontractors at risk for non-contracting emergency services.

 

  6) Subcontractor’s agreement to submit reports as required by Contractor.

 

  7) Subcontractor’s agreement to make all of its books and records, pertaining
to the goods and services furnished under the terms of the Subcontract,
available for inspection, examination or copying:

 

  a) By CDHS, Department of Health and Human Services (DHHS), Department of
Justice (DOJ), and Department of Managed Health Care (DMHC).

 

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  b) At all reasonable times at the subcontractor’s place of business or at such
other mutually agreeable location in California.

 

  c) In a form maintained in accordance with the general standards applicable to
such book or record keeping.

 

  d) For a term of at least five years from the close of the current fiscal year
in which the date of service occurred; in which the record or data was created
or applied; and for which the financial record was created.

 

  e) Including all Encounter data for a period of at least five years.

 

  8) Full disclosure of the method and amount of compensation or other
consideration to be received by the subcontractor from the Contractor.

 

  9) Subcontractor’s agreement to maintain and make available to CDHS, upon
request, copies of all sub-subcontracts and to ensure that all sub-subcontracts
are in writing and require that the Sub-Subcontractor:

 

  a) Make all applicable books and records available at all reasonable times for
inspection, examination, or copying by CDHS, DHHS, DOJ and DMHC.

 

  b) Retain such books and records for a term of at least five years from the
close of the current fiscal year for the last year in which the sub-subcontract
is in effect and in which the date of service occurred; in which the record or
data was created or applied; and for which the financial record was created.

 

  10) Subcontractor’s agreement to assist Contractor in the transfer of care
pursuant to Exhibit E, Attachment 2, provision 15. B. Phase out Requirements, in
the event of Contract termination.

 

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  11) Subcontractor’s agreement to assist Contractor in the transfer of care in
the event of sub-subcontract termination for any reason.

 

  12) Subcontractor’s agreement to notify CDHS in the event the agreement with
the Contractor is amended or terminated. Notice is considered given when
properly addressed and deposited in the United States Postal Service as
first-class registered mail, postage attached.

 

  13) Subcontractor’s agreement that assignment or delegation of the Subcontract
will be void unless prior written approval is obtained from CDHS.

 

  14) Subcontractor’s agreement to hold harmless both the State and Members in
the event the Contractor cannot or will not pay for services performed by the
subcontractor pursuant to the Subcontract.

 

  15) Subcontractor’s agreement to timely gather, preserve and provide to CDHS,
any records in the subcontractor’s possession, in accordance with Exhibit E,
Attachment 2, provision 25. Records Related to Recovery for Litigation.

 

  16) Subcontractor’s agreement to provide interpreter services for Members at
all provider sites.

 

  17) Subcontractor’s right to submit a grievance and Contractor’s formal
process to resolve Provider Grievances.

 

  18) Subcontractor’s agreement to participate and cooperate in the Contractor’s
Quality Improvement System.

 

  19) If Contractor delegates Quality Improvement activities, Subcontract shall
include those provisions stipulated in Exhibit A, Attachment 4, provision 6.
Delegation of Quality Improvement Activities.

 

  20) Subcontractor’s agreement to comply with all applicable requirements of
the CDHS, Medi-Cal Managed Care Program.

 

  C. Departmental Approval—Non-Federally Qualified HMOs

Except as provided in Exhibit A, Attachment 8, Provider Compensation
Arrangements, provision 7 regarding Federally Qualified Health Centers and Rural
Health Clinics, a provider or management Subcontract entered into by Contractor
which is not a federally qualified HMO shall become

 

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Exhibit A, Attachment 6

 

effective upon approval by CDHS in writing, or by operation of law where CDHS
has acknowledged receipt of the proposed Subcontract, and has failed to approve
or disapprove the proposed Subcontract within 60 calendar days of receipt.
Within five (5) Working days of receipt, CDHS shall acknowledge in writing the
receipt of any material sent to CDHS by Contractor for approval.

Subcontract amendments shall be submitted to CDHS for prior approval at least 30
calendar days before the effective date of any proposed changes governing
compensation, services, or term. Proposed changes which are neither approved or
disapproved by CDHS, shall become effective by operation of law 30 calendar days
after CDHS has acknowledged receipt or upon the date specified in the
Subcontract amendment, whichever is later.

 

  D. Departmental Approval—Federally Qualified HMOs

Except as provided in Exhibit A, Attachment 8, provision 7. Provider
Compensation Arrangements, regarding Federally Qualified Health Centers and
Rural Health Clinics, Subcontracts entered into by Contractor which is a
federally qualified HMO shall be:

 

  1) Exempt from prior approval by CDHS.

 

  2) Submitted to CDHS upon request.

 

  E. Public Records

Subcontracts entered into by the Contractor and all information received in
accordance with this subsection will be public records on file with CDHS, except
as specifically exempted in statute. CDHS shall ensure the confidentiality of
information and contractual provisions filed with CDHS which are specifically
exempted by statute from disclosure, in accordance with the statutes providing
the exemption. The names of the officers and owners of the subcontractor,
stockholders owning more than ten (10) percent of the stock issued by the
subcontractor and major creditors holding more than five (5) percent of the debt
of the subcontractor will be attached to the Subcontract at the time the
Subcontract is presented to CDHS.

 

14. Subcontracts with Federally Qualified Health Centers and Rural Health
Clinics (FQHC/RHC)

Subcontracts with FQHCs shall also meet Subcontract requirements of provision 13
above and reimbursement requirements in Exhibit A, Attachment 8, provision

 

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Exhibit A, Attachment 6

 

7. In Subcontracts with FQHCs and RHCs where a negotiated reimbursement rate is
agreed to as total payment, a provision that such rate constitutes total payment
shall be included in the Subcontract.

 

15. Traditional and Safety-Net Providers Participation

Contractor shall establish participation standards pursuant to Title 22, CCR,
Section 53800(b)(2)(C)(1) to ensure participation and broad representation of
Traditional and Safety-Net Providers within a Service Area. Contractor shall
maintain the percentage of Traditional and Safety-Net Provider within a Service
Area submitted and approved by CDHS. Federally Qualified Health Centers meet the
definitions of both Traditional and Safety-Net providers.

 

16. Nondiscrimination In Provider Contracts

Contractor shall not discriminate for the participation, reimbursement, or
indemnification of any provider who is acting within the scope of practice of
his or her license or certification under applicable State law, solely on the
basis of that license or certification. If the Contractor declines to include
individual or groups of providers in its network, it must give the affected
providers written notice of the reason for its decision. Contractor’s provider
selection policies must not discriminate against providers that serve high-risk
populations or specialize in conditions requiring costly treatment. This section
shall not be construed to require Contractor to contract with providers beyond
the number necessary to meet the needs of Contractor’s Members; preclude
Contractor from using different reimbursement amounts for different specialties
or for different practitioners in the same specialty; or preclude Contractor
from establishing measures that are designed to maintain quality of services and
control costs and is consistent with Contractor’s responsibilities to Members.

 

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Exhibit A, Attachment 7

 

PROVIDER RELATIONS

 

1. Exclusivity

Contractor shall not, by use of an exclusivity provision, clause, agreement, or
in any other manner, prohibit any subcontractor from providing services to
Medi-Cal beneficiaries who are not Members of the Contractor’s plan. This
prohibition is not applicable to contracts entered into between Contractor and
Knox-Keene licensed health care service plans.

 

2. Provider Grievances

Contractor shall have a formal process to accept, acknowledge, and resolve
provider grievances. A provider of medical services may submit to Contractor a
grievance concerning the authorization or denial of a service; denial, deferral
or modification of a prior authorization request on behalf of a Member; or the
processing of a payment or non-payment of a claim by the Contractor. This
process shall be communicated to contracting and non-contracting providers.

 

3. Non-Contracting, Non-Emergency Provider Communication

Contractor shall develop and maintain protocols for payment of claims, and
communicating and interacting with non-contracting, non-emergency providers.

 

4. Provider Manual

Contractor shall issue a Provider Manual and updates to the providers of
Medi-Cal services. The manual and updates shall serve as a source of information
to health care providers regarding Medi-Cal services, policies and procedures,
statutes, regulations, telephone access and special requirements.

 

5. Provider Training

Contractor shall ensure that all providers receive training regarding the
Medi-Cal Managed Care program in order to operate in full compliance with the
Contract and all applicable Federal and State statutes and regulations.
Contractor shall ensure that provider training relates to Medi-Cal Managed Care
services, policies, procedures and any modifications to existing services,
policies or procedures. Contractor shall conduct training for all providers
within ten (10) Working days after the Contractor places a newly contracted
provider on active status. Contractor shall ensure that provider training
includes information on all Member rights specified in Exhibit A, Attachment 13,
Member Services, including the right to full disclosure of health care
information and the right to actively participate in health care decisions.
Contractor shall ensure that ongoing training is conducted when deemed necessary
by either the Contractor or the State.

 

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Exhibit A, Attachment 7

 

6. Submittal of Inpatient Days Information

Upon CDHS’ written request, Contractor shall report hospital inpatient days to
CDHS as required by W&I Code, section 14105.985(b)(2) for the time period and in
the form and manner specified in CDHS’ request, within 30 calendar days of
receipt of the request. Contractor shall submit additional reports to CDHS, as
requested, for the administration of the Disproportionate Share Hospital
program.

 

7. Emergency Department Protocols

Contractor shall develop and maintain protocols for communicating and
interacting with emergency departments. Protocols shall be distributed to all
emergency departments in the contracted Service Area and shall include at a
minimum the following:

 

  A. Description of telephone access to triage and advice systems used by the
Contractor.

 

  B. Plan contact person responsible for coordinating services and who can be
contacted 24 hours a day.

 

  C. Written referral procedures (including after-hours instruction) that
emergency department personnel can provide to Medi-Cal Members who present at
the emergency department for non-emergency services.

 

  D. Procedures for emergency departments to report system and/or protocol
failures and process for ensuring corrective action.

 

8. Prohibited Punitive Action Against the Provider

Contractor must ensure that punitive action is not taken against the provider
who either requests an expedited resolution or supports a Member’s appeal.

 

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Exhibit A, Attachment 8

 

PROVIDER COMPENSATION ARRANGEMENTS

 

1. Compensation

Contractor may compensate providers as Contractor and provider negotiate and
agree. Compensation cannot be determined by a percentage of the Contractor’s
payment from CDHS. This provision will not be construed to prohibit Subcontracts
in which compensation or other consideration is determined to be on a capitation
basis.

 

2. Capitation Payments

Capitation payments by a Contractor to a Primary Care Provider or clinic
contracting with the Contractor on a capitation basis shall be payable effective
the date of the Member’s enrollment where the Member’s assignment to or
selection of a Primary Care Provider or clinic has been confirmed by the
Contractor. However, capitation payments by a Contractor to a Primary Care
Provider or clinic for a Member whose assignment to or selection of a Primary
Care Provider or clinic was not confirmed by the Contractor on the date of the
beneficiary’s enrollment, but is later confirmed by the Contractor, shall be
payable no later than 30 calendar days after the Member’s enrollment.

 

3. Physician Incentive Plan Requirements

Contractor may implement and maintain a Physician Incentive Plan only if:

 

  A. No specific payment is made directly or indirectly under the incentive plan
to a Physician or Physician group as an inducement to reduce or limit Medically
Necessary Covered Services provided to an individual Member; and

 

  B. The stop-loss protection (reinsurance), beneficiary survey, and disclosure
requirements of 42 CFR 417.479, 42 CFR 422.208 and 42 CFR 422.210 are met by
Contractor.

 

4. Identification of Responsible Payor

Contractor shall provide the information that identifies the payor responsible
for reimbursement of services provided to a Member enrolled in Contractor’s
Medi-Cal Managed Care health plan to CDHS’ Fiscal Intermediary (FI) contractor.
Contractor shall identify the subcontractor (if applicable) or Independent
Physician Association (IPA) responsible for payment, and the Primary Care
Provider name and telephone number responsible for providing care. Contractor
shall provide this information in a manner prescribed by CDHS once CDHS and the
FI contractor have implemented the enhancement to the California Automated
Eligibility Verification and Claims Management System (CA-AEV/CMS).

 

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Exhibit A, Attachment 8

 

5. Claims Processing

Contractor shall pay all claims submitted by contracting providers in accordance
with this section, unless the contracting provider and Contractor have agreed in
writing to an alternate payment schedule.

 

  A. Contractor shall comply with Section 1932(f), Title XIX, Social Security
Act (42 U.S.C. Section 1396u-2(f), and Health and Safety Code Sections 1371
through 1371.36. Contractor shall be subject to any remedies, including interest
payments provided for in these sections, if it fails to meet the standards
specified in these sections.

 

  B. Contractor shall maintain procedures for prepayment and post payment claims
review, including review of data related to provider, Member and Covered
Services for which payment is claimed.

 

  C. Contractor shall maintain sufficient claims processing/tracking/payment
systems capability to: comply with applicable State and federal law, regulations
and Contract requirements, determine the status of received claims, and
calculate the estimate for incurred and unreported claims, as specified by Title
28, CCR, Sections 1300.77.1 and 1300.77.2.

 

  D. Contractor shall submit claims payment summary reports to CDHS on a
quarterly basis as specified in Exhibit A, Attachment 2, provision 2, paragraph
B. subparagraph 2).

 

6. Prohibited Claims

Except in specified circumstances, Contractor and any of its Affiliates and
subcontractors shall not submit a claim or demand, or otherwise collect
reimbursement for any services provided under this Contract to a Medi-Cal
Member. Collection of claim may be made under those circumstances described in
Title 22, CCR, Sections 53866, 53220, and 53222.

 

7. Federally Qualified Health Centers (FQHC), Rural Health Clinics (RHC), and
Indian Health Service Facilities

 

  A. FQHCs Availability and Reimbursement Requirement

If FQHC services are not available in the provider network of either the Local
Initiative Health Plan in the county or Contractor, Contractor shall reimburse
non-contracting FQHCs for services provided to Contractor’s

 

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Exhibit A, Attachment 8

 

Members at a level and amount of payment that is not less than the Contractor
makes for the same scope of services furnished by a provider that is not a FQHC
or RHC. If FQHC services are not available in Contractor’s provider network, but
are available within CDHS’ time and distance standards for access to Primary
Care for Contractor’s Members within the Local Initiative Health Plan’s provider
network in the county, Contractor shall not be obligated to reimburse
non-contracting FQHCs for services provided to Contractor’s Members (unless
authorized by Contractor).

 

  B. Federally Qualified Health Centers/Rural Health Clinics (FQHC/RHC)

Contractor shall submit to CDHS, within 30 calendar days of a request and in the
form and manner specified by CDHS, the services provided and the reimbursement
level and amount for each of Contractor’s FQHC and RHC Subcontracts. Contractor
shall certify in writing to CDHS within 30 calendar days of CDHS’ written
request that, pursuant to Welfare and Institutions Code Section 14087.325(b) and
(d), as amended by Chapter 894, Statutes of 1998, FQHC and RHC Subcontract terms
and conditions are the same as offered to other subcontractors providing a
similar scope of service and that reimbursement is not less than the level and
amount of payment that Contractor makes for the same scope of services furnished
by a provider that is not a FQHC or RHC. Contractor is not required to pay FQHCs
and RHCs the Medi-Cal per visit rate for that facility. At its discretion, CDHS
reserves the right to review and audit Contractor’s FQHC and RHC reimbursement
to ensure compliance with State and federal law and shall approve all FQHC and
RHC Subcontracts consistent with the provisions of Welfare and Institutions
Code, Section 14087.325(h).

To the extent that Indian Health Service Facilities qualify as FQHCs or RHCs,
the above reimbursement requirements shall apply to Subcontracts with Indian
Health Service Facilities.

 

  C. Indian Health Service Facilities

Contractor shall reimburse Indian Health Service Facilities for services
provided to Members who are qualified to receive services from an Indian Health
Service Facility according to one of the reimbursement options in Title 22, CCR,
Section 55140(a). Contractor shall reimburse non-contracting Indian Health
Service Facilities at the approved Medi-Cal per visit rate for that facility.

 

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Exhibit A, Attachment 8

 

8. Non-Contracting Certified Nurse Midwife (CNM) and Certified Nurse
Practitioner (CNP) Reimbursement

If there are no CNMs or CNPs in Contractor’s provider network, Contractor shall
reimburse non-contracting CNMs or CNPs for services provided to Members at no
less than the applicable Medi-Cal Fee-For-Service (FFS) rates. If an
appropriately licensed non-contracting facility is used, Contractor shall pay
the facility fee. For hospitals, the requirements of provision 13, paragraph C.
below apply. For birthing centers, the Contractor shall reimburse no less than
the applicable Medi-Cal FFS rate.

 

9. Non-Contracting Family Planning Providers’ Reimbursement

Contractor shall reimburse non-contracting family planning providers at no less
than the appropriate Medi-Cal FFS rate. Contractor shall reimburse
non-contracting family planning providers for services listed in Exhibit A,
Attachment 9, provision 8. Access to Services with Special Arrangements,
provided to Members of childbearing age to temporarily or permanently prevent or
delay pregnancy.

 

10. Sexually Transmitted Disease (STD)

Contractor shall reimburse local health departments and non-contracting family
planning providers at no less than the appropriate Medi-Cal FFS rate, for the
diagnosis and treatment of a STD episode, as defined in MMCD Policy Letter
96-09. Contractor shall provide reimbursement only if STD treatment providers
provide treatment records or documentation of the Member’s refusal to release
Medical Records to Contractor along with billing information.

 

11. HIV Testing and Counseling

Contractor shall reimburse local health departments and non-contracting family
planning providers at no less than the Medi-Cal FFS rate for HIV testing and
counseling. Contractor shall provide reimbursement only if local health
departments and non-contracting family planning providers make all reasonable
efforts, consistent with current laws and regulations, to report confidential
test results to the Contractor.

 

12. Immunizations

Contractor shall reimburse local health departments for the administration fee
for immunizations given to Members. However, Contractor is not required to
reimburse the local health department for an immunization provided to a Member
who was already up to date. The local health department shall provide
immunization records when immunization services are billed to the Contractor.
Contractor shall not be obligated to reimburse providers other than local health
departments unless they enter into an agreement with the Contractor.

 

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Exhibit A, Attachment 8

 

13. Non-Contracting Emergency Service Providers

Contractor shall provide care under emergency circumstances in accordance with
the requirements of Title 22, CCR, Section 53855 including the following:

 

  A. Contractor shall pay for Emergency Services received by a Member from
non-contracting providers. Payments to non-contracting providers shall be for
the treatment of the Emergency Medical Condition including Medically Necessary
services rendered to a Member until the Member’s condition has stabilized
sufficiently to permit discharge, or referral and transfer in accordance with
instructions from Contractor. Emergency Services shall not be subject to Prior
Authorization by Contractor.

 

  B. At a minimum, Contractor must reimburse the non-contracting emergency
department and, if applicable, its affiliated providers for Physician services
at the lowest level of emergency department evaluation and management CPT
(Physician’s Current Procedural Terminology) codes, unless a higher level is
clearly supported by documentation, and for the facility fee and diagnostic
services such as laboratory and radiology.

 

  C. For hospital inpatient services, reimbursement by Contractor, or by a
subcontractor who is at risk for out-of-plan Emergency Services, to a
non-contracting Emergency Services provider shall be the lower of the following
rates applicable to the provider at the time the services were rendered by the
provider:

 

  1) For a provider not contracting with the State under the Selected Provider
Contracting Program, the lower of:

 

  a) The Medi-Cal Fee-For-Service rate that would be received by the provider if
the service were provided for a beneficiary under the Medi-Cal Fee-For-Service
program: or

 

  b) The inpatient rate negotiated by Contractor or subcontractor with the
provider.

 

  2) For a provider contracting with the State under the Selected Provider
Contracting Program, the lower of:

 

  a) The average California Medical Assistance Commission (CMAC) rate for the
geographic region referred to as Standard Consolidated Statistical Area in which
the provider is located for the last year reported, as published in the most
recent CMAC Annual Report to the Legislature; or

 

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Exhibit A, Attachment 8

 

  b) The inpatient rate negotiated by Contractor or subcontractor with the
provider.

 

  D. For all other non-contracting providers, reimbursement by Contractor, or by
a subcontractor who is at risk for out-of-plan Emergency Services, for properly
documented claims for services rendered by a non-contracting provider pursuant
to this provision shall be made in accordance with provision 5. Claims
Processing, above, and shall be the lower of the following rates applicable at
the time the services were rendered by the provider:

 

  1) The usual charges made to the general public by the provider.

 

  2) The maximum Fee-For-Service rates for similar services under the Medi-Cal
program.

 

  3) The rate agreed to by Contractor and the provider.

 

  E. Disputed Emergency Services claims may be submitted to CDHS, Office of
Administrative Hearings and Appeals, 1029 J Street, Suite 200, Sacramento,
California, 95814 for resolution under the provisions of Section 14454 (b) of
the Welfare and Institutions Code and Title 22, CCR, Section 53875. Contractor
agrees to abide by the findings of CDHS in such cases, to promptly reimburse the
non-contracting provider within 30 days of the effective date of a decision that
Contractor is liable for payment of a claim and to provide proof of
reimbursement in such form as the CDHS Director may require. Failure to
reimburse the non-contracting provider and provide proof of reimbursement to
CDHS within 30 calendar days shall result in liability offsets in accordance
with Welfare and Institutions Code Section 14454(c) and Title 22, CCR,
Section 53702.

 

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Exhibit A, Attachment 9

 

ACCESS AND AVAILABILITY

 

1. General Requirement

Contractor shall ensure that each Member has a Primary Care Provider who is
available and physically present at the service site for sufficient time to
ensure access for the assigned Member when medically required. This requirement
does not preclude an appropriately licensed professional from being a substitute
for the Primary Care Provider in the event of vacation, illness, or other
unforeseen circumstances.

Contractor shall ensure Members access to Specialists for Medically Necessary
Covered Services. Contractor shall ensure adequate staff within the Service
Area, including Physicians, administrative and other support staff directly
and/or through Subcontracts, sufficient to assure that health services will be
provided in accordance with Title 22, CCR, Section 53853(a) and consistent with
all specified requirements.

 

2. Existing Patient-Physician Relationships

Contractor shall ensure that no traditional or safety-net provider, upon entry
into the Contractor’s network, suffers any disruption of existing
patient-physician relationships, to the maximum extent possible.

 

3. Access Requirements

Contractor shall establish acceptable accessibility standards in accordance with
Title 28, Section 1300.67.2.1 and as specified below. CDHS will review and
approve standards for reasonableness. Contractor shall communicate, enforce, and
monitor providers’ compliance with these standards.

 

  A. Appointments

Contractor shall implement and maintain procedures for Members to obtain
appointments for routine care, Urgent Care, routine specialty referral
appointments, prenatal care, children’s preventive periodic health assessments,
and adult initial health assessments. Contractor shall also include procedures
for follow-up on missed appointments.

 

  B. First Prenatal Visit

Contractor shall ensure that the first prenatal visit for a pregnant Member will
be available within two (2) weeks upon request.

 

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Exhibit A, Attachment 9

 

  C. Waiting Times

Contractor shall develop, implement, and maintain a procedure to monitor waiting
times in the providers’ offices, telephone calls (to answer and return), and
time to obtain various types of appointments indicated in subparagraph A.
Appointments, above.

 

  D. Telephone Procedures

Contractor shall require providers to maintain a procedure for triaging Members’
telephone calls, providing telephone medical advice (if it is made available)
and accessing telephone interpreters.

 

  E. Urgent Care

Contractor shall ensure that a Member needing Urgent Care will be seen within 48
hours upon request.

 

  F. After Hours Calls

At a minimum, Contractor shall ensure that a Physician or an appropriate
licensed professional under his/her supervision will be available for
after-hours calls.

 

  G. Unusual Specialty Services

Contractor shall arrange for the provision of seldom used or unusual specialty
services from specialists outside the network if unavailable within Contractor’s
network, when determined Medically Necessary.

 

4. Access to Services to Which Contractor or Subcontractor Has a Moral Objection

Contractor shall arrange for the timely referral and coordination of Covered
Services to which the Contractor or subcontractor has religious or ethical
objections to perform or otherwise support. Contractor shall demonstrate ability
to arrange, coordinate and ensure provision of services through referrals at no
additional expense to CDHS. Contractor shall identify these services in the
Member Services Guide.

 

5. Standing Referrals

Contractor shall provide for standing referrals to specialists in accordance
with Health and Safety Code, Section 1374.16.

 

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Exhibit A, Attachment 9

 

6. Emergency Care

Contractor shall ensure that a Member with an Emergency Condition will be seen
on an emergency basis and that Emergency Services will be available and
accessible within the Service Area 24-hours-a-day.

 

  A. Contractor shall cover emergency medical services without prior
authorization pursuant to Title 28, CCR, Section 1300.67(g) and Title 22, CCR,
Section 53216. Contractor shall coordinate access to emergency care services in
accordance with the Contractor’s CDHS-approved Emergency Department protocol
(see Exhibit A, Attachment 7, Provider Relations).

 

  B. Contractor shall ensure adequate follow-up care for those Members who have
been screened in the Emergency Room and require non-emergency care.

 

  C. Contractor shall ensure that a plan or contracting Physician is available
24 hours a day to authorize Medically Necessary post-stabilization care and
coordinate the transfer of stabilized Members in an emergency department, if
necessary.

 

7. Nurse Midwife and Nurse Practitioner Services

Contractor shall meet federal requirements for access to Certified Nurse Midwife
(CNM) services as defined in Title 22, CCR, Section 51345 and Certified Nurse
Practitioner (CNP) services as defined in Title 22, CCR, Section 51345.1.
Contractor shall inform Members that they have a right to obtain out-of-plan CNM
services.

 

8. Access to Services with Special Arrangements

 

  A. Family Planning

Members have the right to access family planning services through any family
planning provider without Prior Authorization. Contractor shall inform its
Members in writing of their right to access any qualified family planning
provider without Prior Authorization in its Member Services Guide. See Exhibit
A, Attachment 13, Member Services.

 

  1) Informed Consent

Contractor shall ensure that informed consent is obtained from Medi-Cal
enrollees for all contraceptive methods, including sterilization, consistent
with requirements of Title 22, CCR, Sections 51305.1 and 51305.3.

 

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Exhibit A, Attachment 9

 

  2) Out-Of-Network Family Planning Services

Members of childbearing age may access the following services from out of plan
family planning providers to temporarily or permanently prevent or delay
pregnancy:

 

  a) Health education and counseling necessary to make informed choices and
understand contraceptive methods.

 

  b) Limited history and physical examination.

 

  c) Laboratory tests if medically indicated as part of decision-making process
for choice of contraceptive methods. Contractor shall not be required to
reimburse out-of-plan providers for pap smears, if Contractor has provided pap
smears to meet the U.S. Preventive Services Task Force guidelines.

 

  d) Diagnosis and treatment of a sexually transmitted disease episode, as
defined by CDHS for each sexually transmitted disease, if medically indicated.

 

  e) Screening, testing, and counseling of at risk individuals for HIV and
referral for treatment.

 

  f) Follow-up care for complications associated with contraceptive methods
provided or prescribed by the family planning provider.

 

  g) Provision of contraceptive pills, devices, and supplies.

 

  h) Tubal ligation.

 

  i) Vasectomies.

 

  j) Pregnancy testing and counseling.

 

  B. Sexually Transmitted Diseases (STDs)

Contractor shall provide access to STD services without Prior Authorization to
all Members both within and outside its provider network. Members may access
out-of-plan STD services through local health

 

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Exhibit A, Attachment 9

 

department (LHD) clinics, family planning clinics, or through other community
STD service providers. Members may access LHD clinics and family planning
clinics for diagnosis and treatment of a STD episode. For community providers
other than LHD and family planning providers, out-of-plan services are limited
to one office visit per disease episode for the purposes of: (1) diagnosis and
treatment of vaginal discharge and urethral discharge, (2) those STDs that are
amenable to immediate diagnosis and treatment, and this includes syphilis,
gonorrhea, chlamydia, herpes simplex, chancroid, Trichomoniasis, human papilloma
virus, non-gonococcal urethritis, lymphogranuloma venereum and granuloma
inguinale and (3) evaluation and treatment of pelvic inflammatory disease.
Contractor shall provide follow-up care.

 

  C. HIV Testing and Counseling

Members may access confidential HIV counseling and testing services through the
Contractor’s provider network and through the out-of-network local health
department and family planning providers.

 

  D. Minor Consent Services

Contractor shall ensure the provision of Minor Consent Services for individuals
under the age of 18. Minor Consent Services shall be available within the
provider network and Members shall be informed of the availability of these
services. Minors do not need parental consent to access these services. Minor
Consent Services are services related to:

 

  1) Sexual assault, including rape.

 

  2) Drug or alcohol abuse for children 12 years of age or older.

 

  3) Pregnancy.

 

  4) Family planning.

 

  5) Sexually transmitted diseases (STDs), designated by the Director, in
children 12 years of age or older.

 

  6) Outpatient mental health care for children 12 years of age or older who are
mature enough to participate intelligently and where either 1) there is a danger
of serious physical or mental harm to the minor or others, or 2) the children
are the alleged victims of incest or child abuse.

 

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Exhibit A, Attachment 9

 

  E. Immunizations

Members may access LHD for immunizations. Contractor shall, upon request,
provide updated information on the status of Members’ immunizations to LHDs. The
LHD shall provide immunization records when immunization services are billed to
the Contractor.

 

9. Changes in Availability or Location of Covered Services

Contractor shall provide notification to CDHS 60 calendar days prior to making
any substantial change in the availability or location of services to be
provided under this Contract. In the event of an emergency or other
unforeseeable circumstances, Contractor shall provide notice of the emergency or
other unforeseeable circumstance to CDHS as soon as possible.

 

10. Access for Disabled Members

Contractor’s Facilities shall comply with the requirements of Title III of the
Americans with Disabilities Act of 1990, and shall ensure access for the
disabled which includes, but is not limited to, ramps, elevators, restrooms,
designated parking spaces, and drinking water provision.

 

11. Civil Rights Act of 1964

Contractor shall ensure compliance with Title 6 of the Civil Rights Act of 1964
(42 U.S.C. Section 2000d, 45 C.F.R. Part 80) that prohibits recipients of
federal financial assistance from discriminating against persons based on race,
color, religion, or national origin. Contractor shall ensure equal access to
health care services for limited English proficient Medi-Cal Members through
provision of high quality interpreter and linguistic services.

 

12. Cultural and Linguistic Program

Contractor shall have a Cultural and Linguistic Services Program that
incorporates the requirements of Title 22, CCR, Section 53876. Contractor shall
monitor, evaluate, and take effective action to address any needed improvement
in the delivery of culturally and linguistically appropriate services.
Contractor shall review and update their cultural and linguistic services
consistent with the group needs assessment requirements stipulated below.

 

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Exhibit A, Attachment 9

 

  A. Written Description

Contractor shall implement and maintain a written description of its Cultural
and Linguistic Services Program, which shall include at minimum the following:

 

  1) An organizational commitment to deliver culturally and linguistically
appropriate health care services.

 

  2) Goals and objectives.

 

  3) A timetable for implementation and accomplishment of the goals and
objectives.

 

  4) An organizational chart showing the key staff persons with overall
responsibility for cultural and linguistic services and activities. A narrative
shall explain the chart and describe the oversight and direction to the
Community Advisory Committee, provisions for support staff, and reporting
relationships. Qualifications of staff, including appropriate education,
experience and training shall also be described.

 

  5) Standards and Performance requirements for the delivery of culturally and
linguistically appropriate health care services.

 

  B. Linguistic Capability of Employees

Contractor shall assess, identify and track the linguistic capability of
interpreters or bilingual employees and contracted staff (clinical and
non-clinical).

 

  C. Group Needs Assessment

Contractor shall conduct a group needs assessments, as specified below, to
identify the health education and cultural and linguistic needs of its’ Members;
and utilize the findings for continuous development and improvement of
contractually required health education and cultural linguistic programs and
services. Contractor must use multiple reliable data sources, methodologies,
techniques, and tools to conduct the group needs assessment.

 

  1)

Contractor shall conduct an initial group needs assessment (GNA) within 12
months from the commencement of operations within a Service Area and at least
every five (5) years from the commencement of operations thereafter. For
Contracts existing at

 

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the time this provision becomes effective, the next GNA will be required at a
time within the five (5) year period from the effective date of this provision,
to be determined by CDHS.

 

  2) Contractor shall submit a GNA Summary Report to the CDHS within six
(6) months of the completion of each GNA. The summary report must include:

 

  a) The objectives; methodology; data sources; survey instruments; findings and
conclusions; program and policy implications; and, references contained in the
GNA.

 

  b) The findings and conclusions must include the following information for
Medi-Cal plan Members: 1) demographic profile; 2) related health risks, problems
and conditions; 3) related knowledge, attitudes and practices including cultural
beliefs and practices; 4) perceived health education needs including learning
needs, preferred methods of learning and literacy level; 5) culturally competent
community resources.

 

  3) Contractor shall annually update the GNA summary report, including a
current update on the information required in item 2) b) above. Contractor shall
maintain, and have available for CDHS review, the GNA summary report updates.

 

  4) Contractor shall demonstrate that GNA and summary report findings and
conclusions in item 2) b) above are utilized for continuous development of its
health education and cultural and linguistic services program. Contractor must
maintain documentation of program priorities, target populations, and program
goals/objectives as they are revised to meet the identified and changing needs
of the Member population.

 

  D. The results of the group needs assessment shall be considered in the
development of any Marketing materials prepared by the Contractor.

 

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Exhibit A, Attachment 9

 

  E. Cultural Competency Training

Contractor shall provide cultural competency, sensitivity, or diversity training
for staff, providers and subcontractors at key points of contact. The training
shall cover information about the identified cultural groups in the Contractor’s
Service Areas, such as the groups’ beliefs about illness and health; methods of
interacting with providers and the health care structure; traditional home
remedies that may impact what the provider is trying to do to treat the patient;
and, language and literacy needs.

 

  F. Program Implementation and Evaluation

Contractor shall develop and implement policies and procedures for assessing the
performance of individuals who provide linguistic services as well as for
overall monitoring and evaluation of the Cultural and Linguistic Services
Program.

 

13. Linguistic Services

 

  A. Contractor shall comply with Title 22, CCR, Section 53853(c) and ensure
that all monolingual, non-English-speaking, or limited English proficient (LEP)
Medi-Cal beneficiaries receive 24-hour oral interpreter services at all key
points of contact, as defined in paragraph D of this provision, either through
interpreters or telephone language services.

 

  B. Contractor shall provide, at minimum, the following linguistic services at
no cost to Medi-Cal Members:

 

  1) Oral Interpreters, signers, or bilingual providers and provider staff at
all key points of contact. These services shall be provided in all languages
spoken by Medi-Cal beneficiaries and not limited to those that speak the
threshold or concentration standards languages.

 

  2) Fully translated written informing materials, including but not limited to
the Member Services Guide, enrollee information, welcome packets, marketing
information, and form letters including notice of action letters and grievance
acknowledgement and resolution letters. Contractor shall provide translated
written informing materials to all monolingual or LEP Members that speak the
identified threshold or concentration standard languages. The threshold or
concentration languages are identified by CDHS within the Contractor’s Service
Area, and by the Contractor in its group needs assessment.

 

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  3) Referrals to culturally and linguistically appropriate community service
programs.

 

  4) Telecommunications Device for the Deaf (TDD).

 

  C. Contractor shall provide translated materials to the following population
groups within its Service Area as determined by CDHS:

 

  1) A population group of mandatory Medi-Cal beneficiaries residing in the
Service Area who indicate their primary language as other than English, and that
meet a numeric threshold of 3,000.

 

  2) A population group of mandatory Medi-Cal beneficiaries residing in the
Service Area who indicate their primary language as other than English and who
meet the concentration standards of 1,000 in a single ZIP code or 1,500 in two
contiguous ZIP codes.

 

  D. Key points of contact include:

 

  1) Medical care settings: telephone, advice and urgent care transactions, and
outpatient encounters with health care providers including pharmacists.

 

  2) Non-medical care setting: Member services, orientations, and appointment
scheduling.

 

14. Community Advisory Committee

Contractor shall form a Community Advisory Committee (CAC) pursuant to Title 22,
CCR, Section 53876 (c) that will implement and maintain community partnerships
with consumers, community advocates, and Traditional and Safety-Net providers.
Contractor shall ensure that the CAC is included and involved in policy
decisions related to educational, operational and cultural competency issues
affecting groups who speak a primary language other than English.

 

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Exhibit A, Attachment 10

 

SCOPE OF SERVICES

 

1. Covered Services

Contractor shall provide or arrange for all Medically Necessary Covered Services
for Members. Covered Services are those services set forth in Title 22, CCR,
Chapter 3, Article 4, beginning with Section 51301, and Title 17, CCR, Division
1, Chapter 4, Subchapter 13, beginning with Section 6840, unless otherwise
specifically excluded under the terms of this Contract.

Except as set forth in Attachment 3.1.B.1 (effective 1/1/2006) of the California
Medicaid State Plan or as otherwise authorized by Welfare & Institutions Code
Section 14133.23, effective January 1, 2006, drug benefits for full-benefit dual
eligible beneficiaries who are eligible for drug benefits under Part D of Title
XVIII of the Social Security Act (42 USC Section 1395w-101 et seq) are not a
Covered Service under this Contract. Consequently, effective January 1, 2006,
the capitation rates shall not include reimbursement for such drug benefits and
existing capitation rates shall be adjusted accordingly, even if the adjustment
results in a change of less than one percent of cost to Contractor.
Additionally, Contractor shall comply with all applicable provisions of the
Medicare Prescription Drug Improvement and Modernization Act of 2003, 42 USC
1395(x) et seq.

 

2. Medically Necessary Services

For purposes of this Contract, the term “Medically Necessary” will include all
Covered Services that are reasonable and necessary to protect life, prevent
significant illness or significant disability, or to alleviate severe pain
through the diagnosis or treatment of disease, illness or injury. {Title 22,
CCR, Section 51303(a)}

When determining the Medical Necessity of Covered Services for a Medi-Cal
beneficiary under the age of 21, “Medical Necessity” is expanded to include the
standards set forth in Title 22, CCR, Section 51340 and 51340.1.

 

3. Initial Health Assessment (IHA)

An IHA consists of a history and physical examination and an individual health
education behavioral assessment that enables a provider of primary care services
to comprehensively assess the Member’s current acute, chronic and preventive
health needs.

 

  A. Contractor shall cover and ensure the provision of an IHA (complete history
and physical examination) in conformance with Title 22, CCR, Section 53851(b)(1)
to each new Member within timelines stipulated in provision 4 and provision 5
below.

 

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  B. Contractor shall ensure that the IHA includes a health education behavioral
assessment as described in Exhibit A, Attachment 10, provision 7, paragraph A,
item 10) using an age appropriate CDHS approved assessment tool. Contractor is
responsible for assuring that arrangements are made for follow-up services that
reflect the findings or risk factors discovered during the IHA and health
education behavioral assessment.

 

  C. Contractor shall ensure that Members’ completed IHA and health education
behavioral assessment tool are contained in the Members’ medical record and
available during subsequent preventive health visits.

 

  D. Contractor shall make reasonable attempts to contact a Member and schedule
an IHA. All attempts shall be documented. Documented attempts that demonstrate
Contractor’s unsuccessful efforts to contact a Member and schedule an IHA shall
be considered evidence in meeting this requirement.

 

4. Services for Members under Twenty-One (21) Years of Age

Contractor shall cover and ensure the provision of screening, preventive and
Medically Necessary diagnostic and treatment services for Members under 21 years
of age including Early and Periodic Screening, Diagnosis and Treatment (EPSDT)
supplemental services.

Contractor shall ensure that appropriate diagnostic and treatment services are
initiated as soon as possible but no later than 60 calendar days following
either a preventive screening or other visit that identifies a need for
follow-up.

 

  A. Provision of IHAs for Members under Age 21

 

  1) For Members under the age of 18 months, Contractor is responsible to cover
and ensure the provision of an IHA within 60 calendar days following the date of
enrollment or within periodicity timelines established by the American Academy
of Pediatrics (AAP) for ages two and younger whichever is less.

 

  2) For Members 18 months of age and older upon enrollment, Contractor is
responsible to ensure an IHA is performed within 120 calendar days of
enrollment.

 

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  3) Contractor shall ensure that performance of the California Child Health and
Disability Prevention (CHDP) program’s age appropriate assessment due for each
child at the time of enrollment is accomplished at the IHA. The initial
assessment must include, or arrange for provision of, all immunizations
necessary to ensure that the child is up-to-date for age, and an age appropriate
health education behavioral assessment.

 

  B. Children’s Preventive Services

 

  1) Contractor shall provide preventive health visits for all Members under 21
years of age at times specified by the most recent AAP periodicity schedule.
This schedule requires more frequent visits than does the periodicity schedule
of the CHDP program. Contractor shall provide, as part of the periodic
preventive visit, all age specific assessments and services required by the CHDP
program and the age specific health education behavioral assessment as
necessary.

 

  2) Where the AAP periodicity exam schedule is more frequent than the CHDP
periodicity examination schedule, Contractor shall ensure that the AAP scheduled
assessment includes all assessment components required by the CHDP for the lower
age nearest to the current age of the child.

 

  3) Where a request is made for children’s preventive services by the Member,
the Member’s parent(s) or guardian or through a referral from the local CHDP
program, an appointment shall be made for the Member to be examined within two
weeks of the request.

 

  4) At each non-emergency Primary Care Encounter with Members under the age of
21 years, the Member (if an emancipated minor) or the parent(s) or guardian of
the Member shall be advised of the children’s preventive services due and
available from Contractor, if the Member has not received children’s preventive
services in accordance with CHDP preventive standards for children of the
Members’ age. Documentation shall be entered in the Member’s Medical Record
which shall indicate the receipt of children’s preventive services in accordance
with the CHDP standards or proof of voluntary refusal of these services in the
form of a signed statement by the Member (if an emancipated minor) or the
parent(s) or guardian of the Member. If the responsible party refuses to sign
this statement, the refusal shall be noted in the Member’s Medical Record.

 

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  5) The Confidential Screening/Billing Report form, PM 160-PHP, shall be used
to report all children’s preventive services Encounters. The Contractor shall
submit completed forms to CDHS and to the local children’s preventive services
program within 30 calendar days of the end of each month for all Encounters
during that month.

 

  C. Immunizations

Contractor shall ensure that all children receive necessary immunizations at the
time of any health care visit. Contractor shall cover and ensure the timely
provision of vaccines in accordance with the most recent childhood immunization
schedule and recommendations published by the Advisory Committee on Immunization
Practices (ACIP). Documented attempts that demonstrate Contractor’s unsuccessful
efforts to provide the immunization shall be considered sufficient in meeting
this requirement.

If immunizations cannot be given at the time of the visit, the Member must be
instructed as to how to obtain necessary immunizations or a scheduled and
documented appointment must be made.

Appropriate documentation shall be entered in the Member’s Medical Record that,
indicates all attempts to provide immunization(s); instructions as to how to
obtain necessary immunizations; the receipt of vaccines or proof of prior
immunizations; or proof of voluntary refusal of vaccines in the form of a signed
statement by the Member (if an emancipated minor) or the Parent(s) or guardian
of the Member. If the responsible party refuses to sign this statement, the
refusal shall be noted in the Member’s Medical Record.

Upon federal Food and Drug Administration (FDA) approval of any vaccine for
childhood immunization purposes, Contractor shall develop policies and
procedures for the provision and administration of the vaccine. Such policies
and procedures shall be developed within thirty (30) calendar days of the
vaccine’s approval date. Contractor shall cover and ensure the provision of the
vaccine from the date of its approval regardless of whether or not the vaccine
has been incorporated into the Vaccines for Children (VFC) Program. Policies and
procedures must be in accordance with any Medi-Cal Fee-For-Service guidelines
issued prior to final ACIP recommendations.

Contractor shall provide information to all network providers regarding the VFC
Program.

 

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Exhibit A, Attachment 10

 

  D. Blood Lead Screens

Contractor shall cover and ensure the provision of a blood lead screening test
to Members at ages one (1) and two (2) in accordance with Title 17, Division 1,
Chapter 9, Articles 1 and 2, commencing with Section 37000. Contractor shall
document and appropriately follow up on blood lead screening test results.

Contractor shall make reasonable attempts to ensure the blood lead screen test
is provided and shall document attempts to provide test. If the blood lead
screen test is refused by the Member, proof of voluntary refusal of the test in
the form of a signed statement by the Member (if an emancipated minor) or the
Parent(s) or guardian of the Member shall be documented in the Member’s Medical
Record. If the responsible party refuses to sign this statement, the refusal
shall be noted in the Member’s Medical Record. Documented attempts that
demonstrate Contractor’s unsuccessful efforts to provide the blood lead screen
test shall be considered evidence in meeting this requirement.

 

  E. Screening for Chlamydia

Contractor shall screen all females less than 21 years of age, who have been
determined to be sexually active, for chlamydia. Follow up of positive results
must be documented in the medical record.

Contractor shall make reasonable attempts to contact the appropriately
identified Members and provide screening for chlamydia. All attempts shall be
documented. Documented attempts that demonstrate Contractor’s unsuccessful
efforts to contact a Member and screen for chlamydia shall be considered
evidence in meeting this requirement.

If the Member refuses the screening, proof of voluntary refusal of the test in
the form of a signed statement by the Member (if an emancipated minor) or the
Parent(s) or guardian of the Member shall be documented in the Member’s Medical
Record. If the responsible party refuses to sign this statement, the refusal
shall be noted in the Member’s Medical Record.

 

  F. Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Supplemental
Services

For Members under the age of 21 years, Contractor shall provide or arrange and
pay for EPSDT supplemental services, including case management and supplemental
nursing services, as defined in Title 22, CCR, Section 51184, except when EPSDT
supplemental services are

 

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provide as CCS services pursuant to Exhibit A, Attachment 11, provision 8,
regarding CCS Services, or as mental health services pursuant to provision 7
below, regarding Mental Health Services. Contractor shall determine the Medical
Necessity of EPSDT supplemental services using the criteria established in Title
22, CCR, Sections 51340 and 51340.1.

EPSDT supplemental services include targeted case management services designed
to assist children in gaining access to necessary medical, social, educational
and other services.

 

5. Services for Adults

 

  A. IHAs for Adults (Age 21 and older)

Contractor shall cover and ensure that an IHA for adult Members is performed
within 120 calendar days of enrollment.

Contractor shall ensure that the performance of the initial complete history and
physical exam for adults includes, but is not limited to:

 

  1) blood pressure,

 

  2) height and weight,

 

  3) total serum cholesterol measurement for men ages 35 and over and women ages
45 and over,

 

  4) clinical breast examination for women over 40,

 

  5) mammogram for women age 50 and over,

 

  6) Pap smear (or arrangements made for performance) on all women determined to
be sexually active,

 

  7) chlamydia screen for all sexually active females aged 21 and older who are
determined to be at high-risk for chlamydia infection using the most current CDC
guidelines. These guidelines include the screening of all sexually active
females aged 21 through 25 years of age,

 

  8) screening for TB risk factors including a Mantoux skin test on all persons
determined to be at high risk, and,

 

  9) health education behavioral risk assessment.

 

  B. Adult Preventive Services

Contractor shall cover and ensure the delivery of all preventive services and
Medically Necessary diagnostic and treatment services for adult Members.

 

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  1) Contractor shall ensure that the latest edition of the Guide to Clinical
Preventive Services published by the U.S. Preventive Services Task Force
(USPSTF) is used to determine the provision of clinical preventive services to
asymptomatic, healthy adult Members [age 21 or older]. As a result of the IHA or
other examination, discovery of the presence of risk factors or disease
conditions will determine the need for further follow-up, diagnostic, and/or
treatment services. In the absence of the need for immediate follow-up, the core
preventive services identified in the requirements for the IHA for adults
described above shall be provided in the frequency required by the USPSTF Guide
to Clinical Preventive Services.

 

  2) Contractor shall cover and ensure the provision of all Medically Necessary
diagnostic, treatment, and follow-up services which are necessary given the
findings or risk factors identified in the IHA or during visits for routine,
urgent, or emergent health care situations. Contractor shall ensure that these
services are initiated as soon as possible but no later than 60 calendar days
following discovery of a problem requiring follow up.

 

  C. Immunizations

Contractor is responsible for assuring that all adults are fully immunized.
Contractor shall cover and ensure the timely provision of vaccines in accordance
with the most current California Adult Immunization recommendations.

In addition, Contractor shall cover and ensure the provision of age and risk
appropriate immunizations in accordance with the findings of the IHA, other
preventive screenings and/or the presence of risk factors identified in the
health education behavioral assessment.

Contractor shall document attempts to provide immunizations. If the Member
refuses the immunization, proof of voluntary refusal of the immunization in the
form of a signed statement by the Member or guardian of the Member shall be
documented in the Member’s Medical Record. If the responsible party refuses to
sign this statement, the refusal shall be noted in the Member’s Medical Record.
Documented attempts that demonstrate Contractor’s unsuccessful efforts to
provide the immunization shall be considered evidence in meeting this
requirement.

 

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Exhibit A, Attachment 10

 

6. Pregnant Women

 

  A. Prenatal Care

Contractor shall cover and ensure the provision of all Medically Necessary
services for pregnant women. Contractor shall ensure that the most current
standards or guidelines of the American College of Obstetricians and
Gynecologists (ACOG) are utilized as the minimum measure of quality for
perinatal services.

 

  B. Risk Assessment

Contractor shall implement a comprehensive risk assessment tool for all pregnant
female Members that is comparable to the ACOG standard and Comprehensive
Perinatal Services Program (CPSP) standards per Title 22, CCR, Section 51348.
The results of this assessment shall be maintained as part of the obstetrical
record and shall include medical/obstetrical, nutritional, psychosocial, and
health education needs risk assessment components. The risk assessment tool
shall be administered at the initial prenatal visit, once each trimester
thereafter and at the postpartum visit. Risks identified shall be followed up on
by appropriate interventions, which must be documented in the medical record.

 

  C. Referral to Specialists

Contractor shall ensure that pregnant women at high risk of a poor pregnancy
outcome are referred to appropriate specialists including perinatologists and
have access to genetic screening with appropriate referrals. Contractor shall
also ensure that appropriate hospitals are available within the provider network
to provide necessary high-risk pregnancy services.

 

7. Services for All Members

 

  A. Health Education

 

  1) Contractor shall implement and maintain a health education system that
includes programs, services, functions, and resources necessary to provide
health education, health promotion and patient education for all Members.

 

  2) Contractor shall ensure administrative oversight of the health education
system by a qualified full-time health educator. This individual shall possess a
master’s degree in public or community health with specialization in health
education.

 

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  3) Contractor shall provide health education programs and services at no
charge to Members directly and/or through Subcontracts or other formal
agreements with providers that have expertise in delivering health education
services to the Member population.

 

  4) Contractor shall ensure the organized delivery of health education programs
using educational strategies and methods that are appropriate for Members and
effective in achieving behavioral change for improved health.

 

  5) Contractor shall ensure that health education materials are written at the
sixth grade reading level and are culturally and linguistically appropriate for
the intended audience.

 

  6) Contractor shall maintain a health education system that provides
educational interventions addressing the following health categories and topics:

 

  a) Appropriate use of health care services – managed health care; preventive
and primary health care; obstetrical care; health education services; and,
complimentary and alternative care.

 

  b) Risk-reduction and healthy lifestyles – tobacco use and cessation; alcohol
and drug use; injury prevention; prevention of sexually transmitted diseases;
HIV and unintended pregnancy; nutrition, weight control, and physical activity;
and, parenting.

 

  c) Self-care and management of health conditions – pregnancy; asthma;
diabetes; and, hypertension.

 

  7) Contractor shall ensure that Members receive point of service education as
part of preventive and primary health care visits. Contractor shall provide
education, training, and program resources to assist contracting medical
providers in the delivery of health education services for Members.

 

  8) Contractor shall maintain health education policies and procedures, and
standards and guidelines; conduct appropriate levels of program evaluation; and,
monitor performance of providers that are contracted to deliver health education
services to ensure effectiveness.

 

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  9) Contractor shall periodically review the health education system to ensure
appropriate allocation of health education resources, and maintain documentation
that demonstrates effective implementation of the health education requirements.

 

  10) Contractor shall ensure that all new Members complete the individual
health education behavioral assessment within 120 calendar days of enrollment as
part of the initial health assessment; and that all existing Members complete
the individual health education behavioral assessment at their next non-acute
care visit. Contractor shall ensure: 1) that primary care providers use the CDHS
standardized “Staying Healthy” assessment tools, or alternative approved tools
that comply with CDHS approval criteria for the individual health education
behavioral assessment; and, 2) that the individual health education behavioral
assessment tool is: a) administered and reviewed by the primary care provider
during an office visit, b) reviewed at least annually by the primary care
provider with Members who present for a scheduled visit; and, c) re-administered
by the primary care provider at the appropriate age-intervals.

 

  B. Hospice Care

Contractor shall cover and ensure the provision of hospice care services.
Contractor shall ensure that Members and their families are fully informed of
the availability of hospice care as a covered service and the methods by which
they may elect to receive these services. For individuals who have elected
hospice care, Contractor shall arrange for continuity of medical care, including
maintaining established patient-provider relationships, to the greatest extent
possible. Contractor shall cover the cost of all hospice care provided.
Contractor is also responsible for all medical care not related to the terminal
condition.

Admission to a nursing facility of a Member who has elected hospice services as
described in Title 22, CCR, Section 51349, does not affect the Member’s
eligibility for enrollment under this Contract. Hospice services are Covered
Services under this Contract and are not long term care services regardless of
the Member’s expected or actual length of stay in a nursing Facility.

 

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Members with a terminal condition covered by CCS must be clearly informed that
election of hospice will terminate the child’s eligibility for CCS services.

 

  C. Vision Care—Lenses

Contractor shall cover and ensure the provision of eye examinations and
prescriptions for corrective lenses as appropriate for all Members. Contractor
shall arrange for the fabrication of optical lenses for Members through Prison
Industry Authority (PIA) optical laboratories. Contractor shall cover the cost
of the eye examination and dispensing of the lenses for Members. CDHS will
reimburse PIA for the fabrication of the optical lenses in accordance with the
contract between CDHS and PIA.

 

  D. Mental Health Services

 

  1) Contractor shall cover outpatient mental health services that are within
the scope of practice of Primary Care Physicians. Contractor’s policies and
procedures shall define and describe what services are to be provided by Primary
Care Physicians. In addition, Contractor shall cover and ensure the provision of
psychotherapeutic drugs prescribed by its Primary Care Providers, except those
specifically excluded in this Contract as stipulated below.

 

  2) Contractor shall cover and pay for all Medically Necessary Covered Services
for the Member, including the following services:

 

  a) Emergency room professional services as described in Title 22, CCR,
Section 53855, except services provided by psychiatrists, psychologists,
licensed clinical social workers, marriage, family and child counselors, or
other Specialty Mental Health Providers.

 

  b) Facility charges for emergency room visits which do not result in a
psychiatric admission.

 

  c) All laboratory and radiology services when these services are necessary for
the diagnosis, monitoring, or treatment of a Member’s mental health condition.

 

  d) Emergency medical transportation services necessary to provide access to
all Medi-Cal Covered Services, including emergency mental health services, as
described in Title 22, CCR, Section 51323.

 

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  e) All non-emergency medical transportation services, as provided for in Title
22, CCR, Section 51323, required by Members to access Medi-Cal covered mental
health services, subject to a written prescription by a Medi-Cal Specialty
Mental Health Provider, except when the transportation is required to transfer
the Member from one facility to another, for the purpose of reducing the local
Medi-Cal mental health program’s cost of providing services.

 

  f) Medically Necessary Covered Services after Contractor has been notified by
a specialty mental health provider that a Member has been admitted to a
psychiatric inpatient hospital, including the initial health history and
physical examination required upon admission and any consultations related to
Medically Necessary Covered Services. However, notwithstanding this requirement,
Contractor shall not be responsible for room and board charges for psychiatric
inpatient hospital stays by Members.

 

  g) All Medically Necessary Medi-Cal covered psychotherapeutic drugs for
Members not otherwise excluded under this Contract.

 

  i. This includes reimbursement for covered psychotherapeutic drugs prescribed
by out-of-plan psychiatrists for Members.

 

  ii. Contractor may require that covered prescriptions written by out-of-plan
psychiatrists be filled by pharmacies in Contractor’s provider network.

 

  iii. Reimbursement to pharmacies for those psychotherapeutic drugs listed in
Exhibit A, Attachment 10-A, and psychotherapeutic drugs classified as
Anti-Psychotics and approved by the FDA after July 1, 1997, shall be reimbursed
through the Medi-Cal fee-for-service program, whether these drugs are provided
by a pharmacy contracting with Contractor or by an out-of-plan pharmacy
provider. To qualify for reimbursement under this provision, a pharmacy must be
enrolled as a Medi-Cal provider in the Medi-Cal fee-for-service program.

 

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Exhibit A, Attachment 10

 

  h) Paragraphs c), e), and f) above shall not be construed to preclude
Contractor from: 1) requiring that Covered Services be provided through
Contractor’s provider network, to the extent possible, or 2) applying
Utilization Review controls for these services, including Prior Authorization,
consistent with Contractor’s obligation to provide Covered Services under this
Contract.

 

  3) Contractor shall develop and implement a written internal policy and
procedure to ensure that Members who need specialty mental health services
(services outside the scope of practice of Primary Care Physicians) are referred
to and are provided mental health services by an appropriate Medi-Cal
Fee-For-Service (FFS) mental health provider or to the local mental health plan
for specialty mental health services in accordance with Exhibit A, Attachment
11, provision 5. Speciality Mental Health.

 

  4) Contractor shall establish and maintain mechanisms to identify Members who
require non-covered psychiatric services and ensure appropriate referrals are
made. Contractor shall continue to cover and ensure the provision of primary
care and other services unrelated to the mental health treatment and coordinate
services between the Primary Care Provider and the psychiatric service
provider(s). Contractor shall enter into a Memorandum of Understanding with the
county mental health plan in accordance with Exhibit A, Attachment 12, provision
3. Local Mental Health Plan Coordination.

 

  E. Tuberculosis (TB)

TB screening, diagnosis, treatment and follow-up are covered under the Contract.
Contractor shall provide TB care and treatment in compliance with the guidelines
recommended by American Thoracic Society and the Centers for Disease Control and
Prevention.

Contractor shall coordinate with Local Health Departments in the provision of
direct observed therapy as required in Exhibit A, Attachment 11, provision 15.
Direct Observed Therapy (DOT) for Treatment of Tuberculosis (TB) and Attachment
12, Local Health Department Coordination.

 

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Exhibit A, Attachment 10

 

  F. Pharmaceutical Services and Provision of Prescribed Drugs

 

  1) Contractor shall cover and ensure the provision of all prescribed drugs and
Medically Necessary pharmaceutical services. Contractor shall provide
pharmaceutical services and prescription drugs in accordance with all Federal
and State laws and regulations including, but not limited to the California
State Board of Pharmacy Laws and Regulations, Title 22, CCR, Sections 53214 and
53854 and Title 16, Sections 1707.1, 1707.2, and 1707.3. Prior authorization
requirements for pharmacy services and provision of prescribed drugs must be
clearly described in the Member Services Guide and provider manuals of the
Contractor.

At a minimum, Contractor shall arrange for pharmaceutical services to be
available during regular business hours, and shall ensure the provision of drugs
prescribed in emergency circumstances in amounts sufficient to last until the
Member can reasonably be expected to have the prescription filled.

Contractor shall develop and implement effective drug utilization reviews and
treatment outcomes systems to optimize the quality of pharmacy services.

 

  2) Contractor shall submit to CDHS a complete formulary prior to the beginning
of operations. The Contractor may use the formulary as published unless CDHS
notifies the Contractor of changes which must be made. Thereafter, a report of
changes to the formulary shall be submitted to CDHS upon request and on an
annual basis. Contractor’s formulary shall be comparable to the Medi-Cal FFS
list of contract drugs, except for drugs carved out through specific contract
agreements. Comparable means that the Contractor’s formulary must contain drugs
which represent each mechanism of action sub-class within all major therapeutic
categories of prescription drugs included in the Medi-Cal FFS list of contract
drugs. All drugs listed on the Medi-Cal FFS list need not be included in
Contractor’s formulary.

 

  3) The Contractor shall implement and maintain a process to ensure that its
formulary is reviewed and updated no less than quarterly. This review and update
must consider all drugs approved by the FDA and/or added to the Medi-Cal
Fee-For-Service list of contract drugs. Deletions to the formulary must be
documented and justified.

 

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Exhibit A, Attachment 10

 

  4) Contractor’s process should also ensure that drug utilization reviews are
appropriately conducted and that pharmacy service and drug utilization encounter
data are provided to CDHS on a monthly basis.

 

  5) Reimbursement to pharmacies for those drugs for the treatment of HIV/AIDS
listed in Exhibit A, Attachment 10-B classified as Nucleoside Analogues or
Nucleoside Reverse Transcriptase Inhibitors, Non-Nucleoside Reverse
Transcriptase Inhibitors and Protease Inhibitors approved by the FDA after
July 1, 1997, shall be reimbursed through the Medi-Cal FFS program, whether
these drugs are provided by a pharmacy contracting with Contractor or by an
out-of-plan pharmacy provider. To qualify for reimbursement under this
provision, a pharmacy must be enrolled as a Medi-Cal provider in the Medi-Cal
FFS program.

 

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Exhibit A, Attachment 10-A

 

EXCLUDED PSYCHOTHERAPEUTIC DRUGS

Generic Name

Amantadine HCL

Aripiprazole

Benztropine Mesylate

Biperiden HCL

Biperiden Lactate

Chlorpromazine HCL

Chlorprothixene

Clozapine

Fluphanazine Decanoate

Fluphanazine Enanthate

Fluphanazine HCL

Haloperidol

Haloperidol Deconoate

Haloperidol Lactate

Isocarboxazid

Lithium Carbonate

Lithium Citrate

Loxapine HCL

Loxapine Succinate

Mesoridazine Besylate

Mesoridazine Mesylate

Molindone HCL

Olanzapine

Olanzapine and Fluoxetine HCL

Perphenazine

Phenelzine Sulfate

Pimozide

Procyclidine HCL

Promazine HCL

Quetiapine

Risperidone

Risperidone (microspheres)

Thioridazine HCL

Thiothixene

Thiothixene HCL

Tranylcypromine Sulfate

Trifluoperazine HCL

Triflupromazine HCL

Trihexphenidyl HCL

Ziprasidone

Ziprasidone Mesylate

 

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Exhibit A, Attachment 10-B

 

EXCLUDED DRUGS FOR THE TREATMENT OF HUMAN

IMMUNODEFICIENCYVIRUS (HIV) AND ACQUIRED IMMUNODEFICIENCY

SYNDROME (AIDS)

Generic Name

Abacavir Sulfate

Abacavir Sulfate/Lamivudine/Zidovudine

Abacavir/Lamivudine

Amprenavir

Atazanavir Sulfate

Emtricitabine

Enfuvirtide

Indinavir Sulfate

Efavirenz

Lamivudine

Saquinavir

Lopinavir/Ritonavir

Ritonavir

Delavirdine Mesylate

Saquinavir Mesylate

Tenofovir Disoproxil/Emtricitabine

Tenofovir Disoproxil Fumarate

Tipranavir

Nelfinavir Mesylate

Nevirapine

Stavudine

Zidovudine/Lamivudine

Fosamprenavir Calcium

 

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Exhibit A, Attachment 11

 

CASE MANAGEMENT AND COORDINATION OF CARE

 

1. Comprehensive Case Management and Coordination of Care Services

Contractor shall provide basic Comprehensive Medical Case Management to each
Member.

Contractor shall maintain procedures for monitoring the coordination of care
provided to Members, including but not limited to all Medically Necessary
services delivered both within and outside the Contractor’s provider network.

 

2. Targeted Case Management Services

Contractor is responsible for determining whether a Member requires Targeted
Case Management (TCM) services, and must refer Members who are eligible for TCM
services to a Regional Center or local governmental health program as
appropriate for the provision of TCM services.

If a Member is receiving TCM services as specified in Title 22, CCR,
Section 51351, Contractor shall be responsible for coordinating the Member’s
health care with the TCM provider and for determining the Medical Necessity of
diagnostic and treatment services recommended by the TCM provider that are
Covered Services under the Contract.

If Members under age 21 are not accepted for TCM services, see Exhibit A,
Attachment 10, provision 4, Contractor shall ensure the Members’ access to
services comparable to EPSDT TCM services.

 

3. Disease Management Program

Contractor is responsible for initiating and maintaining a disease management
program. Contractor shall determine the program’s targeted disease conditions
and implement a system to identify and encourage Members to participate.

 

4. Out-of-Plan Case Management and Coordination of Care

Contractor shall implement procedures to identify individuals who may need or
who are receiving services from out of plan providers and/or programs in order
to ensure coordinated service delivery and efficient and effective joint case
management for services presented in provisions 5 through 16 below.

 

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Exhibit A, Attachment 11

 

5. Specialty Mental Health

 

  A. Specialty Mental Health Services

 

  1) All Specialty Mental Health Services (inpatient and outpatient) are
excluded from this Contract.

 

  2) Contractor shall make appropriate referrals for Members needing Specialty
Mental Health Services as follows:

 

  a) For those Members with a tentative psychiatric diagnosis which meets
eligibility criteria for referral to the local Medi-Cal mental health plan, as
defined in MMCD Mental Health Policy Letter 00-01 Revised, the Member shall be
referred to the local mental health plan.

 

  b) For those Members whose psychiatric diagnosis is not covered by the local
Medi-Cal mental health plan, the Member shall be referred to an appropriate
fee-for-service Medi-Cal mental health provider. Contractor shall consult with
the local Medi-Cal mental health plan as necessary to identify other appropriate
community resources and to assist the Member to locate available mental health
services.

 

  3) Disputes between Contractor and the local Medi-Cal mental health plan
regarding this section shall be resolved pursuant to Title 9, CCR,
Section 1850.505. Any decision rendered by CDHS and the California Department of
Mental Health regarding a dispute between Contractor and the local Medi-Cal
mental health plan concerning provision of mental health services or Covered
Services required under this Contract shall not be subject to the dispute
procedures specified in Exhibit E, Attachment 2, provision 18 regarding
Disputes.

 

  B. Local Mental Health Plan Coordination

Contractor shall execute a Memorandum of Understanding (MOU) with the local
mental health plan (MHP) as stipulated in Exhibit A, Attachment 12, Local Health
Department Coordination, provision 3, for the coordination of Specialty Mental
Health Services to Members.

 

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Exhibit A, Attachment 11

 

6. Alcohol and Substance Abuse Treatment Services

Alcohol and substance abuse treatment services available under the Drug Medi-Cal
program as defined in Title 22, CCR, Section 51341.1, and outpatient heroin
detoxification services defined in Title 22, CCR, Section 51328 are excluded
from this Contract. These excluded services include the exclusion of all drugs
used for the treatment of alcohol and substance abuse that are covered by the
Drug Medi-Cal Program administered by the Department of Alcohol and Drug
Programs (ADP) pursuant to Title 22, CCR, Section 51341.1(b)(2), and the drugs
listed in Exhibit A, Attachment 11-A . The drugs listed in Exhibit A, Attachment
11-A are not covered by ADP but are covered by the Medi-Cal Fee-For-Service
program.

Contractor shall identify individuals requiring alcohol and or substance abuse
treatment services and arrange for their referral to the Alcohol and Other Drugs
Program, including outpatient heroin detoxification providers, for appropriate
services. Contractor shall assist Members in locating available treatment
service sites. To the extent that treatment slots are not available in the
Alcohol and other Drugs Program within the Contractor’s Service Area, the
Contractor shall pursue placement outside the area. Contractor shall continue to
cover and ensure the provision of primary care and other services unrelated to
the alcohol and substance abuse treatment and coordinate services between the
primary care providers and the treatment programs.

 

7. Services for Children with Special Health Care Needs

Children with Special Health Care Needs (CSHCN) are defined as “those who have
or are at increased risk for a chronic physical, behavioral, developmental, or
emotional conditions and who also require health or related services of a type
or amount beyond that required by children generally”.

Contractor shall implement and maintain a program for CSHCN which includes, but
is not limited to, the following:

 

  A. Standardized procedures for the identification of CSHCN, at enrollment and
on a periodic basis thereafter;

 

  B. Methods for ensuring and monitoring timely access to pediatric specialists,
sub-specialists, ancillary therapists, and specialized equipment and supplies;
these may include assignment to a specialist as PCP, standing referrals, or
other methods as defined by Contractor;

 

  C. Methods for ensuring that each CSHCN receives a comprehensive assessment of
health and related needs, and that all medically necessary follow-up services
are documented in the medical record, including needed referrals;

 

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Exhibit A, Attachment 11

 

  D. A program for case management or care coordination for CSHCN, including
coordination with other agencies which provide services for children with
special health care needs (e.g. mental health, substance abuse, Regional Center,
CCS, local education agency, child welfare agency); and,

 

  E. Methods for monitoring and improving the quality and appropriateness of
care for children with special health care needs.

 

8. California Children Services (CCS)

Services provided by the CCS program are not covered under this contract. Upon
adequate diagnostic evidence that a Medi-Cal Member under 21 years of age may
have a CCS eligible condition, Contractor shall refer the Member to the local
CCS office for determination of eligibility.

 

  A. Contractor shall develop and implement written policies and procedures for
identifying and referring children with CCS-eligible conditions to the local CCS
program. The policies and procedures shall include, but not be limited to those
which:

 

  1) Ensure that Contractor’s providers perform appropriate baseline health
assessments and diagnostic evaluations which provide sufficient clinical detail
to establish, or raise a reasonable suspicion, that a Member has a CCS-eligible
medical condition;

 

  2) Assure that Contracting Providers understand that CCS reimburses only
CCS-paneled providers and CCS-approved hospitals within Contractor’s network;
and only from the date of referral;

 

  3) Enable initial referrals of Member’s with CCS-eligible conditions to be
made to the local CCS program by telephone, same-day mail or FAX, if available.
The initial referral shall be followed by submission of supporting medical
documentation sufficient to allow for eligibility determination by the local CCS
program.

 

  4) Ensure that Contractor continues to provide all Medically Necessary Covered
Services to the Member until CCS eligibility is confirmed.

 

  5) Ensure that, once eligibility for the CCS program is established for a
Member, Contractor shall continue to provide all Medically Necessary Covered
Services that are not authorized by CCS and shall ensure the coordination of
services and joint case management between its Primary Care Providers, the CCS
specialty providers, and the local CCS program.

 

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Exhibit A, Attachment 11

 

  6) If the local CCS program does not approve eligibility, Contractor remains
responsible for the provision of all Medically Necessary Covered Services to the
Member. If the local CCS program denies authorization for any service,
Contractor remains responsible for obtaining the service, if it is Medically
Necessary, and paying for the service if it has been provided.

 

  B. Contractor shall execute a Memorandum of Understanding (MOU) with the local
CCS program as stipulated in Exhibit A, Attachment 12, provision 2, for the
coordination of CCS services to Members.

 

  C. The CCS program authorizes Medi-Cal payments to Contractor network
physicians who currently are members of the CCS panel and to other providers who
provided CCS-covered services to the Member during the CCS-eligibility
determination period who are determined to meet the CCS standards for paneling.
Contractor shall inform providers, except as noted above, that CCS reimburses
only CCS paneled providers. The Contractor shall submit information to the CCS
program on all providers who have provided services to a Member thought to have
a CCS eligible condition.

Authorization for payment shall be retroactive to the date the CCS program was
informed about the Member through an initial referral by Contractor or a
Contractor network physician, via telephone, FAX, or mail. In an emergency
admission, Contractor or Contractor network physician shall be allowed until the
next Working day to inform the CCS program about the Member. Authorization shall
be issued upon confirmation of panel status or completion of the process
described above.

 

9. Services for Persons with Developmental Disabilities

 

  A. Contractor shall develop and implement procedures for the identification of
Members with developmental disabilities.

 

  B. Contractor shall refer Members with developmental disabilities to a
Regional Center for the developmentally disabled for evaluation and for access
to those non-medical services provided through the Regional Centers such as but
not limited to, respite, out-of-home placement, and supportive living.
Contractor shall participate with Regional Center staff in the development of
the individual developmental services plan required for all persons with
developmental disabilities, which includes identification of all appropriate
services, including medical care services, which need to be provided to the
Member.

 

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Exhibit A, Attachment 11

 

  C. Services provided under the Home and Community-Based Services (HCBS) waiver
programs to persons with developmental disabilities are not covered under this
Contract. Contractor shall implement and maintain systems to identify Members
with developmental disabilities that may meet the requirements for participation
in this waiver and refer these Members to the HCBS Waiver program administered
by the State Department of Developmental Services (DDS).

If DDS concurs with the Contractor’s assessment of the Member and there is
available placement in the waiver program, the Member will receive waiver
services while enrolled in the plan. Contractor shall continue to provide all
Medically Necessary Covered Services.

 

  D. Contractor shall execute a Memorandum of Understanding (MOU) with the local
Regional Centers as stipulated in Exhibit A, Attachment 12, provision 2, for the
coordination of services for Members with developmental disabilities.

 

10. Early Intervention Services

Contractor shall develop and implement systems to identify children who may be
eligible to receive services from the Early Start program and refer them to the
local Early Start program. These children would include those with a condition
known to lead to developmental delay, those in whom a significant developmental
delay is suspected, or whose early health history places them at risk for delay.
Contractor shall collaborate with the local Regional Center or local Early Start
program in determining the Medically Necessary diagnostic and preventive
services and treatment plans for Members participating in the Early Start
program. Contractor shall provide case management and care coordination to the
Member to ensure the provision of all Medically Necessary covered diagnostic,
preventive and treatment services identified in the individual family service
plan developed by the Early Start program, with Primary Care Provider
participation.

 

11. Local Education Agency Services

Local Education Agency (LEA) assessment services are services specified in Title
22, CCR Section 51360(b) and provided to students who qualify based on Title 22,
CCR, Section 51190.1. LEA services provided pursuant to an Individual Education
Plan as set forth in Education Code, Section 56340 et seq. or Individual Family
Service Plan as set forth in Government Code, Section 95020, are not covered
under this Contract. However, the Contractor is responsible for providing a
Primary Care Physician and all Medically Necessary Covered Services for the
Member, and shall ensure that the Member’s Primary Care

 

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Exhibit A, Attachment 11

 

Physician cooperates and collaborates in the development of the Individual
Education Plan or the Individual Family Service Plan. Contractor shall provide
case management and care coordination to the Member to ensure the provision of
all Medically Necessary covered diagnostic, preventive and treatment services
identified in the Individual Education Plan developed by the LEA, with Primary
Care Provider participation.

 

12. School Linked CHDP Services

 

  A. Coordination of Care

Contractor shall maintain a “medical home” and ensure the overall coordination
of care and case management of Members who obtain CHDP services through the
local school districts or school sites.

 

  B. Cooperative Arrangements

Contractor shall enter into one or a combination of the following arrangements
with the local school district or school sites:

 

  1) Cooperative arrangements (e.g. Subcontracts) with school districts or
school sites to directly reimburse schools for the provision of some or all of
the CHDP services, including guidelines for sharing of critical medical
information. The arrangements shall also include guidelines specifying
coordination of services, reporting requirements, quality standards, processes
to ensure services are not duplicated, and processes for notification to
Member/student/parent on where to receive initial and follow-up services.

 

  2) Cooperative arrangements whereby the Contractor agrees to provide or
contribute staff or resources to support the provision of school linked CHDP
services.

 

  3) Referral protocols/guidelines between the Contractor and the school sites,
which merely screen, for the need of CHDP services receive those services from
the Contractor within the required State and federal time frames. This shall
include strategies for the Contractor to follow-up and document that services
are provided to the Member.

 

  4) Any innovative approach that the Contractor may develop to assure access to
CHDP services and coordination with and support for school based health care
services.

 

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Exhibit A, Attachment 11

 

  C. Subcontracts

Contractor shall ensure that the Subcontracts with the local school districts or
school sites meet the requirements of Exhibit A, Attachment 6, provision 13,
regarding Subcontracts, and address the following: the population covered,
beginning and end dates of the agreement, services covered, practitioners
covered, outreach, information dissemination, educational responsibilities,
utilization review requirements, referral procedures, medical information flows,
patient information confidentiality, quality assurance interface, data reporting
requirements, and grievance/complaint procedures.

 

13. Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS)
Home and Community Based Services Waiver Program

Services provided under the HIV/AIDS Home and Community Based Services Waiver
are not covered under this Contract. Contractor shall maintain procedures for
identifying Members who may be eligible for the HIV/AIDS Home and Community
Based Services Waiver Program and shall facilitate referrals of these Members to
the HIV/AIDS Home and Community Based Services Waiver Program.

Medi-Cal beneficiaries enrolled in Medi-Cal managed care health plans who are
subsequently diagnosed with HIV/AIDS, according to the definition most recently
published in the Mortality and Morbidity Report from the Centers for Disease
Control and Prevention, may participate in the HIV/AIDS Home and Community Based
Services Waiver Program without having to disenroll from their Medi-Cal managed
care plan. Members of Medi-Cal managed care plans must meet the eligibility
requirements of the HIV/AIDS Home and Community Based Services Medi-Cal Waiver
Program and enrollment is dependent on available space. Persons already enrolled
in the HIV/AIDS Home and Community Based Services Medi-Cal Waiver Program may
voluntarily enroll in a Medi-Cal managed care health plan.

 

14. Dental

Dental services are not covered under this Contract. Contractor shall cover and
ensure that dental screenings for all Members are included as a part of the
initial health assessment. For Members under 21 years of age, a dental
screening/oral health assessment shall be performed as part of every periodic
assessment, with annual dental referrals made commencing at age three (3) or
earlier if conditions warrant. Contractor shall ensure that Members are referred
to appropriate Medi-Cal dental providers.

 

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Exhibit A, Attachment 11

 

Contractor shall cover and ensure the provision of covered medical services
related to dental services that are not provided by dentists or dental
anesthetists. Covered medical services include: contractually covered
prescription drugs; laboratory services; and, pre-admission physical
examinations required for admission to an out-patient surgical service center or
an in-patient hospitalization required for a dental procedure (including
facility fees and anesthesia services for both inpatient and outpatient
services). Contractor may require Prior Authorization for medical services
required in support of dental procedures.

If the Contractor requires pre-authorization for these services, Contractor
shall develop and publish the procedures for obtaining pre-authorization to
ensure that services for the Member are not unduly delayed. Contractor shall
submit such procedures to CDHS for review and approval.

 

15. Direct Observed Therapy (DOT) for Treatment of Tuberculosis (TB)

 

  A. DOT is offered by local health departments (LHDs) and is not covered under
this Contract. Contractor shall assess the risk of noncompliance with drug
therapy for each Member who requires placement on anti-tuberculosis drug
therapy.

The following groups of individuals are at risk for non-compliance for the
treatment of TB: Members with demonstrated multiple drug resistance (defined as
resistance to Isoniazid and Rifampin); Members whose treatment has failed or who
have relapsed after completing a prior regimen; children and adolescents; and,
individuals who have demonstrated noncompliance (those who failed to keep office
appointments). Contractor shall refer Members with active TB and who have any of
these risks to the TB Control Officer of the LHD for DOT.

Contractor shall assess the following groups of Members for potential
noncompliance and for consideration for DOT: substance abusers, persons with
mental illness, the elderly, persons with unmet housing needs, and persons with
language and/or cultural barriers. If, in the opinion of the Contractor’s
providers, a Member with one or more of these risk factors is at risk for
noncompliance, the Member shall be referred to the LHD for DOT.

Contractor shall provide all Medically Necessary Covered Services to the Member
with TB on DOT and shall ensure joint case management and coordination of care
with the LHD TB Control Officer.

 

  B. Contractor shall execute a Memorandum of Understanding (MOU) with the LHD
as stipulated in Exhibit A, Attachment 12, provision 2, for the provision of
DOT.

 

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Exhibit A, Attachment 11

 

16. Women, Infants, and Children (WIC) Supplemental Nutrition Program

 

  A. WIC services are not covered under this Contract. However, Contractor shall
have procedures to identify and refer eligible Members for WIC services. As part
of the referral process, Contractor shall provide the WIC program with a current
hemoglobin or hematocrit laboratory value. Contractor shall also document the
laboratory values and the referral in the Member’s medical record.

Contractor, as part of its initial health assessment of Members, or, as part of
the initial evaluation of newly pregnant women, shall refer and document the
referral of pregnant, breastfeeding, or postpartum women or a parent/guardian of
a child under the age of five to the WIC program as mandated by Title 42, CFR
431.635(c).

 

  B. Contractor shall execute a Memorandum of Understanding (MOU) with the WIC
program as stipulated in Exhibit A, Attachment 12, provision 2, for services
provided to Members through the WIC program.

 

17. Excluded Services Requiring Member Disenrollment

Contractor shall continue to cover and ensure that all Medically Necessary
services are provided to Members who must disenroll and receive the following
services through the Medi-Cal Fee-for-Service program until the date of
disenrollment is effective.

 

  A. Long Term Care (LTC)

Long-term care (LTC) is defined as care in a facility for longer than the month
of admission plus one month. LTC services are not covered under this Contract.
Contractor shall cover Medically Necessary nursing care provided from the time
of admission and up to one month after the month of admission.

Contractor shall ensure that Members, other than Members requesting hospice
services, in need of nursing Facility services are placed in a health care
facility that provides the level of care most appropriate to the Member’s
medical needs. These health care facilities include Skilled Nursing Facilities,
subacute facilities, pediatric subacute facilities, and Intermediate Care
Facilities. Contractor shall base decisions on the appropriate level of care on
the definitions set forth in Title 22, CCR, Sections 51118, 51120, 51120.5,
51121, 51124.5, and 51124.6 and the criteria for admission set forth in Title
22, CCR, Sections 51335, 51335.5, 51335.6, and 51334 and related sections of the
Manual of Criteria for Medi-Cal Authorization referenced in Title 22, CCR,
51003(e).

 

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Exhibit A, Attachment 11

 

Upon admission to an appropriate Facility, Contractor shall assess the Member’s
health care needs and estimate the potential length of stay of the Member. If
the Member requires LTC, in the Facility for longer than the month of admission
plus one month, Contractor shall submit a disenrollment request for the Member
to CDHS for approval. Contractor shall provide all Medically Necessary Covered
Services to the Member until the disenrollment is effective.

An approved disenrollment request will become effective the first day of the
second month following the month of the Member’s admission to the Facility,
provided the Contractor submitted the disenrollment request at least 30 calendar
days prior to that date. If the Contractor submitted the disenrollment request
less than 30 calendar days prior to that date, disenrollment will be effective
the first day of the month that begins at least 30 calendar days after
submission of the disenrollment request. Upon the disenrollment effective date,
Contractor shall ensure the Member’s orderly transfer from the Contractor to the
Medi-Cal Fee-For-Service program. This includes notifying the Member and his or
her family or guardian of the disenrollment; assuring the appropriate transfer
of medical records from the Contractor to the Medi-Cal fee-for-service provider;
assuring that continuity of care is not interrupted; and, completion of all
administrative work necessary to assure a smooth transfer of responsibility for
the health care of the Medi-Cal beneficiary.

Admission to a nursing Facility of a Member who has elected hospice services as
described in Title 22, CCR, Section 51349, does not affect the Member’s
eligibility for Enrollment under this Contract. Hospice services are Covered
Services under this Contract and are not long term care services regardless of
the Member’s expected or actual length of stay in a nursing Facility.

 

  B. Major Organ Transplants

Except for kidney transplants, major organ transplant procedures that are
Medi-Cal FFS benefits are not covered under the Contract. When a Member is
identified as a potential major organ transplant candidate, Contractor shall
refer the Member to a Medi-Cal approved transplant center. If the transplant
center Physician considers the Member to be a suitable candidate, the Contractor
shall submit a Prior Authorization Request to either the San Francisco Medi-Cal
Field Office (for adults) or the California Children Services Program (for
children) for approval. Contractor shall initiate disenrollment of the Member
when all of the

 

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following has occurred: referral of the Member to the organ transplant Facility;
the Facility’s evaluation has concurred that the Member is a candidate for major
organ transplant; and, the major organ transplant is authorized by either CDHS’
Medi-Cal Field Office (for adults) or the California Children Services Program
(for children).

Contractor shall continue to provide all Medically Necessary Covered Services
until the Member has been disenrolled from the plan.

Upon the disenrollment effective date, Contractor shall ensure continuity of
care by transferring all of the Member’s medical documentation to the transplant
Physician. The effective date of the disenrollment will be retroactive to the
beginning of the month in which the Member was approved as a major organ
transplant candidate. The request for reimbursement for services in the month
during which the transplant is approved are to be sent by the provider directly
to the Medi-Cal FFS fiscal intermediary. The capitation payment for the Member
will be recovered from the Contractor by CDHS.

If the Member is evaluated and determined not to be a candidate for a major
organ transplant or CDHS denies authorization for a transplant, the Member will
not be disenrolled. Contractor shall cover the cost of the evaluation performed
by the Medi-Cal approved transplant center.

 

  C. Waiver Programs

CDHS administers a number of Medi-Cal Home and Community Based Services (HCBS)
Waiver Programs authorized under section 1915(c) of the Social Security Act.
Contractor shall have procedures in place to identify Members who may benefit
from the HCBS Waiver programs, and refer them to the Medical Care Coordination
and Case Management Section of CDHS. These waiver programs include the In-Home
Medical Care Waiver, the Nursing Facility Subacute Waiver, and the Nursing
Facility A/B Waiver. If the agency administering the waiver program concurs with
Contractor’s assessment of the Member and there is available placement in the
waiver program, Contractor shall initiate disenrollment for the Member.
Contractor shall provide documentation to ensure the Member’s orderly transfer
to the Medi-Cal Fee-For-Service program. If the Member does not meet the
criteria for the waiver program, or if placement is not available, Contractor
shall continue comprehensive case management and shall continue to cover all
Medically Necessary Covered Services to the Member.

 

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18. Immunization Registry Reporting

Contractor shall ensure that member-specific immunization information is
periodically reported to an immunization registry(ies) established in the
Contractor’s Service Area(s) as part of the Statewide Immunization Information
System. Reports shall be made following the Member’s initial health assessment
and all other health care visits which result in an immunization being provided.
Reporting shall be in accordance with all applicable State and federal laws.

 

19. Erectile Dysfunction (ED) Drugs and Other ED Therapies

Erectile dysfunction drugs and other ED therapies are excluded from this
Contract. These excluded drugs include all drugs used for the treatment of ED
that are listed in Exhibit A, Attachment 11-B. The drugs listed in Exhibit A,
Attachment 11-B are covered by the Medi-Cal Fee-For-Service program.

Contractor shall identify individuals requiring ED drugs or ED therapies and
arrange for their referral for appropriate services. Contractor shall assist
Members in locating available treatment service sites. Contractor shall continue
to cover and ensure the provision of primary care and other services unrelated
to the ED drugs or ED therapies and coordinate services between the primary care
providers and the treatment programs.

 

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EXCLUDED DRUGS FOR ALCOHOL AND HEROIN (OPIOID) DEPENDENCE TREATMENT

Generic Name

Buprenorphine HCL

Buprenorphine HCL and Naloxone HCL dihydrate

 

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EXCLUDED DRUGS FOR THE TREATMENT OF ERECTILE DYSFUNCTION (ED)

Generic Name

Alprostadil

Papaverine

Phentolamine Mesylate

Sildenafil Citrate

Tadalafil

Vardenafil HCL

Yohimbine HCL

Yohimbine HCL/Strychnine

Yohimbine HCL/Zinc Sulfate

 

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Exhibit A, Attachment 12

 

LOCAL HEALTH DEPARTMENT COORDINATION

 

1. Subcontracts

Contractor shall negotiate in good faith and execute a Subcontract for public
health services listed in A through D below with the Local Health Department
(LHD) in each county that is covered by this Contract. The Subcontract shall
specify: the scope and responsibilities of both parties in the provision of
services to Members; billing and reimbursements; reporting responsibilities; and
how services are to be coordinated between the LHD and the Contractor, including
exchange of medical information as necessary. The Subcontract shall meet the
requirements contained in Exhibit A, Attachment 6, provision 13, regarding
Subcontracts.

 

  A. Family Planning Services: as specified in Exhibit A, Attachment 8,
provision 9.

 

  B. STD services for the disease episode, as specified in Exhibit A, Attachment
8, provision 10, by CDHS, for each STD, including diagnosis and treatment of the
following STDs: syphilis, gonorrhea, chlamydia, herpes simplex, chancroid,
trichomoniasis, human papilloma virus, non-gonococcal urethritis,
lymphogranuloma venereum and granuloma inguinale.

 

  C. HIV Testing and Counseling as specified in Exhibit A, Attachment 8,
provision 11.

 

  D. Immunizations: as specified in Exhibit A, Attachment 8, provision 12.

To the extent that Contractor does not meet this requirement on or before four
(4) months after the effective date of this Contract, Contractor shall submit
documentation substantiating reasonable efforts to enter into Subcontracts.

 

2. Subcontracts or Memoranda of Understanding

If reimbursement is to be provided for services rendered by the following
programs or agencies, Contractor shall execute a Subcontract with the LHD or
agency as stipulated in provision 1 above. If no reimbursement is to be made,
Contractor or agency shall negotiate in good faith and execute a Memorandum of
Understanding (MOU) for services provided by these programs and agencies.

 

  A. California Children Services (CCS)

 

  B. Maternal and Child Health (MCH)

 

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  C. Child Health and Disability Prevention (CHDP) Program

 

  D. Tuberculosis Direct Observed Therapy

 

  E. Women, Infants, and Children (WIC) Supplemental Nutrition Program

 

  F. Regional Centers for services for persons with developmental disabilities.

 

3. Local Mental Health Plan Coordination

 

  A. Contractor shall negotiate in good faith and execute a MOU with the local
mental health plan (MHP) in accordance with Welfare and Institutions Code,
Section 5777.5. The MOU shall specify, consistent with this Contract, the
respective responsibilities of Contractor and the MHP in delivering Medically
Necessary Covered Services and Specialty Mental Health Services to Members. The
MOU shall address:

 

  1) Protocols and procedures for referrals between Contractor and the MHP;

 

  2) Protocols for the delivery of Specialty Mental Health Services, including
the MHP’s provision of clinical consultation to Contractor for Members being
treated by Contractor for mental illness;

 

  3) Protocols for the delivery of mental health services within the Primary
Care Physician’s scope of practice;

 

  4) Protocols and procedures for the exchange of Medical Records information,
including procedures for maintaining the confidentiality of Medical Records;

 

  5) Procedures for the delivery of Medically Necessary Covered Services to
Members who require Specialty Mental Health Services, including:

 

  a) Pharmaceutical services and prescription drugs;

 

  b) Laboratory, radiological and radioisotope services;

 

  c) Emergency room facility charges and professional services;

 

  d) Emergency and non-emergency medical transportation;

 

  e) Home health services;

 

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  f) Medically Necessary Covered Services to Members who are patients in
psychiatric inpatient hospitals.

 

  6) Procedures for transfers between inpatient psychiatric services and
inpatient medical services to address changes in a Member’s medical or mental
health condition.

 

  7) Procedures to resolve disputes between Contractor and the MHP.

 

4. MOU Monthly Reports

To the extent Contractor does not execute an MOU within four (4) months after
the effective date of this Contract, Contractor shall submit documentation
substantiating its good faith efforts to enter into an MOU. Until such time as
an MOU is executed, Contractor shall submit monthly reports to CDHS documenting
its continuing good faith efforts to execute an MOU and the justifications why
such an MOU has not been executed.

 

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MEMBER SERVICES

 

1. Members Rights And Responsibilities

 

  A. Member Rights and Responsibilities

Contractor shall develop, implement and maintain written policies that address
the Member’s rights and responsibilities and shall communicate these to its
Members, and providers.

 

  1) Contractor’s written policies regarding Member rights shall include the
following:

 

  a) to be treated with respect, giving due consideration to the Member’s right
to privacy and the need to maintain confidentiality of the Member’s medical
information.

 

  b) to be provided with information about the organization and its services.

 

  c) to be able to choose a Primary Care Provider within the Contractor’s
network.

 

  d) to participate in decision making regarding their own health care,
including the right to refuse treatment.

 

  e) to voice grievances, either verbally or in writing, about the organization
or the care received.

 

  f) to receive oral interpretation services for their language.

 

  g) to formulate advance directives.

 

  h) to have access to family planning services, Federally Qualified Health
Centers, Indian Health Service Facilities, sexually transmitted disease services
and Emergency Services outside the Contractor’s network pursuant to the federal
law.

 

  i) to request a State Medi-Cal fair hearing, including information on the
circumstances under which an expedited fair hearing is possible.

 

  j) to have access to, and where legally appropriate, receive copies of, amend
or correct their Medical Record.

 

  k) to disenroll upon request.

 

  l) to access minor consent services.

 

  m) to receive written Member informing materials in alternative formats,
including Braille, large size print, and audio format upon request.

 

  n) to be free from any form of restraint or seclusion used as a means of
coercion, discipline, convenience, or retaliation.

 

  o) to receive information on available treatment options and alternatives,
presented in a manner appropriate to the Member’s condition and ability to
understand.

 

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  p) freedom to exercise these rights without adversely affecting how they are
treated by the Contractor, providers, or the State.

 

  2) Contractor’s written policy regarding Member responsibilities shall include
providing accurate information to the professional staff, following
instructions, and cooperating with the providers.

 

  B. Members’ Right to Confidentiality

Contractor shall implement and maintain policies and procedures to ensure the
Members’ right to confidentiality of medical information.

 

  1) Contractor shall ensure that Facilities implement and maintain procedures
that guard against disclosure of confidential information to unauthorized
persons inside and outside the network.

 

  2) Contractor shall counsel Members on their right to confidentiality and
Contractor shall obtain Member’s consent prior to release of confidential
information, unless such consent is not required pursuant to Title 22, CCR,
Section 51009.

 

  C. Members’ Rights to Advance Directives

Contractor shall implement and maintain written policies and procedures
respecting advance directives in accordance with the requirements of 42 CFR
422.128 and 42 CFR 438.6(i).

 

2. Member Services Staff

 

  A. Contractor shall maintain the capability to provide Member services to
Medi-Cal Members through sufficient assigned and knowledgeable staff.

 

  B. Contractor shall ensure Member services staff are trained on all
contractually required Member service functions including, policies, procedures,
and scope of benefits of this Contract.

 

3. Call Center Reports

Contractor shall report quarterly, in a format to be approved by CDHS, the
number of calls received by call type (questions, grievances, access to
services, request for health education, etc.); the average speed to answer
Member services telephone calls with a live voice; and, the Member services
telephone calls abandonment rate.

 

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4. Written Member Information

 

  A. Contractor shall provide all new Medi-Cal Members, and Potential Enrollees
upon request only, with written Member information as specified in Title 22,
CCR, Section 53895. Compliance with items required by Section 53895(b) may be
met through distribution of the Member Services Guide.

The Member Services Guide shall meet the requirements of an Evidence of Coverage
and Disclosure Form (EOC/DF) as stipulated by Title 28, CCR, Sections
1300.51(d), Exhibit T (EOC) or U (Combined EOC/DF) and Title 22, CCR,
Section 53881. In addition, the Member Services Guide shall meet the
requirements contained in Health and Safety Code, Section 1363, and Title 28,
CCR, Section 1300.63(a), as to print size, readability, and understandability of
text.

 

  B. Contractor shall distribute the Member information no later than seven
(7) calendar days after the effective date of the Member’s Enrollment.
Contractor shall revise this information, if necessary, and distribute it
annually to each Member or family unit.

 

  C. Contractor shall ensure that all written Member information is provided to
Members at a sixth grade reading level or as determined appropriate through the
Contractor’s group needs assessment and approved by CDHS. The written Member
information shall ensure Members’ understanding of the health plan processes and
ensure the Member’s ability to make informed health decisions.

Written Member-informing materials shall be translated into the identified
threshold and concentration languages discussed in Exhibit A, Attachment 9,
provision 13. Linguistic Services.

Written Member informing materials shall be provided in alternative formats,
including Braille, large size print, and audio format upon request.

 

  D. Contractor shall develop and provide each Member, or family unit, a Member
Services Guide that constitutes a fair disclosure of the provisions of the
covered health care services. The Member Services Guide shall be submitted to
CDHS for review prior to distribution to Members. The Member Services Guide
shall include the following information:

 

  1) The plan name, address, telephone number and service area covered by the
health plan.

 

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  2) A description of the full scope of Medi-Cal Managed Care covered benefits
and all available services including health education, interpretive services
provided by plan personnel and at service sites, and “carve out” services and an
explanation of any service limitations and exclusions from coverage or charges
for services. Include information and identification of services to which the
Contractor or subcontractor has a moral objection to perform or support.

 

  3) Procedures for accessing Covered Services including that Covered Services
shall be obtained through the plan’s providers unless otherwise allowed under
this Contract.

A description of the Member identification card issued by the Contractor, if
applicable, and an explanation as to its use in authorizing or assisting Members
to obtain services.

 

  4) Compliance with the following may be met through distribution of a provider
directory:

The address and telephone number of each Service Location (e.g., locations of
hospitals, Primary Care Physicians (PCP), Specialists, optometrists,
psychologists, pharmacies, Skilled Nursing Facilities, Urgent Care Facilities,
FQHCs, Indian Health Centers). In the case of a medical group/foundation or
independent practice association (IPA), the medical group/foundation or IPA
name, address and telephone number shall appear for each Physician provider:

The hours and days when each of these Facilities is open, the services and
benefits available, the telephone number to call after normal business hours,
and identification of providers that are not accepting new patients.

 

  5) Procedures for selecting or requesting a change in PCP at any time; any
requirements that a Member would have to change PCP; reasons for which a request
for a specific PCP may be denied; and reasons why a provider may request a
change.

 

  6) The purpose and value of scheduling an initial health assessment
appointment.

 

  7) The appropriate use of health care services in a managed care system.

 

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  8) The availability and procedures for obtaining after hours services (24-hour
basis) and care, including the appropriate provider locations and telephone
numbers. This shall include an explanation of the Members’ right to interpretive
services, at no cost, to assist in receiving after hours services.

 

  9) Procedures for obtaining emergency health care from specified plan
providers or from non-plan providers, including outside Contractor’s Service
Area.

 

  10) Process for referral to specialists in sufficient detail so Member can
understand how the process works, including timeframes.

 

  11) Procedures for obtaining any transportation services to Service Sites that
are offered by Contractor or available through the Medi-Cal program, and how to
obtain such services. Include a description of both medical and non-medical
transportation services and the conditions under which non-medical
transportation is available.

 

  12) Procedures for filing a grievance with Contractor, either orally or in
writing, including procedures for appealing decisions regarding Member’s
coverage, benefits, or relationship to the organization or other dissatisfaction
with the Contractor and/or providers. Include the title, address, and telephone
number of the person responsible for processing and resolving grievances and
responsible for providing assistance completing the request. Information
regarding the process shall include the requirements and the timelines for the
Contractor to acknowledge receipt of grievances, to resolve grievances, and to
notify the Member of the resolution of grievances or appeals. Information shall
be provided informing the Member that services previously authorized by the
Contractor will continue while the grievance is being resolved.

 

  13) The causes for which a Member shall lose entitlement to receive services
under this Contract as stipulated in Exhibit A, Attachment 16, provision 3.
Disenrollment.

 

  14) Procedures for Disenrollment, including an explanation of the Member’s
right to disenroll without cause at any time, subject to any restricted
disenrollment period.

 

  15)

Information on the Member’s right to the Medi-Cal fair hearing process and
information on the circumstances under which an expedited fair hearing is
possible and information regarding

 

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assistance in completing the request, regardless of whether or not a grievance
has been submitted or if the grievance has been resolved, pursuant to Title 22,
CCR, Section 53452, when a health care service requested by the Member or
provider has been denied, deferred or modified. Information on State Fair
Hearing shall also include information on the timelines which govern a Member’s
right to a State Fair Hearing, pursuant to Welfare & Institutions Code §10951
and the State Department of Social Services’ Public Inquiry and Response Unit
toll-free telephone number (1-800-952-5253) to request a State hearing.

 

  16) Information on the availability of, and procedures for obtaining, services
at FQHCs and Indian Health Clinics.

 

  17) Information on the Member’s right to seek family planning services from
any qualified provider of family planning services under the Medi-Cal program,
including providers outside Contractor’s provider network, how to access these
services, and a description of the limitations on the services that Members may
seek outside the plan. Contractor may use the following statement:

Family planning services are provided to Members of childbearing age to enable
them to determine the number and spacing of children. These services include all
methods of birth control approved by the Federal Food and Drug Administration.
As a Member, you pick a doctor who is located near you and will give you the
services you need. Our Primary Care Physicians and OB/GYN specialists are
available for family planning services. For family planning services, you may
also pick a doctor or clinic not connected with [Plan Name (Contractor)] without
having to get permission from [Plan Name (Contractor)]. [Plan Name (Contractor)]
shall pay that doctor or clinic for the family planning services you get.

 

  18) Procedures for providing female Members with direct access to a women’s
health specialist within the network for covered care necessary to provide
women’s routine and preventive health care services. This is in addition to the
Member’s designated source of primary care if that source is not a woman’s
health specialist.

 

  19) CDHS’ Office of Family Planning toll-free telephone number
(1-800-942-1054) providing consultation and referral to family planning clinics.

 

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Exhibit A, Attachment 13

 

  20) Information on the availability of, and procedures for obtaining,
Certified Nurse Midwife and Certified Nurse Practitioner services, pursuant to
Exhibit A, Attachment 9, provision 7. Nurse Midwife and Nurse Practitioner
Services.

 

  21) Information on the availability of transitional Medi-Cal eligibility and
how the Member may apply for this program. Contractor shall include this
information with all Member Service Guides sent to Members after the date such
information is furnished to Contractor by CDHS.

 

  22) Information on how to access State resources for investigation and
resolution of Member complaints, including a description of the CDHS Medi-Cal
Managed Care Ombudsman Program and toll-free telephone number (1-888-452-8609),
and the Department of Managed Health Care, Health Maintenance Organization (HMO)
Consumer Service toll-free telephone number (1-800-400-0815).

 

  23) Information concerning the provision and availability of services covered
under the CCS program from providers outside Contractor’s provider network and
how to access these services.

 

  24) An explanation of the expedited Disenrollment process for Members
qualifying under conditions specified under Title 22, CCR, Section 53889(j)
which includes children receiving services under the Foster Care or Adoption
Assistance Programs; Members with special health care needs, including, but not
limited to major organ transplants; and Members already enrolled in another
Medi-Cal, Medicare or commercial managed care plan.

 

  25) Information on how to obtain Minor Consent Services through Contractor’s
provider network, an explanation of those services, and information on how they
can also be obtained out of the Contractor’s provider network.

 

  26) An explanation on how to use the Fee-For-Service system when Medi-Cal
Covered Services are excluded or limited under this Contract and how to obtain
additional information.

 

  27) An explanation of an American Indian Member’s right to not enroll in a
Medi-Cal Managed Care plan, to be able to access Indian Health Service
facilities, and to disenroll from Contractor’s plan at any time, without cause.

 

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  28) A notice regarding the positive benefits of organ donations and how a
Member can become an organ or tissue donor. Pursuant to California Health and
Safety Code, Section 7158.2, this notice must be provided upon enrollment and
annually thereafter in the evidence of coverage (Member Services Guide), health
plan newsletter or any other direct communication with Members.

 

  29) A statement as to whether the Contractor uses provider financial bonuses
or other incentives with its contracting providers of health care services and
that the Member may request additional information about these bonuses or
incentives from the plan, the Member’s provider or the provider’s medical group
or independent practice association, pursuant to California Health and Safety
Code, Section 1367.10.

 

  30) A notice as to whether the Contractor uses a drug formulary. Pursuant to
California Health and Safety Code, Section 1363.01, the notice shall: (1) be in
the language that is easily understood and in a format that is easy to
understand; (2) include an explanation of what a formulary is, how the plan
decides which prescription drugs are included in or excluded from the formulary,
and how often the formulary is updated; (3) indicate that the Member can request
information regarding whether a specific drug is on the formulary and the
telephone number for requesting this information; and (4) indicate that the
presence of a drug on the plan’s formulary does not guarantee that a Member will
be prescribed that drug by his or her prescribing provider for a particular
medical condition.

 

  31) Policies and procedures regarding a Members’ right to formulate advance
directives. This information shall include the Member’s right to be informed by
the Contractor of State law regarding advance directives, and to receive
information from the Contractor regarding any changes to that law. The
information shall reflect changes in State law regarding advance directives as
soon as possible, but no later than 90 calendar days after the effective date of
change.

 

  32) Any other information determined by CDHS to be essential for the proper
receipt of Covered Services.

 

  E. Member Identification Card

Contractor shall provide an identification card to each Member, which identifies
the Member and authorizes the provision of Covered Services to the Member. The
card shall specify that Emergency Services rendered to the Member by
non-Contracting providers are reimbursable by the Contractor without Prior
Authorization.

 

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Exhibit A, Attachment 13

 

5. Notification of Changes in Access to Covered Services

Contractor shall ensure Medi-Cal Members are notified in writing of any changes
in the availability or location of Covered Services, or any other changes in
information listed in 42 CFR 438.10(f)(4), at least 30 calendar days prior to
the effective date of such changes. In the event of an emergency or other
unforeseeable circumstances, Contractor shall provide notice of the emergency or
other unforeseeable circumstance to CDHS as soon as possible. The notification
must also be presented to and approved in writing by CDHS prior to its’ release.

 

6. Primary Care Provider Selection

 

  A. Contractor shall implement and maintain CDHS approved procedures to ensure
that each new Member has an appropriate and available Primary Care Physician.
Contractor shall provide each new Member an opportunity to select a Primary Care
Physician within the first 30 calendar days of enrollment. Contractor may allow
Members to select a clinic that provides Primary Care. If the Contractor’s
provider network includes nurse practitioners, certified nurse midwives, or
physician assistants, the Member may select a nurse practitioner, certified
nurse midwife, or physician assistant within 30 calendar days of enrollment to
provide Primary Care services in accordance with Title 22, CCR,
Section 53853(a)(4). Contractor shall ensure that Members are allowed to change
a Primary Care Physician, nurse practitioner, certified nurse midwife or
physician assistant, upon request, by selecting a different Primary Care
Provider from Contractor’s network of providers.

 

  B. Contractor shall disclose to affected Members any reasons for which their
selection or change in Primary Care Physician could not be made.

 

  C. Contractor shall ensure that Members with an established relationship with
a provider in Contractor’s network, who have expressed a desire to continue
their patient/provider relationship, are assigned to that provider without
disruption in their care.

 

  D. Contractor shall ensure that Members may choose traditional and safety net
providers as their Primary Care Provider.

 

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7. Primary Care Provider Assignment

 

  A. If the Member does not select a Primary Care Provider within 30 calendar
days of the effective date of enrollment, Contractor shall assign that Member to
a Primary Care Provider and notify the Member and the assigned Primary Care
Provider no later than 40 calendar days after the Member’s Enrollment.
Contractor shall ensure that adverse selection does not occur during the
assignment process of Members to providers.

 

  B. Contractor shall notify the Primary Care Provider that a Member has
selected or been assigned to the provider within ten (10) calendar days from
when selection or assignment is completed by the Member or the Contractor,
respectively.

 

  C. Contractor shall maintain procedures that proportionately include
contracting Traditional and Safety-Net providers in the assignment process for
Members who do not choose a Primary Care Provider.

 

8. Denial, Deferral, or Modification of Prior Authorization Requests

 

  A. Contractor shall notify Members of a decision to deny, defer, or modify
requests for Prior Authorization, in accordance with Title 22, CCR, Sections
51014.1 and 53894 by providing written notification to Members and/or their
authorized representative, regarding any denial, deferral or modification of a
request for approval to provide a health care service. This notification must be
provided as specified in Title 22, CCR, Sections 51014.1, 51014.2, 53894, and
Health and Safety Code Section 1367.01.

 

  B. Contractor shall provide for a written notification to the Member and the
Member’s representative on a standardized form informing the Member of all the
following:

 

  1) The Member’s right to, and method of obtaining, a fair hearing to contest
the denial, deferral, or modification action and the decision the Contractor has
made.

 

  2) The Member’s right to represent himself/herself at the fair hearing or to
be represented by legal counsel, friend or other spokesperson.

 

  3) The name and address of Contractor and the State toll-free telephone number
for obtaining information on legal service organizations for representation.

 

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Exhibit A, Attachment 13

 

  C. Contractor shall provide required notification to beneficiaries and their
authorized representatives in accordance with the time frames set forth in Title
22, CCR, Sections 51014.1 and 53894. Such notice shall be deposited with the
United States Postal Service in time for pick-up no later than the third Working
day after the decision is made, not to exceed 14 calendar days from receipt of
the original request. If the decision is deferred because an extension is
requested or justified as explained in Exhibit A, Attachment 5, provision 3,
Contractor shall notify the Member in writing of the deferral of the decision no
later than 14 calendar days from the receipt of the original request. If the
final decision is to deny or modify the request, Contractor shall provide
written notification of the decision to Members no later than 28 calendar days
from the receipt of the original request.

If the decision regarding a prior authorization request is not made within the
time frames indicated in Exhibit A, Attachment 5, provision 3, the decision is
considered denied and notice of the denial must be sent to the Member on the
date the time frame expires.

 

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Exhibit A, Attachment 14

 

MEMBER GRIEVANCE SYSTEM

 

1. Member Grievance System

Contractor shall implement and maintain a Member Grievance system in accordance
with Title 28, CCR, Section 1300.68 and 1300.68.01, Title 22, CCR,
Section 53858, Exhibit A, Attachment 13, provision 4, paragraph D, item 12), and
42 CFR 438.420(a)-(c).

 

2. Grievance System Oversight

Contractor shall implement and maintain procedures as described below to monitor
the Member’s Grievance system and the expedited review of grievances required
under Title 28, CCR, Sections 1300.68 and 1300.68.01 and Title 22, CCR,
Section 53858.

 

  A. Procedure to ensure timely resolution and feedback to complainant.

Provide oral notice of the resolution of an expedited review.

 

  B. Procedure for systematic aggregation and analysis of the grievance data and
use for Quality Improvement.

 

  C. Procedure to ensure that the grievance submitted is reported to an
appropriate level, i.e., medical issues versus health care delivery issues. To
this end, Contractor shall ensure that any grievance involving the appeal of a
denial based on lack of Medical Necessity, appeal of a denial of a request for
expedited resolution of a grievance, or an appeal that involves clinical issues
shall be resolved by a health care professional with appropriate clinical
expertise in treating the Member’s condition or disease.

 

  D. Procedure to ensure the participation of individuals with authority to
require corrective action. Grievances related to medical quality of care issues
shall be referred to the Contractor’s Medical Director.

 

  E. Procedure to ensure that requirements of Title 22 CCR Section 51014.2 are
met regarding services to Members during the grievance process.

 

  F. Procedure to ensure that the person making the final decision for the
proposed resolution of a grievance has not participated in any prior decisions
related to the grievance.

 

  G.

Procedures to ensure that Members are given a reasonable opportunity to present,
in writing or in person before the individual(s) resolving the grievance,
evidence, facts and law in support of their grievance. In the

 

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Exhibit A, Attachment 14

 

 

case of a grievance subject to expedited review, Contactor shall inform the
Member of the limited time available to present evidence. Contractor shall also
comply with 42 CFR 438.406(b)(3) concerning a Member’s request to review records
in connection with a grievance.

 

3. Grievance Log and Quarterly Grievance Report

 

  A. Contractor shall maintain, and have available for CDHS review, grievance
logs, including copies of grievance logs of any sub-contracting entity delegated
the responsibility to maintain and resolve grievances. Grievance logs shall
include all the required information set forth in Title 22, CCR,
Section 53858(e).

 

  B. Contractor shall submit the quarterly grievance report for Medi-Cal Members
only in the form that is required by and submitted to the DMHC as set forth in
Title 28, CCR, Section 1300.68(f).

 

  1) In addition to the types or nature of grievances listed in Title 28, CCR,
Section 1300.68(f)(2)((D), the report shall also include, but not be limited to,
timely assignments to a provider, issues related to cultural and linguistic
sensitivity, and difficulty with accessing specialists.

 

  2) For the Medi-Cal category of the report, provide the following additional
information on each grievance: timeliness of responding to the Member,
geographic region, ethnicity, gender, primary language of the Member, and final
outcome of the grievance.

 

  C. Contractor shall submit the quarterly grievance report for Medi-Cal

Members the following quarters: April – June, July – September, October –
December, January – March. The report is due 30 calendar days from the date of
the end of the reporting quarter.

 

4. Responsibilities in Expedited State Fair Hearings

Within two (2) working days of being notified by CDHS or the Department of
Social Services (DSS) that a Member has filed a request for fair hearing which
meets the criteria for expedited resolution, Contractor shall deliver directly
to the designated/appropriate DSS administrative law judge all information and
documents which either support, or which the Contractor considered in connection
with, the action which is the subject of the expedited fair hearing. This
includes, but is not necessarily limited to, copies of the relevant treatment
authorization request and notice of action (NOA), plus any pertinent grievance
resolution notice. If the NOA or grievance resolution notice are not in English,
fully translated copies shall be transmitted to DSS along with copies of the

 

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Exhibit A, Attachment 14

 

original NOA and grievance resolution notice. One or more plan representatives
with knowledge of the Member’s condition and the reason(s) for the action, which
is the subject of the expedited fair hearing, shall be available by phone during
the scheduled fair hearing.

 

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Exhibit A, Attachment 15

 

MARKETING

 

1. Training and Certification of Marketing Representatives

If Contractor conducts Marketing, Contractor shall develop a training and
certification program for Marketing Representatives and ensure that all staff
performing Marketing activities or distributing Marketing material are
appropriately certified.

 

  A. Contractor is responsible for all Marketing activity conducted on behalf of
the Contractor. Contractor will be held liable for any and all violations by any
Marketing Representatives. Marketing staff may not provide Marketing services
for more than one Contractor. Marketing Representatives shall not engage in
Marketing practices that discriminate against an Eligible Beneficiary or
Potential Enrollee because of race, color, national origin, creed, ancestry,
religion, language, age, gender, marital status, sexual orientation, health
status or disability.

 

  B. Training Program

Contractor shall develop a training program that will train staff and prepare
Marketing Representatives for certification. Contractor shall develop a staff
orientation and Marketing representative’s training/certification manual. The
manual shall, at a minimum, cover the following topics:

 

  1) An explanation of the Medi-Cal Program, including both FFS and capitated
contractors, and eligibility.

 

  2) Scope of Services

 

  3) An explanation of the Contractor’s administrative operations and health
delivery system program, including the Service Area covered, excluded services,
additional services, conditions of enrollment and aid categories.

 

  4) An explanation of Utilization Management (how the beneficiary is obligated
to obtain all non-emergency medical care through the Contractor’s provider
network and describing all precedents to receipt of care like referrals, prior
authorizations, etc.).

 

  5) An explanation of the Contractor’s grievance procedures.

 

  6) An explanation of how a beneficiary disenrolls from the Contractor and
conditions for both voluntary and mandatory disenrollment reasons.

 

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Exhibit A, Attachment 15

 

  7) An explanation of the requirements of confidentiality of any information
obtained from Medi-Cal beneficiaries including information regarding eligibility
under any public welfare or social services program.

 

  8) An explanation of how Marketing Representatives will be supervised and
monitored to assure compliance with regulations.

 

  9) An explanation of acceptable communication and sales techniques. This shall
include an explanation of prohibited Marketing Representative activities and
conduct.

 

  10) An explanation that discrimination in enrollment and failure to enroll a
beneficiary due to a pre-existing medical condition (except for conditions
requiring contract-excluded services) are illegal.

 

  11) An explanation of the consequences of misrepresentation and Marketing
abuses (i.e., discipline, suspension of Marketing, termination, civil and
criminal prosecution, etc.). The Marketing Representative must understand that
any abuse of Marketing requirements can also cause the termination of the
Contractor’s contract with the State.

 

2. CDHS Approval

 

  A. Contractor shall not conduct Marketing activities presented in provision 3,
paragraph A, subparagraph 2), item d) below, without written approval of its
Marketing plan, or changes to its Marketing plan, from CDHS. In cases where the
Contractor wishes to conduct an activity not included in provision 3, paragraph
A, subparagraph 2), items c) and d) below, Contractor shall submit a request to
include the activity and obtain written, prior approval from CDHS. Contractor
must submit the written request within 30 calendar days prior to the Marketing
event, unless CDHS agrees to a shorter period.

 

  B. All Marketing materials, and changes in Marketing materials, including but
not limited to, all printed materials, illustrated materials, videotaped and
media scripts, shall be approved in writing by CDHS prior to distribution.

 

  C. Contractor’s training and certification program and changes in the training
and certification program shall be approved in writing by CDHS prior to
implementation.

 

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Exhibit A, Attachment 15

 

3. Marketing Plan

If Contractor conducts Marketing, Contractor shall develop a Marketing plan as
specified below. The Marketing plan shall be specific to the Medi-Cal program
only. Contractor shall implement and maintain the Marketing plan only after
approval from CDHS. Contractor shall ensure that the Marketing plan, all
procedures and materials are accurate and do not mislead, confuse or defraud.

 

  A. Contractor shall submit a Marketing plan to CDHS for review and approval on
an annual basis. The Marketing plan, whether new, revised, or updated, shall
describe the Contractor’s current Marketing procedures, activities, and methods.
No Marketing activity shall occur until the Marketing plan has been approved by
CDHS.

 

  1) The Marketing plan shall have a table of contents section that divides the
Marketing plan into chapters and sections. Each page shall be dated and numbered
so chapters, sections, or pages, when revised, can be easily identified and
replaced with revised submissions.

 

  2) Contractor’s Marketing plan shall contain the following items and exhibits:

 

  a) Mission Statement or Statement of Purpose for the Marketing plan.

 

  b) Organizational Chart and Narrative Description

The organizational chart shall include the Marketing director’s name, address,
telephone and facsimile number and key staff positions.

The description shall explain how the Contractor’s internal Marketing department
operates, identifying key staff positions, roles and responsibilities, and,
reporting relationships including, if applicable, how the Contractor’s
commercial Marketing staff and functions interface with its Medi-Cal Marketing
staff and functions.

 

  c) Marketing Locations

All sites for proposed Marketing activities such as annual health fairs, and
community events, in which the Contractor proposes to participate, shall be
listed.

 

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Exhibit A, Attachment 15

 

  d) Marketing Activities

All Marketing methods and Marketing activities Contractor expects to use, or
participate in, shall be described. Contractor shall comply with the guidelines
described in Title 22, CCR, Sections 53880 and 53881, Welfare and Institutions
Code, Sections 10850(b), 14407.1, 14408, 14409, 14410, and 14411, and as
follows:

 

  i. Contractor shall not engage in door to door or cold call Marketing for the
purpose of enrolling Members or Potential Enrollees, or for any other purpose.

 

  ii. Contractor shall obtain CDHS approval to perform in-home Marketing
presentations and shall provide strict accountability, including documentation
of the prospective Member’s request for an in-home Marketing presentation or a
documented telephone log entry showing the request was made.

 

  iii. Contractor shall not conduct Marketing presentations at primary care
sites.

 

  iv. Include a letter or other document that verifies cooperation or agreement
between the Contractor and an organization to undertake a Marketing activity
together and certify or otherwise demonstrate that permission for use of the
Marketing activity/event site has been granted.

 

  e) Marketing Materials

Copies of all Marketing materials the Contractor will use for both English and
non-English speaking populations shall be included.

A sample copy of the Marketing identification badge and business card that will
clearly identify Marketing Representatives as employees of the Contractor shall
be included. Marketing identification badges and business cards shall not
resemble those of a government agency.

 

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Exhibit A, Attachment 15

 

  f) Marketing Distribution Methods

A description of the methods the Contractor will use for distributing Marketing
materials.

 

  g) Monitoring and Reporting Activities

Written formal measures to monitor performance of Marketing Representatives to
ensure Marketing integrity pursuant to Welfare and Institutions Code,
Section 14408(c).

 

  h) Miscellaneous

All other information requested by CDHS to assess the Contractor’s Marketing
program.

 

  B. Contractor shall not seek to influence enrollment in conjunction with the
sale or offering of any private insurance.

 

4. Marketing Event Notification

Contractor shall notify CDHS at least 30 calendar days in advance of
Contractor’s participation in all Marketing events. In cases where Contractor
learns of an event less than 30 calendar days in advance, Contractor shall
provide notification to CDHS immediately. In no instance shall notification be
less than 48 hours prior to the event.

 

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Exhibit A, Attachment 16

 

ENROLLMENTS AND DISENROLLMENTS

 

1. Enrollment Program

Contractor shall cooperate with the CDHS Enrollment program and shall provide to
CDHS’ enrollment contractor a list of network providers (provider directory),
linguistic capabilities of the providers and other information deemed necessary
by CDHS to assist Medi-Cal beneficiaries, and Potential Enrollees, in making an
informed choice in health plans. The provider directory will be submitted every
six (6) months and in accordance with MMCD Policy Letter 00-02.

 

2. Enrollment

Contractor shall accept as Members Medi-Cal beneficiaries in the mandatory and
voluntary aid categories as defined in Exhibit E, Attachment 1, Definitions,
provision 30. Eligible Beneficiaries, including Medi-Cal beneficiaries in Aid
Codes who elect to enroll with the Contractor or are assigned to the Contractor.

 

  A. Enrollment - General

Eligible Beneficiaries residing within the Service Area of Contractor may be
enrolled at any time during the term of this Contract. Eligible Beneficiaries
shall be accepted by Contractor in the order in which they apply without regard
to race, color, national origin, creed, ancestry, religion, language, age,
gender, marital status, sexual orientation, health status, or disability.

 

  B. Coverage

Member coverage shall begin at 12:01 a.m. on the first day of the calendar month
for which the Eligible Beneficiary’s name is added to the approved list of
Members furnished by CDHS to Contractor. The term of enrollment shall continue
indefinitely unless this Contract expires, is terminated, or the Member is
disenrolled under the conditions described in provision 3. Disenrollment.

Contractor shall provide Covered Services to a child born to a Member for the
month of birth and the following month. For a child born in the month
immediately preceding the mother’s membership, Contractor shall provide Covered
Services to the child during the mother’s first month of Enrollment. No
additional capitation payment will be made to the Contractor by CDHS.

 

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Exhibit A, Attachment 16

 

  C. Exception to Enrollment

A Member in a mandatory aid code category is not required to enroll when a
request for an exemption under Title 22, CCR, Section 53887 has been approved.

 

  D. Enrollment Restriction

Enrollment will proceed unless restricted by CDHS. Such restrictions will be
defined in writing and the Contractor notified at least ten (10) calendar days
prior to the start of the period of restriction. Release of restrictions will be
in writing and transmitted to the Contractor at least ten (10) days calendar
prior to the date of the release.

 

3. Disenrollment

The enrollment contractor shall process a Member Disenrollment under the
following conditions, subject to approval by CDHS, in accordance with the
provisions of Title 22, CCR, Section 53891:

 

  A. Disenrollment of a Member is mandatory when:

 

  1) The Member requests Disenrollment, subject to any lock-in restrictions on
Disenrollment under the federal lock-in option, if applicable.

 

  2) The Member’s eligibility for Enrollment with Contractor is terminated or
eligibility for Medi-Cal is ended, including the death of the Member.

 

  3) Enrollment was in violation of Title 22, CCR, Sections 53891(a)(2), or
requirements of this Contract regarding Marketing, and CDHS or Member requests
Disenrollment.

 

  4) Disenrollment is requested in accordance with Welfare and Institutions
Code, Sections 14303.1 regarding merger with other organizations, or 14303.2
regarding reorganizations or mergers with a parent or subsidiary corporation.

 

  5) There is a change of a Member’s place of residence to outside Contractor’s
Service Area.

 

  6) Disenrollment is based on the circumstances described in Exhibit A,
Attachment 11, provision 17. Excluded Services Requiring Member Disenrollment.

 

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Exhibit A, Attachment 16

 

 

Such Disenrollment shall become effective on the first day of the second month
following receipt by CDHS of all documentation necessary, as determined by CDHS,
to process the Disenrollment, provided Disenrollment was requested at least 30
calendar days prior to that date, except for Disenrollments pursuant to Exhibit
A, Attachment 11, provision 17, regarding Major Organ Transplants, for which
Disenrollment shall be effective the beginning of the month in which the
transplant is approved.

 

  B. Contractor may recommend to CDHS the Disenrollment of any Member in the
event of a breakdown in the “Contractor/Member relationship” which makes it
impossible for Contractor’s providers to render services adequately to a Member.
Except in cases described in subparagraph 2) below or fraud, Contractor shall
make, and document, significant efforts to resolve the problem with the Member
through avenues such as reassignment of Primary Care Physician, education, or
referral to services (such as mental health or substance abuse programs), before
requesting a Contractor-initiated Disenrollment. In cases of
Contractor-initiated Disenrollment of a Member, Contractor must submit to CDHS a
written request with supporting documentation for Disenrollment based on the
breakdown of the “Contractor/Member relationship.” Contractor-initiated
Disenrollments must be prior approved by CDHS and shall be considered only under
any of the following circumstances:

 

  1) Member is repeatedly verbally abusive to contracting providers, ancillary
or administrative staff, subcontractor staff or to other plan Members.

 

  2) Member physically assaults a Contractor’s staff person, contracting
provider or staff person, or other Member, or threatens another individual with
a weapon on Contractor’s premises or subcontractor’s premises. In this instance,
Contractor or subcontractor shall file a police or security agency report and
file charges against the Member.

 

  3) Member is disruptive to Contractor operations, in general.

 

  4) Member habitually uses providers not affiliated with Contractor for
non-Emergency Services without required authorizations (causing Contractor to be
subjected to repeated provider demands for payment for those services or other
demonstrable degradation in Contractor’s relations with community providers).

 

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Exhibit A, Attachment 16

 

  5) Member has allowed the fraudulent use of Medi-Cal coverage under the plan,
which includes allowing others to use the Member’s plan identification card to
receive services from Contractor.

 

  C. A Member’s failure to follow prescribed treatment (including failure to
keep established medical appointments) shall not, in and of itself, be good
cause for the approval by CDHS of a Contractor-initiated Disenrollment request
unless Contractor can demonstrate to CDHS that, as a result of the failure,
Contractor is exposed to a substantially greater and unforeseeable risk than
that otherwise contemplated under the Contract and rate-setting assumptions.

 

  D. The problem resolution attempted prior to a Contractor-initiated
Disenrollment described in paragraph B, must be documented by Contractor. A
formal procedure for Contractor-initiated Disenrollments shall be established by
Contractor and approved by CDHS. As part of the procedure, the Member shall be
notified in writing by Contractor of the intent to disenroll the Member for
cause and allowed a period of no less than 20 calendar days to respond to the
proposed action.

 

  1) Contractor must submit a written request for Disenrollment and the
documentation supporting the request to CDHS for approval. The supporting
documentation must establish the pattern of behavior and Contractor’s efforts to
resolve the problem. CDHS shall review the request and render a decision in
writing within ten (10) Working days of receipt of a Contractor request and
necessary documentation. If the Contractor-initiated request for Disenrollment
is approved by CDHS, CDHS shall submit the Disenrollment request to the
enrollment contractor for processing. Contractor shall be notified by CDHS of
the decision, and if the request is granted, shall be notified by the enrollment
contractor of the effective date of the Disenrollment. Contractor shall notify
the Member of the Disenrollment for cause if CDHS grants the
Contractor-initiated request for Disenrollment.

 

  2) Contractor shall continue to provide Covered Services to the Member until
the effective date of the Disenrollment.

 

  E. Except as provided in paragraph A, subparagraph 6, enrollment shall cease
no later than midnight on the last day of the first calendar month after the
Member’s Disenrollment request and all required supporting documentation are
received by CDHS. On the first day after enrollment ceases, Contractor is
relieved of all obligations to provide Covered Services to the Member under the
terms of this Contract. Contractor agrees in turn to return to CDHS any
capitation payment forwarded to Contractor for persons no longer enrolled under
this Contract.

 

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Exhibit A, Attachment 16

 

  F. Contractor shall implement and maintain procedures to ensure that all
Members requesting Disenrollment or information regarding the Disenrollment
process are immediately referred to the enrollment contractor.

 

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Exhibit A, Attachment 17

 

REPORTING REQUIREMENTS

 

Contract Section

  

Requirement

   Frequency

Exhibit A - SCOPE OF WORK

Attachment 1 ORGANIZATION AND ADMINISTRATION OF THE PLAN

2. A. Key Personnel (Disclosure Form)

   Key Personnel (Disclosure Form)    Annually

Attachment 2 FINANCIAL INFORMATION

2. Financial Audit Reports

B. 1)

or

B. 2)

  

Annual certified Financial Statements and DMHC required reporting forms

or

Financial Statement

   Annually

2. Financial Audit Reports

B. 2)

   Quarterly Financial Reports    Quarterly 3. Monthly Financial Statements   

Monthly Financial Statements

(If applicable)

   Monthly

Attachment 3 MANAGEMENT INFORMATION SYSTEM

2. Encounter Data Submittal

3rd paragraph

   Encounter Data Submittal    Monthly

Attachment 4 QUALITY IMPROVEMENT SYSTEM (QIS)

4. Quality Improvement Committee

3rd paragraph

   Quality Improvement Committee meeting minutes    Quarterly 8. Quality
Improvement Annual Report    Quality Improvement Annual Report    Annually

9. External Quality Review Requirements

A. External Accountability Set (EAS) Performance Measures

2) b)

   EAS Performance Measurement Rates    Annually

10. Site Review

E. Data Submission

   Site Review Data    Semi- Annually

Attachment 6 PROVIDER NETWORK

10. Provider Network Report    Provider Network Report    Quarterly 11. Plan
Subcontractors    Plan Subcontractors Report    Quarterly

Attachment 9 ACCESS AND AVAILABILITY

12. Cultural and Linguistic Program

C. Group Needs Assessment

4)

   Group Needs Assessment Summary Report    Every 5 years

 

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Exhibit A, Attachment 17

 

Contract Section

  

Requirement

   Frequency

Attachment 10 SCOPE OF SERVICES

4. Services for Members under Twenty-

One(21) Years of Age

B. Children’s Preventive Services

5)

  

Confidential Screening/Billing

Report Form, PM 160-PHP

   Monthly

7. Services for All Members

F. Pharmaceutical Services and Provision of Prescribed Drugs

2)

  

Report of Changes to the

Formulary

   Annually Attachment 12 LOCAL HEALTH DEPARTMENT COORDINATION 4. MOU Monthly
Report   

Local Health Department - MOU’s

Local Mental Health - MOU’s

(If deemed necessary)

   Monthly Attachment 13 MEMBER SERVICES 3. Call Center Report    Call Center
Report    Quarterly

4. Written Member Information

B.

   Member Services Guide    Annually Attachment 14 MEMBER GRIEVANCE SYSTEM 3.
Grievance Log and Quarterly Grievance Report    Grievance Report    Quarterly
Attachment 15 MARKETING

3. Marketing Plan

A.

   Marketing Plan    Annually Attachment 16 ENROLLMENTS AND DISENROLLMENTS 1.
Enrollment Program (Policy Letter 00-02)    Provider Directory    Semi-
Annually Exhibit B - BUDGET DETAIL AND PAYMENT PROVISIONS

12. Payment of Aids Beneficiary Rates

A. Compensation at the AIDS Beneficiary Rate

(ABR)

1) c)

  

AIDS Beneficiaries Rate (ABR)

Invoice

   Monthly

 

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Exhibit A, Attachment 18

 

IMPLEMENTATION PLAN AND DELIVERABLES

The Implementation Plan and Deliverables section describes CDHS requirements for
specific deliverables, activities, and timeframes that the Contractor must
complete during the Implementation Period before beginning Operations.

Once the Contract is awarded, the Contractor has 15 calendar days after they
sign the Contract to submit a Workplan for each county that describes in detail
how and when the Contractor will submit and complete the deliverables to CDHS in
accordance with the Implementation Plan and Deliverables section. The
Contractor’s Workplan(s) will include a timetable to accomplish the activities
to assure timely start-up of operations and contingency plans in the event of
implementation delays.

The Implementation Period begins with the effective date of the Contract and
extends to the beginning of the Operations Period (approximately 6 months after
the effective date of the Contract). The Operations Period is the period of time
beginning with the effective date of the first month of operations and continues
on through the last month of capitation and services to Members.

The Contractor’s Workplan(s) will identify all of the deliverables, milestones,
and timeframes to achieve an orderly sequence of events that will lead to
compliance with all contract requirements. CDHS will review and approve each of
the Workplan(s). However, Contractor shall not delay the submission of
deliverables required in the Workplan(s) while waiting for CDHS approval of
previously submitted deliverables required by the Workplan(s). Contractor will
continue to submit deliverables based on the milestones and timeframes set forth
in the approved CDHS Workplan(s). In the event the Contractor fails to submit
all deliverables in accordance with the milestones and timeframes in the
approved CDHS Workplan(s), CDHS may impose Liquidated Damages in accordance with
Exhibit E, Attachment 2 – Program Terms and Conditions, provision 17, Liquidated
Damages Provisions.

In the event that this section omits a deliverable required by the Contract, the
Contractor will still be responsible to assure that all contract requirements
are met. Upon successful completion of the Implementation Plan and Deliverables
section requirements, CDHS will authorize, in writing, that the Contractor may
begin the Operations Period.

Knox-Keene Licensure

If not currently licensed to operate in awarded service area, a complete
material modification to operate in the service area must be submitted to the
DMHC within 30 working days of award of contract. Submit proof of the material
modification submission to CDHS concurrently. Operation shall not begin until
the material modification is approved by DMHC. Contractor shall submit a copy of
their Knox-Keene license.

 

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Exhibit A, Attachment 18

 

1. Organization and Administration of Plan

 

  A. Submit documentation of employees (current and former State employees) who
may present a conflict of interest.

 

  B. Submit a complete organizational chart.

 

  C. If the Contractor is a subsidiary organization, submit an attestation by
the parent organization that this Contract will be a high priority to the parent
organization.

 

  D. Submit an attestation that the medical decisions made by the medical
director will not be unduly influenced by fiscal or administrative management.

 

  E. Submit policies and procedures describing the representation and
participation of Medi-Cal Members on Contractor’s Public Policy Advisory
Committee.

 

  F. Submit the following Knox-Keene license exhibits and forms reflecting
current operation status:

 

  1) Type of Organization: Submit the following applicable exhibits and forms as
appropriate for its type of organization and administration of the health plan.

 

  i. Corporation: Exhibits F-1-a-i through F-1-a-iii and Corporation Information
Form, Form HP 1300.51-A. (See Appendix 8 of the Central Valley Counties RFP)

 

  ii. Partnership: Exhibits F-1-b-i and F-1-b-ii and Partnership Information
Form, Form HP 1300.51-B. (See Appendix 9 of the Central Valley Counties RFP)

 

  iii. Sole Proprietorship: Exhibit F-1-c and Sole Proprietorship Information
Form, Form HP 1300.51-C. (See Appendix 10 of the Central Valley Counties RFP)

 

  iv. Other Organization: Exhibits F-1-d and F-1-d-ii, and Information Form for
other than Corporations, Partnerships, and Sole Proprietorships, Form HP
1300.51-D.

 

  v. Public Agency: Exhibits F-1-e-I through F-1-e-iii.

 

  Title 28, CCR, Section 1300.51(d)(F)(1)(a) through (e)

 

  2) Exhibit F-1-f: Individual Information Sheet (Form HP 1300.51.1) for each
person named in response to item 1) above. (See Appendix 11 of the Central
Valley Counties RFP) Title 28, CCR, Section 1300.51(d)(F)(1)(f)

 

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Exhibit A, Attachment 18

 

  3) Exhibits F-2-a and F-2-b: contracts with Affiliated person, Principal
Creditors and Providers of Administrative Services.

 

  4) Exhibit F-3 Other Controlling Persons. Title 28, CCR, Section 1300.51(d)(F)

 

  5) In addition to Exhibits F, Contractor shall demonstrate compliance with
requirements of Title 22, CCR, Sections 53874 and 53600. Identify any individual
named in this item b. that was an employee of the State of California in the
past 12 months. Describe their job position and function while a State employee.

 

  G. Submit Exhibit M-2: Statements as to each person identified in Section L.
Technical Proposal Requirements, provision 1. Organization and Administration,
a. 2) (Exhibit L) and 3). (Exhibit M-1)

Title 28, CCR, Section 1300.51(d)(M)(2)

 

  H. Submit Exhibits N-1 and N-2: Contracts for Administrative Services.

Title 28, CCR, Section 1300.51(d)(N)(2)

 

  I. If, within the last five (5) years, Contractor has had a contract
terminated or not renewed for poor performance, nonperformance, or any other
reason, Contractor shall submit a summary of the circumstances surrounding the
termination or non-renewal. Describe the parties involved, including address(es)
and telephone number(s). Describe the Contractor’s corrective actions to prevent
future occurrences of any problems identified.

 

  J. Contractor shall describe provisions and arrangements, existing, and
proposed, for including Medi-Cal Members in their Public Policy Advisory
Committee development process. Identify the composition and meeting frequency of
any committee participating in establishing the Contractor’s public policy.
Describe the frequency of the committee’s report submission to the Contractor’s
Governing Body, and the Governing body, and the Governing Body’s process for
handling reports and recommendations after receipt.

 

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Exhibit A, Attachment 18

 

2. Financial Information

All submitted financial information must adhere to Generally Accepted Accounting
Principles (GAAP), unless otherwise noted.

 

  Note:  Where Knox-Keene license exhibits are requested, the descriptions of
exhibit content may have been amended to address Medi-Cal program needs or
industry terminology.

 

  A. Submit most recent audited annual financial reports

 

  B. Submit quarterly financial statements with the most recent quarter prior to
execution of the Contract.

 

  C. Submit the following Knox-Keene license exhibits reflecting projected
financial viability:

 

  1) Exhibit HH-1

 

  2) Exhibit HH-2

(Title 28, CCR, Section 1300.76)

 

  3) In addition to Exhibit HH-2, include projected Medi-Cal enrollment for each
month and cumulative Member months for quarterly financial projections.

 

  D. Submit Knox-Keene license Exhibit HH-6. Include the following:

 

  1) Exhibit HH-6-a

 

  2) Exhibit HH-6-b

 

  3) Exhibit HH-6-c

 

  4) Exhibit HH-6-d

 

  5) Exhibit HH-6-e

Title 28, CCR, Section 1300.51(d)(HH)

 

  E. Describe any risk sharing or incentive arrangements. Explain any intent to
enter into a stop loss option with CDHS. Also describe any reinsurance and
risk-sharing arrangements with any subcontractors shown in this Proposal. Submit
copies of all policies and agreements. For regulations related to Assumption of
Financial Risk and Reinsurance, see Title 22, CCR, Sections 53863 and 53868.

 

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Exhibit A, Attachment 18

 

  F. Fiscal Arrangements: Submit the following Knox-Keene license exhibits
reflecting current operation status:

1) Exhibit II-1

2) Exhibit II-2

3) Exhibit II-3

Title 28, CCR, Section 1300.51(d)(II)

 

  G. Describe systems for ensuring that subcontractors, who are at risk for
providing services to Medi-Cal Members, as well as any obligations or
requirements delegated pursuant to a Subcontract, have the administrative and
financial capacity to meet its contractual obligations.

Title 28, CCR Section 1300.70(b)(2)(H)1. Title 22, CCR, Section 53250.

 

  H. Submit financial policies that relate to Contractor’s systems for budgeting
and operations forecasting. The policies should include comparison of actual
operations to budgeted operations, timelines used in the budgetary process,
number of years prospective forecasting is performed, and variance analysis and
follow-up procedures.

 

  I. Describe process to ensure timely filing of required financial reports. The
description should include mechanisms for systems oversight for generating
financial and operational information, including a tracking system with lead
times and due dates for quarterly and annual reports. Describe how this process
coincides with the organization’s management information system. Additionally,
Contractor shall describe how it will comply with the Administrative cost
requirements in Title 22, CCR, Section 53864(b).

 

  J. Submit policies and procedures for a system to evaluate and monitor the
financial viability of all subcontracting entities.

 

3. Management Information System

 

  Note:  Contractor’s readiness for operation will be reviewed against the
“Model MIS Guidelines” (Appendix 4 of the Central Valley Counties RFP). See
Appendix 6 of the Central Valley Counties RFP for additional information.

 

  A. Submit a completed MCO Baseline Assessment Form (see Appendix 5 of the
Central Valley Counties RFP).

 

  B. If procuring a new MIS or modifying a current system, Contractor shall
provide a detailed implementation plan that includes:

1) Outline of the tasks required;

 

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Exhibit A, Attachment 18

 

2) The major milestones;

3) The responsible party for all related tasks;

The implementation plan must also include:

1) A full description of the acquisition of software and hardware, including the
schedule for implementation;

2) Full documentation of support for software and hardware by the manufacturer
or other contracted party;

3) System test flows through a documented process that has specific control
points where evaluation data can be utilized to correct any deviations from
expected results;

4) Documentation of system changes related to Exhibit G, Health Insurance
Portability and Accountability Act (HIPAA) requirements.

 

  C. Submit a detailed description of how Proposer will monitor the flow of
encounter data from provider level to the organization.

 

  D. Submit Encounter data test tape produced from State supplied data.

 

  E. Submit policies and procedures for the complete, accurate, and timely
submission of Encounter-level data.

 

  F. Submit a work plan for compliance with Exhibit G, Health Insurance
Portability and Accountability Act (HIPAA).

 

  G. Submit the data security, backup, or other data disaster processes used in
the event of a MIS failure.

 

  H. Submit a detailed description of the proposed and/or existing MIS as it
relates to the following subsystems;

1) Financial

2) Member/Eligibility

3) Provider

4) Encounter/Claims

5) Quality Management/Utilization

 

  I. Submit a sample and description of the following reports generated by the
MIS;

1) Member roster

2) Provider Listing

3) Capitation payments

 

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Exhibit A, Attachment 18

 

4) Cost and Utilization

5) System edits/audits

6) Claims payment status/processing

7) Quality Assurance

8) Utilization

9) Monitoring of Complaints

 

4. Quality Improvement System

 

  A. Submit a flow chart and/or organization chart identifying all components of
the QIS and who is involved and responsible for each activity.

 

  B. Submit policies that specify the responsibility of the Governing Body in
the QIS.

 

  C. Submit policies for the QI Committee including membership, activities,
roles and responsibilities.

 

  D. Submit procedures outlining how providers will be kept informed of the
written QIS, its activities and outcomes.

 

  E. Submit policies and procedures related to the delegation of the QIS
activities.

 

  F. Submit boilerplate Subcontract language showing accountability of delegated
QIS functions and responsibilities.

 

  G. Submit a written description of the QIS.

 

  H. Policies and procedures to address how the Contractor will meet the
requirements of:

 

  1) External Accountability Set (EAS) Performance Measures

 

  2) Quality Improvement Projects

 

  3) Consumer Satisfaction Survey

 

  I. Submit policies and procedures for performance of Primary Care Provider
site reviews.

 

  J. Submit a list of sites to be reviewed prior to initiating plan operation

 

  K. Submit the aggregate results of pre-operational site review to CDHS at
least six (6) weeks prior to Plan operation. The aggregate results shall include
all data elements defined by CDHS.

 

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Exhibit A, Attachment 18

 

  L. Submit policies and procedures for reporting any disease or condition to
public health authorities.

 

  M. Submit policies and procedures for credentialing and re-credentialing.

 

  N. Submit policies and procedures for appropriate handling and maintenance of
medical records regardless of form (electronic, paper, etc.).

 

5. Utilization Management

 

  A. Submit written description of UM program that describes appropriate
processes to be used to review and approve the provision of medical services.

 

  B. Submit policies and procedures for pre-authorization, concurrent review,
and retrospective review.

 

  C. Submit a list of services requiring prior authorization and the utilization
review criteria.

 

  D. Submit policies and procedures for the utilization review appeals process
for providers and members.

 

  E. Submit policies and procedures that specify timeframes for medical
authorization.

 

  F. Submit policies and procedures to detect both under- and over-utilization
of health care services.

 

  G. Submit policies and procedures showing how delegated activities will be
regularly evaluated for compliance with Contract requirements and, that any
issues identified through the UM program are appropriately resolved, and that UM
activities are properly documented and reported.

 

6. Provider Network

 

  A. Submit complete provider network showing the ability to serve sixty percent
(60%) of the Eligible Beneficiaries in the county pursuant to the Contract.

 

  B. Submit policies and procedures describing how Contractor will monitor
provider to patient ratios to ensure they are within specified standards.

 

  C. Submit policies and procedures regarding physician supervision of
non-physician medical practitioners.

 

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Exhibit A, Attachment 18

 

  D. Submit policies and procedures for providing emergency services.

 

  E. Submit a complete list of specialists by type within the Contractor’s
network.

 

  F. Submit policies and procedures for how Contractor will meet Federal
requirements for access and reimbursement for in-Plan and/or out-of-Plan FQHC
services.

 

  G. Submit a GeoAccess report (or similar) showing that the proposed provider
network meets the appropriate time and distance standards set forth in the
Contract.

 

  H. Submit a policy regarding the availability of a health plan physician
24-hours a day, 7-days a week, and procedures for communicating with emergency
room personnel.

 

  I. Submit a report containing the names of all subcontracting provider groups
(see Exhibit A, Attachment 6, provision 11).

 

  J. Submit an analysis demonstrating the ability of the Contractor’s provider
network to meet the ethnic, cultural, and linguistic needs of the Contractor’s
Members.

 

  K. Submit all boilerplate Subcontracts.

 

  L. Submit policies and procedures that establish Traditional and Safety-Net
Provider participation standards.

 

  M. Submit an attestation as to the percentage of Traditional and Safety-Net
Providers in the Contractor’s network and agreement to maintain that percentage.

 

7. Provider Relations

 

  A. Submit policies and procedures for provider grievances.

 

  B. Submit a written description of how Contractor will communicate the
provider grievance process to subcontracting and non-contracting providers.

 

  C. Submit protocols for payment and communication with non-contracting
providers.

 

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Exhibit A, Attachment 18

 

  D. Submit copy of provider manual.

 

  E. Submit a schedule of provider training to be conducted during year one of
operation. Include date, time and location, and complete curriculum.

 

  F. Submit protocols for communicating and interacting with all emergency
departments in the Service Area.

 

8. Provider Compensation Arrangements

 

  A. Submit policies and procedures regarding timing of capitation payments to
primary care providers or clinics.

 

  B. Submit description of any physician incentive plans.

 

  C. Submit policies and procedures for processing and payment of claims.

 

  D. Submit policies regarding the prohibition of a claim or demand for services
provided under the Medi-Cal managed care contract, to any Medi-Cal member.

 

  E. Submit Federally Qualified Health Centers (FQHC), Rural Health Clinics
(RHC), and Indian Health Service Facilities Subcontracts.

 

  F. Submit policies and procedures for the reimbursement of Non-Contracting
Certified Nurse Midwives (CNM) and Certified Nurse Practitioners (CNP).

 

  G. Submit policies and procedures for the reimbursement to local health
department and non-contracting family planning providers for the provision of
family planning service, STD episode, and HIV testing and counseling.

 

  H. Submit policies and procedures for the reimbursement of immunization
services to local health department.

 

  I. Submit policies and procedures regarding payment to non-contracting
emergency services providers. Include schedule of per diem rates and/or
Fee-for-service rates for each of the following provider types;

 

  1) Primary Care Providers

 

  2) Medical Groups and Independent Practice Associations

 

  3) Specialists

 

  4) Hospitals

 

  5) Pharmacies

 

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Exhibit A, Attachment 18

 

9. Access and Availability

 

  A. Submit policies and procedures that include standards for:

1) Appointment scheduling

2) Routine specialty referral

3) First prenatal visit

4) Waiting times

5) Urgent care

6) After-hours calls

7) Unusual specialty services

 

  B. Submit policies and procedures for the timely referral and coordination of
Covered Service to which the Contractor or subcontractor has objections to
perform or otherwise support.

 

  C. Submit policies and procedures for standing referrals.

 

  D. Submit policies and procedures regarding 24-hr./day access without prior
authorization, follow-up and coordination of emergency care services.

 

  E. Submit policies and procedures regarding access to Nurse Midwives and Nurse
Practitioners.

 

  F. Submit applicable section of Member Services Guide stating Member’s right
to access family planning services without prior authorization.

 

  G. Submit policies and procedures for the provision of and access to:

1) Family planning services

2) Sexually transmitted disease treatment

3) HIV testing and counseling services

4) Pregnancy termination

5) Minor consent services

6) Immunizations

 

  H. Submit policies and procedures regarding access for disabled members
pursuant to the Americans with Disabilities Act of 1990.

 

  I. Submit policies and procedures regarding Contractor and subcontractor
compliance with the Civil Rights Act of 1964.

 

  J. Submit a written description of the Cultural and Linguistic Services
Program.

 

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Exhibit A, Attachment 18

 

  K. Submit a timeline and work plan for the development and performance of a
Group Needs Assessment.

 

  L. Submit policies and procedures for providing cultural competency,
sensitivity or diversity training for staff, providers, and subcontractors.

 

  M. Submit policies and procedures for monitoring and evaluation of the
Cultural and Linguistic Services Program.

 

  N. Submit policies and procedures for the provision of 24-hour interpreter
services at all provider sites.

 

  O. Submit policies and procedures describing the membership of the Community
Advisory Committee (CAC) and how the Contractor will ensure the CAC will be
involved in appropriate policy decisions.

 

10. Scope of Services

 

  A. Submit policies and procedures for providing Initial Health Assessments
(IHA) for adults and children. Include components (including Behavioral Health
Assessment) of the IHA.

 

  B. Submit policies and procedures, including standards, for the provision of
the following services for Members under 21 years of age:

 

  1) Children’s preventive services

 

  2) Immunizations

 

  3) Blood Lead screens

 

  4) Screening for Chlamydia

 

  5) EPSDT supplemental services

 

  C. Submit policies and procedures for the provision of adult preventive
services, including immunization.

 

  D. Submit policies and procedures for the provision of services to pregnant
women, including:

 

  1) Prenatal care

 

  2) Use of American College of Obstetricians and Gynecologists (ACOG) standards
and guidelines

 

  3) Comprehensive risk assessment tool for all pregnant women

 

  4) Referral to specialists

 

  E. Submit a list of appropriate hospitals available within the provider
network that provide necessary high-risk pregnancy services.

 

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Exhibit A, Attachment 18

 

  F. Provide a detailed description of health education system including
policies and procedures regarding delivery of services, administration and
oversight.

 

  G. Provide a list and schedule of all health education classes and/or
programs.

 

  H. Submit policies and procedures for the provision of:

1) Hospice care

2) Vision care – Lenses

3) Mental health services

4) Tuberculosis services

 

  I. Submit standards and guidelines for the provision of Pharmaceutical
services and prescribed Drugs.

 

  J. Submit a complete drug formulary.

 

  K. Submit a process for review of drug formulary.

 

  L. Submit policies and procedures for conducting drug utilization reviews.

 

11. Case Management and Coordination of Care

 

  A. Submit procedures for monitoring the coordination of care provided to
Members.

 

  B. Submit policies and procedures for coordinating care of Members who are
receiving services from a targeted case management provider.

 

  C. Submit policies and procedures for the referral of Members under the age of
21 years that require case management services.

 

  D. Submit policies and procedures for a disease management program. Include
policies and procedures for identification and referral of Members eligible to
participate in the disease management program.

 

  E. Submit policies and procedures for referral and coordination of care for
Members in need of Specialty Mental Health Services from the local Medi-Cal
mental health plan or other community resources.

 

  F. Submit policies and procedures for resolving disputes between Contractor
and the local mental health plan.

 

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Exhibit A, Attachment 18

 

  G. Submit policies and procedures for identification, referral and
coordination of care for Members requiring alcohol or substance abuse treatment
services from both within and, if necessary, outside the Contractor’s Service
Area.

 

  H. Submit a detailed description of Contractor’s program for Children with
Special Health Care Needs (CSHCN).

 

  I. Submit policies and procedures for identifying and referring children with
CCS-eligible conditions to the local CCS program.

 

  J. Submit policies and procedures for the identification, referral and
coordination of care for Members with developmental disabilities in need of
non-medical services from the local Regional Center and the DDS-administered
Home and Community Based Waiver program.

 

  K. Submit policies and procedures for the identification, referral and
coordination of care for Members at risk of developmental delay and eligible to
receive services from the local Early Start program.

 

  L. Submit policies and procedures for case management coordination of care of
LEA services, including primary care physician involvement in the development of
the Member’s Individual Education Plan or Individual Family Service Plan.

 

  M. Submit policies and procedures for case management coordination of care of
Members who receive services through local school districts or school sites.

 

  N. Submit a description of the cooperative arrangement Contractor has with the
local school districts, including the Subcontracts or written
protocols/guidelines, if applicable.

 

  O. Submit policies and procedures describing the cooperative arrangement that
Contractor has regarding care for children in Foster Care.

 

  P. Submit policies and procedures for identification and referral of Members
eligible to participate in the HIV/AIDS Home and Community Based Waiver Program.

 

  Q. Submit policies and procedures for the provision of dental screening and
covered medical services related to dental services.

 

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Exhibit A, Attachment 18

 

  R. Submit policies and procedures for coordination of care and case management
of Members with the LHD TB Control Officer.

 

  S. Submit policies and procedures for the assessment and referral of Members
with active TB and at risk of non-compliance with TB drug therapy to the LHD.

 

  T. Procedures to identify and refer eligible Members for WIC services.

 

  U. Submit policies and procedures for the assessment and subsequent
disenrollment of Members eligible for the following services:

 

  1) Long-term care

 

  2) Major organ transplants

 

  3) Waiver programs

 

12. Local Health Department Coordination

 

  A. Submit executed Subcontracts or documentation substantiating Contractor’s
efforts to enter into Subcontracts with the LHD for the following public health
services:

 

  1) Family planning services

 

  2) STD services

 

  3) HIV testing and counseling

 

  4) Immunizations

 

  B. Submit executed Subcontracts, Memoranda of Understanding, or documentation
substantiating Contractor’s efforts to negotiate an agreement with the following
programs or agencies:

 

  1) California Children Services (CCS)

 

  2) Maternal and Child Health

 

  3) Child Health and Disability Prevention Program (CHDP)

 

  4) Tuberculosis Direct Observed Therapy

 

  5) Women, Infants, and Children Supplemental Nutrition Program (WIC)

 

  6) Regional centers for services for persons with developmental disabilities.

 

  C. Executed MOU or documentation substantiating Contractor’s efforts to
negotiate a MOU with the local mental health plan.

 

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Exhibit A, Attachment 18

 

13. Member Services

 

  A. Submit policies and procedures that address Member’s rights and
responsibilities. Include method for communicating them to both Members and
providers.

 

  B. Submit policies addressing Member’s rights to confidentiality of medical
information. Include procedures for release of medical information.

 

  C. Submit policies and procedures for addressing advance directives.

 

  D. Submit policies and procedures for the training of Member Services staff.

 

  E. Submit policies and procedures regarding the development content and
distribution of Member information. Address appropriate reading level and
translation of materials.

 

  F. Submit final draft of Member Identification Card and Member Services Guide.

 

  G. Submit policies and procedures for notifying Members of changes in
availability or location of Covered Services.

 

  H. Submit policies and procedures for Member selection of a primary care
physician or non-physician medical practitioner.

 

  I. Submit policies and procedures for Member assignment to a primary care
physician.

 

  J. Submit policies and procedures for notifying primary care provider that a
member has selected or been assigned to the provider within 7-days.

 

  K. Submit policies and procedures demonstrating how, upon entry into the
Contractor’s network, the relationship between traditional and safety-net
providers and their patients is not disrupted, to the maximum extent possible.

 

  L. Submit policies and procedures for notifying Members for denial, deferral,
or modification of requests for Prior Authorization.

 

14. Member Grievance System

 

  A. Submit policies and procedures relating to Contractor’s Member Grievance
system.

 

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Exhibit A, Attachment 18

 

  B. Submit policies and procedures for Contractor’s oversight of the Member
Grievance system for the receipts, processing and distribution including the
expedited review of grievances. Please include a flow chart to demonstrate the
process.

 

  C. Submit format for Quarterly Grievance Log and Report.

 

15. Marketing

 

  A. Submit policies and procedures for training and certification of marketing
representatives.

 

  B. Submit a description of training program, including the marketing
representative’s training/certification manual.

 

  C. Submit Contractor’s marketing plan.

 

  D. Submit copy of boilerplate request form used to obtain CDHS approval of
participation in a marketing event.

 

16. Enrollments and Disenrollments

 

  A. Submit policies and procedures for how Contractor will update and maintain
accurate information on its contracting providers.

 

  B. Submit policies and procedures for how Contractor will access and utilize
enrollment data from CDHS.

 

  C. Submit policies and procedures relating to Member disenrollment, including,
Contractor-initiated disenrollment.

 

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Exhibit B

Budget Detail and Payment Provisions

 

Table of Contents

I. Budget Detail and Payment Provisions

 

  1. Budget Contingency Clause

 

  2. Amounts Payable

 

  3. Contractor Risk in Providing Services

 

  4. Capitation Rates

 

  5. Capitation Rates Constitute Payment in full

 

  6. Determination of Rates

 

  7. Redetermination of Rates-Obligation Changes

 

  8. Reinsurance

 

  9. Catastrophic Coverage Limitation

 

  10. Financial Performance Guarantee

 

  11. Recovery of Capitation Payments

 

  12. Payment of Aids Beneficiary Rate

II. Exhibit B, Attachment 1 – Capitation Rate Sheets

 

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Exhibit B

Budget Detail and Payment Provisions

 

1. Budget Contingency Clause

 

  A. It is mutually agreed that if the Budget Act of the current year and/or any
subsequent years covered under this Agreement does not appropriate sufficient
funds for the program, this Agreement shall be of no further force and effect.
In this event, the State shall have no liability to pay any funds whatsoever to
Contractor or to furnish any other considerations under this Agreement and
Contractor shall not be obligated to perform any provisions of this Agreement.

 

  B. If funding for any fiscal year is reduced or deleted by the Budget Act for
purposes of this program, the State shall have the option to either cancel this
Agreement with no liability occurring to the State, or offer an agreement
amendment to Contractor to reflect the reduced amount.

 

2. Amounts Payable

 

  A. The amounts payable under this agreement shall not exceed:

 

  1) [ILLEGIBLE] for the 2006/07 Fiscal Year ending June 30, 2007.

 

  2) [ILLEGIBLE] for the 2007/08 Fiscal Year ending June 30, 2008.

 

  3) [ILLEGIBLE] for the 2008/09 Fiscal Year ending June 30, 2009.

 

  B. Reimbursement shall be made for allowable expenses up to the amount
annually encumbered commensurate with the state fiscal year in which services
are performed and/or goods are received.

 

3. Contractor Risk In Providing Services

Contractor will assume the total risk of providing the Covered Services on the
basis of the periodic capitation payment for each Member, except as otherwise
allowed in this Contract. Any monies not expended by the Contractor after having
fulfilled obligations under this Contract will be retained by the Contractor.

 

4. Capitation Rates

 

  A. CDHS shall remit to Contractor a capitation payment each month for each
Medi-Cal Member that appears on the approved list of Members supplied to
Contractor by CDHS. The capitation rate shall be the amount specified below. The
payment period for health care services shall commence on the first day of
operations, as determined by CDHS. Capitation payments shall be made in
accordance with the following schedule of capitation payment rates at the end of
the month:

 

Page 1 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

MEDI-CAL ONLY

For the period effective 04/01/07

   Riverside*     

Groups

  

Aid Codes

   Rate     

Family

  

01, 0A, 02, 03, 04, 08, 30, 32, 33, 34, 35,

38, 39, 40, 42, 45, 47, 54, 59, 72, 82, 3A,

3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U,

3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K, 5X, 7A,

7J, 7X, 8P, 8R

     

Disabled

   20, 24, 26, 36, 60, 64, 66, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6V, 2E      

Aged

   10, 14, 16, 1E, 1H      

Adult

   86      

Aids

Beneficiary

        

Breast and

Cervical

Cancer

Treatment

Program

   0N, 0P       MEDI-CAL ONLY

For the period effective 04/01/07

   San Bernardino*     

Groups

  

Aid Codes

   Rate     

Family

  

01, 0A, 02, 03, 04, 08, 30, 32, 33, 34, 35,

38, 39, 40, 42, 45, 47, 54, 59, 72, 82, 3A,

3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P, 3R, 3U,

3W, 4A, 4C, 4F, 4G, 4K, 4M, 5K, 5X, 7A,

7J, 7X, 8P, 8R

     

Disabled

  

20, 24, 26, 36, 60, 64, 66, 6A, 6C, 6E, 6H,

6J, 6N, 6P, 6V, 2E

     

Aged

   10, 14, 16, 1E, 1H      

Adult

   86      

Aids

Beneficiary

        

Breast and

Cervical

Cancer

Treatment

Program

   0N, 0P      

 

Page 3 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

DUAL ELIGIBLES – MEDI-CAL AND MEDICARE (Part D)

For the period effective 04/01/07

  

Riverside*

    

Groups

  

Aid Codes

  

Rate

     Disabled Duals    20, 24, 26, 36, 60, 64, 66, 6A, 6C, 6E, 6H, 6J, 6N, 6P,
6V, 2E       Aged Duals    10, 14, 16, 1E, 1H       Aids Beneficiary Duals      
  

DUAL ELIGIBLES – MEDI-CAL AND MEDICARE (Part D)

  

For the period effective 04/01/07

  

San Bernardino*

    

Groups

  

Aid Codes

  

Rate

     Disabled Duals    20, 24, 26, 36, 60, 64, 66, 6A, 6C, 6E, 6H, 6J, 6N, 6P,
6V, 2E       Aged Duals    10, 14, 16, 1E, 1H       Aids Beneficiary Duals      
  

--------------------------------------------------------------------------------

* The rates for the 2006/07 Rate Period have not been developed as of the
effective date of this contract. Reimbursement for Riverside and San Bernardino
counties which become operational April 1, 2007 will be reimbursed at the above
1/1/06 – 9/30/06 rates from the 2005/06 rate period until the 2006/07 Rate
Period rates are implemented via a contract Change Order or Amendment.

 

  B. If CDHS creates a new aid code that is split or derived from an existing
aid code covered under this Contract, and the aid code has a neutral revenue
effect for the Contractor, then the split aid code will automatically be
included in the same aid code rate group as the original aid code covered under
this Contract Contractor agrees to continue providing Covered Services to the
Members at the monthly capitation rate specified for the original aid code CDHS
shall confirm all aid code splits, and the rates of payment for such new aid
codes, in writing to Contractor as soon as practicable after such aid code
splits occur.

 

Page 4 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  C. Pursuant to Title 42, Code of Federal Regulations, Section 438.6(c)(2)(ii),
the actuarial basis for the computation of the capitation payment rates shall be
set forth in CDHS’ most recent version of the annually-published Rate Manual for
the rate period that is identified in the Capitation Rate Sheets attached hereto
in Exhibit B, Attachment 1. Said Rate Manual is incorporated by reference in
Exhibit E, Provision 1.

 

5. Capitation Rates Constitute Payment In Full

Capitation rates for each rate period, as calculated by CDHS, are prospective
rates and constitute payment in full, subject to any stop loss reinsurance
provisions, on behalf of a Member for all Covered Services required by such
Member and for all Administrative Costs incurred by the Contractor in providing
or arranging for such services. CDHS is not responsible for making payments for
recoupment of losses.

 

6. Determination Of Rates

 

  A. CDHS shall determine the capitation rates for the initial period April 1,
2007 or the Contract effective date of operations, through September 30, 2007.
Subsequent to September 30, 2007 and through the duration of the Contract, CDHS
shall make an annual redetermination of rates in accordance with Title 22, CCR,
Section 53869 for each rate year defined as the 12-month period from October 1,
through September 30. CDHS reserves the right to establish rates on an actuarial
basis for each rate year. All payments and rate adjustments are subject to
appropriations of funds by the Legislature and the Department of Finance
approval. Further, all payments are subject to the availability of Federal
congressional appropriation of funds.

 

  B. Once CDHS establishes rates on an actuarially sound basis, it shall
determine whether the rates shall be increased, decreased, or remain the same.
If it is determined by CDHS that Contractor’s capitation rates shall be
increased or decreased, the increase or decrease shall be effectuated through a
change order to this Contract in accordance with the provisions of Exhibit E,
Attachment 2, provision 4. Change Requirements, subject to the following
provisions:

 

  1) The change order shall be effective as of October 1 of each year covered by
this Contract.

 

  2)

In the event there is any delay in a determination to increase or decrease
capitation rates, so that a change order may not be processed in time to permit
payment of new rates commencing

 

Page 5 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

 

October 1, the payment to Contractor shall continue at the rates then in effect.
Those continued payments shall constitute interim payment only. Upon final
approval of the change order providing for the rate change, CDHS shall make
retroactive adjustments for those months for which interim payment was made.

 

  3) By accepting payment of new annual rates prior to full approval by all
control agencies of the change order to this Contract implementing such new
rates, Contractor stipulates to a confession of judgment for any amounts
received in excess of the final approved rate. If the final approved rate
differs from the rates established by CDHS or agreed upon by Contractor and
CDHS:

 

  a) Any underpayment by the State shall be paid to Contractor within 30
calendar days after final approval of the new rates.

 

  b) Any overpayment to Contractor shall be recaptured by the State’s
withholding the amount due from Contractor’s next capitation check. If the
amount to be withheld from that capitation check exceeds 25 percent of the
capitation payment for that month, amounts up to 25 percent shall be withheld
from successive capitation payments until the overpayment is fully recovered by
the State.

 

  4) If mutual agreement between CDHS and Contractor cannot be attained on
capitation rates for rate years subsequent to September 30, 2007 resulting from
a rate change pursuant to this provision 6 or provision 7 below, Contractor
shall retain the right to terminate the Contract, but no earlier than
September 30, 2008. Notification of intent to terminate a Contract shall be in
writing and provided to CDHS at least nine months prior to the effective date of
termination, subject to any earlier termination date negotiated in accordance
with Exhibit E, Attachment 2, provision 14, regarding Termination – Contractor.
CDHS shall pay the capitation rates last offered for that rate period until the
Contract is terminated.

 

  5) CDHS shall make every effort to notify and consult with Contractor
regarding proposed redetermination of rates pursuant to this section or
provision 7, below at the earliest possible time prior to implementation of the
new rate.

 

7. Redetermination Of Rates - Obligation Changes

The capitation rates may be adjusted during the rate year to provide for a
change in obligations that results in an increase or decrease of more than one
percent of

 

Page 6 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

cost (as defined in Title 22, CCR, Section 53869) to the Contractor. Any
adjustments shall be effectuated through a change order to the Contract subject
to the following provisions:

 

  A. The change order shall be effective as of the first day of the month in
which the change in obligations is effective, as determined by CDHS.

 

  B. In the event CDHS is unable to process the change order in time to permit
payment of the adjusted rates as of the month in which the change in obligations
is effective, payment to Contractor shall continue at the rates then in effect.
Continued payment shall constitute interim payment only. Upon final approval of
the change order providing for the change in obligations, CDHS shall make
adjustments for those months for which interim payment was made.

 

  C. CDHS and Contractor may negotiate an earlier termination date, pursuant to
Exhibit E, Attachment 2, provision 14, regarding Termination – Contractor, if a
change in contractual obligations is created by a State or Federal change in the
Medi-Cal program, or a lawsuit, that substantially alters the financial
assumptions and conditions under which Contractor entered into this Contract,
such that Contractor can demonstrate to the satisfaction of CDHS that it cannot
remain financially solvent until the termination date that would otherwise be
established under this provision.

 

8. Reinsurance

 

  A. Contractor may obtain reinsurance (stop loss coverage) through CDHS or
other insurers to ensure maintenance of adequate capital by Contractor for the
cost of providing Covered Services under this Contract. Reinsurance will not
limit the Contractor’s liability below $5,000 per Member for any 12-month period
as specified by CDHS. The Contractor may obtain reinsurance for both of the
factors described in Title 22, CCR, Section 53252 (a)(2)(A) & (B).

 

  B. If Contractor selects State reinsurance, Contractor will submit a
reinsurance claim form along with copies of the actual claims upon exceeding the
reinsurance threshold. As part of the processing, actual claims are priced to
appropriate Medi-Cal rates and the appropriate amount in excess of the
reinsurance threshold is remitted to the Contractor by CDHS.

 

  1) Claims submitted will not be paid by CDHS unless received by CDHS not later
than the last day of the sixth month following the end of the 12-month contract
period in which they were incurred.

 

Page 7 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  2) The time specified for submission of claims may be extended for a period
not to exceed one year upon a finding of “good cause” by the Director in the
following circumstances:

 

  a) Where the claim involves health coverage, other than Medi-Cal, and the
delay is necessary to permit the Contractor to obtain payment, partial payment,
or proof of non-liability of that other health coverage.

 

  b) Where the claim submission was delayed due to eligibility certification or
determination by the State or county.

 

  c) Where there was substantial interference with claim submission due to
damage to, or destruction of, the Contractor’s (or subcontractor’s) business
office or records by a natural disaster, including fire, flood or earthquake, or
other similar circumstances.

 

  d) Where delay in claims submission was due to other circumstances that are
clearly beyond the control of the Contractor. Circumstances that will not be
considered beyond the control of the Contractor include, but are not limited to:

 

  i. Negligence or delay of the Contractor or Contractor’s employees, agents,
and subcontractors.

 

  ii. Misunderstanding of or unfamiliarity with Medi-Cal regulations, or the
terms of this Contract.

 

  iii. Illness, absence or other incapacity of a Contractor’s employee, agent,
or subcontractor responsible for preparation and submission of claims.

 

  iv. Delays caused by the United States Postal Service or any private delivery
service.

 

9. Catastrophic Coverage Limitation

CDHS may limit the Contractor’s liability to provide or arrange and pay for care
for illness of, or injury to Members, which results from or is greatly
aggravated by, a catastrophic occurrence or disaster. Contractor will return a
prorated amount of the capitation payment following the CDHS Director’s
invocation of the catastrophic coverage limitation. The amount returned will be
determined by dividing the total capitation payment by the number of days in the
month. The amount will be returned to CDHS for each day in the month after the
Director has invoked the catastrophic coverage limitation clause.

 

Page 8 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

10. Financial Performance Guarantee

Contractor shall provide satisfactory evidence of, and maintain Financial
Performance Guarantee in, an amount equal to at least one month’s capitation
payment, in a manner specified by CDHS. At the Contractor’s request, and with
CDHS approval, Contractor may establish a phase-in schedule to accumulate the
required Financial Performance Guarantee. Contractor may elect to satisfy the
Financial Performance Guarantee requirement by receiving payment on a post
payment basis. The Financial Performance Guarantee shall remain in effect for a
period not exceeding 90 calendar days following termination or expiration of
this Contract unless CDHS has a financial claim against Contractor. Further
rights and obligations of the Contractor and the Department, in regards to the
Financial Performance Guarantee, shall be as specified in Title 22, CCR,
Section 53865.

 

11. Recovery Of Capitation Payments

CDHS shall have the right to recover from Contractor amounts paid to Contractor
in the following circumstances as specified:

 

  A. If CDHS determines that a Member has either been improperly enrolled due to
ineligibility of the Member to enroll in Contractor’s plan, residence outside of
Contractor’s Service Area, or pursuant to Title 22, Section 53891(a)(2), or
should have been disenrolled with an effective date in a prior month, CDHS may
recover or, upon request by Contractor, CDHS shall recover the capitation
payments made to Contractor for the Member and absolve Contractor from all
financial and other risk for the provision of services to the Member under the
terms of the Contract for the month(s) in question. In such event, Contractor
may seek to recover any payments made to providers for Covered Services rendered
for the month(s) in question. Contractor shall inform providers that claims for
services provided to Members during the month(s) in question shall be paid by
CDHS’ fiscal intermediary, if the Member is determined eligible for the Medi-Cal
program.

Upon request by Contractor, CDHS may allow Contractor to retain the capitation
payments made for Members that are eligible to enroll in Contractor’s plan, but
should have been retroactively disenrolled pursuant to Exhibit A, Attachment 11,
provision 17. Excluded Services Requiring Member Disenrollment, or under other
circumstances as approved by CDHS. If Contractor retains the capitation
payments, Contractor shall provide or arrange and pay for all Medically
Necessary Covered Services for the Member, until the Member is disenrolled on a
nonretroactive basis pursuant to Exhibit A, Attachment 16, provision 3.
Disenrollment.

 

Page 9 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  B. As a result of Contractor’s failure to perform contractual responsibilities
to comply with mandatory federal Medicaid requirements, the Federal Department
of Health and Human Services (DHHS) may disallow Federal Financial Participation
(FFP) for payments made by CDHS to Contractor. CDHS may recover the amounts
disallowed by DHHS by an offset to the capitation payments made to Contractor.
If recovery of the full amount at one time imposes a financial hardship on
Contractor, CDHS at its discretion may grant a Contractor’s request to repay the
recoverable amounts in monthly installments over a period of consecutive months
not to exceed six (6) months.

 

  C. If CDHS determines that any other erroneous or improper payment not
mentioned above has been made to Contractor, CDHS may recover the amounts
determined by an offset to the capitation payments made to Contractor. If
recovery of the full amount at one time imposes a financial hardship on
Contractor, CDHS, at its discretion, may grant a Contractor’s request to repay
the recoverable amounts in monthly installments over a period of consecutive
months not to exceed six (6) months. At least 30 calendar days prior to seeking
any such recovery, CDHS shall notify Contractor to explain the improper or
erroneous nature of the payment and to describe the recovery process.

 

12. Payment Of AIDS Beneficiary Rate

 

  A. Compensation at the AIDS Beneficiary Rate (ABR)

Subject to Contractor’s compliance with the requirements contained in
subparagraph 1. below, Contractor shall be eligible to receive compensation at
the ABR for AIDS Beneficiaries. Compensation to Contractor at the ABR for each
AIDS Beneficiary shall consist of payment at the ABR less the capitation rate
initially paid for the AIDS beneficiary.

 

  1) Compensation at the ABR shall be subject to the conditions listed below.
Contractor’s failure to comply with any of the conditions listed below for any
request for compensation at the ABR on behalf of an individual AIDS Beneficiary
for a specific month of Enrollment shall result in CDHS’ denial of Contractor’s
claim for compensation at the ABR for that individual AIDS Beneficiary for that
specific month of Enrollment. Contractor may submit a corrected claim, within
the timeframes specified in paragraph d below, that complies with all the
conditions listed below and CDHS shall reimburse Contractor at the ABR.

 

Page 10 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  a) The ABR shall be in lieu of any other compensation for an AIDS Beneficiary
in any month.

 

  b) For AIDS Beneficiaries, Contractor shall be eligible to receive
compensation at the ABR commencing in the month in which a Diagnosis of AIDS is
made and recorded, dated and signed by the treating physician in the AIDS
Beneficiary’s Medical Record.

 

  c) Contractor shall submit an invoice to CDHS by the 25th day of each month
for claims for compensation at the ABR for AIDS Beneficiaries. The invoice shall
include the following:

 

  i. A list of all AIDS Beneficiaries identified by Medi-Cal numbers only for
whom the Contractor is claiming compensation at the ABR. Member names shall not
be used.

 

  ii. The month(s) and year(s) for which compensation at the ABR is being
claimed for each AIDS Beneficiary listed, sorted by month and year of service.

 

  iii. The capitation rate initially paid for the AIDS Beneficiary for each
month being claimed by the Contractor, the ABR being claimed, and the difference
between the ABR and the capitation rate initially paid for the AIDS Beneficiary.

 

  iv. The total amount being claimed on the invoice.

 

  d) Invoices, containing originally submitted claims or corrected claims, for
compensation at the ABR for any month of eligibility during the rate year
beginning October 1, 2006, and ending September 30, 2007, or any rate year
thereafter beginning October 1 and ending September 30, must be submitted by
Contractor to CDHS no later than six months following the end of the subject
rate year.

 

Page 11 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  e) Invoices shall include the Agreement Number and shall be submitted to:

California Department of Health Services

Medi-Cal Managed Care Division

Attn: Fiscal Analysis Unit

Mailing Address: See Exhibit A, Scope of Work, provision 4

In addition, invoices shall:

 

  i. Be prepared on company letterhead.

 

  ii. Bear the Contractor’s name as shown on the agreement.

 

  iii. Be signed by an authorized official, employee or agent.

 

  2) Contractor shall confirm Medi-Cal eligibility of AIDS Beneficiaries prior
to submission of the monthly invoice to CDHS. CDHS may verify the Medi-Cal
eligibility of each Member for whom the ABR is claimed and adjust the invoiced
amounts to reflect any capitation payments that have been previously made to
Contractor for each Member prior to submission of the invoice required under
paragraph 1.c above.

 

  3) If CDHS determines that a Member for whom compensation has been paid at the
ABR did not meet the definition of an AIDS Beneficiary, in a month for which the
ABR was paid, CDHS shall recover any amount improperly paid, by an offset to
Contractor’s capitation payment, in accordance with provision 11. Recovery of
Capitation Payments, paragraph C. CDHS shall give Contractor 30 calendar days
prior written notice of any such offset.

 

  B. Prompt Payment Clause

Payment will be made in accordance with, and within the time specified in,
Chapter 4.5 (commencing with Section 927), Part 3, Division 3.6, of Title 2 of
the Government Code.

 

Page 12 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit B

Budget Detail and Payment Provisions

 

  C. Timely Submission of Final Invoice

 

  1) A final undisputed ABR invoice shall be submitted for payment no more than
90 calendar days following the expiration or termination date of this agreement,
unless a later or alternate deadline is agreed to in writing by the program
contract manager. Said ABR invoice should be clearly marked “Final Invoice -
ABR”, thus indicating that all payment obligations of the State under this
agreement have ceased and that no further payments are due or outstanding.

 

  2) The State may, at its discretion, choose not to honor any delinquent final
ABR invoice if the Contractor fails to obtain prior written State approval of an
alternate final ABR invoice submission deadline. Written State approval shall be
sought from the program contract manager prior to the expiration or termination
date of this agreement.

 

  3) The Contractor is hereby advised of its obligation to submit, with the
final ABR invoice, a “Contractor’s Release (Exhibit F)” acknowledging submission
of the final ABR invoice to the State and certifying the approximate percentage
amount, if any, of recycled products used in performance of this agreement.

 

Page 13 of 13

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E

Additional Provisions

 

Table of Contents

 

I. Additional Provisions

 

  1. Additional Incorporated Exhibits

 

  2. Priority of Provisions

 

II. Attachment 1 – Definitions

 

III. Attachment 2 – Program Terms and Conditions

 

  1. Governing Law

 

  2. Entire Agreement

 

  3. Amendment

 

  4. Change Requirements

 

  5. Delegation of Authority

 

  6. Authority of the State

 

  7. Fulfillment of Obligations

 

  8. Obtaining CDHS Approval

 

  9. Certifications

 

  10. Notices

 

  11. Term

 

  12. Service Area

 

  13. Contract Extension

 

  14. Termination for Cause and Other Terminations

 

  15. Phaseout Requirements

 

  16. Sanctions

 

  17. Liquidated Damages Provisions

 

  18. Disputes

 

  19. Audit

 

  20. Inspection Rights

 

  21. Confidentiality of Information

 

  22. Pilot Projects

 

  23. Cost Avoidance and Post-Payment Recovery of Other Health Coverage Sources
(OHCS)

 

  24. Third-Party Tort Liability

 

  25. Records Related to Recovery for Litigation

 

  26. Fraud and Abuse Reporting

 

  27. Equal Opportunity Employer

 

  28. Discrimination Prohibitions

 

  29. Americans With Disabilities Act of 1990 Requirements

 

  30. Disabled Veterans Business Enterprises (DVBE)

 

  31. Word Usage

 

  32. Parties to State Fair Hearing

 

IV. Attachment 3 – Duties of the State

 

  1. Payment for Services

 

  2. Medical Reviews

 

  3. Enrollment Processing

 

  4. Disenrollment Processing

 

  5. Approval Process

 

  6. Program Information

 

  7. Catastrophic Coverage Limitation

 

  8. Risk Limitation

 

  9. Notice of Termination of Contract

 

Page 1 of 2

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E

Additional Provisions

 

1. Additional Incorporated Provisions

 

  A. The following documents and any subsequent updates are not attached, but
are incorporated herein and made a part hereof by this reference. These
documents may be updated periodically by CDHS, as required by program
directives. CDHS shall provide the Contractor with copies of said documents and
any periodic updates thereto, under separate cover. CDHS will maintain on file,
all documents referenced herein and in any subsequent updates.

 

  1) Managed Care Data Element Dictionary

 

  2) Rate Manual

 

  B. The following documents are not attached, but are incorporated herein and
made a part hereof by this reference. Contractor agrees to provide the
additional performance requirements that exceed the minimum requirements set
forth in the Contract as described in the following documents:

 

  1) Section 4.f. Innovative Quality Improvement Activities

 

  2) Section 5.d. Innovative Utilization Management Activities

 

  3) Section 9.e. Innovative Ideas/Practices

 

  4) Section 13.d. Innovative Member Services Activities

 

  5) Section 14.c. Innovative Activities

 

2. Priority of Provisions

In the even of a conflict between the provisions of Exhibit E and any other
exhibit of this contract, excluding Exhibit C, the provisions of Exhibit E shall
prevail.

 

Page 2 of 2

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 1

 

DEFINITIONS

As used in this Contract, unless otherwise expressly provided or the context
otherwise requires, the following definitions of terms will govern the
construction of this Contract:

 

1. Administrative Costs means only those costs that arise out of the operation
of the plan excluding direct and overhead costs incurred in the furnishing of
health care services, which would ordinarily be incurred in the provision of
these services whether or not through a plan.

 

2. Affiliate means an organization or person that directly or indirectly through
one or more intermediaries’ controls, or is controlled by, or is under control
with the Contractor and that provides services to, or receives services from,
the Contractor.

 

3. AIDS Beneficiary means a Member for whom a Diagnosis of Human
Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS) has been
made by a treating Physician based on the definition most recently published in
the Mortality and Morbidity Report from the Centers for Disease Control and
Prevention.

 

4. Allied Health Personnel means specially trained, licensed, or credentialed
health workers other than Physicians, podiatrists and Nurses.

 

5. Ambulatory Care means the type of health services that are provided on an
outpatient basis.

 

6. Beneficiary Assignment means the act of the California Department of Health
Services (CDHS) or CDHS’ enrollment contractor of notifying a beneficiary in
writing of the health plan in which the beneficiary shall be enrolled if the
beneficiary fails to timely choose a health plan. If, at any time, the
beneficiary notifies CDHS or CDHS’ enrollment contractor of the beneficiary’s
health plan choice, such choice shall override the beneficiary assignment and be
effective as provided in Exhibit A, Attachment 16, provision 2.

 

7. Beneficiary Identification Card (BIC) means a permanent plastic card issued
by the State to Medi-Cal recipients which is used by Contractors and providers
to verify Medi-Cal eligibility and health plan enrollment.

 

8. California Children Services (CCS) means those services authorized by the CCS
program for the diagnosis and treatment of the CCS eligible conditions of a
specific Member.

 

9. California Children Services (CCS) Eligible Conditions means a physically
handicapping condition defined in Title 22, California Code of Regulations
(CCR), Section 41800.

 

Page 1 of 16

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 1

 

10. California Children Services (CCS) Program means the public health program
which assures the delivery of specialized diagnostic, treatment, and therapy
services to financially and medically eligible children under the age of 21
years who have CCS eligible conditions.

 

11. Catastrophic Coverage Limitation means the date beyond which Contractor is
not at risk, as determined by the Director, to provide or make reimbursement for
illness of or injury to beneficiaries which results from or is greatly
aggravated by a catastrophic occurrence or disaster, including, but not limited
to, an act of war, declared or undeclared, and which occurs subsequent to
enrollment.

 

12. Claims and Eligibility Real-Time System (CERTS) means the mechanism for
verifying a recipient’s Medi-Cal or County Medical Services Program (CMSP)
eligibility by computer.

 

13. Comprehensive Medical Case Management Services means services provided by a
Primary Care Provider to ensure the coordination of Medically Necessary health
care services, the provision of preventive services in accordance with
established standards and periodicity schedules and the continuity of care for
Medi-Cal enrollees. It includes health risk assessment, treatment planning,
coordination, referral, follow-up, and monitoring of appropriate services and
resources required to meet an individual’s health care needs.

 

14. Confidential Information means specific facts or documents identified as
“confidential” by any law, regulations or contractual language.

 

15. Contract means this written agreement between CDHS and the Contractor.

 

16. Contracting Providers means a Physician, Nurse, technician, teacher,
researcher, hospital, home health agency, nursing home, or any other individual
or institution that contracts with Contractor to provide medical services to
Members.

 

17. Corrective Actions means specific identifiable activities or undertakings of
the Contractor which address program deficiencies or problems.

 

18. Cost Avoid means Contractor requires a provider to bill all liable third
parties and receive payment or proof of denial of coverage from such third
parties prior to Contractor paying the provider for the services rendered.

 

19. County Department means the County Department of Social Services (DSS), or
other county agency responsible for determining the initial and continued
eligibility for the Medi-Cal program.

 

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Exhibit E, Attachment 1

 

20. Covered Services means Medical Case Management and those services set forth
in Title 22, CCR, Division 3, Subdivision 1, Chapter 3, beginning with
Section 51301, and Title 17, CCR, Chapter 4, Subchapter 13, Article 4, beginning
with Section 6840. Covered Services do not include:

 

  A. Services for major organ transplants as specified in Exhibit A, Attachment
11, provision 17.

 

  B. Long-term care services as specified in Exhibit A, Attachment 11, provision
17.

 

  C. Home and Community Based Services (HCBS) as specified in Exhibit A,
Attachment 11, provision 17 regarding Waiver Programs, and Department of
Developmental Services (DDS) Administered Medicaid Home and Community Based
Services Waiver. HCBS do not include any service that is available as an EPSDT
service, including EPSDT supplemental services, as described in Title 22, CCR,
Sections 51184, 51340 and 51340.1. EPSDT supplemental services are covered under
this Contract, as specified in Exhibit A, Attachment 10 regarding Early and
Periodic Screening, Diagnosis and Treatment (EPSDT) Supplemental Services.

 

  D. California Children Services (CCS) as specified in Exhibit A, Attachment
11, provision 8.

 

  E. Specialty Mental health services as specified in Exhibit A, Attachment 11,
provision 5.

 

  F. Services provided by psychiatrists; psychologists; licensed clinical social
workers; marriage, family, and child counselors; or other specialty mental
health provider.

 

  G. Alcohol and substance abuse treatment services and outpatient heroin
detoxification as specified in Exhibit A, Attachment 11, provision 6.

 

  H. Fabrication of optical lenses as specified in Exhibit A, Attachment 10,
provision 7.

 

  I. Directly observed therapy for treatment of tuberculosis as specified in
Exhibit A, Attachment 11, provision 15.

 

  J. Dental services as specified in Title 22, CCR, Section 51307 and EPSDT
supplemental dental services as described in Title 22, CCR, Section 51340.1(a).
However, Contractor is responsible for all Covered Services as specified in
Exhibit A, Attachment 11, provision 14 regarding dental services.

 

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Exhibit E, Attachment 1

 

  K. Acupuncture services as specified in Title 22, CCR, Section 51308.5. L.
Chiropractic services as specified in Title 22, CCR, Section 51308. M. Prayer or
spiritual healing as specified in Title 22, CCR, Section 51312.

 

  N. Local Education Agency (LEA) assessment services as specified in Title 22,
CCR, Section 51360(b) provided to a Member who qualifies for LEA services based
on Title 22, CCR, Section 51190.1.

 

  O. Any LEA services as specified in Title 22, CCR, Section 51360 provided
pursuant to an Individualized Education Plan (IEP) as set forth in Education
Code, Section 56340 et seq. or an Individualized Family Service Plan (IFSP) as
set forth in Government Code Section 95020, or LEA services provided under an
Individualized Health and Support Plan (IHSP), as described in Title 22, CCR,
Section 51360.

 

  P. Laboratory services provided under the State serum alphafetoprotein-testing
program administered by the Genetic Disease Branch of CDHS.

 

  Q. Adult Day Health Care. R. Pediatric Day Health Care. S. Personal Care
Services. T. State Supported Services.

 

  U. Targeted case management services as specified in Title 22, CCR, Sections
51185 and 51351, and as described in Exhibit A, Attachment 11, provision 2.

 

  V. Childhood lead poisoning case management provided by County health
departments.

 

  W. Psychotherapeutic drugs listed in Exhibit A, Attachment 10-A, and
psychotherapeutic drugs classified as Anti-Psychotics and approved by the FDA
after July 1, 1997.

 

  X. Human Immunodeficiency Virus (HIV) and AIDS drugs listed in Exhibit A,
Attachment 10-B, and HIV/AIDS drugs classified as Nucleoside Analogs, Protease
Inhibitors, Fusion Inhibitors and Non-Nucleoside Reverse Transcriptase
Inhibitors approved by the federal Food and Drug Administration (FDA) after
March 1, 2003.

 

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Exhibit E, Attachment 1

 

21. Credentialing means the recognition of professional or technical competence.
The process involved may include registration, certification, licensure and
professional association membership.

 

22. Department of Health and Human Services (DHHS) means the federal agency
responsible for management of the Medicaid program.

 

23. California Department of Health Services (CDHS) means the single State
Department responsible for administration of the federal Medicaid (referred to
as Medi-Cal in California) Program, California Children Services (CCS),
Genetically Handicapped Persons Program (GHPP), Child Health and Disabilities
Prevention (CHDP), and other health related programs.

 

24. Department of Managed Health Care (DMHC) means the State agency responsible
for administering the Knox-Keene Health Care Service Plan Act of 1975.

 

25. Department of Mental Health (DMH) means the State agency, in consultation
with the California Mental Health Directors Association (CMHDA) and California
Mental Health Planning Council, which sets policy and administers for the
delivery of community based public mental health services statewide.

 

26. Diagnosis of AIDS means a clinical diagnosis of AIDS that meets the most
recent communicable disease surveillance case definition of AIDS established by
the federal Centers for Disease Control and Prevention (CDC), United States
Department of Health and Human Services, and published in the Morbidity and
Mortality Weekly Report (MMWR) or its supplements, in effect for the month in
which the clinical diagnosis is made.

 

27. Dietitian/Nutritionist means a person who is registered or eligible for
registration as a Registered Dietitian by the Commission on Dietetic
Registration (Business and Professions Code, Chapter 5.65, Sections 2585 and
2586).

 

28. Director means the Director of the California Department of Health Services.

 

29. Disproportionate Share Hospital (DSH) means a health Facility licensed
pursuant to Chapter 2, Division 2, Health and Safety Code, to provide acute
inpatient hospital services, which is eligible to receive payment adjustments
from the State pursuant to W&I Code, Section 14105.98.

 

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Exhibit E, Attachment 1

 

30. Eligible Beneficiary means any Medi-Cal beneficiary who is residing in the
Contractor’s Service Area with one of the following aid codes:

Mandatory Aid Codes:

 

  Group 1 – Family:

01, 02, 08, 0A, 30, 32, 33, 34, 35, 38, 39, 3A, 3C, 3E, 3G, 3H, 3L, 3M, 3N, 3P,

3R, 3U, 3W, 47, 54, 59, 5X, 72, 7A, 7X, 82, 8P, 8R

Non-Mandatory Aid Codes:

Group 1 – Family:

03, 04, 40, 42, 45, 4A, 4C, 4F, 4G, 4K, 4M, 5K, 7J

Group 2 – Disabled:

20, 24, 26, 2E, 36, 60, 64, 66, 6A, 6C, 6E, 6H, 6J, 6N, 6P, 6V

Group 3 – Aged:

10, 14, 16, 1E, 1H

Group 4 – Adult:

86

Group 5 – Breast & Cervical Cancer Treatment Program (BCCTP):

0N, 0P

An Eligible Beneficiary may continue to be a Member following any
redetermination of Medi-Cal eligibility that determines that the individual is
eligible for, and the individual thereafter enrolls in, the BCCTP.

The following exclusions apply to all the above:

 

  A. Individuals who have been approved by the Medi-Cal Field Office or the
California Children Services Program for any major organ transplant that is a
Medi-Cal FFS benefit except kidney transplants.

 

  B. Individuals who elect and are accepted to participate in the following
Medi-Cal waiver programs: In-Home Medical Care Waiver, the Nursing Facility
Subacute Waiver, and the Nursing Facility A/B Waiver.

 

  C. Individual determined by the Medi-Cal Field Office to be in need of long
term care and residing in a Skilled Nursing Facility for 30 calendar days past
the month of admission.

 

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Exhibit E, Attachment 1

 

  D. Individuals who have commercial or Medicare HMO coverage, unless the
Medicare HMO is a provider under this Contract and CDHS has agreed, as a term of
the HMO’s contract, that these individuals may be enrolled. Individuals with
Medicare fee-for-service coverage are not excluded from enrolling under this
Contract.

 

31. Emergency Medical Condition means a medical condition (including emergency
labor and delivery) manifesting itself by acute symptoms of sufficient severity
(including severe pain) such that a prudent lay person, who possesses an average
knowledge of health and medicine, could reasonably expect the absence of
immediate medical attention to result in any of the following:

 

  A. Placing the health of the individual (or, in the case of a pregnant woman,
the health of the woman or her unborn child) in serious jeopardy.

 

  B. Serious impairment to bodily function.

 

  C. Serious dysfunction of any bodily organ or part.

 

32. Emergency Services means those health services needed to evaluate or
stabilize an Emergency Medical Condition.

 

33. Encounter means any single medically related service rendered by (a) medical
provider(s) to a Member enrolled in the health plan during the date of service.
It includes, but is not limited to, all services for which the Contractor
incurred any financial liability.

 

34. Enrollment means the process by which an Eligible Beneficiary becomes a
Member of the Contractor’s plan.

 

35. External Accountability Set (EAS) means a set of HEDIS® and CDHS-developed
performance measures selected by CDHS for evaluation of health plan performance.

 

36. External Quality Review Organization (EQRO) means a Peer Review Organization
(PRO), PRO-like entity, or accrediting body that is an expert in the scientific
review of the quality of health care provided to Medicaid beneficiaries in a
State’s Medicaid managed care plans.

 

37. Facility means any premise that is:

 

  A. Owned, leased, used or operated directly or indirectly by or for the
Contractor or its Affiliates for purposes related to this Contract, or

 

  B. Maintained by a provider to provide services on behalf of the Contractor.

 

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Exhibit E, Attachment 1

 

38. Federal Financial Participation means federal expenditures provided to match
proper State expenditures made under approved State Medicaid plans.

 

39. Federally Qualified Health Center (FQHC) means an entity defined in
Section 1905 of the Social Security Act (42 United States Code
Section 1396d(l)(2)(B)).

 

40. Federally Qualified Health Maintenance Organization (FQHMO) means a prepaid
health delivery plan that has fulfilled the requirements of the HMO Act, along
with its amendments and regulations, and has obtained the Federal Government’s
qualification status under Section 1310(d) of the Public Health Service Act (42
USC §300e).

 

41. Fee-For-Service (FFS) means a method of payment based upon per unit or per
procedure billing for services rendered to an Eligible Beneficiary.

 

42. Fee-For-Service Medi-Cal means the component of the Medi-Cal Program which
Medi-Cal providers are paid directly by the State for services not covered under
this Contract.

 

43. Fee-For-Service Medi-Cal Mental Health Services (FFS/MC) means the services
covered through Fee-For-Service Medi-Cal which includes mental health outpatient
services and acute care inpatient services.

 

44. Financial Performance Guarantee means cash or cash equivalents which are
immediately redeemable upon demand by CDHS, in an amount determined by CDHS,
which shall not be less than one full month’s capitation.

 

45. Financial Statements means the Financial Statements which include a Balance
Sheet, Income Statement, Statement of Cash Flows, Statement of Equity and
accompanying footnotes prepared in accordance with Generally Accepted Accounting
Principles.

 

46. Fiscal Year (FY) means any 12-month period for which annual accounts are
kept. The State Fiscal Year is July 1 through June 30, the federal Fiscal Year
is October 1 through September 30.

 

47. Health Maintenance Organization (HMO) means an organization that is not a
federally qualified HMO, but meets the State Plan’s definition of an HMO
including the requirements under Section 1903(m)(2)(A)(i-vii) of the Social
Security Act. An Organization that, through a coordinated system of health care,
provides or assures the delivery of an agreed upon set of comprehensive health
maintenance and treatment services for an enrolled group of persons through a
predetermined periodic fixed prepayment.

 

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Exhibit E, Attachment 1

 

48. Health Plan Employer Data and Information Set (HEDIS®) means the set of
standardized performance measures sponsored and maintained by the National
Committee for Quality Assurance.

 

49. HEDIS® Compliance Audit means an audit process that uses specific standards
and guidelines for assessing the collection, storage, analysis, and reporting of
HEDIS® measures. This audit process is designed to ensure accurate HEDIS®
reporting.

 

50. Indian Health Service (IHS) Facilities means Facilities operated with funds
from the IHS under the Indian Self-Determination Act and the Indian Health Care
Improvement Act, through which services are provided, directly or by contract,
to the eligible Indian population within a defined geographic area. (See Title
22, Section 55000.)

 

51. Intermediate Care Facility (ICF) means a Facility which is licensed as an
ICF by CDHS or a hospital or Skilled Nursing Facility which meets the standards
specified in Title 22, CCR, Section 51212 and has been certified by CDHS for
participation in the Medi-Cal program.

 

52. Joint Commission on the Accreditation of Health Care Organizations (JCAHO)
means the organization composed of representatives of the American Hospital
Association, the American Medical Association, the American College of
Physicians, the American College of Surgeons, and the American Dental
Association. JCAHO provides health care accreditation and related services that
support performance improvement in health care organizations.

 

53. Knox-Keene Health Care Service Plan Act of 1975 means the law that regulates
HMOs and is administrated by the DMHC, commencing with Section 1340, Health &
Safety Code.

 

54. Marketing means any activity conducted on behalf of the Contractor where
information regarding the services offered by the Contractor is disseminated in
order to persuade Eligible Beneficiaries to enroll. Marketing also includes any
similar activity to secure the endorsement of any individual or organization on
behalf of the Contractor.

 

55. Marketing Representative means a person who is engaged in marketing
activities on behalf of the Contractor.

 

56. Medi-Cal Eligibility Data System (MEDS) means the automated eligibility
information processing system operated by the State which provides on-line
access for recipient information, update of recipient eligibility data and
on-line printing of immediate need beneficiary identification cards.

 

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Exhibit E, Attachment 1

 

57. Medical Records means written documentary evidence of treatments rendered to
plan Members.

 

58. Medically Necessary or Medical Necessity means reasonable and necessary
services to protect life, to prevent significant illness or significant
disability, or to alleviate severe pain through the diagnosis or treatment of
disease, illness, or injury.

When determining the Medical Necessity of Covered Services for a Medi-Cal
beneficiary under the age of 21, “Medical Necessity” is expanded to include the
standards set forth in Title 22, CCR, Section 51340 and 51340.1.

 

59. Member means any Eligible Beneficiary who has enrolled in the Contractor’s
plan. For the purposes of this Contract, “Enrollee” shall have the same meaning
as “Member”.

 

60. Member Grievance means an oral or written expression of dissatisfaction,
including any complaint, dispute, request for reconsideration or appeal made by
a Member. CDHS considers complaints and appeals the same as a grievance.

 

61. Minimum Performance Level refers to a minimum requirement of performance of
Contractor on each of the External Accountability Set measures.

 

62. Minor Consent Services means those Covered Services of a sensitive nature
which minors do not need parental consent to access, related to:

 

  A. Sexual assault, including rape.

 

  B. Drug or alcohol abuse for children 12 years of age or older.

 

  C. Pregnancy.

 

  D. Family planning.

 

  E. Sexually transmitted diseases (STDs), designated by the Director, in
children 12 years of age or older.

 

  F. Outpatient mental health care for children 12 years of age or older who are
mature enough to participate intelligently and where either (1) there is a
danger of serious physical or mental harm to the minor or others or (2) the
children are the alleged victims of incest or child abuse.

 

63. National Committee for Quality Assurance (NCQA) is a non-profit organization
committed to evaluating and publicly reporting on the quality of managed care
plans.

 

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Exhibit E, Attachment 1

 

64. NCQA Licensed Audit Organization is an entity licensed to provide auditors
certified to conduct HEDIS Compliance Audits.

 

65. Newborn Child means a child born to a Member during her membership or the
month prior to her membership.

 

66. Non-Emergency Medical Transportation means inclusion of services outlined in
Title 22, CCR, Sections 51231.1 and 51231.2 rendered by licensed providers.

 

67. Non-Medical Transportation means transportation of Members to medical
services by passenger car, taxicabs, or other forms of public or private
conveyances provided by persons not registered as Medi-Cal providers. Does not
include the transportation of sick, injured, invalid, convalescent, infirm, or
otherwise incapacitated Members by ambulances, litter vans, or wheelchair vans
licensed, operated and equipped in accordance with State and local statutes,
ordinances or regulations.

 

68. Non-Physician Medical Practitioners (Mid-Level Practitioner) means a nurse
practitioner, certified nurse midwife, or physician assistant authorized to
provide Primary Care under Physician supervision.

 

69. Not Reported means: 1) Contractor calculated the measure but the result was
materially biased; 2) Contractor did not calculate the measure even though a
population existed for which the measure could have been calculated; and/or, 3)
Contractor calculated the measure but chose not to report the rate.

 

70. Nurse means a person licensed by the California Board of Nursing as, at
least, a Registered Nurse (RN).

 

71. Other Healthcare Coverage Sources (OHCS) means the responsibility of an
individual or entity, other than Contractor or the Member, for the payment of
the reasonable value of all or part of the healthcare benefits provided to a
Member. Such OHCS may originate under any other State, federal or local medical
care program or under other contractual or legal entitlement, including, but not
limited to, a private group or indemnification program. This responsibility may
result from a health insurance policy or other contractual agreement or legal
obligation, excluding tort liability.

 

72. Outpatient Care means treatment provided to a Member who is not confined in
a health care Facility.

 

73. Pediatric Subacute Care means health care services needed by a person under
21 years of age who uses a medical technology that compensates for the loss of
vital bodily function. Medical Necessity criteria are described in the
Physician’s Manual of Criteria for Medi-Cal Authorization.

 

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Exhibit E, Attachment 1

 

74. Physician means a person duly licensed as a Physician by the Medical Board
of California.

 

75. Physician Incentive Plan means any compensation arrangement between
Contractor and a Physician or a Physician group that may not directly or
indirectly have the effect of reducing or limiting services provided to Members
under this Contract.

 

76. Policy Letter means a document that has been dated, numbered, and issued by
the Medi-Cal Managed Care Division, provides clarification of Contractor’s
obligations pursuant to this Contract, and may include instructions to the
Contractor regarding implementation of mandated changes in State or federal
statutes or regulations, or pursuant to judicial interpretation.

 

77. Post-Payment Recovery means Contractor pays the provider for the services
rendered and then uses all reasonable efforts to recover the cost of the
services from all liable third parties.

 

78. Potential Enrollee means a Medi-Cal recipient who is subject to mandatory
enrollment or may voluntarily elect to enroll in a given managed care program,
but is not yet an enrollee of a specific plan.”

 

79. Preventive Care means health care designed to prevent disease and /or its
consequences.

 

80. Primary Care means a basic level of health care usually rendered in
ambulatory settings by general practitioners, family practitioners, internists,
obstetricians, pediatricians, and mid-level practitioners. This type of care
emphasizes caring for the Member’s general health needs as opposed to
specialists focusing on specific needs.

 

81. Primary Care Physician (PCP) means a Physician responsible for supervising,
coordinating, and providing initial and Primary Care to patients and serves as
the medical home for Members. The medical home is where care is accessible,
continuous, comprehensive, and culturally competent. The PCP is a general
practitioner, internist, pediatrician, family practitioner, or
obstetrician/gynecologist (OB/GYN).

 

82. Primary Care Provider means a person responsible for supervising,
coordinating, and providing initial and Primary Care to patients; for initiating
referrals; and, for maintaining the continuity of patient care. A Primary Care
Provider may be a Primary Care Physician or Non-Physician Medical Practitioner.

 

83. Prior Authorization means a formal process requiring a health care provider
to obtain advance approval to provide specific services or procedures.

 

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Exhibit E, Attachment 1

 

84. Provider Grievance means an oral or written expression of dissatisfaction,
including any complaint, dispute, request for reconsideration or appeal made by
a Provider. CDHS considers complaints and appeals the same as a grievance.

 

85. Quality Improvement (QI) means the result of an effective Quality
Improvement System.

 

86. Quality Improvement Projects (QIPs) means studies selected by Medi-Cal
Managed Care Plans, either independently or in collaboration with CDHS and other
participating health plans, to be used for quality improvement purposes. The
studies include four phases and may occur within a 24 month time frame.

 

87. Quality Improvement System (QIS) means the systematic activities to monitor
and evaluate the medical care delivered to Members according to the standards
set forth in regulations and Contract language. Contractor must have processes
in place, which measure the effectiveness of care, identify problems, and
implement improvement on a continuing basis.

 

88. Quality of Care means the degree to which health services for individuals
and populations increase the likelihood of desired health outcomes and are
consistent with current professional knowledge.

 

89. Quality Indicators means measurable variables relating to a specific clinic
or health services delivery area which are reviewed over a period of time to
screen delivered health care and to monitor the process or outcome of care
delivered in that clinical area.

 

90. Rural Health Clinic (RHC) means an entity defined in Title 22, CCR,
Section 51115.5.

 

91. Safety-Net Provider means any provider of comprehensive primary care or
acute hospital inpatient services that provides these services to a significant
total number of Medi-Cal and charity and/or medically indigent patients in
relation to the total number of patients served by the provider. Examples of
safety net providers include Federally Qualified Health Centers; governmentally
operated health systems; community health centers; rural and Indian Health
Service Facilities; disproportionate share hospitals; and, public, university,
rural, and children’s hospitals.

 

92. Service Area means the county or counties that the Contractor is approved to
operate in under the terms of this Contract. A Service Area may have designated
ZIP Codes (under the U.S. Postal Service) within a county that are approved by
CDHS to operate under the terms of this Contract.

 

93. Service Location means any location at which a Member obtains any health
care service provided by the Contractor under the terms of this Contract.

 

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Exhibit E, Attachment 1

 

94. Skilled Nursing Facility (SNF) means, as defined in Title 22, CCR,
Section 51121(a), any institution, place, building, or agency which is licensed
as a SNF by CDHS or is a distinct part or unit of a hospital, meets the standard
specified in Section 51215 of these regulations (except that the distinct part
of a hospital does not need to be licensed as a SNF) and has been certified by
CDHS for participation as a SNF in the Medi-Cal program. Section 51121(b)
further defines the term “Skilled Nursing Facility” as including terms “skilled
nursing home”, “convalescent hospital”, “nursing home”, or “nursing Facility”.

 

95. Specialty Mental Health Provider means a person or entity who is licensed,
certified or otherwise recognized or authorized under State law governing the
healing arts to provide Specialty Mental Health Services and who meets the
standards for participation in the Medi-Cal program.

 

96. Specialty Mental Health Service means:

 

  A. Rehabilitative services, which includes mental health services, medication
support services, day treatment intensive, day rehabilitation, crisis
intervention, crisis stabilization, adult residential treatment services, crisis
residential services, and psychiatric health facility services;

 

  B. Psychiatric inpatient hospital services;

 

  C. Targeted Case Management;

 

  D. Psychiatrist services;

 

  E. Psychologist services; and,

 

  F. EPSDT supplemental specialty mental health services.

 

97. State means the State of California.

 

98. State Supported Services means those services that are provided under a
different contract between the Contractor and the Department.

 

99. Subacute Care means, as defined in Title 22, CCR, Section 51124.5, a level
of care needed by a patient who does not require hospital acute care but who
requires more intensive licensed skilled nursing care than is provided to the
majority of patients in a SNF.

 

100. Subcontract means a written agreement entered into by the Contractor with
any of the following:

 

  A. A provider of health care services who agrees to furnish Covered Services
to Members.

 

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Exhibit E, Attachment 1

 

  B. Any other organization or person(s) who agree(s) to perform any
administrative function or service for the Contractor specifically related to
fulfilling the Contractor’s obligations to CDHS under the terms of this
Contract.

 

101. Sub-Subcontractor means any party to an agreement with a subcontractor
descending from and subordinate to a Subcontract, which is entered into for the
purpose of providing any goods or services connected with the obligations under
this Contract.

 

102. Supplemental Security Income (SSI) means the program authorized by Title
XVI of the Social Security Act for aged, blind, and disabled persons.

 

103. Targeted Case Management (TCM) means services which assist Medi-Cal Members
within specified target groups to gain access to needed medical, social,
educational and other services. In prescribed circumstances, TCM is available as
a Medi-Cal benefit as a discrete service, as well as through State or local
government entities and their contractors.

 

104. Third Party Tort Liability (TPTL) means the responsibility of an individual
or entity other than Contractor or the Member for the payment of claims for
injuries or trauma sustained by a Member. This responsibility may be
contractual, a legal obligation, or as a result of, or the fault or negligence
of, third parties (e.g., auto accidents or other personal injury casualty claims
or Workers’ Compensation appeals).

 

105. Traditional Provider means any physician who has delivered services to
Medi-Cal beneficiaries within the last six months either through FFS Medi-Cal or
a Medi-Cal Managed Care plan. The term includes physician and hospital providers
only, either profit or non-profit entities, publicly or non-publicly owned and
operated.

 

106. Urgent Care means services required to prevent serious deterioration of
health following the onset of an unforeseen condition or injury (i.e., sore
throats, fever, minor lacerations, and some broken bones).

 

107. Utilization Review means the process of evaluating the necessity,
appropriateness, and efficiency of the use of medical services, procedures and
Facilities.

 

108. Vaccines for Children (VFC) Program means the federally funded program that
provides free vaccines for eligible children (including all Medi-Cal eligible
children age 18 or younger) and distributes immunization updates and related
information to participating providers. Providers contracting with the
Contractor are eligible to participate in this program.

 

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Exhibit E, Attachment 1

 

109. Working day(s) mean State calendar (State Appointment Calendar, Standard
101) working day(s).

 

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Exhibit E, Attachment 2

 

PROGRAM TERMS AND CONDITIONS

 

1. Governing Law

In addition to Exhibit C, provision 14. Governing Law, Contractor also agrees to
the following:

 

  A. If it is necessary to interpret this Contract, all applicable laws may be
used as aids in interpreting the Contract. However, the parties agree that any
such applicable laws shall not be interpreted to create contractual obligations
upon CDHS or Contractor, unless such applicable laws are expressly incorporated
into this Contract in some section other than this provision, Governing Law.
Except for provision 16. Sanctions, and provision 17. Liquidated Damages
Provision, the parties agree that any remedies for CDHS’ or Contractor’s
non-compliance with laws not expressly incorporated into this Contract, or any
covenants implied to be part of this Contract, shall not include money damages,
but may include equitable remedies such as injunctive relief or specific
performance. This Contract is the product of mutual negotiation, and if any
ambiguities should arise in the interpretation of this Contract, both parties
shall be deemed authors of this Contract.

 

  B. Any provision of this Contract which is in conflict with current or future
applicable Federal or State laws or regulations is hereby amended to conform to
the provisions of those laws and regulations. Such amendment of the Contract
shall be effective on the effective date of the statutes or regulations
necessitating it, and shall be binding on the parties even though such amendment
may not have been reduced to writing and formally agreed upon and executed by
the parties.

Such amendment shall constitute grounds for termination of this Contract in
accordance with the procedures and provisions of provision 14, paragraph C.
Termination - Contractor. The parties shall be bound by the terms of the
amendment until the effective date of the termination.

 

  C. The final Balanced Budget Act of 1997 regulations are published in the
Federal Register/ Volume 67, Number 115/ June 14, 2002, at 42 Code of Federal
Regulations, Parts 400, 430, 431, 434, 435, 438, 440 and 447. Contractor shall
be in compliance with the final Balance Budget Act of 1997 regulations by
August 13, 2003.

 

  D. All existing final Policy Letters issued by MMCD can be viewed at
www.dhs.ca.gov/mcs/mcmcd and shall be complied with by Contractor. All Policy
Letters issued by MMCD subsequent to the effective date of this Contract shall
provide clarification of Contractors obligations pursuant to this Contract, and
may include instructions to the Contractor regarding implementation of mandated
obligations pursuant to changes in State or federal statutes or regulations, or
pursuant to judicial interpretation.

 

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In the event CDHS determines that there is an inconsistency between this
Contract and a Policy Letter, the Contract shall prevail.

 

2. Entire Agreement

This written Contract and any amendments shall constitute the entire agreement
between the parties. No oral representations shall be binding on either party
unless such representations are reduced to writing and made an amendment to the
Contract.

 

3. Amendment Process

In addition to Exhibit C, provision 2. Amendment, Contractor also agrees to the
following:

Should either party, during the life of this Contract, desire a change in this
Contract, that change shall be proposed in writing to the other party. The other
party shall acknowledge receipt of the proposal within ten (10) calendar days of
receipt of the proposal. The party proposing any such change shall have the
right to withdraw the proposal any time prior to acceptance or rejection by the
other party. Any proposal shall set forth an explanation of the reason and basis
for the proposed change and the text of the desired amendment to this Contract
which would provide for the change. If the proposal is accepted, this Contract
shall be amended to provide for the change mutually agreed to by the parties on
the condition that the amendment is approved by DHHS, and the State Department
of Finance, if necessary.

 

4. Change Requirements

 

  A. General Provisions

The parties recognize that during the life of this Contract, the Medi-Cal
Managed Care program will be a dynamic program requiring numerous changes to its
operations and that the scope and complexity of changes will vary widely over
the life of the Contract. The parties agree that the development of a system
which has the capability to implement such changes in an orderly and timely
manner is of considerable importance.

 

  B. Contractor’s Obligation to Implement

The Contractor will make changes mandated by CDHS. In the case of mandated
changes in regulations, statutes, federal guidelines, or judicial
interpretation, CDHS may direct the Contractor to immediately begin

 

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implementation of any change by issuing a change order. If CDHS issues a change
order, the Contractor will be obligated to implement the required changes while
discussions relevant to any capitation rate adjustment, if applicable, are
taking place.

CDHS may, at any time, within the general scope of the Contract, by written
notice, issue change orders to the Contract.

 

  C. Moral or Religious Objections to Providing a Service

If the Contractor has a moral or religious objection to providing a service or
referral for a service for which the Contractor is not responsible, during the
term of this agreement, the Contractor shall notify the CDHS in writing
providing sufficient detail to establish the moral or religious grounds for the
objection.

 

5. Delegation Of Authority

CDHS intends to implement this Contract through a single administrator, called
the “Contracting Officer”. The Director of CDHS will appoint the Contracting
Officer. The Contracting Officer, on behalf of CDHS, will make all
determinations and take all actions as are appropriate under this Contract,
subject to the limitations of applicable Federal and State laws and regulations.
The Contracting Officer may delegate his/her authority to act to an authorized
representative through written notice to the Contractor.

Contractor will designate a single administrator; hereafter called the
“Contractor’s Representative”. The Contractor’s Representative, on behalf of the
Contractor, will make all determinations and take all actions as are appropriate
to implement this Contract, subject to the limitations of the Contract, Federal
and State laws and regulations. The Contractor’s Representative may delegate
his/her authority to act to an authorized representative through written notice
to the Contracting Officer. The Contractor’s Representative will be empowered to
legally bind the Contractor to all agreements reached with CDHS.

Contractor shall designate Contractor’s Representative in writing and shall
notify the Contracting Officer in accordance with Exhibit E, Attachment 2,
provision 10. Notices.

 

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6. Authority of the State

Sole authority to establish, define, or determine the reasonableness, the
necessity and level and scope of covered benefits under the Medi-Cal Managed
Care program administered in this Contract or coverage for such benefits, or the
eligibility of the beneficiaries or providers to participate in the Medi-Cal
Managed Care Program reside with CDHS.

Sole authority to establish or interpret policy and its application related to
the above areas will reside with CDHS.

The Contractor may not make any limitations, exclusions, or changes in benefits
or benefit coverage; any changes in definition or interpretation of benefits; or
any changes in the administration of the Contract related to the scope of
benefits, allowable coverage for those benefits, or eligibility of beneficiaries
or providers to participate in the program, without the express, written
direction or approval of the Contracting Officer.

 

7. Fulfillment of Obligations

No covenant, condition, duty, obligation, or undertaking continued or made a
part of this Contract will be waived except by written agreement of the parties
hereto, and forbearance or indulgence in any other form or manner by either
party in any regard whatsoever will not constitute a waiver of the covenant,
condition, duty, obligation, or undertaking to be kept, performed or discharged
by the party to which the same may apply; and, until performance or satisfaction
of all covenants, conditions, duties, obligations, and undertakings is complete,
the other party will have the right to invoke any remedy available under this
Contract, or under law, notwithstanding such forbearance or indulgence.

 

8. Obtaining CDHS Approval

Contractor shall obtain written approval from CDHS, as provided in Exhibit E,
Attachment 3, provision 5. CDHS Approval Process, prior to commencement of
operation under this Contract.

CDHS reserves the right to review and approve any changes to Contractor’s
protocols, policies, and procedures as specified in this Contract.

 

9. Certifications

Contractor shall comply with certification requirements set forth in 42 CFR
438.604 and 42 CFR 438.606.

 

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In addition to Exhibit C, provision 11. Certification Clauses, Contractor also
agrees to the following:

With respect to any report, invoice, record, papers, documents, books of
account, or other Contract required data submitted, pursuant to the requirements
of this Contract, the Contractor’s Representative or his/her designee will
certify, under penalty of perjury, that the report, invoice, record, papers,
documents, books of account or other Contract required data is current,
accurate, complete and in full compliance with legal and contractual
requirements to the best of that individual’s knowledge and belief, unless the
requirement for such certification is expressly waived by CDHS in writing.

 

10. Notices

All notices to be given under this Contract will be in writing and will be
deemed to have been given when mailed to CDHS or the Contractor:

 

California Department of

Health Services

Medi-Cal Managed Care Division

MS 4407, P.O. Box 997413

Sacramento, CA 95899-7413

Attn: Contracting Officer

 

Molina Healthcare of California

Partner Plan, Inc.

Attn: Joann Zarza-Garrido, CEO

One Golden Shore

Long Beach, CA 90802

 

11. Term

The Contract will become effective August 1, 2006, and will continue in full
force and effect through March 31, 2009 at the latest, subject to the provisions
of Exhibit B, provision 1. Budget Contingency Clause and Exhibit D(F), provision
9. Federal Contract Funds because the State has currently appropriated and
available for encumbrance only funds to cover costs through June 30, 2007.

The term of the Contract consists of the following three periods: 1) The
Implementation Period shall extend from August 1, 2006 to March 31, 2007; 2) The
Operations Period shall extend from April 1, 2007 to March 31, 2009, at the
latest, subject to the termination provisions of provision 14. Termination for
Cause and Other Terminations, and provision 16. Sanctions, and subject to the
limitation provisions of Exhibit B, provision 1. Budget Contingency Clause; and
3) The Phaseout Period shall extend for six (6) months from the end of the
Operations Period, subject to provision 13. Contract Extension, in which case
the Phaseout Period shall apply to the six (6) month period beginning the first
day after the end of the Operations Period, as extended. The Operations Period
will commence subject to CDHS acceptance of the Contractor’s readiness to begin
the Operations period.

 

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12. Service Area

The Service Area covered under this Contract includes:

Riverside and San Bernardino Counties

All Contract provisions apply separately to each Service Area. This Contract may
expire for some Service Areas and still remain in effect for others with each
Service Area having its own Operations and Phaseout periods.

 

13. Contract Extension

CDHS will have the exclusive option to extend the term of the Contract for any
Service Area during the last twelve (12) months of the Contract, as determined
by the original expiration date or by a new expiration date if an extension
option has been exercised. CDHS may invoke up to three (3) separate extensions
of up to twenty-four months each. The Contractor will be given at least nine
(9) months prior written notice of CDHS’ decision on whether or not it will
exercise this option to extend the Contract for each Service Area.

Contractor will provide written notification to CDHS of its intent to accept or
reject the extension within five (5) working days of the receipt of the notice
from CDHS.

 

14. Termination for Cause and Other Terminations

In addition to Exhibit C, provision 7. Termination for Cause, Contractor also
agrees to the following:

 

  A. Termination - State or Director

CDHS may terminate performance of work under this Contract in whole, or in part,
whenever for any reason CDHS determines that the termination is in the best
interest of the State.

 

  1) Notification shall be given at least six (6) months prior to the effective
date of termination, except in cases described below in paragraph B. Termination
for Cause.

 

  2) If CDHS awards a new contract for one or more of the Service Areas to
another Contractor during one of the amendment periods as described above in
provision 13. Contract Extension, CDHS shall provide the Contractor written
notification at least six (6) months prior to termination to allow for all
Phaseout Requirements to be completed.

 

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  B. Termination for Cause

 

  1) CDHS shall terminate this Contract pursuant to the provisions of Welfare
and Institutions Code, Section 14304(a) and Title 22, CCR, Section 53873.

 

  2) CDHS shall terminate this Contract in the event that: (1) the Secretary,
DHHS, determines that the Contractor does not meet the requirements for
participation in the Medicaid program, Title XIX of the Social Security Act (42
U.S. Code § 1396), or (2) the Department of Managed Health Care finds that the
Contractor no longer qualifies for licensure under the Knox-Keene Health Care
Service Plan Act (Health and Safety Code § 1340 et seq.) by giving written
notice to the Contractor. The termination will be effectuated consistent with
the provisions of Title 22, CCR, Section 53873. Notification will be given by
CDHS at least 60 calendar days prior to the effective date of termination.

 

  3) In cases where the Director determines the health and welfare of Members is
jeopardized by continuation of the Contract, the Contract will be immediately
terminated. Notification will state the effective date of, and the reason for,
the termination.

Except for termination pursuant to paragraph B, item 3) above, termination of
the Contract shall be effective on the last day of the month in which the
Secretary, DHHS, or the DMHC makes such determination, provided that CDHS
provides Contractor with at least 60 calendar days notice of termination. The
termination of this Contract shall be effective on the last day of the second
full month from the date of the notice of termination. Contractor agrees that 60
calendar days notice is reasonable. Termination under this section does not
relieve Contractor of its obligations under provision 15. Phaseout Requirements
below. Phaseout Requirements shall be performed after Contract termination.

 

  C. Termination - Contractor

If mutual agreement between CDHS and Contractor cannot be attained on capitation
rates for rate years subsequent to September 30, 2007, Contractor shall retain
the right to terminate the Contract, no earlier than September 30, 2008, by
giving at least nine (9) months written notice to CDHS to that effect. The
effective date of any termination under this section shall be September 30.

Grounds under which Contractor may terminate this Contract are limited to:
(1) Unwillingness to accept the capitation rates determined by CDHS, or if CDHS
decides to negotiate rates, failure to reach mutual agreement

 

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on rates; or (2) When a change in contractual obligations is created by a State
or Federal change in the Medi-Cal program, or a lawsuit, that substantially
alters the financial assumptions and conditions under which the Contractor
entered into this Contract, such that the

Contractor can demonstrate to the satisfaction of CDHS that it cannot remain
financially solvent through the term of the Contract.

If Contractor invokes ground number 2, Contractor shall submit a detailed
written financial analysis to CDHS supporting its conclusions that it cannot
remain financially solvent. At the request of CDHS, Contractor shall submit or
otherwise make conveniently available to CDHS, all of Contractor’s financial
work papers, financial reports, financial books and other records, bank
statements, computer records, and any other information required by CDHS to
evaluate Contractor’s financial analysis.

CDHS and Contractor may negotiate an earlier termination date if Contractor can
demonstrate to the satisfaction of CDHS that it cannot remain financially
solvent until the termination date that would otherwise be established under
this section. Termination under these circumstances shall not relieve Contractor
from performing the Phaseout Requirements described in provision 15. below.

 

D. Termination of Obligations

All obligations to provide Covered Services under this Contract or Contract
extension will automatically terminate on the date the Operations Period ends.

 

E. Notice to Members of Transfer of Care

At least 60 calendar days prior to the termination of the Contract, CDHS will
notify Members about their medical benefits and available options.

 

15. Phaseout Requirements

 

  A. CDHS shall retain the lesser of an amount equal to 10% of the last month’s
Service Area capitation payment or one million dollars ($1,000,000) for each
Service Area unless provided otherwise by the Financial Performance Guarantee,
from the capitation payment of the last month of the Operations Period for each
Service Area until all activities required during the Phaseout Period for each
Service Area are fully completed to the satisfaction of CDHS, in its sole
discretion.

If all Phaseout activities for each Service Area are completed by the end of the
Phaseout Period, the withhold will be paid to the Contractor. If the Contractor
fails to meet any requirement(s) by the end of the Phaseout

 

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Period for each Service Area, CDHS will deduct the costs of the remaining
activities from the withhold amount and continue to withhold payment until all
activities are completed.

 

  B. The objective of the Phaseout Period is to ensure that, at the termination
of this Contract, the orderly transfer of necessary data and history records is
made from the Contractor to CDHS or to a successor Contractor. The Contractor
shall not provide services to Members during the Phaseout Period.

Ninety (90) calendar days prior to termination or expiration of this Contract
and through the Phaseout Period for each Service Area, the Contractor shall
assist CDHS in the transition of Members, and in ensuring, to the extent
possible, continuity of Member-Provider relationships. In doing this, the
Contractor will make available to CDHS copies of Medical Records, patient files,
and any other pertinent information, including information maintained by any
subcontractor, necessary for efficient case management of Members, as determined
by the Director. In no circumstances will a Medi-Cal Member be billed for this
activity.

 

  C. Phaseout for this Contract will consist of the processing, payment and
monetary reconciliation(s) necessary regarding claims for payment for Covered
Services.

Phaseout for the Contract will consist of the completion of all financial and
reporting obligations of the Contractor. The Contractor will remain liable for
the processing and payment of invoices and other claims for payment for Covered
Services and other services provided to Members pursuant to this Contract prior
to the expiration or termination. The Contractor will submit to CDHS all reports
required in Exhibit A, Attachment 17, Reporting Requirements, for the period
from the last submitted report through the expiration or termination date.

All data and information provided by the Contractor will be accompanied by
letter, signed by the responsible authority, certifying, under penalty of
perjury, to the accuracy and completeness of the materials supplied.

 

  D. Phaseout Period will commence on the date the Operations Period of the
Contract or Contract extension ends. Phaseout related activities are non-payable
items.

 

16. Sanctions

Contractor is subject to sanctions and civil penalties taken pursuant to Welfare
and Institutions Code Section 14304 and Title 22 of the California Code of
Regulations, Section 53872, however, such sanctions and civil penalties may not

 

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exceed the amounts allowable pursuant to 42 CFR, 438.704. If required by CDHS,
Contractor shall ensure subcontractors cease specified activities which may
include, but are not limited to, referrals, assignment of beneficiaries, and
reporting, until CDHS determines that Contractor is again in compliance.

 

  A. In the event CDHS finds Contractor non-compliant with any provisions of
this Contract, applicable statutes or regulations, CDHS may impose sanctions
provided in Welfare and Institutions Code, Section 14304 and Title 22, CCR,
Section 53872 as modified for purposes of this Contract. Title 22, CCR,
Section 53872 is so modified as follows:

 

  1) Subsection (b)(1) is modified by replacing “Article 2” with “Article 6”

 

  2) Subsection (b)(2) is modified by replacing “Article 3” with “Article 7”

 

  B. The requirements of Exhibit A, Attachment 4, regarding QIS are all Contract
provisions which are not specifically governed by Chapter 4.1 (commencing with
Section 53800) of Division 3 of Title 22, CCR. Therefore, sanctions for
violations of the requirements of Exhibit A, Attachment 4, regarding QIS shall
be governed by Subsection 53872 (b)(4).

 

  C. For purposes of Sanctions, good cause includes, but is not limited to, the
following:

 

  1) Three repeated and uncorrected findings of serious deficiencies that have
the potential to endanger patient care identified in the medical audits
conducted by CDHS.

 

  2) In the case of Exhibit A, Attachment 4, the Contractor consistently fails
to achieve the minimum performance levels, or receives a “Not Reported”
designation on an External Accountability Set measure, after implementation of
Corrective Actions.

 

  D. Sanctions in the form of denial of payments provided for under the contract
for new enrollees shall be taken, when and for as long as, payment for those
enrollees is denied by Centers for Medicare and Medicaid Services (CMS) under 42
CFR § 438.730.

 

17. Liquidated Damages Provisions

 

  A. General

It is agreed by the State and Contractor that:

 

  1) If Contractor does not provide or perform the requirements of this Contract
or applicable laws and regulations, damage to the State shall result;

 

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  a) Proving such damages shall be costly, difficult, and time-consuming;

 

  b) Should the State choose to impose liquidated damages, Contractor shall pay
the State those damages for not providing or performing the specified
requirements;

 

  c) Additional damages may occur in specified areas by prolonged periods in
which Contractor does not provide or perform requirements;

 

  d) The damage figures listed below represent a good faith effort to quantify
the range of harm that could reasonably be anticipated at the time of the making
of the Contract;

 

  e) CDHS may, at its discretion, offset liquidated damages from capitation
payments owed to Contractor;

 

  2) Imposition of liquidated damages as specified in paragraphs B. Liquidated
Damages for Violation of Contract Terms Regarding the Implementation Period, and
C. Liquidated Damages for Violation of Contract Terms or Regulations Regarding
the Operations Period, shall follow the administrative processes described
below;

 

  3) CDHS shall provide Contractor with written notice specifying the Contractor
requirement(s), contained in the Contract or as required by federal and State
law or regulation, not provided or performed;

 

  4) During the Implementation Period, Contractor shall submit or complete the
outstanding requirement(s) specified in the written notice within five
(5) working days from the date of the notice, unless, subject to the Contracting
Officer’s written approval, Contractor submits a written request for an
extension. The request must include the following: the requirement(s) requiring
an extension; the reason for the delay; and the proposed date of the submission
of the requirement.

 

  5) During the Implementation Period, if Contractor has not performed or
completed an Implementation Period requirement or secured an extension for the
submission of the outstanding requirement, CDHS may impose liquidated damages
for the amount specified in paragraph B. Liquidated Damages for Violation of
Contract Terms Regarding the Implementation Period.

 

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  6) During the Operations Period, Contractor shall demonstrate the provision or
performance of Contractor’s requirement(s) specified in the written notice
within a 30 calendar day Corrective Action period from the date of the notice,
unless a request for an extension is submitted to the Contracting Officer,
subject to CDHS’ approval, within five (5) calendar days from the end of the
Corrective Action period. If Contractor has not demonstrated the provision or
performance of Contractor’s requirement(s) specified in the written notice
during the Corrective Action period, CDHS may impose liquidated damages for each
day the specified Contractor’s requirement is not performed or provided for the
amount specified in paragraph C. Liquidated Damages for Violation of Contract
Terms or Regulations Regarding the Operations Period.

 

  7) During the Operations Period, if Contractor has not performed or provided
Contractor’s requirement(s) specified in the written notice or secured the
written approval for an extension, after 30 calendar days from the first day of
the imposition of liquidated damages, CDHS shall notify Contractor in writing of
the increase of the liquidated damages to the amount specified in paragraph C.
Liquidated Damages for Violation of Contract Terms or Regulations Regarding the
Operations Period.

Nothing in this provision shall be construed as relieving Contractor from
performing any other Contract duty not listed herein, nor is the State’s right
to enforce or to seek other remedies for failure to perform any other Contract
duty hereby diminished.

 

  B. Liquidated Damages for Violation of Contract Terms Regarding the
Implementation Period CDHS may impose liquidated damages of $25,000 per
requirement specified in the written notice for each day of the delay in
completion or submission of Implementation Period requirements beyond the
Implementation Period as specified in provision 11. Term above.

If CDHS determines that a delay or other non-performance was caused in part by
the State, CDHS will reduce the liquidated damages proportionately.

 

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  C. Liquidated Damages for Violation of Contract Terms or Regulations Regarding
the Operations Period

 

  1) Site Reviews

CDHS may impose liquidated damages of $2,500 per day for each violation of
contract requirement not performed in accordance with Exhibit A, Attachment 4 –
Quality Improvement System, provision 10. Site Review, paragraph D. Corrective
Actions, until Contract requirement is performed or provided.

 

  2) Third-Party Tort Liability

CDHS may impose liquidated damages of $3,500 per instance or case, per Medi-Cal
Member if a Contractor fails to deliver the requested information in accordance
with Exhibit E, Attachment 2, provision 24 Third-Party Tort Liability.

 

  3) Plan Physician Availability

CDHS may impose liquidated damages of $3,500 per violation of Contract
requirement not performed in accordance with Exhibit A, Attachment 6, Provider
Network, provision 9. Plan Physician Availability.

 

  D. Conditions for Termination of Liquidated Damages

Except as waived by the Contracting Officer, no liquidated damages imposed on
the Contractor will be terminated or suspended until the Contractor issues a
written notice of correction to the Contracting Officer certifying, under
penalty of perjury, the correction of condition(s) for which liquidated damages
were imposed. Liquidated damages will cease on the day of the Contractor’s
certification only if subsequent verification of the correction by CDHS
establishes that the correction has been made in the manner and at the time
certified to by the Contractor.

The Contracting Officer will determine whether the necessary level of
documentation has been submitted to verify corrections. The Contracting Officer
will be the sole judge of the sufficiency and accuracy of any documentation.
Corrections must be sustained for a reasonable period of at least 90 calendar
days from CDHS acceptance; otherwise, liquidated damages may be reimposed
without a succeeding grace period within which to correct. The Contractor’s use
of resources to correct deficiencies will not be allowed to cause other contract
compliance problems.

 

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  E. Severability of Individual Liquidated Damages Clauses

If any portion of these liquidated damages provisions is determined to be
unenforceable, the other portions will remain in full force and effect.

 

18. Disputes

In addition to Exhibit C, provision 6. Disputes, Contractor also agrees to the
following:

This Disputes section will be used by the Contractor as the means of seeking
resolution of disputes on contractual issues.

Filing a dispute will not preclude CDHS from recouping the value of the amount
in dispute from the Contractor or from offsetting this amount from subsequent
capitation payment(s). If the amount to be recouped exceeds 25 percent of the
capitation payment, amounts of up to 25 percent will be withheld from successive
capitation payments until the amount in dispute is fully recouped.

 

  A. Disputes Resolution by Negotiation

CDHS and Contractor agree to try to resolve all contractual issues by
negotiation and mutual agreement at the Contracting Officer level without
litigation. The parties recognize that the implementation of this policy depends
on open-mindedness, and the need for both sides to present adequate supporting
information on matters in question.

 

  B. Notification of Dispute

Within 15 calendar days of the date the dispute concerning performance of this
Contract arises or otherwise becomes known to the Contractor, the Contractor
will notify the Contracting Officer in writing of the dispute, describing the
conduct (including actions, inactions, and written or oral communications) which
it is disputing.

The Contractor’s notification will state, on the basis of the most accurate
information then available to the Contractor, the following:

 

  1) That it is a dispute pursuant to this section.

 

  2) The date, nature, and circumstances of the conduct which is subject of the
dispute.

 

  3) The names, phone numbers, function, and activity of each Contractor,
subcontractor, CDHS/State official or employee involved in or knowledgeable
about the conduct.

 

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  4) The identification of any documents and the substances of any oral
communications involved in the conduct. Copies of all identified documents will
be attached.

 

  5) The reason the Contractor is disputing the conduct.

 

  6) The cost impact to the Contractor directly attributable to the alleged
conduct, if any.

 

  7) The Contractor’s desired remedy.

The required documentation, including cost impact data, will be carefully
prepared and submitted with substantiating documentation by the Contractor. This
documentation will serve as the basis for any subsequent appeal.

Following submission of the required notification, with supporting
documentation, the Contractor will comply with the requirements of Title 22,
CCR, Section 53851(d) and diligently continue performance of this Contract,
including matters identified in the Notification of Dispute, to the maximum
extent possible.

 

  C. Contracting Officer’s or Alternate Dispute Officer’s Decision

Pursuant to a request by Contractor, the Contracting Officer may provide for a
dispute to be decided by an alternate dispute officer designated by CDHS, who is
not the Contracting Officer and is not directly involved in the Medi-Cal Managed
Care Program. Any disputes concerning performance of this Contract shall be
decided by the Contracting Officer or the alternate dispute officer in a written
decision stating the factual basis for the decision. Within 30 calendar days of
receipt of a Notification of Dispute, the Contracting Officer or the alternate
dispute officer, shall either:

 

  1) Find in favor of Contractor, in which case the Contracting Officer or
alternate dispute officer may:

 

  a) Countermand the earlier conduct which caused Contractor to file a dispute;
or

 

  b) Reaffirm the conduct and, if there is a cost impact sufficient to
constitute a change in obligations pursuant to the payment provisions contained
in Exhibit B, direct CDHS to comply with that Exhibit.

Or,

 

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  2) Deny Contractor’s dispute and, where necessary, direct the manner of future
performance; or

 

  3) Request additional substantiating documentation in the event the
information in Contractor’s notification is inadequate to permit a decision to
be made under 1) or 2) above, and shall advise Contractor as to what additional
information is required, and establish how that information shall be furnished.
Contractor shall have 30 calendar days to respond to the Contracting Officer’s
or alternate dispute officer’s request for further information. Upon receipt of
this additional requested information, the Contracting Officer or alternate
dispute officer shall have 30 calendar days to respond with a decision. Failure
to supply additional information required by the Contracting Officer or
alternate dispute officer within the time period specified above shall
constitute waiver by Contractor of all claims in accordance with paragraph F.
Waiver of Claims below.

A copy of the decision shall be served on Contractor.

 

  D. Appeal of Contracting Officer’s or Alternate Dispute Officer’s Decision

Contractor shall have 30 calendar days following the receipt of the decision to
file an appeal of the decision to the Director. All appeals shall be governed by
Health and Safety Code Section 100171, except for those provisions of
Section 100171(d)(1) relating to accusations, statements of issues, statement to
respondent, and notice of defense. All appeals shall be in writing and shall be
filed with CDHS’ Office of Administrative Hearings and Appeals. An appeal shall
be deemed filed on the date it is received by the Office of Administrative
Hearings and Appeals. An appeal shall specifically set forth each issue in
dispute, and include Contractor’s contentions as to those issues. However,
Contractor’s appeal shall be limited to those issues raised in its Notification
of Dispute filed pursuant to paragraph B. Notification of Dispute above. Failure
to timely appeal the decision shall constitute a waiver by Contractor of all
claims arising out of that conduct, in accordance with paragraph F. Waiver of
Claims. Contractor shall exhaust all procedures provided for in this provision
18. Disputes, prior to initiating any other action to enforce this Contract.

 

  E. Contractor Duty to Perform

Pending final determination of any dispute hereunder, Contractor shall comply
with the requirements of Title 22, CCR, Section 53851 (d) and proceed diligently
with the performance of this Contract and in accordance with the Contracting
Officer’s or alternate dispute officer’s decision.

 

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If pursuant to an appeal under paragraph D. Appeal of Contracting Officer’s or
Alternate Dispute Officer’s Decision above, the Contracting Officer’s or
alternate dispute officer’s decision is reversed, the effect of the decision
pursuant to paragraph D. shall be retroactive to the date of the Contracting
Officer’s or alternate dispute officer’s decision, and Contractor shall promptly
receive any benefits of such decision. CDHS shall not pay interest on any
amounts paid pursuant to a Contracting Officer’s or alternate dispute officer’s
decision or any appeal of such decision.

 

  F. Waiver of Claims

If Contractor fails to submit a Notification of Dispute, supporting and
substantiating documentation, any additionally required information, or an
appeal of the Contracting Officer’s or alternate dispute officer’s decision, in
the manner and within the time specified in this provision 18. Disputes, that
failure shall constitute a waiver by Contractor of all claims arising out of
that conduct, whether direct or consequential in nature.

 

19. Audit

In addition to Exhibit C, provision 4. Audit, Contractor also agrees to the
following:

The Contractor will maintain such books and records necessary to disclose how
the Contractor discharged its obligations under this Contract. These books and
records will disclose the quantity of Covered Services provided under this
Contract, the quality of those services, the manner and amount of payment made
for those services, the persons eligible to receive Covered Services, the manner
in which the Contractor administered its daily business, and the cost thereof.

 

  A. Books and Records

These books and records will include, but are not limited to, all physical
records originated or prepared pursuant to the performance under this Contract
including working papers; reports submitted to CDHS; financial records; all
Medical Records, medical charts and prescription files; and other documentation
pertaining to medical and non-medical services rendered to Members.

 

  B. Records Retention

Notwithstanding any other records retention time period set forth in this
Contract, these books and records will be maintained for a minimum of five years
from the end of the current Fiscal Year in which the date of service occurred;
in which the record or data was created or applied; and for which the financial
record was created or the Contract is terminated,

 

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or, in the event the Contractor has been duly notified that CDHS, DHHS, DOJ, or
the Comptroller General of the United States, or their duly authorized
representatives, have commenced an audit or investigation of the Contract, until
such time as the matter under audit or investigation has been resolved,
whichever is later.

 

20. Inspection Rights

In addition to Exhibit D(F), provision 8. Site Inspection, Contractor also
agrees to the following:

Through the end of the records retention period specified in provision 19.
Audit, paragraph B. Records Retention, Contractor shall allow the CDHS,
Department of Health and Human Services, the Comptroller General of the United
States, Department of Justice (DOJ) Bureau of Medi-Cal Fraud, DMHC, and other
authorized State agencies, or their duly authorized representatives, including
CDHS’ external quality review organization contractor, to inspect, monitor or
otherwise evaluate the quality, appropriateness, and timeliness of services
performed under this Contract, and to inspect, evaluate, and audit any and all
books, records, and Facilities maintained by Contractor and subcontractors
pertaining to these services at any time during normal business hours.

Books and records include, but are not limited to, all physical records
originated or prepared pursuant to the performance under this Contract,
including working papers, reports, financial records, and books of account,
Medical Records, prescription files, laboratory results, Subcontracts,
information systems and procedures, and any other documentation pertaining to
medical and non-medical services rendered to Members. Upon request, through the
end of the records retention period specified in provision 19. Audit, paragraph
B. Records Retention, Contractor shall furnish any record, or copy of it, to
CDHS or any other entity listed in this section, at Contractor’s sole expense.

 

  A. Facility Inspections

CDHS shall conduct unannounced validation reviews on a number of the
Contractor’s Primary Care sites, selected at CDHS’ discretion, to verify
compliance of these sites with CDHS requirements.

 

  B. Access Requirements and State’s Right To Monitor

Authorized State and Federal agencies will have the right to monitor all aspects
of the Contractor’s operation for compliance with the provisions of this
Contract and applicable federal and State laws and regulations. Such monitoring
activities will include, but are not limited to, inspection and auditing of
Contractor, subcontractor, and provider facilities, management systems and
procedures, and books and records as the Director deems

 

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appropriate, at any time during the Contractor’s or other facility’s normal
business hours. The monitoring activities will be either announced or
unannounced.

To assure compliance with the Contract and for any other reasonable purpose, the
State and its authorized representatives and designees will have the right to
premises access, with or without notice to the Contractor. This will include the
MIS operations site or such other place where duties under the Contract are
being performed.

Staff designated by authorized State agencies will have access to all security
areas and the Contractor will provide, and will require any and all of its
subcontractors to provide, reasonable facilities, cooperation and assistance to
State representative(s) in the performance of their duties. Access will be
undertaken in such a manner as to not unduly delay the work of the Contractor
and/or the subcontractor(s).

 

21. Confidentiality of Information

In addition to Exhibit D(F), provision 13. Confidentiality of Information,
Contractor also agrees to the following duties and responsibilities with respect
to confidentiality of information and data:

 

  A. Notwithstanding any other provision of this Contract, names of persons
receiving public social services are confidential and are to be protected from
unauthorized disclosure in accordance with Title 42, CFR, Section 431.300 et
seq., Section 14100.2, W&I Code, and regulations adopted thereunder. For the
purpose of this Contract, all information, records, data, and data elements
collected and maintained for the operation of the Contract and pertaining to
Members shall be protected by the Contractor from unauthorized disclosure.

Contractor may release Medical Records in accordance with applicable law
pertaining to the release of this type of information. Contractor is not
required to report requests for Medical Records made in accordance with
applicable law.

 

  B.

With respect to any identifiable information concerning a Member under this
Contract that is obtained by the Contractor or its subcontractors, the
Contractor: (1) will not use any such information for any purpose other than
carrying out the express terms of this Contract, (2) will promptly transmit to
CDHS all requests for disclosure of such information, except requests for
Medical Records in accordance with applicable law, (3) will not disclose except
as otherwise specifically permitted by this Contract, any such information to
any party other than CDHS without CDHS’ prior written authorization specifying
that the information is releasable under

 

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Title 42, CFR, Section 431.300 et seq., Section 14100.2, W&I Code, and
regulations adopted thereunder, and (4) will, at the termination of this
Contract, return all such information to CDHS or maintain such information
according to written procedures sent to the Contractor by CDHS for this purpose.

 

22. Pilot Projects

CDHS may establish pilot projects to test alternative managed care models
tailored to suit the needs of populations with special health care needs. The
operation of these pilot projects may result in the disenrollment of Members
that participate. Implementation of a pilot project may affect the Contractor’s
obligations under this Contract. Any changes in the obligations of the
Contractor that are necessary for the operation of a pilot project in the
Contractor’s Service Area will be implemented through a Contract amendment.

 

23. Cost Avoidance and Post-Payment Recovery of Other Health Coverage Sources
(OHCS)

 

  A. Contractor shall Cost Avoid or make a Post-Payment Recovery for the
reasonable value of services paid for by Contractor and rendered to a Member
whenever a Member’s OHCS covers the same services, either fully or partially.
However, in no event shall Contractor Cost Avoid or seek Post-Payment Recovery
for the reasonable value of services from a Third-Party Tort Liability (TPTL)
action or make a claim against the estates of deceased Members.

 

  B. Contractor retains all monies recovered by Contractor.

 

  C. Contractor shall coordinate benefits with other coverage programs or
entitlements, recognizing the OHCS as primary and the Medi-Cal program as the
payor of last resort.

 

  D. Cost Avoidance

 

  1) If Contractor reimburses the provider on a fee-for-service basis,
Contractor shall not pay claims for services provided to a Member whose Medi-Cal
eligibility record indicates third party coverage, designated by a Other Health
Coverage (OHC) code or Medicare coverage, without proof that the provider has
first exhausted all sources of other payments. Contractor shall have written
procedures implementing this requirement.

 

  2) Proof of third party billing is not required prior to payment for services
provided to Members with OHC codes A, M, X, Y, or Z.

 

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  E. Post-Payment Recovery

 

  1) If Contractor reimburses the provider on a fee-for-service basis,
Contractor shall pay the provider’s claim and then seek to recover the cost of
the claim by billing the liable third parties:

 

  a) For services provided to Members with OHC codes A, M, X, Y, or Z;

 

  b) For services defined by CDHS as prenatal or preventive pediatric services;
or

 

  c) In child-support enforcement cases, identifiable by Contractor. If
Contractor does not have access to sufficient information to determine whether
or not the OHC coverage is the result of a child enforcement case, Contractor
shall follow the procedures for Cost Avoidance.

 

  2) In instances where Contractor does not reimburse the provider on a
fee-for-service basis, Contractor shall pay for services provided to a Member
whose eligibility record indicates third party coverage, designated by a OHC
code or Medicare coverage, and then shall bill the liable third parties for the
cost of actual services rendered.

 

  3) Contractor shall also bill the liable third parties for the cost of
services provided to Members who are retroactively identified by Contractor or
CDHS as having OHC.

 

  4) Contractor shall have written procedures implementing the above
requirements.

 

  F. Reporting Requirements

 

  1) Contractor shall maintain reports that display claims counts and dollar
amounts of costs avoided and the amount of Post-Payment Recoveries, by aid
category, as well as the amount of outstanding recovery claims (accounts
receivable) by age of account. The report shall display separate claim counts
and dollar amounts for Medicare Part A, Part B, and Part D. Reports shall be
made available upon CDHS request.

 

  2) When Contractor identifies OHC unknown to CDHS, Contractor shall report
this information to CDHS within ten (10) calendar days of discovery in automated
format as prescribed by CDHS. This information shall be sent to the California
Department of Health Services, Third Party Liability Branch, Other Coverage
Unit, P.O. Box 997422, Sacramento, CA 95899-7422.

 

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  3) Contractor shall demonstrate to CDHS that where Contractor does not Cost
Avoid or perform Post-Payment Recovery that the aggregate cost of this activity
exceeds the total revenues Contractor projects it would receive from such
activity.

 

24. Third-Party Tort Liability

Contractor shall identify and notify CDHS’ Third Party Liability Branch of all
instances or cases in which Contractor believes an action by the Medi-Cal Member
involving casualty insurance or tort or Workers’ Compensation liability of a
third party could result in recovery by the Member of funds to which CDHS has
lien rights under Article 3.5 (commencing with Section 14124.70), Part 3,
Division 9, Welfare and Institutions Code. Contractor shall make no claim for
recovery of the value of Covered Services rendered to a Member in such cases or
instances and such case or instance shall be referred to CDHS’ Third Party
Liability Branch within ten (10) calendar days of discovery. To assist CDHS in
exercising its responsibility for such recoveries, Contractor shall meet the
following requirements:

 

  A. If CDHS requests service information and/or copies of paid invoices/claims
for Covered Services to an individual Member, Contractor shall deliver the
requested information within 30 calendar days of the request. Service
information includes subcontractor and out-of-plan provider data. The value of
the Covered Services shall be calculated as the usual, customary and reasonable
charge made to the general public for similar services or the amount paid to
subcontracted providers or out-of-plan providers for similar services.

 

  B. Information to be delivered shall contain the following data items:

 

  1) Member name.

 

  2) Full 14 digit Medi-Cal number.

 

  3) Social Security Number.

 

  4) Date of birth.

 

  5) Contractor name.

 

  6) Provider name (if different from Contractor).

 

  7) Dates of service.

 

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  8) Diagnosis code and description of illness/injury.

 

  9) Procedure code and/or description of services rendered.

 

  10) Amount billed by a subcontractor or out-of-plan provider to Contractor (if
applicable).

 

  11) Amount paid by other health insurance to Contractor or subcontractor (if
applicable).

 

  12) Amounts and dates of claims paid by Contractor to subcontractor or
out-of-plan provider (if applicable).

 

  13) Date of denial and reasons for denial of claims (if applicable).

 

  14) Date of death (if applicable).

 

  C. Contractor shall identify to CDHS’ Third Party Liability Branch the name,
address and telephone number of the person responsible for receiving and
complying with requests for mandatory and/or optional at-risk service
information.

 

  D. If Contractor receives any requests from attorneys, insurers, or
beneficiaries for copies of bills, Contractor shall refer the request to Third
Party Liability Branch with the information contained in paragraph B above, and
shall provide the name, address and telephone number of the requesting party.

 

  E. Information submitted to CDHS under this section shall be sent to the
California Department of Health Services, Third Party Liability Branch, Recovery
Section, MS 4720, P.O. Box 997425, Sacramento, CA 95899-7425.

 

25. Records Related To Recovery For Litigation

 

  A. Records

Upon request by CDHS, Contractor shall timely gather, preserve and provide to
CDHS, in the form and manner specified by CDHS, any information specified by
CDHS, subject to any lawful privileges, in Contractor’s or its subcontractors’
possession, relating to threatened or pending litigation by or against CDHS. (If
Contractor asserts that any requested documents are covered by a privilege,
Contractor shall: 1) identify such privileged documents with sufficient
particularity to reasonably identify the document while retaining the privilege;
and 2) state

 

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the privilege being claimed that supports withholding production of the
document.) Such request shall include, but is not limited to, a response to a
request for documents submitted by any party in any litigation by or against
CDHS. Contractor acknowledges that time may be of the essence in responding to
such request. Contractor shall use all reasonable efforts to immediately notify
CDHS of any subpoenas, document production requests, or requests for records,
received by Contractor or its subcontractors related to this Contract or
subcontracts entered into under this Contract.

 

  B. Payment for Records

In addition to the payments provided for in Exhibit B, Budget Detail and Payment
Provisions, CDHS agrees to pay Contractor for complying with paragraph A,
Records, above, as follows:

 

  1) CDHS shall reimburse Contractor amounts paid by Contractor to third parties
for services necessary to comply with paragraph A. Any third party assisting
Contractor with compliance with paragraph A above, shall comply with all
applicable confidentiality requirements. Amounts paid by Contractor to any third
party for assisting Contractor in complying with paragraph A, shall not exceed
normal and customary charges for similar services and such charges and
supporting documentation shall be subject to review by CDHS.

 

  2) If Contractor uses existing personnel and resources to comply with
paragraph A, CDHS shall reimburse Contractor as specified below. Contractor
shall maintain and provide to CDHS time reports supporting the time spent by
each employee as a condition of reimbursement. Reimbursement claims and
supporting documentation shall be subject to review by CDHS.

 

  a) Compensation and payroll taxes and benefits, on a prorated basis, for the
employees’ time devoted directly to compiling information pursuant to paragraph
A.

 

  b) Costs for copies of all documentation submitted to CDHS pursuant to
paragraph A, subject to a maximum reimbursement of ten (10) cents per copied
page.

 

  3) Contractor shall submit to CDHS all information needed by CDHS to determine
reimbursement to Contractor under this provision, including, but not limited to,
copies of invoices from third parties and payroll records.

 

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26. Fraud and Abuse Reporting

Contractor shall meet requirements set forth in 42 CFR 438.608. Contractor shall
report to the Contracting Officer all cases of suspected fraud and/or abuse, as
defined in 42 Code of Federal Regulations, Section 455.2, where there is reason
to believe that an incident of fraud and/or abuse has occurred, by
subcontractors, Members, providers, or employees within ten (10) working days of
the date when Contractor first becomes aware of or is on notice of such
activity. Contractor shall establish policies and procedures for identifying,
investigating and taking appropriate corrective action against fraud and/or
abuse in the provision of health care services under the Medi-Cal program.
Contractor shall notify CDHS prior to conducting any investigations, based upon
Contractor’s finding that there is reason to believe that an incident of fraud
and/or abuse has occurred, and, upon the request of CDHS, consult with CDHS
prior to conducting such investigations. Without waiving any privileges of
Contractor, Contractor shall report investigation results within ten
(10) working days of conclusion of any fraud and/or abuse investigation.

 

27. Equal Opportunity Employer

Contractor will, in all solicitations or advertisements for employees placed by
or on behalf of the Contractor, state that it is an equal opportunity employer,
and will send to each labor union or representative of workers with which it has
a collective bargaining agreement or other contract or understanding, a notice
to be provided by CDHS, advising the labor union or workers’ representative of
the Contractor’s commitment as an equal opportunity employer and will post
copies of the notice in conspicuous places available to employees and applicants
for employment.

 

28. Discrimination Prohibitions

 

  A. Member Discrimination Prohibition

Contractor shall not discriminate against Members or Eligible Beneficiaries
because of race, color, creed, religion, ancestry, marital status, sexual
orientation, national origin, age, sex, or physical or mental handicap in
accordance with Title VI of the Civil Rights Act of 1964, 42 USC Section 2000d,
rules and regulations promulgated pursuant thereto, or as otherwise provided by
law or regulations. For the purpose of this Contract, discriminations on the
grounds of race, color, creed, religion, ancestry, age, sex, national origin,
marital status, sexual orientation, or physical or mental handicap include, but
are not limited to, the following:

 

  1) Denying any Member any Covered Services or availability of a Facility;

 

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  2) Providing to a Member any Covered Service which is different, or is
provided in a different manner or at a different time from that provided to
other Members under this Contract except where medically indicated;

 

  3) Subjecting a Member to segregation or separate treatment in any manner
related to the receipt of any Covered Service;

 

  4) Restricting a Member in anyway in the enjoyment of any advantage or
privilege enjoyed by others receiving any Covered Service, treating a Member or
Eligible Beneficiary differently from others in determining whether he or she
satisfies any admission, Enrollment, quota, eligibility, membership, or other
requirement or condition which individuals must meet in order to be provided any
Covered Service;

 

  5) The assignment of times or places for the provision of services on the
basis of the race, color, national origin, creed, ancestry, religion, language,
age, gender, marital status, sexual orientation, health status, or disability of
the participants to be served.

Contractor shall take affirmative action to ensure that Members are provided
Covered Services without regard to race, color, national origin, creed,
ancestry, religion, language, age, gender, marital status, sexual orientation,
health status, or disability, except where medically indicated.

For the purposes of this section, physical handicap includes the carrying of a
gene which may, under some circumstances, be associated with disability in that
person’s offspring, but which causes no adverse effects on the carrier. Such
genes will include, but are not limited to, Tay-Sachs trait, sickle cell trait,
thalassemia trait, and X-linked hemophilia.

 

  B. Discrimination Related To Health Status

Contractor shall not discriminate among eligible individuals on the basis of
their health status requirements or requirements for health care services during
enrollment, re-enrollment or disenrollment. Contractor will not terminate the
enrollment of an eligible individual based on an adverse change in the Member’s
health.

 

  C. Discrimination Complaints

Contractor agrees that copies of all grievances alleging discrimination against
Members or Eligible Beneficiaries because of race, color, national origin,
creed, ancestry, religion, language, age, gender, marital status, sexual
orientation, health status, or disability, will be forwarded to CDHS for review
and appropriate action.

 

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29. Americans With Disabilities Act Of 1990 Requirements

Contractor shall comply with all applicable federal requirements in Section 504
of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of
1990 (42 USC, Section 12101 et seq.), Title 45, Code of Federal Regulations
(CFR), Part 84 and Title 28, CFR, Part 36. Title IX of the Education Amendments
of 1972 (regarding education programs and activities), and the Age
Discrimination Act of 1975.

 

30. Disabled Veteran Business Enterprises (DVBE)

Contractor shall comply with applicable requirements of California law relating
to Disabled Veteran Business Enterprises (DVBE) commencing at Section 10115 of
the Public Contract Code.

 

31. Word Usage

Unless the context of this Contract clearly requires otherwise, (a) the plural
and singular numbers shall each be deemed to include the other; (b) the
masculine, feminine, and neuter genders shall each be deemed to include the
others; (c) “shall,” “will,” “must,” or “agrees” are mandatory, and “may” is
permissive; (d) “or” is not exclusive; and (e) “includes” and “including” are
not limiting.

 

32. Parties to State Fair Hearing

The parties to the State fair hearing include the Contractor as well as the
Member and his or her representative or the representative of a deceased
enrollee’s estate.

 

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DUTIES OF THE STATE

 

1. Payment For Services

CDHS shall pay the appropriate capitation payments set forth in Exhibit B.
Budget Detail and Payment Provisions, provision 4. Capitation Rates to the
Contractor for each eligible Member under this Contract, and ensure that such
payments are based on actuarially sound capitation rates as defined in 42 CFR,
Section 438.6(c). Payments will be made monthly for the duration of this
Contract. Any adjustments for Federally Qualified Health Centers will be made in
accordance with Section 14087.325 of the Welfare and Institutions Code.

 

2. Medical Reviews

CDHS shall conduct medical reviews in accordance with the provisions of
Section 14456, Welfare and Institutions Code. CDHS shall have the discretion to
accept plan performance reports, audits or reviews conducted by other agencies
or accrediting bodies that use standards comparable to those of CDHS. These plan
performance reports, audits and reviews may be in lieu of an audit or review
conducted by CDHS in order to eliminate duplication of auditing efforts.

 

3. Enrollment Processing by CDHS

 

  A. General

The parties to this Contract agree that the primary purpose of CDHS’ Medi-Cal
managed care system is to improve quality and access to care for Medi-Cal
beneficiaries. The parties acknowledge that the Medi-Cal eligibility process and
the managed care enrollment system are dynamic and complex programs. The parties
also acknowledge that it is impractical to ensure that every beneficiary
eligible for enrollment in the Contractor’s plan will be enrolled in a timely
manner. Furthermore, the parties recognize that for a variety of reasons some
Eligible Beneficiaries will not be enrolled in Contractor’s plan and will
receive Covered Services in the Medi-Cal fee-for-service system. These reasons
include, but are not limited to, the exclusion of some beneficiaries from
participating in Medi-Cal managed care, the time it takes to enroll
beneficiaries, and the lack of a current valid address for some beneficiaries.
The parties desire to work together in a cooperative manner so that Eligible
Beneficiaries who choose to or should be assigned to Contractor’s plan are
enrolled in Contractor’s plan pursuant to the requirements of this entire
provision 3. The parties agree that to accomplish this goal it is necessary to
be reasonably flexible with regard to the enrollment process.

 

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  B. Enrollment Processing Definitions

For purposes of this entire provision 3. Enrollment Processing by CDHS, the
following definitions shall apply:

 

  1) Fully Converted County means a county in which the following circumstances
exist, except for those Medi-Cal beneficiaries covered by Title 22, CCR,
Section 53887:

 

  a) Eligible Beneficiaries who meet the mandatory enrollment criteria contained
in Title 22, CCR, Section 53845(a) may no longer choose to receive Covered
Services on a Fee-for-Service basis; and

 

  b) All new Eligible Beneficiaries who meet the mandatory enrollment criteria
contained in Title 22, CCR, Section 53845(a) must now choose a managed care plan
or they will be assigned to a managed care plan; and

 

  c) All Eligible Beneficiaries listed in the Medi-Cal Eligibility Data System
(MEDS) as meeting the mandatory enrollment criteria contained in Title 22, CCR,
Section 53845(a) on the last date that both a. and b. above occur:

 

  i. Have been notified of the requirement to choose a managed care plan and
informed that if they fail to choose a plan they will be assigned to a managed
care plan; and

 

  ii. Those beneficiaries still eligible for Medi-Cal and enrollment into a
managed care plan at the time their plan enrollment is processed in MEDS have
been enrolled into a managed care plan.

 

  2) Mandatory Plan Beneficiary means:

 

  a) A new Eligible Beneficiary who meets the mandatory enrollment criteria
contained in Title 22, CCR, Section 53845(a), both at the time her/his plan
enrollment is processed by the CDHS Enrollment Contractor and by MEDS; or

 

  b) An Eligible Beneficiary previously receiving Covered Services in a county
without mandatory managed care enrollment who now resides in a county where
mandatory enrollment is in effect and who meets the mandatory enrollment
criteria contained in Title 22, CCR, Section 53845(a); or

 

Page 2 of 7

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 3

 

  c) An Eligible Beneficiary meeting the criteria of Title 22, CCR,
Section 53845(b), and who subsequently meets the criteria of Title 22, CCR,
Section 53845(a).

 

  3) Mandatory Plan Beneficiary shall not include any Eligible Beneficiary who:

 

  a) is eligible to receive Covered Services on a Fee-for-Service basis because
her/his MEDS eligibility for managed care plan enrollment is interrupted due to
aid code, ZIP code or county code changes; or

 

  b) becomes eligible for enrollment in a managed care plan on a retroactive
basis.

 

  C. CDHS Enrollment Obligations

 

  1) CDHS shall receive applications for enrollment from its enrollment
contractor and shall verify the current eligibility of applicants for enrollment
in Contractor’s plan under this Contract. If the Contractor has the capacity to
accept new Members, CDHS or its enrollment contractor shall enroll or assign
Eligible Beneficiaries in Contractor’s plan when selected by the Eligible
Beneficiary or when the Eligible Beneficiary fails to timely select a plan. Of
those to be enrolled or assigned in Contractor’s plan, CDHS will ensure that in
a Fully Converted County a Mandatory Plan Beneficiary will receive an effective
date of plan enrollment that is no later than 90 calendar days from the date
that MEDS lists such an individual as meeting the enrollment criteria contained
in Title 22, CCR, Section 53845(a), if all changes to MEDS have been made to
allow for the enrollment of the individual and all changes necessary to this
Contract to accommodate such enrollment, including, but not limited to rate
changes and aid code changes, have been executed. CDHS will use due diligence in
making any changes to MEDS and to this Contract. CDHS will provide Contractor a
list of Members on a monthly basis.

 

  2) CDHS or its enrollment contractor shall assign Eligible Beneficiaries
meeting the enrollment criteria contained in Title 22, CCR, Section 53845(a) to
plans in accordance with Title 22, CCR, Section 53884.

 

  3) Notwithstanding any other provision in this Contract, subparagraphs 1) and
2) above shall not apply to:

 

  a) Eligible Beneficiaries previously eligible to receive Medi-Cal services
from a Prepaid Health Plan or Primary Care Case Management plan and such plan’s
contract with CDHS expires, terminates, or is assigned or transferred to
Contractor;

 

Page 3 of 7

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 3

 

  b) Members who are enrolled into another managed care plan on account of
assignment, assumption, termination, or expiration of this Contract;

 

  c) Eligible Beneficiaries covered by a new mandatory aid code, added to this
Contract;

 

  d) Eligible Beneficiaries meeting the criteria of Title 22, CCR,
Section 53845(b), who subsequently meet the criteria of Title 22, CCR,
Section 53845(a) due solely to CDHS designating a prior voluntary aid code as a
new mandatory aid code;

 

  e) Eligible Beneficiaries residing in an excluded zip code area within a
County that is not a fully Converted County; or

 

  f) Eligible Beneficiaries without a current valid deliverable address or with
an address designated as a County post office box for homeless beneficiaries.

 

  D. Disputes Concerning CDHS Enrollment Obligations

 

  1) Contractor shall notify CDHS of CDHS’ noncompliance with this provision 3.
Enrollment Processing pursuant to the requirements and procedures contained in
Exhibit E, Attachment 2, provision 18. Disputes.

 

  2) CDHS shall have 120 calendar days from the date of CDHS’ receipt of
Contractor’s notice (the “cure period”) to cure any noncompliance with this
provision 3. Enrollment Processing, identified in Contractor’s notice, without
incurring any financial liability to the Contractor. For purposes of this
section, CDHS shall be deemed to have cured any noncompliance with this
provision 3. Enrollment Processing, identified in Contractor’s notice if within
the cure period any of the following occurs:

 

  a) Mandatory Plan Beneficiaries receive an effective date of plan enrollment
that is within the cure period, or

 

Page 4 of 7

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 3

 

 

  b) CDHS corrects enrollment that failed to comply with this provision 3.
Enrollment Processing, by redirecting enrollment from one Contractor to another
within the cure period in order to comply with this provision 3. Enrollment
Processing, or

 

  c) Within the cure period, CDHS changes the distribution of beneficiary
Assignment (subject to the requirements of Title 22, CCR, Section 53845), to the
maximum extent new beneficiaries are available to be assigned, to make up the
number of incorrectly assigned beneficiaries as soon as possible.

 

  3) If it is necessary to redirect enrollment or change the distribution of
beneficiary Assignment due to noncompliance with this provision 3. Enrollment
Processing, and such change varies from the requirements of Title 22, CCR,
Section 53884(b)(5) or (b)(6), Contractor agrees it will neither seek legal nor
equitable relief for such variance or the results of such variance if CDHS
resumes assignment consistent with Sections 53884(b)(5) or (b)(6) after
correcting a noncompliance with this provision 3. Enrollment Processing.

 

  4) Notwithstanding Exhibit E, Attachment 2, provision 1. Governing Law or any
other provision of this Contract, if CDHS fails to cure a noncompliance with
this provision 3. Enrollment Processing, within the cure period, CDHS will be
financially liable for such noncompliance as follows:

CDHS will be financially liable for Contractor’s demonstrated actual reasonable
losses as a result of the noncompliance, beginning with CDHS’ first failure to
comply with its enrollment obligation set forth herein. CDHS’ financial
liability shall not exceed 15 percent of Contractor’s monthly capitation payment
calculated as if noncompliance with this provision 3. Enrollment Processing did
not occur, for each month in which CDHS has not cured noncompliance pursuant to
paragraph D. subparagraph 2) above, beginning with CDHS’ first failure to comply
with its enrollment obligation set forth herein.

 

  5)

Notwithstanding paragraph D. subparagraph 4) above, CDHS shall not be
financially liable to Contractor for any noncompliance with provision 3.
Enrollment Processing, in an affected county (on a county-by-county basis) if
Contractor’s loss of Mandatory Plan Beneficiaries, in a month in which any
noncompliance occurs, is less than five percent of Contractor’s total Members in
that affected

 

Page 5 of 7

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 3

 

 

county in the month in which the noncompliance occurs. The parties acknowledge
that the above-referenced five-percent threshold shall apply on a
county-by-county basis, not in the aggregate.

 

4. Disenrollment Processing

CDHS shall review and process requests for Disenrollment and notify the
Contractor and the Member of its decision.

 

5. CDHS Approval Process

 

  A. Within five (5) working days of receipt, CDHS shall acknowledge in writing
the receipt of any material sent to CDHS by Contractor pursuant to Exhibit E,
Attachment 2, provision 8. Obtaining CDHS Approval.

 

  B. Within 60 calendar days of receipt, CDHS shall make all reasonable efforts
to approve in writing the use of such material provided to CDHS pursuant to
Exhibit E, Attachment 2, provision 8. Obtaining CDHS Approval, provide
Contractor with a written explanation why its use is not approved, or provide a
written estimated date of completion of CDHS’ review process. If CDHS does not
complete its review of submitted material within 60 calendar days of receipt, or
within the estimated date of completion of CDHS review, Contractor may elect to
implement or use the material at Contractor’s sole risk and subject to possible
subsequent disapproval by CDHS. This paragraph shall not be construed to imply
CDHS approval of any material that has not received written CDHS approval. This
paragraph shall not apply to Subcontracts or sub-subcontracts subject to CDHS
approval in accordance with Exhibit A, Attachment 6, provision 13. Subcontracts,
paragraph C. regarding Departmental Approval – Non-Federally Qualified HMOs, and
paragraph D. regarding Departmental Approval – Federally Qualified HMOs.

 

6. Program Information

CDHS shall provide Contractor with complete and current information with respect
to pertinent policies, procedures, and guidelines affecting the operation of
this Contract, within 30 calendar days of receipt of Contractor’s written
request for information, to the extent that the information is readily
available. If the requested information is not available, CDHS shall notify
Contractor within 30 calendar days, in writing, of the reason for the delay and
when Contractor may expect the information.

 

Page 6 of 7

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit E, Attachment 3

 

7. Catastrophic Coverage Limitation

CDHS shall limit the Contractor’s liability to provide or arrange and pay for
care for illness of, or injury to, Members which results from or is greatly
aggravated by, a catastrophic occurrence or disaster.

 

8. Risk Limitation

CDHS shall agree that there will be no risk limitation and that Contractor will
have full financial liability to provide Medically Necessary Covered Services to
Members.

 

9. Notice Of Termination Of Contract

CDHS shall notify Members of their health care benefits and options available
upon termination or expiration of this Contract.

 

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Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

   Completed
Activity    Discontinued
Activity   

Comments

4f Innovative Quality Improvement Activities             NCQA Accreditation    X
         The plan has received NCQA accreditation through January 2008.
Appointment Acces Survey    X          Nurse Advice line 24/7 Service    X      
   Transportation Summit       X       This was a one-time summit coordinated by
the plan that has been completed. ER Management       X       The ER management
study was conducted by the plan over a 24 month period. It was completed at the
time of RFP. Provider Profiling Collaborative       X       The Asthma
Partnership with IEHP concluded in 2005. The plan continues participation with
IEHP through the Plan Practice Improvement Project. Asthma Disease Management
Program “Breathe with Ease”    X          Asthma Management (inhaled
steroid/high beta-agonist use study)       X       The plan completed the Use of
High Amounts of Short Acting Beta Agonist Medications by Members Receiving
inhaled Steroids (ages 3-50) study in 2004. The plan has an on-going asthma
medication studies and continues with both quarterly and semi annual
initiatives. Diabetes Management (Hgb A1C screening, control and LDL-C screening
study)       X       The Plan completed the LDL-C Screening/Lipids in Good
Control study in 2004. The plan conducts on-going diabetes management studies.
Diabetes Disease Management Program Living Well Diabetes Program    X         
Pregnancy Program Motherhood matters Program    X         
Continuity/Coordination of care studies    X          The plan participates in
on-going quality improvement studies including semi-annual reporting Disease
Registries    X          Cervical cancer Improving the rate of Cervical Cancer
Screening.    X          The plan is continuing this preventive care and HEDIS
initiative, which includes HEDIS data collection and enhanced member education
efforts.

 

Page 1 of 12

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Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

   Completed
Activity    Discontinued
Activity   

Comments

Chlamydia Screening, treatment & re-screening       X       The Chlamydia
Screening, Treatment and Re-screening study was complete in 2005. The plan
continues with preventive care and HEDIS initiatives, including HEDIS data
collection and enhanced member education. Breast Cancer Improving the Rate of
Breast Cancer Screening    X          The plan continues with preventive care
and HEDIS initiatives, including HEDIS data collection and enhanced breast
cancer member education. HEDIS incentives    X          The plan is currently
enhancing a provider incentive program to increase encounter data submission
rates and improve overall HEDIS performance. Immunization Registries    X      
   Cultural and linguistic Advisory Committee    X          Ask the
Anthropologist (web based)    X          The plan is revising this program to
better serve members. A new initiative is being developed to allow members to
contact the plan’s cultural & linguistics staff to received answers about
cultural and linguistic questions/issues. Interpreter wallet card    X         
Interpretation Services    X          Welcome Call/New Member Outreach program
   X          After delivery home visit    X          The plan has modified this
program, called the Motherhood Matters Program. The plan sends trimester
specific information including postpartum materials to members. The plan
continues telephonic outreach to encourage members to complete their postpartum
check up. Also, the plan coordinates home visits to members based upon medical
need. Ask the Registered Dietician (web based)    X          Member Services
telephone Responsiveness    X          Pharmacy Services-Language Matching    X
         Pharmacy: Timeless of Eligibility Release    X          Medical
Nutrition Therapy    X          Population-Based Member Surveys          X   
DHS approves plan’s request to remove this activity. The plan has discontinued
this initiative. In its place, the plan participates in CAHPS surveys. Provider
Satisfaction Surveys    X         

 

Page 2 of 12

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Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Acitivity

   Completed
Activity    Discontinued
Activity   

Comments

SMO Community Outreach Activities    X          In the RFP, the plan listed a
number of achievements that have been completed. The plan continues to
participate in a variety of outreach events in communities surrounding the
plan’s staff model offices. (“SMOs”). Hablamos Juntos       X       The plan has
completed this activity. The Report Wood Johnson Foundation awarded a two (2)
year grant to the plan to perform this activity. The grant funding was from
December 2004 through April 2006. TeleSalud    X          The plan’s TeleSalud
bilingual 24/7 Nurse Advice Line is available to members. Interpreter services
are provided telephonically by the plan’s language services vendor. Moreno
Valley School District Immunization Program       X       In the RFP, the plan
listed this initiative that is now completed. The plan continues to participate
in a variety of community outreach activates, including working with community
based organizations (“CBOs”) to facilitates outreach and coordination efforts.
School Nebulizer Project       X       The plan has completed this limited-time
activity, in which the plan donated nebulizers to 35 local schools. THRIVE
Project       X       The plan has completed this limited-time activity, in
which the plan supported the development of a community center. Book Buddies
Program    X          Payment Mechanism for Interpreter Service    X         
Cultural Competency Training    X          The plan provides cultural competency
training in various settings to members, providers and community groups. RSV
Quality Improvement Project       X       The RSV Quality Improvement study was
completed in 2004. In 2006, under the joint leadership of the plan’s Medical
Director, Dr. Kenneth Smith, the RSV Taskforce reconvened to review and
reconfirm recommendations for Synagis usage utilizing AAP guidelines. NCQA
National Medicaid Work Group       X       The NCQA Medicaid workgroup concluded
in 2003. The plan’s Medical Director, Kenneth Smith, MD, continues to be
actively involved with NCQA and serves as an expert in national NCQA Medicaid
issues.

 

Page 3 of 12

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Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current

Activity

  

Completed

Activity

  

Discontinued

Activity

  

Comments

HEDIS Incentive Program Enhancements    X          The plan is currently
enhancing a provider incentive program to increase encounter data submission
rates and Improve overall HEDIS performance. Dental Health Education    X      
   The plan continues to perform this activity. This activity will conclude in
2007. Healthy Kids Coalition    X          Molina Healthcare participates in the
Teachers for Healthy Kids Initiative, as well as other outreach and enrollment
programs targeting uninsured children and families. 5.d. Innovative Utilization
Management Activities             Ask the Pharmacist (Web-based Interactive
Program)    X          Asthma DHS/CHCS Collaborative       X       The Asthma
DHS/CHCS collaborative concluded in 2004. The new collaborative Plan Practice
Improvement Project runs from 2005-2006. The plan continues to participate in
various ongoing quality improvement studies, projects and collaboratives, such
as the Asthma study Improvement Project. Asthma Partnership with IEHP       X   
   Clinical Practice Guideline (Asthma, Diabetes, hypertension, Gestational
Diabetes, and Pregnancy)    X          Diabetes DHS Collaborative       X      
The Diabetes DHS Collaborative concluded in 2005. The plan continues to
participate in various ongoing collaboratives, such as the Adolescent Well Care
collaborative. Disease Registries    X          ER Use and Abuse Program    X   
      Hospital On-Site Review    X          Language Matching for Pharmacy
Services    X          Maternal Home Health    X          Medical Director
Ambassador Program    X         

 

Page 4 of 12

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Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current

Activity

  

Completed

Activity

  

Discontinued

Activity

  

Comments

Medical Nutrition Therapy (Registered Dietician Services)    X          Nurse
Advice Line    X          PharmaCheck Program    X          Population-based
Member Surveys          X    DHS approves plan’s request to remove this
activity. The plan has discontinued this initiative. In its place, the plan
participates in CAHPS surveys. Respiratory Syncytial Virus (RSV Care Management)
   X          Riverside/San Bernardino County Asthma Coalition    X         
School Nebulizer Project       X       The plan has completed this limited-time
activity, in which the plan donated nebulizers to 35 local schools.
Transportation Summit       X       This was a one-time summit coordinated by
the plan that has been completed. Language Services Access Summit       X      
The plan has completed this activity. The Robert Wood Johnson Foundation awarded
a two (2) year grant to the plan to perform this activity. The grant funding was
from December 2004 through April 2006. 24 Hour Billingual Spanish Nurse Advice
Line-Telesalud    X          Exceeding DHS Standards in Daily Um Activities:   
        

a) Member Data Base of carved out services

   X         

b) ER Visit summaries to delegated entities

   X         

c) Provide In-patient and Bed day summaries to delegated entities

   X         

 

Page 5 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current

Activity

  

Completed

Activity

  

Discontinued

Activity

  

Comments

After delivery home visit    X          The plan has modified this program,
called the Motherhood Matters Program. The Plan sends trimester specific
information including postpartum materials to members. The plan continues
telephonic outreach to encourage members to complete their postpartum check up.
Also, the plan coordinates home visits to members based upon medical need.
Comprehensive CPSP Training    X          Hospital to Home Program    X         
The plan has modified this program to provide focused discharge planning for
those members requiring medically necessary follow-up care. The plan’s case
management staff perform outreach activities including placing phone calls
directly to members to ensure complex medical needs and needs based upon social
limitations are being addressed. Rural Transportation Program    X         
Video Medical Conferencing          X    DHS approves plan’s request to remove
this activity. The plan has discontinued the intended implementation of this
initiative. The plan researched the application of this service for health plan
members and determined that it was not an appropriate service to implement at
the present time. The purpose of this initiative was to enable a treating PCP to
consult about a member’s condition/treatment with a specialist via telephone or
video conference. The plan has instead focused on building up its specialist
network to provide PCPs a network of qualified specialist providers with whom to
consult on member conditions and treatment options. 9.e. Innovative
Ideas/Practices             Annual PCP and specialist appointment access and
after hours instructions survey    X          Requires Urgent Care
pre-contractual facility site review    X          Every six month analysis
using qualifiable and measurable standards for PCP’s (1:2000 members) and their
geographic distribution    X         

 

Page 6 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current

Activity

  

Completed

Activity

  

Discontinued

Activity

  

Comments

Every six month analysis using qualifiable and measurable standards for high
volume specialists for orthopedic surgeons, dermatologists, otolaryngologists,
opthalmologists (1:5000 members) and OB-GYN’s (1:1000 members)    X          The
plan modified this activity to assess and identify high volume specialists on an
annual basis. Annual Analysis of geographic availability to members for the
number of:            

a) PCP’s

   X         

b) Specialists

   X         

c) Pharmacies

   X         

d) Urgent Care Centers

   X         

e) Facilities

   X          Access and Availability Committee    X          Ask the Registered
Dietician (web based)    X          Breathe with Ease Program    X         
Disease Specific Member Newsletters    X          Healthy Living with Diabetes
   X          Hablamos Juntos       X       The plan has completed this
activity. The Robert Wood Johnson Foundation awarded a two (2) year grant to the
plan to perform this activity. The grant funding was from December 2004 through
April 2006.

 

Page 7 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

  

Completed
Activity

   Discontinued
Activity   

Comments

Immunization Outreach Program (Home Verification)          X    DHS approves
plan’s request to remove this activity. The plan has discontinued this
initiative. The plan researched ways to implement this activity and determined
that it was not practical at the present time. The shortage of qualified nurses
in California made this program very difficult to implement. To help achieve the
original objective of increasing immunization rates for plan members, the plan
has focused on performing outreach activities to members and their families to
educate them about the importance of staying up-to-date with immunizations. The
plan’s “Healthy Baby Program” provides a car seat to a member’s family when
evidence is presented that the members immunizations are current and up-to-date.
Another example of the plan’s ongoing activities in this area is a flu shot
campaign underway in which postcards are sent to members along with phone calls,
reminding members and their families about scheduled immunizations. The plan
also participates in community outreach events and other collaborative
activities directed at increasing immunization rates Interpreter Request Card
Program    X          Molina Appointment Access Survey    X          Motherhood
Matters Program    X          Motherhood Matters Outreach    X         
Prenatal/Postpartum Reminders    X          Community Based Organization
Outreach    X          The plan’s RFP response covered activities that occurred
in 2003 and 2004. The plan continues to participate in a variety of community
outreach activities. Including working with community based organizations
(“CBOs”) to facilitate outreach and coordination efforts. Community Located
Staff Model Offices    X          The plan continues to operate four (4) staff
model offices (“SMOs”) in San Bernardino, two (2) SMOs in Riverside and two (2)
SMOs in east Los Angeles County that adjoin Riverside. Transportation Assistance
Program (New Innovation)    X          Welcome Call Program    X         

 

Page 8 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

  

Completed
Activity

  

Discontinued
Activity

  

Comments

13.d Innovative member Services Activities

            Customer telephone Service requires:            

a) Average speed of answer less that 30 seconds

   X         

b) Abandonment Rate less than 5%

   X          Implemented new member welcome call to confirm new member
understanding of health care benefits and how to access services    X         
Uses easy to understand language in member materials to advise members about
protected health information and open communication with their PCP    X         
Measures numerous categories or reasons for member inquiries, complains and
grievances and identifies systemic trends and acts on findings    X          IHA
Gift Incentive    X          New member Outreach: Welcome Call    X         
Telephone Outreach    X          Mail Outreach    X          FAQ
Sheet-Frequently Asked Questions and Answers    X          Molina’s Ombudsman
Program             Cultural Training Assistance    X          The plan provides
cultural competency training, assistance and resources to members; providers and
community groups in a variety of settings. Cultural Training and Assistance    X
         Cultural and Linguistic Advisory Committee    X          Disenrollment
Survey    X          Education on IHA    X         

 

Page 9 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

  

Completed
Activity

  

Discontinued
Activity

  

Comments

Hablamos Juntos       X       The plan has completed this activity. The Robert
Wood Johnson Foundation awarded a two (2) year grant to the plan to perform this
activity. The grant funding was from December 2004 through April 2006.
Interpreter Card Program    X          “Motherhood Matters”    X         
Motherhood Matters Outreach    X          Web Site Translation    X         
Wellness Mailing (Annual)    X          The plan has revised its member mailing
activities to include member wellness information such as informative brochures
and refrigerator magnets in new member enrollment mailing and annual member
mailings. Health Education information, such as wellness materials, are
routinely reviewed with the plan’s community advisory committees to receive
feedback. Collaborative Activities    X          Molina Healthcare participates
in various ongoing projects and collaboratives Birthday Card Program    X      
   IHA Appointment Reminders    X          The plan has modified this activity
to provide manual reminder calls to members about IHAs. The plan continues to
consider new technological applications to more effectively notify member of
IHAs. Transportation    X         

 

Page 10 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

  

Completed
Activity

  

Discontinued
Activity

  

Comments

Immunization Outreach Program (Home Verification)          X    DHS approves
plan’s request to remove this activity. The plan has discontinued this
initiative. The plan research ways to implement this activity and determined
that it was not practical at the present time. The shortage of qualified nurses
in California made this program very difficult to implement. To help achieve the
original objective of increasing immunization rates for plan members, the plan
has focused on performing outreach activities to members and their families to
educate them about the importance of staying up-to-date with immunizations. The
plan’s “Health Baby Program” provides a car seat to a member’s family when
evidence is presented that the member’s immunizations are current and
up-to-date. Another example of the plan’s ongoing activities in this area is a
flu short campaign underway in which postcards are sent to members along with
phone calls, reminding members and their families about scheduled immunizations.
The plan also participates in families about scheduled immunizations. The plan
also participates in community outreach events and other collaborative
activities directed at increasing immunization rates.

14.c Innovative Activities

            Customer Telephone Services requires:            

a) Average speed of answer less than 30 seconds

   X         

b) Abandonment Rate less than 5%

   X          Implemented new member welcome call to confirm new member
understanding of health care benefits and how to access services    X         
Uses easy to understand language in member materials to advise members about
protected health information and open communication with their PCP    X         
Measures member understanding of plan Information to provide strategies for
improvement    X          Measures numerous categories of reasons for members
inquiries, complains and grievances and identifies systemic trends and acts on
finds    X          Molina’s Ombudsman Program    X         

 

Page 11 of 12

--------------------------------------------------------------------------------

Innovative Activities List   Molina Healthcare of California   06-55498  
Exhibit E, Attachment 4

 

Activity Name

  

Current
Activity

  

Completed
Activity

  

Discontinued
Activity

  

Comments

Grievance Acknowledgement within 24 hours    X          Grievance Closure TAT 15
days    X          Member Participation Committee    X          Disenrollment
Survey             Cultural training and Assistance    X          The plan
provides cultural competency training, assistance and resources to members,
providers and community groups in a variety of settings. Interpreter Wallet
Cards    X          Ask the Anthropologist (web based)    X          The plan is
revising this program to better serve members. A new initiative is being
developed to allow members to contact the plan’s cultural & linguistics staff to
received answers about cultural and linguistic questions/issues. Hablamos Juntos
      X       The plan has completed this activity. The Robert Wood Johnson
Foundation awarded a two (2) year grant to the plan to perform this activity.
The grant funding was from December 2004 through April 2006. New Member
Outreach: Welcome Call    X         

 

Page 12 of 12

--------------------------------------------------------------------------------

State of California—Health and Human Services Agency

California Department of Health Services

 

Exhibit F

Contractor’s Release

Instructions to Contractor:

With final invoice(s) submit one (1) original and one (1) copy. The original
must bear the original signature of a person authorized to bind the Contractor.
The additional copy may bear photocopied signatures.

Submission of Final Invoice

Pursuant to contract number                      entered into between the State
of California Department of Health Services (CDHS) and the Contractor
(identified below), the Contractor does acknowledge that final payment has been
requested via invoice number(s)                     , in the amount of $
                     and dated                      If necessary, enter “See
Attached” in the appropriate blocks and attach a list of invoice numbers, dollar
amounts and invoice dates.

Release of all Obligations

By signing this form, and upon receipt the amount specified in the invoice
number(s) referenced above, the Contractor does hereby release and discharge the
State, its offices, agents and employees of and from any and all liabilities,
obligations, claims, and demands whatsoever arising from the above referenced
contract.

Repayments Due to Audit Exceptions / Record Retention

By signing in this form, Contractor acknowledges that expenses authorized for
reimbursement does not guarantee final allowability of said expenses. Contractor
that the amount of any sustained audit exceptions resulting from any subsequent
audit made after final payment will be refunded to the State.

All expense and accounting records related to the above referenced contract must
be maintained for audit purposes for no less than three years beyond the date of
final payment, unless a longer term is stated in said contract.

Recycled Product Use Certification

By signing this form, Contractor certifies under penalty of perjury that a
minimum 0% unless otherwise specified in writing of post consumer material, as
defined in the Public Contract Code Section 12200, in products, materials,
goods, or supplies offered or sold to the State regardless of whether it meets
the requirements of Public Contract Code Section 12209. Contractor specifies
that printer or duplication cartridges offered or sold to the State comply with
the requirements of Section 12516(e).

Reminder to Return State Equipment/Property (If Applicable)

(Applies only if equipment was provided by CDHS or purchased with or reimbursed
by contract funds)

Unless CDHS has approved the continued use and possession of State equipment (as
defined in the above referenced contract) for use in connection with another
CDHS agreement, Contractor agrees to promptly initiate arrangements to account
for and return said equipment to CDHS, at CDHS’s expense, if said equipment has
not passed its useful life expectancy as defined in the above referenced
contract.

Patents / Other Issues

By signing this form, Contractor further agrees, in connection with patent
matters and with any claims that are not specifically released as set forth
above, that it will comply with all of the provisions contained in the above
referenced contract, including, but not limited to, those provisions relating to
notification to the State and related to the defense or prosecution of
litigation.

 

--------------------------------------------------------------------------------

ONLY SIGN AND DATE THIS DOCUMENT WHEN ATTACHING TO THE FINAL INVOICE

 

Contractor’s Legal Name (as on contract):  

 

Signature of Contractor or Official Designee:  

 

   Date:   

 

Printed Name/Title of Person Signing:  

 

CDHS Distribution: Accounting (Original)    Program

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

1. Recitals

 

  A. “Protected Health Information” or “PHI” means any information, whether oral
or recorded in any form or medium that relates to the past, present, or future
physical or mental condition of an individual, the provision of health care to
an individual, or the past, present, or future payment for the provision of
health care to an individual; and that identifies the individual or with respect
to which there is a reasonable basis to believe the information can be used to
identify the individual. PHI shall have the meaning given to such term under
HIPAA and HIPAA regulations, as the same may be amended from time to time.

 

  B. CDHS desires to protect the privacy and provide for the security of PHI
disclosed, created or received on behalf of CDHS pursuant to this Contract.

IN THE USE OR DISCLOSURE OF INFORMATION PURSUANT TO THIS CONTRACT, THE PARTIES
AGREE AS FOLLOWS:

 

2. Permitted Uses and Disclosures.

 

  A. Permitted Uses and Disclosures. Except as otherwise required by law,
Contractor may use or disclose PHI only to perform functions, activities or
services specified in this Contract provided that such use or disclosure is for
purposes directly connected with the administration of the Medi-Cal program.
Those activities which are for purposes directly connected with the
administration of the Medi-Cal program include, but are not limited to:
establishing eligibility and methods of reimbursement; determining the amount of
medical assistance; providing services for Members; conducting or assisting an
investigation, prosecution, or civil or criminal proceeding related to the
administration of the Medi-Cal program; and conducting or assisting a
legislative investigation or audit related to the administration of the Medi-Cal
program.

 

  B. Specific Use and Disclosure Provisions. Except as otherwise indicated in
this Contract, Contractor may:

 

  1) Use and disclose for management and administration. Use and disclose PHI
for the proper management and administration of the Contractor or to carry out
the legal responsibilities of the Contractor, provided that disclosures are
required by law, or the Contractor obtains reasonable assurances from the person
to whom the information is disclosed that it will remain confidential and will
be used or further disclosed only as required by law or for the purpose for
which it was disclosed to the person, and the person notifies the Contractor of
any instances of which it is aware that the confidentiality of the information
has been breached.

 

Page 1 of 6

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

  2) Provision of Data Aggregation Services. Use PHI to provide data aggregation
services to CDHS. Data aggregation means the combining of PHI created or
received by the Contractor on behalf of CDHS with PHI received by the Contractor
in its capacity as the Contractor of another covered entity, to permit data
analyses that relate to the health care operations of CDHS.

 

  C. Prohibition of External Disclosures of Lists of Members. A Contractor must
provide CDHS’ contract manager with a list of external entities, including
persons, organizations, and agencies, other than those within its treatment
network and other than CDHS, to which it discloses lists of Medi-Cal Member
names and addresses. This list must be provided within 30 calendar days of the
execution of this Contract and annually thereafter.

 

3. Responsibilities of Contractor.

Contractor agrees:

 

  A. Divulging Medi-Cal Status. Not to divulge the Medi-Cal status of a
Contractor’s Members without CDHS’s prior approval except for treatment, payment
and operations.

 

  B. Safeguards. To implement administrative, physical, and technical safeguards
that reasonably and appropriately protect the confidentiality, integrity, and
availability of the PHI, including electronic PHI, that it creates, receives,
maintains or transmits on behalf of CDHS; and to prevent use or disclosure of
PHI other than as provided for by this Contract. Contractor shall maintain a
comprehensive written information privacy and security program that includes
administrative, technical and physical safeguards appropriate to the size and
complexity of the Contractor’s operations and the nature and scope of its
activities. Contractor will provide CDHS with information concerning such
safeguards as CDHS may reasonably request.

 

  C. Security. To take any and all steps necessary to ensure the continuous
security of all computerized data systems containing PHI, and provide data
security procedures for the use of CDHS at the end of the contract period. These
steps shall include, at a minimum:

 

  i. Complying with all of the data system security precautions listed in this
Agreement or in an Exhibit attached to this Agreement;

 

Page 2 of 6

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

  ii. Achieving and maintaining compliance with the HIPAA Security Rule (45 CFR
Parts 160 and 164), as necessary in conducting operations on behalf of CDHS
under this Agreement;

 

  iii. Providing a level and scope of security that is at least comparable to
the level and scope of security established by the Office of Management and
Budget in OMB Circular No. A-130, Appendix III- Security of Federal Automated
Information Systems, which sets forth guidelines for automated information
systems in Federal agencies; and

 

  iv. Complying with the safeguard provisions in the Department’s Information
Security Policy, embodied in Health Administrative Manual (HAM), sections 6-1000
et seq. and in the Security and Risk Management Policy in the Information
Technology Section of the State Administrative Manual (SAM), sections 4840 et
seq., in so far as the security standards in these manuals apply to Business
Associate’s operations. In case of a conflict between any of the security
standards contained in any of these four enumerated sources of security
standards, the most stringent shall apply. The most stringent means that
safeguard which provides the highest level of protection to PHI from
unauthorized disclosure. Further, Business Associate must comply with changes to
these standards that occur after the effective date of this Agreement.

Business Associate shall designate a Security Officer to oversee its data
security program who shall be responsible for carrying out the requirements of
this section and for communicating on security matters with CDHS.

 

  D. Contractor’s Agents. To ensure that any agents, including subcontractors
but excluding providers of treatment services, to whom Contractor provides PHI
received from or created or received by Contractor on behalf of CDHS, agree to
the same restrictions and conditions that apply to Contractor with respect to
such PHI; and to incorporate, when applicable, the relevant provisions of this
Contract into each subcontract or subaward to such agents or subcontractors.

 

  E. Availability of Information to Members. To provide access to members (upon
reasonable notice and during Contractor’s normal business hours) to their PHI in
a Designated Record Set in accordance with 45 CFR 164.524. Designated Record Set
means the group of records maintained for CDHS that includes medical and billing
records about Members; enrollment, payment, claims adjudication, and case or
medical management systems maintained for CDHS health plans; or those records
used to make decisions about Members on behalf of CDHS.

 

Page 3 of 6

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

  F. Internal Practices. To make Contractor’s internal practices, books and
records relating to the use and disclosure of PHI received from CDHS, or created
or received by Contractor on behalf of CDHS, available to CDHS for inspection
and auditing in a time and manner designated by CDHS, for purposes of
determining compliance with the provisions of this Exhibit.

 

  G. Documentation and Accounting of Disclosures. To document and make available
to CDHS and to a Member such disclosures of PHI, and information related to such
disclosures, necessary to respond to a proper request by the subject Member for
an accounting of disclosures of PHI, in accordance with 45 CFR 164.528.

 

  H. Notification of Breach. During the term of this Agreement:

 

  i. Discovery of Breach. To notify CDHS immediately by telephone call plus
e-mail or fax upon the discovery of breach of security of PHI in computerized
form if the PHI was, or is reasonably believed to have been, acquired by an
unauthorized person; or within 24 hours by e-mail or fax of any suspected
security incident, intrusion or unauthorized use or disclosure of PHI in
violation of this Agreement and this Addendum, or potential loss of confidential
data affecting this Agreement. Notification shall be provided to the CDHS
contract manager, the CDHS Privacy Officer and the CDHS Information Security
Officer. If the incident occurs after business hours or on a weekend or holiday
and involves electronic PHI, notification shall be provided by calling the CDHS
ITSD Help Desk. Business Associate shall take:

 

  a. Prompt corrective action to mitigate any risks or damages involved with the
breach and to protect the operating environment and

 

  b. Any action pertaining to such unauthorized disclosure required by
applicable Federal and State laws and regulations.

 

  ii. Investigation of Breach. To immediately investigate such security
incident, breach, or unauthorized use or disclosure of PHI or confidential data.
Within 72 hours of the discovery, to notify the CDHS contract manager, the SDHS
Privacy Officer, and the CDHS Information Security Officer of:

 

  1. What data elements were involved and the extent of the data involved in the
breach,

 

Page 4 of 6

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

  2. A description of the unauthorized persons known or reasonably believed to
have improperly used or disclosed PHI or confidential data,

 

  3. A description of where the PHI or confidential data is believed to have
been improperly transmitted, sent, or utilized,

 

  4. A description of the probable causes of the improper use or disclosure; and

 

  5. Whether Civil Code sections 1798.29 or 1798.82 or any other federal or
state laws requiring individual notifications of breaches are triggered.

 

  iii. CDHS Contact Information. To direct communications to the above
referenced SDHS staff, the Contractor shall initiate contact as indicated
herein. SDHS reserves the right to make changes to the contact information below
by giving written notice to the Contractor. Said changes shall not require an
amendment to this Agreement or Addendum.

 

CDHS Contract Manager

  

CDHS Privacy Officer

  

CDHS Information Security Officer

See Provision 4

of Exhibit A for

Contract Manager

information???

  

Privacy Officer

% Office of Legal Services

California Department of Health

Services

P.O. Box 997413, MS 0011

Sacramento, CA 95899-7413

Telephone: (916) 440-7750

Email: privacyofficer@dhs.ca.gov

  

Information Security Officer

Information Security Office

P.O. Box 997413, MS 6302

Sacramento, CA 95899-7413

Email: dhsiso@dhs.ca.gov

Telephone: ITSD Help Desk

916-440-7000 or

800-579-0874

 

  I. Notice of Privacy Practices. To produce a Notice of Privacy Practices (NPP)
in accordance with standards and requirements of HIPAA, the HIPAA regulations,
applicable State and Federal laws and regulations, and Section 2.A. of this
Exhibit. Such NPP’s must include the CDHS Privacy Officer contact information
included in part H. above of this Contract as an alternative means for Medi-Cal
beneficiaries to lodge privacy complaints. All NPP’s created or modified, must
be submitted to the CDHS contract manager for review.

 

Page 5 of 6

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Molina Healthcare of California Partner Plan, Inc.

06-55498

Exhibit G

Health Insurance Portability and Accountability Act (HIPAA)

 

4. Miscellaneous Provisions.

 

  A. Amendment. The parties acknowledge that Federal and State laws relating to
electronic data security and privacy are rapidly evolving and that amendment of
this Contract may be required to provide for procedures to ensure compliance
with such developments. The parties specifically agree to take such action as is
necessary to implement the standards and requirements of HIPAA, the HIPAA
regulations and other applicable laws relating to the security or privacy of
PHI. Upon CDHS’s request, Contractor agrees to promptly enter into negotiations
with CDHS concerning an amendment to this Contract embodying written assurances
consistent with the standards and requirements of HIPAA, the HIPAA regulations
or other applicable laws. CDHS may terminate this Contract upon 30 calendar days
written notice in the event (i) Contractor does not promptly enter into
negotiations to amend this Contract when requested by CDHS pursuant to this
Section or (ii) Contractor does not enter into an amendment providing assurances
regarding the safeguarding of PHI that CDHS in its sole discretion, deems
sufficient to satisfy the standards and requirements of HIPAA, the HIPAA
regulations, and applicable laws.

 

  B. Assistance in Litigation or Administrative Proceedings. Contractor shall
make itself and its employees, and use all due diligence to make any
subcontractors or agents assisting Contractor in the performance of its
obligations under this Contract, available to CDHS at no cost to CDHS to testify
as witnesses, or otherwise, in the event of litigation or administrative
proceedings being commenced against CDHS, its directors, officers or employees
based upon claimed violation of HIPAA, the HIPAA regulations or other laws
relating to security and privacy, except where Contractor or its subcontractor,
employee or agent is a named adverse party.

 

Page 6 of 6